Notes for remarks delivered by former OECD Secretary General Donald Johnston at the Warwick Economics Summit 2020, Warwick University, Coventry, U.K.

Donald J. Johnston

 

Three years ago, I wrote a book titled Missing the Tide: Global Governments in Retreat.

David Ignatius, a well-known journalist with the Washington Post wrote a blurb for the cover which began “Read it and weep.” Why did he write that? I will tell you.

Had I written that book in the mid-1990s when you students were children and some perhaps not yet born, part of the narrative of the book which I touch upon today would have been quite different. I explain why in a moment.

It would have spoken to a rapidly changing world of great promise for your generation in almost every area of human endeavor.

Over the years, I have listened to multiple speeches telling graduating students and others of what a wondrous, exciting peaceful and prosperous world they look forward to. I have been guilty of some such speeches myself. That is not my message today.

My friends John and Marcy McCall MacBain, created the McCall McBain Foundation (MMF), which I chaired for many years, and being extraordinary philanthropists, they have recently committed over 100 million dollars to the Rhodes Trust and 200 million for McCall MacBain graduate scholarships at McGill University. The scholarships focus on leadership potential, which I will return to in conclusion.

John, who is also the founder and first chair of the European Climate Foundation (ECF), said to me on my 80^th birthday, “Donald…as things are going perhaps it is not bad to be in your 80s.”

I hope not, but I do worry about the future more than I ever have as an adult.

The title “Missing the Tide,” which I took from your local Bard, would have been quite different in 1995. It comes from Shakespeare’s Julius Caesar in which, as many of you here will recall, Brutus says:

“There is a tide in the affairs of men, which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat,
and we must take the current when it serves, or lose our ventures.”

(William Shakespeare, Julius Caesar, Act 4, scene 3, 218–24)

When I arrived at the OECD as Secretary General in 1996, we seemed to be at the flood…On such a full sea we were then afloat and ready to take that current.

Sadly, my generation did not take the current and it now falls to your generation to attempt to recover lost opportunities, if it is not too late.

I elaborate.

There were a number of major challenges 25 years ago, but it seemed that leaders could turn them into wonderful opportunities for rapid and sustainable economic and social progress. The exciting prospect of global free trade and investment under the newly established World Trade Organization (WTO) was seen as bringing economic growth and rising prosperity everywhere, but especially to the developing world. Trade not aid became the new mantra.

Those challenges and opportunities included geopolitical restructuring in the wake of the fall of the Berlin Wall and the evolution of the European Union; the expansion of the proven Marshall Plan formula to other regions fractured by division and conflict; a long-overdue international commitment to protecting the biosphere and its natural capital; and improvements to the stunning success of healthy capitalism through good governance and appropriate regulatory frameworks across the globe, accompanied by the gradual spread of democracy and transparent, honest government for the benefit of billions of people.

Yes, we saw the biosphere deteriorating at a rapid pace, especially through global warming and climate change, but we knew how to fix it and repeatedly said so. In July 1997, we faced the Asian financial crisis and with the increasing global interdependence of financial markets we feared a global crisis through contagion. But the fear was short lived, and it was thought that the successful containment and resolution of that crisis augured well for the future.

We were witnessing improved and massive transportation networks complemented by the awesome power of information and communication technologies, together making Marshall McLuhan’s global village concept a reality. We witnessed the creation of the UN Millennium Development Goals, which, when achieved by 2015, together with liberalized trade and investment would lift billions out of poverty and bring them closer to the standards of living of developed countries.

We also saw the cancer of corruption continuing to limit the growth of emerging market economies and diverting precious foreign aid into the pockets of dishonest public officials in both the developing and developed world. But we were well on our way to securing an international agreement through a binding convention (often referred to as the OECD Anti-Bribery Convention) to cure that disease.

With the end of the Cold War we foresaw new and promising relations with Russia and China, and the Sword of Damocles of massive international armed conflict seemed destined for the dustbin of history.

Hostilities in the Balkans had ceased with the Dayton Accords, and the IRA had laid down its weapons in Northern Ireland. Terrorism seemed confined to isolated incidents from traditional sources.

Perhaps even more importantly, we saw what we thought was the emergence of new democratic governments in Russia itself, as well as in other former members of the Soviet Union and in countries of Europe that had lived under the Soviet yoke since the end of the Second World War. The democratic revolution seemed planet-wide with countries in South America, Asia, and Africa providing many good examples.

The European Union, and within it the Eurozone, seemed well on the road to creating the largest unified economic market in history, with many countries enjoying the euro as a common currency managed by the European Central Bank. (Even with Brexit, the European market will be the world’s largest which seems to irritate President Trump who would like to see it disappear as a competitor to the United States).

The world’s largest economy, the United States, with the Clinton Administration, had brought its public finances under control and was moving into primary surpluses, once again showing the world the benefits of good capitalism at work.

