Xu Haoliang: Remarks on 2nd High Level Policy Forum on Global Governance

Oct 22, 2014

By Mr. Xu Haoliang, UN Assistant Secretary-General, RBAP Director, UNDP

Beijing

Your Excellency Mr. Zeng Peiyan, Chairman of CCIEE,

Distinguished guests, Ladies and Gentlemen,

Let me first thank CCIEE for the invitation to speak at this second Global Governance Forum.  It is very timely that we have convened in Beijing today to discuss economic aspects of global governance, especially with a focus on sustainable financing. The attention given to development finance in the on-going discussions on the global development agenda reflects the changing realities of global development. The current discussions on the post-2015 agenda, in particular the inter-governmental process, have highlighted a number of issues that will be crucial for the international community to shape and agree on both the new global development agenda and a new global economic governance. This includes defining how the concept of “Common but Differentiated Responsibilities” (CBDR) works in practice alongside the concept of “universality” in pursuing development goals and efforts. This also includes clarifying the relationship between the ODA commitment of developed countries and alternative sources of financing—domestic and international, public, private and blended, and ensure that the sources of financing, including the very significant global savings, move towards sustainable development. Finance is required for sustainable development, yet this move is not happening.

The key to be successful is creating the right global structure and rules to channeling these savings towards sustainable development – in other words, the right “means of implementation” as it is known in UN circles.  Means of implementation has been recognized as the crux of discussions for the Sustainable Development Goals and the Post-2015 Development Agenda. It includes finance, but also non-financial policies including trade (e.g. duty-free access), rules and practice around sharing of technology, responsible business guidelines, and the capacity building and movement of people.  This inclusion and the approach followed by different countries should be in an important point of the discussions at the Forum and they will directly impact on global economic governance.

Ladies and Gentlemen,

It is also particularly timely that this Forum will discuss what role China, and more broadly Asia can play to support global development, through its own growth and also by actively helping others. As the most dynamic region in the world with several emerging countries, the Asia-Pacific region has huge potential to positively contribute to governance at the global level. However, and while in the last two decades there have been several new Asian institutions created to promote integration, there is still much work to be done in order to truly progress in region-wide integration and maximize the synergy among the countries in the region. Growth is still largely dependent on demand from outside, and the outcome of bilateral FTAs among Asian countries is unclear. 

But there are some changes taking place. Mechanisms such as a potential trilateral FTA between China, Japan and South Korea; the Greater Mekong Sub-region Economic Cooperation Program; and the Greater Tumen Initiative could enhance connectivity, competitiveness and a sense of community of the respective member states in the region. Others such as the ASEAN+3 Macroeconomic Research Office (AMRO) and the Chiang Mai Initiative Multilateralism (CMIM) could help the region avoid and respond better to any future crises. 

Stronger regional integration can make a difference to global governance. The global financial crisis in 2008 created the space for the G20 grouping to take more responsibility for governance from the G7, and the G20 includes five countries from Asia.  As part of the G20, these countries could make a real difference if they were more integrated.  Indeed, China’s hosting of this year’s APEC Summit is a testament to the country’s role as a committed partner in both the regional and global trade and investment dialogue.

Global economic governance is also closely linked to the institutional framework and its functioning. Today, global financial governance is managed by the International Monetary Fund, the Bank for International Settlements and the Financial Stability Board, on which developing countries lack an adequate representation. At the same time, in this context, new institutions are being created and it will be important for us to discuss how the international community should relate to the New Development Bank and Asia Infrastructure Investment Bank, and how these can be shaped to simultaneously support regional growth and global growth.

Through its significant and increasing assistance, trade and investments, China is playing an important role in the development of other countries. For example and as highlighted in the recently released White Paper on Foreign Aid, projects to various African countries cover a wide array of fields including agriculture, education, transportation, energy, communications, and health. However, the perceptions about China’s aid and China’s overall role in the world can be very different. For China’s to play a greater role and be better understood, it would be of interest to discuss if there is more that can be done, for example by leveraging opportunities such as the China Africa Forum for Cooperation (FOCAC).

Ladies and Gentlemen,

The excellent papers that have been prepared in advance of the forum includes a number of innovative, even perhaps provocative– ideas for how countries, including China, could improve global economic governance. Given the urgent need for new approaches to global governance it is important to consider all options and I hope that those ideas that will be presented in the sessions will contribute to active discussions and will inform the recommendations that the Forum will formulate for the attention of policy-makers in China and around the world.

I look forward to an open, challenging and insightful day with you all, here in Beijing. Thank you.

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