plenary world at a crossroads tpsa

Polish Confederation of Private Employers Lewiatan

6 Klonowa Street, 00-591 Warsaw, Poland, phone (+48 22) 845 95 50, fax (+48 22) 845 95 51, e-mail: [email protected], internet: www.prywatni.pl

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European Forum for New Ideas

OPENING REPORT

Plenary session: World at a Crossroads

SESION DATE: 30 September 2011, 16:00 – 18:00

AUTHOR OF THE REPORT: Maciej Kuźmicz

MAIN TOPICS

We believe the world is driven by megatrends today as opposed to geography until

early 20th century. Hence, we ask the panellists to map contemporary global

challenges with four new poles that set a specific direction for the world. We ask

each panellist to characterise one of the poles, assess the intensity of the selected

phenomenon and place it in the political and economic context. Questions: Why is

the phenomenon important and how does it change the socio-economic context and

the vector of world? Which development has had the biggest impact and which is

going to change the world’s direction at a crossroads? Where is the centre of the

world today and where are its peripheries?

The expected outcome of the debate should be recommendations for countries and

businesses. Given that the world and Europe are at a crossroads today, what

measures should be adopted by both businesses and public institutions? What

recommendations can be formulated? What business and policy decisions can be

effective at the crossroads? What are the limitations on specific recommendations?

Three recommendations for Europe and three developmental inspirations: How

can Europe find its place in the new world?



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DETAILED DESCRIPTION OF THE SUBJECT:

1. World at a Crossroads – these four words designate a state which can be

directly defined as change. The concept of crossroads, a frontier reached by

Europe and the world, serves as a point of departure for the panel discussion.

The concept entails a state of uncertainty and a time for choices. Ever since

the fall of the Berlin Wall and the peaceful political transition in Poland and

other Central and Eastern European countries in 1989, Europe has

significantly accelerated its integration but history has not come to its end

contrary to Fukuyama’s suggestions. The political and economic order has

begun to evolve as the command-and-control economies of Eastern Europe

proved to be a complete failure. In contrast, the Chinese experiments with

economic liberalisation pioneered by Deng Xiaoping’s reforms in 1978 turned

out successful. The order of economic activity, the ‘marching direction’ for the

world appeared set: towards market governance. I don't care if it's a white cat

or a black cat. It's a good cat as long as it catches mice, the Chinese leader

stated and pragmatically put the most populous country in the world on a

market-oriented development path following the example of the Asian Tigers

such as South Korea. Further, the economic reforms initiated by Prime

Minister P.V. Narasimha Rao and Finance Minister Manmohan Singha in the

early 1990s in India, the gradual removal of business licensing and moving

towards the laissez-faire were only to confirm the trend.

2. Meanwhile, the ‘development pattern’ became stronger than ever, dominant

in fact, in development policies of fast-growing countries, which made the

impression of the world having set its course. Institutions established at

Bretton Woods, i.e. the World Bank and the International Monetary Fund have

promoted the market approach and left no doubt that trade liberalisation,

opening up of financial markets, free flow of information and

deregulation/privatisation were to inspire growth. The Washington Consensus

resulted from a unique view of the world: the world that existed since the end

of World War II with Europe’s role defined by the strategic Euro-Atlantic

partnership with the U.S. offering its development opportunities. The



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crossroads appears when you begin to explore other socio-economic growth

opportunities that are not linked to Europe or U.S.: China, India, Brazil (strong

protectionism and market but also commitment to bridging the development

gap in society).

Uncertainties are visible not only in the competition space between countries

but also between businesses and their customers. Is the consumption of today

a continuation of the extensive model or perhaps a totally different type of

behaviour? Is the crisis, particularly in the U.S., going to strengthen low-

consumption, saving and self-denial behaviours? How should one proceed as

not to ‘consume up’ all the resources which are critical for development?

3. Global order has changed from bipolar (US-Soviet Union) through unipolar

(US as the hegemon state) to multipolar and multilateral. Countries like India,

China or Brazil pursue pro-active foreign economic policies, e.g. in Africa,

trying to shift the decision-making centre away from Washington, London,

Brussels or Moscow closer to Beijing, or New Delhi. The new world order is

being established and it seems to be a networked one. The level of

interdependency between countries is growing and the vision of the

‘networked world’ is turning into reality. There is a growing importance of

informal organisations such as G8 or G20 leaving formalised organisations

weaker e.g. UN. This means that the multipolar order may become

established in approximately 2020 with a group of strongly interdependent

countries playing the key role. This network of relations will spawn the new

order and Europe may play a major role in making it happen.

