CSR-Global Governance

8/14/2019 CSR-Global Governance

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Corporate Social Responsibility

NEED FOR GLOBAL GOVERNANCE AND

INSTITUTIONS

Submitted byGROUP 10:

Rakshak Lodha (338)

Nilesh Chandra Sinha (359)

Ankur Ahuja (303)

Abhishek Kumar (332)

Jaybind Jha (328)

Gaurav Kumar (334)

Vivian Asthana (380)

Need for Global Governance and Institutions


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CONTENTS

Introduction Global Governance

Global Trade

World Health Issues

World Security

World Financial Markets

Environmental Issues

Conclusion



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The Global Governance Architecture

Global governance wants to fill the resulting vacuum in the deficit in regulation with international

cooperations - here, the nation state retains its central regulatory function as well as with new forms of politics, in particular, by including the (global) civil society and by strengthening international

organisations. The diagram below details an appropriate architecture for this:

NEED

The desire to rule the world has been a part of the human experience throughout recordedhistory. From great wars of dominance to overt wars of imperialistic and capitalisticdominance and to this day of post world war era, History is a record of the competition forglobal dominance. In every age, there has always been a force somewhere, conniving toconquer the world with ideas clothed in promises imposed by military might. The 20thcentury is no different from any other: Marx, Lenin, and Hitler reflect some of the ideas

which competed for world dominance in the 1900s. The competition is still underway. One ofthe competitors is the idea that people are born free, totally free and sovereign, and chooseto surrender specified freedoms to a limited government to achieve mutual benefits. The othercompetitor is the idea that government must be sovereign in order to distribute benefitsequitably and to manage the activities of people to protect them from one another.

In 1995, a Commission on Global Governance, an independent group of 28 world leadersmeet in US and attempted to create a balance between these competitors for the general goodfor all. It argued that global values must be the cornerstone of global governance; and wenton to list seven core values. These were:

Respect for life;



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Liberty;

Justice;

Equity;

Mutual respect;

Caring;

Integrity.

The Commission proposed a global civic ethic, based on the notion of balancing rights andresponsibilities, it recognized that a new global ethic would require modification of cherishedelements of the international system, including the ideas of sovereignty and self-determination neither could be pursued without regard to its effect on other members of theglobal community.



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Global Trade

Globalization, the buzz word few years back, has impacted almost every aspect of theorganizational functioning and peoples lives. It brought out revolution in the way trade isdone bringing people near and interdependent in unprecedented ways. Sourcing of rawmaterials from one nation to utilization of labour in other and then selling of these finishedgoods almost in every corner of the world has become a normal way of functioning ofcorporate behemoths. This integration of economies, big and small, lead to creation of variousnon-existent methodologies of working which were complex from other existentmethodologies. Successful integration in turn requires both enhanced market access in the

advanced industrial countries and a range of institutional reforms at home (ranging from legaland administrative reforms to safety nets) to render viable and growth-promoting economicopenness.

And for profitable utilization of these changes, a need for different codes of governing therelated activities began to be felt. With firms dealing with others in other geographic domainsneeded a common ground for understanding the need and required standard procedures tomake their functioning manageable and productive. This need of governance on the globallevel lead to the World Trade Organization (WTO), an initiative of the United Nations.

The World Trade Organization is a major player in the field of global governance. Since itscreation in January 1995, it has expanded the reach of trade rules deep into the regulatorystructure of almost 140 sovereign states, affecting the daily lives of all citizens. As a result, ithas found itself at the centre of controversy in areas that are well outside the domain oftraditional trade policy. The WTO is successful in reducing barriers to trade and conductingtrade according to agreed rules. It focuses on expanding market access and deepeningintegration through the harmonization of a wide range of trade-related practices.

WTO strives to balance and sustain Growth and Poverty reduction. It enshrines development

at the top of its agenda. The issues and objectives of WTO in terms of the objectives laid down

by United Nations Development Program (UNDP) are as follows:

To assist developing country governments and civil society organizations in ensuring that theircountries can selectively and strategically seize the opportunities of global economic and trade

integration for advancing national progress in human development and poverty eradication.

To strengthen the participation and substantive negotiating and advocacy positions of

developing countries in the debate and negotiations on the emerging global trading regime.

To present a UNDP position on the human development outcomes of the current global

trading regime and the reforms needed to make it more inclusive and balanced, thereby

enabling trade to become an instrument for enhancing human development and reducing

poverty.



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Well before moving further into having a detailed look at the impact of WTO has made on theissue of global governance and corporations, a look at institutions of global governance whichwhere precursor to WTO deems necessary for better understanding. Below is the brief look atInternational Trade organization (ITO) and GATT:

In the context of pre-Doha debate, the previous grand design for global governance wasITO and the Havana Charter. ITO was a big failure.

GATT was successful as it was built on successful experience, and ideas which werethoroughly discussed and widely shared. Moreover negotiators did not look for a supra-national code and organization within which countries would work together for a commongood, during the creation of GATT. The GATT was possible because there was sufficientcoincidence among original signatories to make it work.