These ambitious opportunities seemed within reach in the mid- to late-1990s and were widely shared across the planet.

Sadly, it was to be short-lived. How, in less than two decades, did our story turn from one of bright hope to one of pessimism and despair?

That is the question I put to you today because you represent the global leadership of tomorrow. My generation has failed and failed badly. Think of the following issues measured against the prevailing optimism of that period.

The environment continues to deteriorate. The outcome of the December 2015 Paris conference, while received with enthusiasm in many quarters, did not produce enforceable solutions, only aspirational hopes that had virtually no possibility of arresting greenhouse gas emissions and then putting them into decline. And we are now picking through the debris of COP 25 at Madrid which can only be considered a dismal failure with key issues being deferred to the next COP gathering in 2020.

I will add to this comment in a moment because climate change may well be the most serious challenge your generation will face in protecting a satisfactory social and economic evolution of human civilization on planet earth.

The potential economic and social development of the Arab world and the promise of the Arab Spring have been subsumed by the continuing Palestinian–Israeli conflict and the Sunni–Shia conflict in the breast of Islam, accompanied by international terrorism and the rise of the Islamic State in Iraq and Syria (ISIS).

Vladimir Putin has been fanning the embers of the Cold War and distancing Russia from the West. A new cold war is developing, giving birth to a renewed “arms race” between Russia and the West, but also with China as an apparent Russian ally. In conferences I have attended both senior officials from China and Russia seemed very pleased as Trump elects to withdraw the US from the international stage.

The financial shenanigans of many promoting personal financial success whilebending the rules to stay within the boundaries of laws, but not ethics, continues to undermine public confidence in capitalism.

Indeed only a few of the opportunities outlined above have been realized and, in some cases, they have been completely lost. Much of the wonderful story we told ourselves only 25 years ago is now in a state of shambolic self-destruction.

Why have we failed, and failed so badly? Of the opportunities I described above, the mechanisms which have facilitated globalization, namely transportation and the extraordinary transformational power of information and communication technology (ICT) have been real game changers. Unfortunately, ICT has also been exploited to facilitate the undermining of values liberal democracies cherish, even to the point of interfering in democratic electoral processes.

When we compare human and societal evolution to a relay race one generation must pass the baton on to the next. In a small way that is what I am saying to you today.

We have fallen behind in many respects, perhaps even forfeiting the hard-earned benefits of good capitalism and democracy to an ever-increasing number of corrupt strong men and autocratic regimes.

Is that the future?

Remember the words your historic neighbor of Stratford attributed to Brutus:

“There is a tide in the affairs of men which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life is bound in shallows and in miseries.”

I am persuaded that the latter may be our fate in the absence of conviction, hard work and sacrifice for a better world.

What should you do? What can you do?

It will depend to a large extent on your personal values, which I hope have not been irreversibly warped by admiration for the material success of greed and visible wealth of the famous 1 percent who dominate power and politics in the USA and increasingly elsewhere.

I have described the state of the world today as analogous to my fireplace at my country home. It is usually fully loaded with tinder, kindling and dry wood. All it awaits is a match. Unfortunately, there are many matches out there waiting to be lit and spread their deadly destruction to regions, if not the planet as a whole.

Finally, a comment on the two most dangerous threats of those cited above.

The first is to the democratic structures and market economies which far-sighted academics, politicians, statesmen and women have fought for and built over generations. The second is climate change which I will address in a moment.

The world is faced with a growing number of autocratic strongmen who would prefer to destroy the important international infrastructure as it constrains their personal ambitions. It would appear that when one combines the far east, parts of Eastern Europe, Russia, Turkey, China, North Korea, the Philippines, Thailand etc., more than 50 percent of humanity is or will soon be governed by “strong men.” History shows that such people have only one interest: “me”.

President Trump gives every indication that he is anxious to join the ranks of these strongmen, initially by withdrawing the United States from the central role it had played through visionary leadership by building and helping to maintain the post war international and institutional architecture. His slogan “America First” should be interpreted for what it really is, namely, “Donald Trump First.”

David Frum, a Conservative and traditional Republican and senior editor at the Atlantic published a book two years ago “Trumpocracy: The Corruption of the American Republic”. It has recently been released in paperback with a new preface by Frum which reviews the appalling record of this individual to whom Americans have entrusted the leadership of the most powerful nation in history.

In a concluding paragraph of the book he writes, “President Trump is cruel, vengeful, ignorant, lazy, avaricious and treacherous…”

Later he adds… “We are living through the most dangerous challenge to the free government of the United States that anyone alive has encountered. What happens next is up to you. Don’t be afraid. This moment of danger can be your finest hour as a citizen and as an American.”

Today I cast Frum’s challenge to each of you in a global perspective rather than just American.