4. For Europe, which has been accustomed to Eurocentrism for centuries,

this situation comes as a surprise and source of confusion. Europe is in a

state of heart fibrillation, it is looking for its competitive advantage and a way

to respond to the new challenge. This is one of the reasons behind the need to

reflect on ‘the world at a crossroads’. However, should the discussion be

solely confined to the geographic shift and some countries having a higher

GDP growth than others? Do GDP and population size define the economic



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growth vectors? We share the view that today centres of power and influence

are shaped not by military prowess or geographic location. Culture and

technology, not just politics, provide a new dimension for assessing the

growth prospects and vectors of the world today. Hence, we suggest the

world should be thought of as an essentially flexible map which is subject to

attracting forces from four POLES that form its shape. The four poles are:

A) ALTERNATIVE POLITICAL MODELS. Europe has its political system

dilemmas and this is yet another reason for considering an alternative

global order and development pattern. What model should Europe adopt?

How to deepen integration between countries and come closer to the new

solution and what should the solution be? If the not the democracy in the

non-Western world, then what? Is it possible to enjoy effective growth

which contributes to global development in a system which does not allow

the majority to make decisions? Which political systems of the emerging

economies, i.e. China (centralised government) and India (decentralised

decision-making and federation), can inspire growth? Africa – is the neo-

colonialism returning as a result of the aggressive expansion of BRIC?

Does Europe have anything intellectual to offer in this area? How should it

enhance its story to become a competitive POLE that other want to

imitate?

B) SECURITY – CONFLICT. Global processes are not removing inequalities.

On the contrary, they are amplified in many less institutionally mature

countries. This raises the question about sources of conflict in the coming

years. Clearly, many will have an ethnic, religious or cultural background

(just to mention such growing conflicts within the EU, e.g. between Poland

and Lithuania, Czech Republic and Hungary etc.). The conflict of

generations over wealth is another threat (dwindling jobs in Europe,

prospects of extended retirement age and its potential impact on limited

career opportunities for young people). Could this lead to a global war

between generations? Will disputes be limited to the competition for

resources between countries or between generations? One of the most



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important sources of conflict may come from the clash of religious values.

Can these values be reconciled in order to improve global security?

C) COMMUNICATION AND TECHNOLOGY. The growing role of

communication in society may be one of the issues that will be critical for

the pace of growth and change in activity. The question why there are is so

much self-interest in the era of globalisation can be partly answered while

analysing the change in the communication world. In fact, the answer can

be trivial: self-interest has always existed but they could not be juxtaposed

without adequate communication technology. Let us just consider the

number of subscribers of digital telephony: there were 60 million in 1996 as

opposed to more than 5.3 billion mobile subscribers globally (some 77

percent of the population); many of them have two or three phones. How is

the open communication altering the world, how is it redefining the

borders? How does it affect social behaviours, how does it define groups,

attitudes and hypes? What conclusions for politics and democracy can be

drawn from the Arab Spring of Nations and the shift of civil society to the

Internet? What are the new competences that will be required of public

institutions and politicians? Is Europe a trend follower, a trend setter or a

passive observer? Does it have a concept of how it can take the lead in

this area?

Europe is fighting for leadership in several domains, e.g. energy. Is the

world in 50 years going to be the world of environmentally-friendly houses

and wind mills as German Chancellor Angela Merkel wants it to be? Can

such a European proposition be attractive? Does it stand a chance of

becoming a role model for the rest of the world or has Europe gone too far

while putting its economy at risk?

D) DEMOGRAPHICS. The altering age structure and the demographic

potential provide another point of gravity that will affect development. What

should the role of Europe be in the world of today in the context of a radical

shift in the demographic structure? This is not just the issue of a small



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number of young people in Europe but mainly the issue of creativity –

young people have more appetite for risk and they are ready to pave the

way, develop and search for out-of-the-box solutions. While the

competitive advantage of most of the highly developed countries rests on

the creative sector how is Europe going to ensure the inflow of young

people? Should it continue with its current migration policies on a new map

of the world? How should it take advantage of the fact that people want to

migrate to Europe? Should we create a strong magnet to attract

immigrants?

The discussion of this panel is designed as an attempt to review the

crossroads dilemmas and map out challenges for the Continent. It will largely

refer to panellists’ personal views and beliefs.



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NUMBERS, STATISTICS, CHARTS AND GRAPHIC

The World Map: source CIA Factbook

Countries by real GDP growth rate in 2010

Countries by population

Countries by life expectancy (men)



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Countries by population density

Countries by birth rate



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Major religions of the world (moral syncretism)

North vs. South

Population of Europe vs. Rest of the World (Eurostat)



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Energy consumption

New citizens (Number/percentage of migrants receiving new citizenship)



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Share in world imports



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High technology exports as a percentage of total exports

GDP in constant prices



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Additional Inspiration:

1. The UE in the world. A statistical portrait. Eurostat 2010

2. World Economic Forum, The World Competitiveness Index 2010-2011

plenary world at a crossroads tpsa

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