ITO tried to work and adopt the same ideologies of GATT but could not do it as not manymembers aligned themselves with most of the ideologies it aimed at.

GATT also eventually lost its standing leading to the development of a more

comprehensive code on commercial policy: the Uruguay Round and the WTO. Thedemise of GATT was due to the conservatism of thinking and interests which somehowlimited the expansion and momentum of GATT and its work.

GATT resulted in permitting trade policy, previously a politically sensitive issue, to recede

from high to low politics, trade became an issue preoccupying bureaucrats, and Geneva a place where officials solved international trade problems... incrementally and

cautiously.... Not until the 1980s, when new trade frictions flowing from globalization of the

economy exposed new problems, did trade again begin to assume a high profile. As aconsequence, GATT members decided to shed conservatism and try once again to develop a

more comprehensive code on commercial policy... the Uruguay Round and the WTO...

-Michael Hart (Professor at Carleton University in Ottawa), inhis book Also Present at the Creation

Effectiveness of Global Governance institutions like WTO

The increasingly interconnected world economy requires effective global governance. AndBuilding global governance is a gradual process, involving changes to longstanding practices,entrenched interests, cultural habits and social norms and values. Key issues like globalwarming, AIDS, terrorism, peacekeeping, and protection from global economic crises are justa few of the concerns beyond the grasp of national governments. Citing cooperation and

consultation, and example of the European Union the new models of governance are neededto respond to the needs of the age.

Ten years of dispute settlement shows that the WTO has been sensitive to maintainingthe balance between trade and non-trade values.

The WTO acts as a forum where members negotiate international agreements whichare then adopted.

It permits and promotes monitoring and surveillance mechanisms including peerreviews of member states' actions.

It provides a venue of adjudication in case of international trade litigation and

maintains transparency of international trade.



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World Health Issues

In todays world, the health risks are changing because ofshrinking world geography and intensification of cross border.There is an increasing trend of trans border flows of people,goods, services, and ideas. In the wake of globalization, nationalaction alone cannot ensure proper health monitoring, status and outcomes of variousinitiatives.

It is becoming clear that the existing rules, institutional mechanisms and forms oforganization should be modified in order to face the challenges posed by globalisation in a

better way. There is a great need to ensure the welfare of the people who were left behind inthe development process. The need for more effective collective action by governments,

business and civil society to better manage the health risks are leading us to re-evaluate therules and institutions that govern health policy and practice at the sub-national, national,regional and global levels. The health determinants are increasingly getting affected byexternal factors like trade and investment flows, violence and conflict, criminal activity,environmental change and communication technologies.

Many people believe that the current system of international health governance is not able tomeet the expectations and has a number of limitations and gaps. In light of these perceiveddrawbacks, the concept of global health governance (GHG) has become a subject of interestand debate in the field of international health.

WHO-An Overview:

The World Health Organization (WHO) is a specialized agency of the United Nations (UN)that acts as a coordinating authority on international public health. Established on 7 April1948, and headquartered in Geneva, Switzerland, the agency inherited the mandate andresources of its predecessor, the Health Organization, which had been an agency of theLeague of Nations.

Apart from coordinating international efforts to monitor outbreaks of infectious diseases, suchas SARS, malaria, and AIDS, the WHO also sponsors programs to prevent and treat suchdiseases. The WHO supports the development and distribution of safe and effective vaccines,

pharmaceutical diagnostics, and drugs.In addition to its work in eradicating disease, the WHOalso carries out various health-related campaigns for example, to boost the consumption offruits and vegetables worldwide and to discourage tobacco use.

The WHO is financed by contributions from member states and from donors

Health governance: the challenge of globalization

in broad terms, governancecan be defined as the actions and means adopted by a society topromote collective action and deliver collective solutions in pursuit of common goals. Suchorganization requires agreement on a range of matters including membership within the co-operative relationship, obligations and responsibilities of members, the making of decisions,



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means of communication, resource mobilisation and distribution, dispute settlement, andformal or informal rules and procedures concerning all of these. Defined in this way,governance pertains to highly varied sorts of collective behaviour ranging from localcommunity groups to trans-national corporations, from labour unions to the UN SecurityCouncil.

The impact of globalization upon the capacity of states and other actors to co-operateinternationally to protect human health is discussed below:

1. Globalization has introduced or intensified trans-border health risks which is defined asrisks to human health that transcend national borders in their origin or impact. Such risks mayinclude emerging and re-emerging infectious diseases, various non communicable diseases(e.g. lung cancer, obesity, and hypertension) and environmental degradation (e.g. globalclimate change).

2. Globalization brings with it, a growth in the number, and degree of influence, of non stateactors in health governance. Many argue that the relative authority and capacity of nationalgovernments to protect and promote the health of domestic populations has declined in theface of globalizing forces beyond national borders that affect the basic determinants of health.

Non-state actors, including civil society groups, global social movements, private companies,consultancy firms, think tanks, religious movements and organized crime, in turn, havegained relatively greater power and influence both formally and informally. The emerging

picture is becoming more complex, with the distinct roles of state and non-state actors ingovernance activities such as agenda setting, resource mobilisation and allocation, anddispute settlement becoming less clear. New combinations of both state and non-state actorsare rapidly forming, in different forms such as partnerships, alliances, coalitions, networksand joint ventures.