What happens next to global free government is up to your generation of leadership. It is a humongous challenge, especially in countries where the seeds of democracy have never been planted or where they have enjoyed short life spans; Thailand and especially Turkey come to mind.

The future of democracy across the globe could be destroyed if the autocratic motives and moves of Donald Trump succeed, as they well might as I read the current political climate in the United States. Despite shortcomings which need correction such as the unfortunate influence on elections through Super Pacs, the United States has been perceived for years as a remarkable democracy which others attempt to emulate. This may be about to change as it is increasingly viewed as government by the rich, of the rich and for the rich, and Trump does not appear to feel constrained by the institutional checks and balances of the constitution. He could put democracy on the terrible path to an autocratic state which he seems to admire, especially in the Russia and Turkey of today.

The second dangerous issue, of the many described above, is the challenge of obvious and perhaps irreversible climate change. It is the most important global threat today, which like a number of others, demands concerted action and cooperation amongst approximately 200 countries.

How will the world act to counter global warming and climate change, which it has been unable to do for almost 5 decades since 1972?

In assessing the way ahead, I often refer to the wisdom of Maynard Keynes who advocated “Examine the present in light of the past for the purposes of the future.”

Let us indulge in that exercise for a moment.

As early as 1896, a Swedish scientist, Svante Arrhenius (Nobel Prize for Chemistry, 1903) identified the warming effects of the CO2 emitted by burning coal. Alarm bells rang at the Stockholm UN environmental conference in 1972. Concern was expressed about greenhouse gas emissions (GHGs), but their measurement and impact were not broadly understood until the UN creation of the International Panel on Climate Change (IPCC) in 1988. The alarm bells rang louder after the UN’s Brundtland report (“Our Common Future”) was released in 1987, and especially after the UN’s Earth Summit in Rio in 1992, where the United Nations Framework Convention on Climate Change (UNFCC) was adopted by 197 countries.

The UN General Assembly in Special Session met in New York in 1997, where we listened to statements from world leaders and others (including me) about the importance of reducing emissions. That meeting was followed by the UN Kyoto conference, at which the Kyoto Protocol was adopted. It was agreed that Annex 1 countries (37 developed countries) would reduce their emissions during two commitment periods by an average of 5.2 per cent below their respective 1990 levels. Canada’s commitment was a 6 per cent decrease from 1990 levels by 2012. By 2008 Canada’s emissions had increased by 24.1 per cent over 1990 levels, and Canada withdrew from the protocol.

So, the past should tell us that Madrid and COP 25 are examples of the present simply continuing failed international public policy and coordination from 1972. I ask you, is it not time for your generation to adopt new approaches if we are to succeed in saving the planet as we know it? I have many ideas to share of this subject which I have followed for decades, but we need to hear your ideas and those of youth around the world. This obviously requires new leadership with fresh ideas.

They must be realistic in view of the current dependency of today’s world on fossil fuels. There is a tendency for young idealists (of which I was one many years ago), to ignore realities, many saying leave all fossil fuels in the ground. That cannot and will not happen with global energy consumption being currently about 80 percent based on fossil fuels with international and national infrastructure in place to ensure that does not change. Be realistic. Hopefully, there will be technological solutions. Some are on the horizon but not in time to abandon fossil fuels. You must examine ways to counteract negative consequences of fossil fuels perhaps with solar radiation management engineering as a last resort, but hopefully more carbon capture and sequestration and other approaches under investigation by serious scientists.

Now I warn you to be skeptical of journalists who try to distance you from facts to promote their own agendas, whatever they may be. As one example amongst many, a person of apparent credibility, Matt Ridley, wrote an article in the Spectator captioned, “Vindicated Optimist: We have just had the best decade in human history.”

His focus is largely on reducing poverty in the developing world. He does not even address the destructive potential of climate change nor the unprecedented international migration it is already starting to bring about.

And even his claims about poverty reduction ring hollow.  Certainly, there have been improvements in the areas he cites whether it be famine or infant mortality in developing countries. But he fails to mention the objectives set in 2000 by the UN Millennium Goals which I signed on to as the Secretary General of the OECD, 20 years ago. There were 8 primary objectives to be achieved by 2015:

1. to eradicate extreme poverty and hunger;
2. to achieve universal primary education;
3. to promote gender equality and empower women;
4. to reduce child mortality;
5. to improve maternal health;
6. to combat HIV/AIDS, malaria, and other diseases;
7. to ensure environmental sustainability; and
8. to develop a global partnership for development.

I do not deny that improvements have been made in many of these areas, but far short of the “victory lap” suggested by the Spectator columnist. Here is part of the UN self-assessment of the achievements of the 8 development goals set in 2000:

“The Declaration committed nations to a new global partnership to reduce extreme poverty, and set out a series of eight time-bound targets — with a deadline of 2015 — that have become known as the Millennium Development Goals (MDGs).

