The rise of the big idea

The COVID-19 pandemic has further unveiled the decline of our international institutions. But it also reminds us that our biggest problems are global in nature. Whether it’s pandemics, climate change, terrorism or international trade, all are global issues that we can only address or mitigate collectively.

At times, in the past few months, it’s been difficult not to believe the doomsayers. Life in 2020 seemed to descend into one bad news story after another, be it swarms of locusts plaguing parts of East Africa, the Arabian Peninsula and South Asia, the economic fallout of the pandemic, Brexit and its effects on the European Union, migration and even the day-to-day handling of the pandemic, which saw a hodgepodge of jurisdictions play hardball in a race to obtain personal protective equipment to the detriment of some health services and poorer countries.

Against this backdrop, the fate of a single UN agency – the World Health Organization (WHO) – seems emblematic of the paucity of international cooperation, as well as strikingly apt given the circumstances. In July 2020, the Trump administration began formal moves to pull out of the WHO, branding it pro-Chinese, while leaders in China appeared to show distrust of the organization, initially resisting the agency’s calls for an independent inquiry into the origins of COVID-19.

By promoting the rule of law, humanitarianism and fair terms, multilateral organizations helped produce unprecedented advances in human well-being during the mid-20th century, but the 21st century has shaped up to be a very different era. For some, COVID-19 has highlighted the chaotic end of multilateralism, combined with the vacuum of global governance and the rise of various forms of populist nationalism, all of which have made it more difficult to deal with the pandemic as well as other pressing problems. More positively, however, the international cooperation required to tackle the disease has helped establish groundwork for – if not a new, at least a reformed – set of rules and systems.

In this respect, the pandemic earthquake and its economic aftershocks may provide a unique opportunity to revamp the current dysfunctional system into one that favours cooperation over competition.

We all know the short-term priorities: the COVID-19 vaccine rollout and responses to the pandemic’s economic and societal effects. But international cooperation on those fronts could help establish the basis for coordinated efforts over the longer term to tackle long-standing and deep-rooted challenges such as climate change and inequality.

The international community ranks among the four key stakeholders (the others being government, business and civil society) that can enhance the well-being of people and the planet. The pandemic has laid bare some serious fault lines, underlining the need to strengthen the mandates of international institutions. As information, technology, money, people and diseases flow around the world, and climate change affects everyone everywhere, the need for coordination on a global level has increased disproportionally.

Representative international organizations such as the United Nations, the European Court of Justice and the WTO need to step up. The pandemic’s fallout and continuing short and long-term repercussions underline how regulators are more essential than ever. Unfortunately, however, these supranational institutions have something of a reputation problem, striking most citizens as remote and impersonal. Combine this with distrust from some quarters and in others frustration at the often plodding pace with which international organizations typically seem to respond.

To combat these sentiments, they must ensure that their decision-making processes are transparent and include all of their members (usually sovereign governments). They also need to better understand global trends. Afterall, they have a mandate to oversee them and in recent years, all too often, they have failed. For instance, it is striking that no international organization has established a credible metric for the global digital economy, despite its economic and social importance.

These problems reflect a number of issues, not least of which are the circumstances in which the current institutional framework was designed. Much has changed since the post-Second World War period when many key institutions were founded. In the case of the UN, it was set up to evolve, but in many ways it hasn’t. Furthermore, most international organizations are beholden to just one kind of stakeholder – national governments – thereby largely ignoring the increasingly important voices of the business community, civil society and others.

The good news is that these problems can be fixed, and even more hearteningly, there is already evidence of change. For example, the Organisation for Economic Co-operation and Development (OECD) wants to create a uniform definition and measurement system for digital trade. The Universal Postal Union is moving to realign previously imbalanced international postal rates. The Paris climate change accord remains a shining light of the multistakeholder approach borne out of groundwork initially undertaken by the private sector and civil society.

These quite different examples show potential types of model. Reforming the UN is a difficult – oft talked about – task, and while it should be on the agenda, this can’t be the only option. In the absence of single nation leadership – particularly the US – in recent years, what some called “minilateralism” has emerged in which the onus falls on middling powers to fill the void. A good example is the Trans-Pacific Partnership, which has continued – and was renegotiated as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – even after the US pulled out. Another example would be the US states that have continued their pursuit of green policy even while the federal administration has stalled and, in some areas, reversed years of progress.

While we can expect a more internationally engaged United States to emerge during a Biden presidency, gone are the days when the country led the charge in many areas. Greater engagement will certainly help – if the US as the UN’s long-time heavyweight sponsor supports the institution’s reform it will add impetus – but it won’t be the panacea. Nor should it be; a complicated world needs a range of solutions involving many stakeholders.

The pandemic underlined shortcomings in the responses of many national governments, but it also shone a light on the dynamism and proactive leadership of local and city leaders. With this in mind, when thinking about international institutions, we need to remember a sometimes ignored concept: that of subsidiarity. Subsidiarity means that decisions should be taken at the most granular level possible, closest to where it really matters. Local stakeholders should be able to decide for themselves, except when it is not feasible or effective. The response should not be to create a global governance hegemony but to coordinate actions among policy-makers and regulators.

On 21 January, the Forum launched a set of seven principles designed to help global leaders reexamine the institutions and mechanisms that manage and coordinate international cooperation. These were drawn up by the Global Action Group, comprising more than 36 leading figures from around the world, with representatives from governments, companies, consultancies, think tanks and academia. The principles cover strengthening global cooperation, advancing peace and security, re-globalizing equitably, promoting gender equality, rebuilding sustainably, deepening public-private partnerships, and increasing global resilience.