3. Current forms of globalization appear to be problematic for sustaining, and even worseningexisting socioeconomic, political and environmental problems. UNDP (1999), for example,reports that neoliberal forms of globalization have been accompanied by wideninginequalities between rich and poor within and across countries. Although many of these

problems are most acute in the developing world, they are of concern to all countries giventheir transborder nature (i.e. unconfined to national borders).

4. Globalization has contributed to a decline in both the political and practical capacity of thenational governments, acting alone or in cooperation with other states, to deal with globalhealth challenges. While globalization is a set of changes occurring gradually over severalcenturies, it has brought attention to the fact that states alone cannot address many of the

health challenges arising. Infectious diseases are perhaps the most prominent example of thisdiminishing capacity, but equally significant are the impacts on non communicable diseases(e.g. tobacco-related cancers), food and nutrition, lifestyles and environmental conditions.This reducing role of the state has been reinforced by initiatives to further liberalise the globaltrade of goods and services.

Essential elements of global health governance:

Based on above discussion, we can identify some essential elements of Global healthgovernance and also we need to look at the challenges for achieving them. They are discussed

below:



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1. There has to be a complete change in the way of how we think about and promote health. Itcreates the need to address factors which cross, and even ignore, the geographical boundariesof the state. All of the efforts by international health governance have been focused on pointof contact, the national board of states. However forces of global change have made itimperative to go for some concrete measures. The worldwide flows of information and

communication across the Internet; the ecological impacts of global environmental change;the illicit trade in drugs, food products and even people; render border controls irrelevant.Many of these global changes impact on health and require forms of cooperation that go

beyond IHG.

2. A second essential element of GHG is the need to define and address the determinants ofhealth from a multi-sectored perspective. Traditionally biomedical approach has dominatedwhere the focus was on disease based research and policy. However increased involvement ofother forms of expertise in health policy making (e.g. economics, anthropology) and linkswith other social sectors (e.g. education, labour) has marked the existence of GHG. Informalconsultations between WHO and WTO, for example, have been prompted by the importance

of multilateral trade agreements to health. The main challenge to achieving greater crosssectored collaboration lies in the danger of casting the health net so widely that everything

becomes absorbed within the global health umbrella.

3. The third essential element of GHG is the need to involve, a broader range of actors andinterests. As described above, while Non-state actors have long been an important part of thescene, IHG has been firmly state-defined. Importantly, this does not mean that the role of thestate or IHG will disappear or become redundant, but that they will rather need to become

part of a wider system of GHG. Many existing institutions will be expected to play asignificant role in GHG, and states will continue to be key actors. However, states and state-defined governance alone is not enough. Forms of governance that bring together more

concertedly state and non-state actors will be central in a global era

Defining and shaping the architecture for Global health governance

After having understood the concept of GHG, what is required is to define and shape thearchitecture of GHG and identify the challenges for research and policy. The challenges arediscussed below:

1. The first, and perhaps the most fundamental, is the need to agree to the framework whichshould be adopted to build the system of GHG. There is a need to reach some degree of

consensus about the underlying moral and ethical principles that define global healthcooperation. Health for All and health as human right have been some of the approaches inthis direction. However the basic framework still needs to be defined.

2. Another challenge is the need to define leadership and authority in GHG. Leadership willhelp in generating public awareness, mobilising resources, using resources judiciously, setting

priorities. In this complex arena of actors, the issue of leadership and authority is a difficultone. United Nations Childrens Fund (UNICEF), International Labour Organization (ILO),United Nations Development Programme (UNDP), and United Nations Population Fund(UNFPA) being some of the actors in this field with some influence. The problem is that thereis no single institution which has the authority and capacity to act decisively in order to



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address the health issue. The willingness of state to sacrifice their sovereignty and actcollectively through GHG mechanism is a great concern.

3. The challenge for GHG is the need to garner sufficient resources for global healthcooperation and ensure that they are distributed proportionally in line with agreed priorities.

At present, this system is very ad-hoc in nature, depending more on the government annualspending and corporate funding. The creation of a Tobin Tax can help in facing thischallenge.

4. The sovereignty of states is also a hurdle to giving support to global health initiatives because of the lack of effective enforcement mechanisms. With the exception of theInternational Health Regulations, WHO can recommend rather than command action bymember states. The reporting of outbreaks of yellow fever, cholera and plague, for example,is traditionally reliant on governments who may not be willing to report such information forfear of causing adverse economic reactions. Reliance on voluntary compliance in absence ofany monitoring can have serious impact. The next task is to better understand the nitty-gritty

of global governance in terms of what, in concrete terms, it looks like in practice.



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World security

The world security situation is more dangerous now than it was during the Cold War. Thecontinuous violence in Iraq & Afghanistan, tension of a looming attack on Iran (dubbed asWorld War III) and terrorist organizations acquiring nuclear weapons are pointers to thissituation. The global warming and climate change crisis has posed a major threat to the

planet. Here we are talking about the survival of human race. If we sit still and take no actionto mitigate the climate change crisis, we will have no planet to live.