The final MDG Report found that the 15-year effort has produced the most successful anti-poverty movement in history:

• Since 1990, the number of people living in extreme poverty has declined by more than half. (goal was to eradicate extreme poverty)
• The proportion of undernourished people in the developing regions has fallen by almost half. (goal was to eradicate hunger)
• The primary school enrolment rate in the developing regions has reached 91 percent, and many more girls are now in school compared to 15 years ago. (goal was to achieve universal primary education)
• Remarkable gains have also been made in the fight against HIV/AIDS, malaria and tuberculosis. (goal was to combat HIV/AIDS and other diseases. No measurements of success were suggested)
• The under-five mortality rate has declined by more than half, and maternal mortality is down 45 percent worldwide. (goal was to reduce child mortality and to improve maternal health. With no measurement criteria can be seen as success)
• The target of halving the proportion of people who lack access to improved sources of water was also met.

The concerted efforts of national governments, the international community, civil society and the private sector have helped expand hope and opportunity for people around the world.

Yet the job is unfinished for millions of people—we need to go the last mile on ending hunger, achieving full gender equality, improving health services and getting every child into school. Now we must shift the world onto a sustainable path.

The global Sustainable Development Goals (SDGs), or Global Goals, will guide policy and funding for the next 15 years, beginning with a historic pledge on 25 September 2015, to end poverty. Everywhere. Permanently.

Note that goals 3, 7 and 8 are not commented on, suggesting that they have not been met. This conclusion also flows from the fact that new Sustainable Development Goals were adopted as the MDGs expired to guide policy and funding for the next 15 years. The MDGs did not finish the job. Media suggestions that it is “mission accomplished” will only diminish the political will to reinforce our efforts in the developed world to fight for long term and permanent sustainability globally on economic, social and environmental fronts.

With President Trump in the White House the world faces a new and different environment from what we have seen since WWII.

Unless the USA reinvents itself and returns as the democratic leader of the free world by recognizing that it is the foundation upon which the benefits of international cooperation and development and growing global prosperity must be constructed, your generation will live in perilous times where the very future of civilization could be threatened.

We have briefly looked at two areas where the presence of strong enlightened American leadership is critical.

No one country can be the bulwark against the rising tide of autocratic leaders except the United States. Autocrats often masquerade as democrats such as Putin or Erdogan who Trump seems to admire, suggesting that he would like to point the United States in that direction if he could. It must not happen.

Also, the fight against greenhouse gas emissions and climate change must engage the United States not only to lead with policies and technologies, but to reduce its emissions and to create a global consensus to do so.

Your generation must step up to very serious and difficult challenges. I return to David Frum’s exhortation to his American audience.

“What happens next is up to you. Don’t be afraid. This moment of danger can be your finest hour as a citizen and as an American.”

Although Americans are in the front line of attack by this narcissistic, ignorant bully, the challenge is for all people to get engaged to support freedom and democracy across the planet and make it their finest hour.

Regarding leadership, I have referred to the McCall MacBain scholarships at McGill University focused on leaders of the future, of which you at this conference are worthy representatives.

Leadership is necessary in too many areas to cite including political, natural and social sciences, the academe and NGOs such as the McCall MacBain Foundation referred to. There is another, not often referred to except by ignorant critics, namely public servants. I dedicated my recent book Missing the Tide to public servants. This is what I wrote based on broad knowledge of many countries.

Dedication to Public Servants:

“The world today finds itself on a number of perilous paths. At such critical times in history, visionary leaders committed to the common good often emerged from the chaos and confusion around them. In the wake of Europe’s devastation in the Second World War, for instance, many remarkable individuals, not all of whom were politicians, demonstrated extraordinary and selfless leadership. A good example is Jean Monnet, one of the founding fathers of the European Union.

During my career in public life I grew to respect and appreciate the essential role of competent, committed, and honest public servants, who are the infrastructure and operating systems of governments and international organizations. Political leaders may struggle to see beyond the next election cycle, but a core professional public service can provide them with the longer-term vision that they need to govern well.

Having dealt with the governments of all OECD countries, I believe without reservation that no government can be better than the quality of its public service.

So, I dedicate this book to public servants, who often sacrifice the material rewards of the private sector to serve their fellow citizens. I hope that more of our talented young people will see public service as an honourable and desirable career.”

I hope that many of you here will accept this challenge. Doing so does not necessarily mean a lifetime in public service, but it means connecting you with the challenges, opportunities and satisfaction of changing our societies for the better in a democratic context.

Donald Johnston is a former Liberal federal cabinet Minister; former Secretary General of the OECD; founding Director and former Chair of the International Risk Governance Council (IRGC) and Chair Emeritus of the McCall MacBain Foundation, Geneva.