This initiative represents the most recent step in a series of Forum actions since the Annual Meeting 2020. In February 2020, the Forum launched the Covid Action Platform, which now boasts more than 1,800 members from business, government and civil society that together have embarked on more than 40 projects. Created with the support of the WHO, it has been addressing the pandemic through collective action, protecting livelihoods and ensuring business continuity, and strengthening supply chains for medical equipment and funding vaccine development. Associated with this is the support that the Forum is giving to entrepreneurs in their work aimed at combatting the pandemic.

A month later came the Regional and Industry Action Groups initiative to scale-up existing solutions and build consensus. In June, the Great Reset initiative began, with the aim of helping stakeholders cooperate, especially in response to the COVID-19 crisis. And in September 2020, more than 30 chief executives announced their support for the EU’s Green New Deal.

Business leaders are agreed that the Green Deal is an essential tool for Europe’s COVID-19 economic recovery in a fair, sustainable and resilient manner, and the private sector has a very real interest in creating sustainable investment opportunities. To date, however, the links between trade and climate change have been largely ignored, despite the fact that trade is recognized as contributing approximately 25% of all greenhouse gas emissions.

To address these challenges, the Forum’s CEO Action Group for the European Green Deal has brought senior business leaders together to support the Green Deal through tangible action, aimed at reducing carbon footprints, embracing new production and placing the regional bloc and its businesses on the road to climate neutrality by 2050.

What these initiatives perhaps highlight is the shift to supporting big ideas rather than big institutions. The latter clearly have an important – often undervalued – role to play. For all the politicking, it is hard to imagine the response to the pandemic without the WHO’s involvement. Similarly, while it’s easy to criticize the UN as a slow, bureaucratic, under-representative entity beset with competing interests, it has helped to maintain peace in the past 75 years.

In an era, however, where swift action is required to tackle pressing global problems like climate change, do we have time to wait for the reform of large institutions, and importantly, do we want large institutions to do all the leading? Instead, perhaps the preferred option should be forming groups of the right stakeholders to rally around big ideas.

The need for dynamic international organizations to address global challenges – from the pandemic to climate change and beyond – stood front and centre during the final day of The Davos Agenda, which focused on advancing global and regional cooperation.

“We are living on the same planet,” said Taro Kono, Minister in charge of Administrative Reform and Regulatory Reform at Cabinet Office of Japan. “It is time for us to get the United Nations, the EU, G20, G7, all the global mechanisms we have, to solve these issues.”

Many of these institutions are in dire need of reform, or at the very least revitalization. National governments and other stakeholders also need to encourage them to play bigger roles.

“The operating system of international trade is quite old,” said Beatrice Weder di Mauro, President at Centre for Economic Policy Research (CEPR). “If it was a computer, it would be like 50 years old. We definitely would want to upgrade the system.”

A recently released interim report by a WHO panel on the global response to the pandemic spreads the blame around, pointing fingers at just about everyone, including world leaders. But it hardly spares the WHO. When the final version is published, it could provide a road map to reform of the body.

The WHO’s governance structures need to be strengthened, argued Kang Kyung-Wha, Minister of Foreign Affairs of the Republic of Korea. “The reporting obligations of member states need to be strengthened and the WHO more empowered to demand information from member states if we are to avoid [a repeat of] the uncertainty and distrust that hampered the global response to COVID-19 in the initial months.”

The World Trade Organization (WTO) has a few remedial steps to take before it can move forward. It must first choose a new director-general. Member nations have been unable to reach a consensus on one of the two remaining candidates for the position vacated in August. It must also resuscitate its dispute settlement system, hamstrung by the Trump Administration’s refusal to cooperate with efforts to appoint new members to its Appellate Body.

There’s no lack of work to be done after that. “We want to see the rules modernized, and things like digital trade, which wasn't part of core negotiations when the WTO was set up, clearly, be brought in,” said Damien O'Connor, Minister of Trade and Export Growth of New Zealand. Climate change looms as another key 21st century issue.

Meanwhile, a handful of multistakeholder partnerships are filling in a few critical gaps. Rodrigo Yañez, Vice-Minister of Trade of Chile, outlined the Digital Economy Partnership Agreement (DEPA) that his country has reached with Singapore and New Zealand to work together on digital trade and promote interoperability. Canada has shown interest in joining, he added.

“A very positive step forward,” Al Kelly Jr, Chief Executive Officer and Chairman at Visa, called it. “They're accepting each other's standards, and they're accepting, in fact, industry standards.”

Covax is an initiative led by a triumvirate: Gavi (the Vaccine Alliance), the Coalition for Epidemic Preparedness Innovations (CEPI) and the WHO. Its mission to accelerate the development and manufacture of COVID-19 vaccines, and to guarantee their fair and equitable access. Gavi and CEPI were both launched in Davos at the Annual Meeting in 2000 and 2017, respectively.

“The Covax facility has brought together governments, international organizations, researchers and experts, private charities and private companies in search of solutions that are beneficial to all,” said Kang. “This should also be, and to a certain extent already is, the approach in tackling climate change, the SEGs [Sustainable Development Goals] and other global challenges.”

A collection of initiatives relevant to the day has been created for those with access to the Forum’s online tool, TopLink.