Global, Human and Collective Security

We can broadly define security into three categories: Global, Human and Collective. We needto integrate all the three security challenges for achieving lasting peace.

Global security focuses on the security of territories and borders. States often deploy arms,weapons and threats of weapons of mass destruction to defend their boundaries.

Human security is concerned with preservation of human life and their safety in a changingworld. It is an alternative way of looking at the world as it challenges the basic concept ofmilitary security. Instead it takes concepts of democracy, human rights, social equity andelimination of poverty as essential elements of what constitute human security.

The collective security forms the foundation of United Nations charter and has served theglobal community for decades. At its minimum, it requires a commitment to multilateralismand seeking the cooperation of widest possible number of groups, institutions and civilsociety at large.

Present day threats and challenges

The challenges are terrorism, climate change, weapons of mass destruction (WMD),globalization (rich poor divide), and the recent increases in military spending, unilateral or

pre-emptive attacks by powerful nations on sovereign states. All these need to be tackled forthe maintenance of world security.

TerrorismThe world and specially the US have identified the War on Terror as its top priority. Theheightened state of alert in US and in various other western states is creating lot of problemsfor normal citizens. War on terror is used as an excuse for increase in military spending inorder to secure power and control. The recently formed Counter Terrorism Council (CTC) bythe UN is monitoring the worldwide terror networks and responding to them.

Climate ChangeThe threat of climate change is so grave that it has potential of destroying our civilization.The effects climate change are already apparent with increased floods, droughts, watershortages and rising sea levels; phenomena which is expected to grow over the course of next



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century which is most likely to hit the poorest the hardest. What the world needs presently isthe global action plan to fight climate change crisis otherwise rising temperatures and risingsea levels will result into shortages of food and water, intense struggle for resources andgradual weakening of global institutions thereby posing a severe threat to the planet.

Weapons of Mass Destruction (WMD)Towards the world is awash with 36000 nuclear warheads worldwide. After the unilateralistmilitary approach of the USA, most countries in the world, including five 5 veto wieldingmembers of Security Council, have increased their military spending in the post Cold war era.This shows the increase in the sense of insecurity in the minds of various nationalgovernments. The USA has proposals to develop low yield nuclear weapons or so called mininukes. This is a very dangerous precedent for other countries in the world to follow. This willonly result in boosting the nuclear arms race which can threaten the very existence of humancommunity. The world needs to get rid of all military hardware in order to achieve lasting

peace on earth.

Recent increase in military spendingThere are various reasons for increase in military spending: terrorism, civil wars, borderconflicts, etc. At present global military spending stands at over $1 trillion per year in contrast to$6 billion spent on basic education. This highlights the paradox of the world in which we spendmore to destroy each other than to spend on peace, international cooperation, education and theeradication of poverty.

Tackling World Security and Way Forward

The way forward for global institutions is to tackle new security threats by promoting

disarmament, human rights and building a global rule of law and order. It also includesmanaging environmental degradation, emergencies and disasters, clash of religions andcultures and unrestrained tide of globalization. The implementation and completion ofMillennium Development Goals must be a top priority as poverty, inequity and lack ofopportunity are fertile grounds for violence and terrorism. Moreover the internationalcommunity has moral obligation to intervene and control the situation in countries if they aresliding into chaos, lawlessness and are unable to protect its citizens from murder, rape andkillings. Following are few recommendations to be followed to achieve the security of eachand every individual on the planet.

1. We should try and find holistic solutions to the global problems and take responsibility todeal collectively and have multilateral approach in dealing with present day threats andchallenges.

2. The international community needs to integrate the agenda of development, environmentand disarmament together by partnering at national and global level.

3. Unilateralist approach of major powers of the world cannot solve the global governanceand world security problems. The international community should make efforts to giveopportunity to all the stakeholders of global security to have their say in resolving theissue of global security.

4. The international community should work towards phasing out the nuclear weapons as thethreat of these weapons falling in hands of terrorist and fundamentalist organizations is

looming large.



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5. In the globalized world where fundamentalism is rife, the clash of cultures and religionsare bound to happen and so we should try and make efforts to promote discussion anddialogue leading to inter cultural and inter religious harmony.

6. The international community needs to implement comprehensive global counter terrorismstrategy, help countries emerge out of violence and civil conflicts and deal more

objectively and credibly with human rights violation.7. We should promote democracy and multilateralism which paired with rule of law can

provide civil liberty, economic opportunity and security which can change life in apositive way.

8. We should promote free and fair participation of media across the globe so that truepicture of the global security and challenges to it can be known to each and everystakeholder.

9. We should work towards ensuring peaceful and environmentally sustainable use of naturalresources.

10.We should make efforts towards making 21st century about power in the hands of peopleand not governments.

The role of UN and the goal of global governance is to promote peace and disarmament,protection of human rights and environment, rule of law, and development of the poorest regionsof the world. If that can be put into action by leaders and global institutions then we stand a fairchance of solving the huge security problems of the 21st century.



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Financial Institutions and Global Governance

International Monetary Fund (IMF) and World Bank are the twoprimary International Financial Institutions dealing with financialissues around the world. The formation, purpose and the functions ofthe above said institutions are explained below:

International Monetary Fund (IMF): The IMF was created in 1945to help promote the economic health of the world after the GreatDepression of the 1930s through international monetary cooperation.Headquartered in Washington DC, it is governed by and accountableto the governments of the 185 nations that make up its globalmembership.

Fast Facts about IMF:

Current membership of 185 countries

Staff: approximately 2,596 from 146 countries

Total Quotas :$352 billion (as of May 31,2008)

Loans outstanding(as of May 31,2008) : $19.4 billion to 65 countries of which $6.4billion to 57 countries on concessional terms

Field delivery of technical assistance: 186.2 person years during FY 2008.

Surveillance consultations concluded: 123 countries during FY 2008,of which 115voluntarily published information on their consultation.

Main Responsibilities of IMF:

Promoting international monetary cooperation Facilitating the expansion and balanced growth of international trade

Promoting exchange stability Assisting in the establishment of a multilateral system of payments

Making its resources available (with adequate safeguards) to members experiencingbalance of payments difficulties.

IMF activities

The IMF is generally, responsible for promoting the stability of the international monetaryand financial systemthe system of international payments and exchange rates amongnational currencies that enable trade and financial transactions to take place betweencountries. The Fund's job is to promote economic stability, help prevent crises, and helpresolve them when they do occur, thereby promoting growth and alleviating poverty. TheIMF works to promote global growth and economic stability and thereby prevent economiccrisis by encouraging countries to adopt sound economic policies. Its three main activitiessurveillance, technical assistance, and lendingare intended to meet these goals.

Surveillance: It consists of bilateral surveillance under which the IMF provides periodic

assessments of global and regional developments and prospects, published twice each year in



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the World Economic Outlook, and bilateral surveillance which is the regular dialogue andpolicy advice that the IMF offers to each of its members. Usually once a year IMF conductsin depth appraisals of each member countrys economic situation and policies, and advices ondesirable policy adjustments.

Technical assistance: Technical assistance and training are offered (free of cost) to helpmember countries strengthen their capacity to design and implement effective policies.Technical assistance is offered in several areas, including fiscal policy, monetary andexchange rate policies, banking and financial system supervision and regulation, andstatistics.

Lending: Financial assistance is available to give member countries the breathing room theyneed to correct balance of payments problems. A policy program supported by IMF financingis designed by the national authorities in close cooperation with the IMF, and continuedfinancial support is conditional on effective implementation of this program. In low-incomecountries, the IMF provides financial support through its concessional lending facilitiesthe

Poverty Reduction and Growth Facility (PRGF) and the Exogenous Shocks Facility (ESF)and through debt relief under the Heavily Indebted Poor Countries Initiative (HIPCI) and theMultilateral Debt Relief Initiative (MDRI). In most low-income countries, this support isunderpinned by Poverty Reduction Strategy Papers (PRSP). These papers are prepared bycountry authoritiesin consultation with civil society and external development partnerstodescribe a comprehensive economic, structural and social policy framework that is beingimplemented to promote growth and reduce poverty.

Through all these activities, the IMF contributes to international efforts to reduce povertyaround the globe, in collaboration with the World Bank and other organizations.

IMF governance and organization

The IMF is accountable to the governments of its member countries. At the apex of itsorganizational structure is its Board of Governors, which consists of one Governor from eachof the IMF's 185 member countries. All Governors meet once each year at the IMF-WorldBank Annual Meetings. Twenty-four of the Governors sit on the International Monetary andFinance Committee (IMFC) and meet twice each year. The day-to-day work of the IMF isconducted at its Washington DC headquarters by its 24-member Executive Board; this workis guided by the IMFC and supported by the IMF's professional staff. The Managing Directoris Head of IMF staff and Chairman of the Executive Board, and is assisted by three DeputyManaging Directors.

The IMF's resources are provided by its member countries, primarily through payment ofquotas, which broadly reflect each country's economic size. The total amount of quotas is themost important factor determining the IMF's lending capacity. The annual expenses ofrunning the Fund have been met mainly by the difference between interest receipts (onoutstanding loans) and interest payments (on quotas used to finance the loans "reserve

positions"), but the membership recently agreed to adopt a new income model with a range ofrevenue sources more suited to the diverse activities of the Fund.



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World Bank

The World Bank is an internationally supported bank that providesfinancial and technical assistance to developing countries fordevelopment programs (e.g. bridges, roads, schools, etc.) with the

stated goal of reducing poverty. The World Bank consists of twoorganisations-- International Bank for Reconstruction andDevelopment (IBRD) and the International DevelopmentAssociation (IDA). The World Bank was formally established onDecember 27, 1945, following the ratification of the BrettonWoods agreement. The concept was originally conceived in July 1944 at the United NationsMonetary and Financial Conference. Two years later, the Bank issued its first loan: $250million to France for post-war reconstruction, the main focus of the Bank's work in the early

post-World War II years. Over time, the "development" side of the Bank's work has assumeda larger share of its lending, although it is still involved in post-conflict reconstruction,together with reconstruction after natural disasters, response to humanitarian emergencies and

post-conflict rehabilitation needs affecting developing and transition economies. At present185 countries are the members of the World Bank.

World Bank Background and Objectives

World Bank background and objectives have expanded and evolved over the years. Theoriginal purpose and objectives as the International Bank for Reconstruction andDevelopment was a facilitator role in post-war reconstruction. Since 1944, this role hasexpanded and World Bank's objectives have grown to develop its current mandate to alleviateworldwide poverty. They work closely with their affiliate, the International DevelopmentAssociation.

With all this expansion and growth, World Bank's original focus has not changed. Today,reconstruction remains a top priority in such situations as:

Natural disasters

Needs affecting developing economies

Post conflict rehabilitation

Needs affecting a transitioning economy

Expanded Focus

In 2000, the World Bank background and objectives expanded with the adoption of theMillennium Development Goals. This effort cemented a historic, global partnership withspecific goals targeted to reduce not only poverty but also hunger, illiteracy and disease. In aneffort to accomplish these goals, the World Bank background and objectives have grown toinclude ventures in social sector lending. The purpose of these projects is to alleviate povertyand offer debt relief. Today World Bank considers the reduction of poverty as an overarchinggoal. Within this effort, they strive to alleviate poverty in developing countries withsustainable economic growth by encouraging the poor to take part in development. WorldBank hopes to accomplish this goal with incentives like strengthening governments andeducating government officials. Other objectives include:

Creating infrastructure



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Develop financial systems

Protect individual and property rights

Implement legal systems that encourage business

As an overall objective, World Bank strives to combat corruption to ensure that theprogress they make remains effective.

Improving Living Standards: Across the earth, World Bank objectives touch lives for thebetter. World Bank development projects engage people to improve living standards whilereducing poverty. In 2006, the World Bank contributed $23.6 billion for projectsworldwide. Current projects within developing countries like Bosnia, Herzegovina,Mexico and India number more than 1,800.

Evaluating Results

Its one thing to set goals and objectives, but without an effective way to measure the resultsit's difficult to know if they are effectively being met. In 1998, the World Bank adopted a

Comprehensive Development Framework. This framework directs the development ofpoverty-reduction strategies and is specifically designed to reach objectives. It outlines fourprinciples:

Development strategies should be comprehensive and shaped by a long-term vision.

Each country should devise and direct its own development agenda based on citizenparticipation.

Government donors, civil society, the private sector and other stakeholders should worktogether in partnership led by recipient countries to carry out development strategies.

Development performance should be evaluated on the basis of measurable results.

Working Together

Currently, the more than 63,000 donor-funded development projects supported worldwide bythe World Wide bank are individually governed by guidelines and procedures put in place toensure aid gets into the hands of the poor. As donors coordinate their activities andsynchronize procedures, that capacity within developing countries can be strengthened andimproved.

Since its inception in 1944, World Bank has proven to be a vital financial source around theworld.

Criticism

Considering the state of the world's economy and the disparity between rich and poor nations,the Bretton Woods institutions have come under much criticism. This criticism has come fromthe entire spectrum of political thought, ranging from the "aid is imperialism" school, which

believes that foreign aid has been used as a tool of coercion by the rich against the poorcountries, to the more conservative critics who believe that foreign aid gets in the way of themarket forces that will be the ultimate rectifier of poverty.

Societal Factors



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The IMF lacks the expertise to deal with social and environmental issues, and does notadequately accommodate the widely differing economic situations in each country. The lackof country-specific policies has hindered the stabilization of economies, and has rendered theIMF sometimes ineffective at the realization of its own goals. By aiming to focus only oncorrecting short-term balance-of-payment problems, the IMF has harmed the social fabric of

the countries they claimed to have helped.

Some recent examples are in Eastern Europe. In 1986, the IMF imposed a SAP in Yugoslaviawhich devalued the dinar. The resultant inflation is considered a contributing factor to thealready tense environment of ethnic tension and nationalism which has led to the currentconflict throughout the region. In Russia and other former Soviet bloc countries, the IMFimposed "economic shock therapy" measures, which involved the sudden introduction ofcapitalism into what were previous command economies. The result has been widespreadunemployment, and in the case of Poland going from 0% in 1990 to 15% in 1993. This hasalso led to the devaluation of pensions and large cuts in social services. In Russia, similarconditions are commonly attributed to the rise in popularity of ultra-nationalism, and the rise

of Vladimir Zhirinovsky.

The Environment

More than half of the World Bank's $24 billion annual lending supports projects inenvironmentally sensitive areas. According to the campaign, the record of lending in theseareas has been characterized by "needless environmental destruction and missed opportunitiesfor economically more efficient and environmentally more friendly alternatives." As anexample, between 1986 and 1993, 15% of World Bank loans were for projects (such as dams)which forcibly displaced 2 million people.

No Public Access

The campaign points out the problems of secrecy with which the two institutions operate. Inthe case of the World Bank, decisions that are made by the management are sometimes keptsecret from the Bank's Executive Directors. Those citizens of the country who will be mostaffected by the decisions are left out of the decision-making process, with the exception ofcommunity meetings with World Bank officials which the campaign deems as publicrelations-driven window dressing. It was discontent with this culture of secrecy that led to therecent resignation of Herman Daly, formerly the Senior Economist of the Bank's EnvironmentDepartment.

Not Addressing the Root Causes of Poverty

The World Bank has failed to address the structural problems of poverty, and these problemsare exacerbated by SAPs. The Bank is "throwing good money after bad" by creating povertysituations, which lead to the necessity of further loans to attack the symptoms of the disease.

Perpetuation of the Debt Crisis

Currently, $278 billion is owed to the World Bank and the IMF. The pressure of the debt, aswell as export-oriented SAPs and collapsing global prices for exports, have put manycountries on an accelerating treadmill, forcing them to sell their assets, mine their naturalresources and cut spending. Often this debt occurred because of loaning to corrupt regimes,such as that of Marcos in the Philippines, Mobutu in Zaire and Somoza in Nicaragua. While



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many commercial banks and creditor nations have agreed to some debt reduction andrescheduling, the IMF and World Bank refuse to reschedule or reduce debt payments.

Destructive Agricultural Practices

The emphasis on World Bank agricultural lending programs is the development of exportcrops. The result is farming practices which emphasize chemical-intensive methods which aredesigned to achieve high economic rates of return. This includes hybrid seeds requiringintensive watering, chemical fertilizer, and pesticide use. Environmental problems stemmingfrom these methods include soil degradation, limited and contaminated water supplies, loss ofcrop genetic diversity and deforestation. While the emphasis on export crops is designed toalleviate debt, food production for local consumption has fallen behind demand in somecountries.

According to the World Bank's own evaluation process, of 82 agricultural projects, 45% wereconsidered unsatisfactory. In a 1990 evaluation report, it was found that projects in the

Northeast of Brazil benefited 100,000 owner companies while excluding most of the targeted3 million low-income families from credit and agricultural services, as well as from thedesign of projects. An internal report on projects in India in 1991 reported that "project

performance and economic viability have been poor all along for most projects" for manyreasons, including cost and time overruns, declining construction and maintenance standards,and environmental degradation.

The Road Ahead

From the above discussion we can observe that though IMF and the World Bank hasundertaken several steps to eradicate poverty and promote equality across nations, the gap

between the rich and the poor has in fact increased and poverty still prevails, Sub SaharanAfrica being the poorest of all. Developing and undeveloped nations often criticise thesefinancial institution of being driven by developed nations. These countries want a loudervoice in the workings of these financial institutions. Developing countries want to seechanges in staffing, top management and voting system. The Developing countries are poorlyrepresented in these institutions. The votes are weighted, in line with member nations'financial contributions, which in turn are loosely related to the size of their economies andcertainly not their population. The result is that the US has 17% of the vote in the IMF,

whereas India, with more than three times the population has less than a third. A group ofdeveloping countries (called G 24) recently met at Dubai to discuss about the above saidmatter ahead of the annual meetings of these financial institutions. In order to achieve itsobjectives IMF and the World Bank need to be reformed so that all the nations are equallyrepresented and a greater degree of transparency, democratization, accessibility andaccountability is required. The nation states along with the civil society can decide upon theway forward of these institutions so that the ultimate objective of poverty eradication andequality is actually achieved.



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Environmental issues

Global Environmental Governance refers to the sum of organizations, policy instruments,financing mechanisms, rules, procedures and norms that regulate global environmental

protection. Within the context of the evolution of global environmental politics and policy, theend goal of global environmental governance is to improve the state of the environment andto eventually lead to the broader goal of sustainable development. In a condition of overshoot,in which we are using environmental resources faster than they can be renewed, sustainabledevelopment also strives to balance economic and environmental needs.

Improving global environmental governance has been an issue of dynamic debate inacademic and policy-making circles ever since environmental issues entered the international

agenda in the 1970s. Since then, both environmental threats and international responses tothem have increased in their number and complexity. The key challenge of globalenvironmental governance has, however, remained the same: how to design an institutionalframework (system) that would best protect the global environment.

The major institutional decision coming out of the United Nations Conference on the HumanEnvironment (Stockholm, 1972) was the establishment of the United Nations EnvironmentProgramme (UNEP), which was created to play the lead role in GEG by coordinatingenvironmental activities within the UN agencies and acting as a catalyst for new initiatives.Since then, the world has seen hectic activity in global environmental policy (and, morerecently, in sustainable development policy) and a host of treaties, organizations and

mechanisms have emerged. The two important international treaties are the Montreal Protocolon Substances that Deplete the Ozone Layer and the Kyoto Protocol to the United NationsFramework on Climate Change. The first is the most successful example ever of internationalenvironmental cooperation; it led to a substantial decrease in the emission ofchlorofluorocarbons that harm the ozone layer. This is largely because the treaty was self-enforcing, providing a mixture of incentives and punishments. The ready availability ofsubstitutes for chlorofluorocarbons also helped the treaty.

Kyoto Protocol

The Kyoto protocol is one of the recent global environmental governance initatives,

Countries that ratify the Kyoto Protocol commit to reducing their emissions of carbon dioxideand five other greenhouse gases (GHG), or engaging in emissions trading if they maintain orincrease emissions of these green house gases. Carbon credits used in emission trading aregenerated by enterprises in the developing world that shift to cleaner technologies andthereby save on energy consumption, consequently reducing their greenhouse gas emissions.For each tonne of carbon dioxide (the major GHG) emission avoided, the entity can get acarbon emission certificate, which they can sell either immediately or through a futuresmarket, just like any other commodity.



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The certificates are sold to entities in rich countries, like power utilities, which have emissionreduction targets to achieve and find it cheaper to buy 'offsetting' certificates rather than do acleanup in their own backyard. This trade is carried out under a UN-mandated internationalconvention on climate change to help rich countries reduce their emissions. Countries arerequired to reduce their emissions 5.2 % below 1990 baseline over the 2008 to 2012 period .

The Kyoto Protocol now covers 181 countries globally but only 60% of countries in terms ofglobal greenhouse gas emissions. The United States of America is the only developed countrythat has not joined the Kyoto Protocol.

Economic Impact of the Kyoto Protocol

The Kyoto protocol will certainly leave an imprint on the economies of the signatorycountries, as well as on the global economy in general. Economists perceive that this impactwill be crystallized in the financial burdens that the countries will shoulder in accordance

with their commitments to the protocol. The protocol will similarly affect macroeconomicvariables such as inflation, unemployment and consumption and saving trends. Internationalreactions towards the protocol varied.

The problem of global warming is a pressing one that should be more firmly addressed.Developing countries should not consider themselves in isolation from the commitments ofthe protocol. Rather, they should prepare themselves to adapt to the commitments andeconomic impact of the protocol.

Developing countries have to make full use of the privileges provided by the protocol.According to the protocol, developed countries have to transfer environmentally friendly

technology to developing ones. The protocol provides developing countries with flexiblemechanisms such as the clean development mechanism and the emission trading system.

On the other hand, the commitment of developed countries to reduce emissions will increaseoil prices. This will, in turn, negatively affect petroleum-producing countries, which have hadto accept the fact that there is a shift in the long term towards the use of technology thatconsumes less energy. This will eventually lead to a regress in the importance of oil, and thatwould affect the revenues of these countries, which underscores the importance ofdiversification of resources.

The expected inflation that developed countries will suffer from in the short term would helpincrease the competitiveness of the products of developing countries. The economic impact ofthe Kyoto protocol will include developed as well as developing countries, which necessitatescoordination between them to make the ultimate use of the protocol.



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Conclusion

Global governance system comprises of national governments, international organizations,nongovernmental organizations and transnational corporations. The mass media have createda global theatre that is also inescapably a part of this system.

Global Governance is extensive and multi layered because it can embrace pretty well anychallenge facing the global community. The people across the globe are becominginterconnected and mutually concerned. Be it on the issue of climate change, human rights,environmental degradation, health of national economies or operation of financial markets.This is the case of What affects one affects all.

A healthy form of global governance is that it must be implemented by popular consent andyet consented and implemented by nation states. We need to understand that today ideas andvalues are as important tools as economic might in effort to guarantee our security.

However, the world institutions of today are slow to react and bureaucratic. They are in needof radical reforms if they are to work effectively and be relevant to fight the present daychallenges. The leaders of the governments of the world are relentlessly pursing their nationalagendas to the detriment of planet.

Clearly present system of global governance is ill-equipped to handle the challenges of global

agenda. National interest dominates to the detriment of global interests. Also the existinginstitutions tend to be compartmentalized with separate organizations for health, security,trade and environmental issues. Hence they are ill equipped to address the interrelated issuesof 21st century.

We need government and institutions which are transparent, democratic, accountable andready to work with NGOs and civil society. The need for international cooperation has grownstronger. Solution to current security concerns lie in policies that strengthen civilian ratherthan military institutions, policies that are preventive in nature and which address the rootcauses of insecurity; and policies that draw insights from different disciplines transcendinggeographical boundaries. And this is UNs role.

On the positive side, some of the successful examples of global governance can be listed asnewly formed International Criminal Court, Kyoto Protocol and MDGs where thegovernments of various nations, NGOs and civil society have worked together certain code ofconduct which can be used to fight some of the challenges including prosecution for crimeagainst humanity, prevention of HIV AIDS, reducing poverty, etc.

Non proliferation treaty has made major contributions to maintain world peace and economicwell being. NPT has been remarkably successful in achieving its goals with 190 countriesadhering to the treaty. It has become indispensable tool in preventing the spread of nuclear

weapons.



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The role of UN and global governance is to promote protection of human rights andenvironment, peace and disarmament, rule of law and development of the poorest regions ofthe world. If efforts can be made towards achieving these goals by national leaders andinternational institutions like UN, then we stand a fair chance of solving the major problemsof 21st century.

CSR-Global Governance

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