Rede anlässlich der Tagung des Club of Rome "A New Path for World Development" in der Oesterreichischen Nationalbank
A New
Path for World Development
Concerted
Strategies to Meet the Environmental and Economic Challenges of the
21st Century
Oesterreichische
Nationalbank, Vienna
April 16
and 17, 2009
Ladies
and Gentlemen,
It is my
great pleasure to welcome you here in Vienna to this Club of Rome
conference on “Concerted Strategies to Meet the Environmental
and Economic Challenges of the 21st
Century”.
The idea
to organize this event here in Austria came up last summer in a
discussion with Dr. Eberhard von Koerber, Co-President of the Club
of Rome.
And my
long-time friend Prof. Ewald Nowotny, governor of the
Oesterreichische Nationalbank, has supported our idea and kindly
offered to host the conference here at the OeNB.
Ladies
and Gentlemen,
At the
planning stage of this event – that is, in the late summer of
2008 – I had no way of predicting the state of the global and
European economy in April 2009; nor could we have guessed what the
economic outlook would be at the beginning of the second quarter of
2009.
I’m
sure none of us could have anticipated – at least not in
detail – the challenges we would be facing in 2009 in terms
of economic developments.
I am not
an economist myself – I used to teach political science and
give lectures on constitutional law.
This is
why I am especially interested in the impact the current crisis has
on our political systems.
There is
historical evidence for certain interrelations between economic and
political stability, and also for a link between severe economic
crises and instability in our democratic systems.
The
history of the 20th century offers numerous examples of
this link.
Economic
and social aspects are therefore not the only compelling reasons
why we must join forces to fight the crisis – it is also for
the sake of democracy.
Furthermore,
this crisis clearly shows that we must reassess certain elements of
our political and economic philosophy.
A case in
point is the role of the state in a democratic market-economy
society.
In the
period between the foundation and the collapse of the Soviet Union
– the “short 20th century,” as
historian Eric Hobsbawm called it – countries within the
communist sphere of influence believed in nationalization and the
supreme role of the state in many areas. Similar ideals were also
promoted in other countries.
After
1989, however, the pendulum swung in the opposite direction, and
privatization and deregulation became the new orthodoxy. Many even
thought that, in general, “the less the state is involved,
the better.” What followed, however, at least in some areas,
was a lack of control and transparency as well as too little
social symmetry.
Today,
there is a growing consensus that a well-functioning democratic
state has to perform important political, social and economic
functions. We have been dramatically reminded that our commitment
to market economy – and especially to the European model
– must not be confused with an unreflective belief in
absolutely self-regulating, uncontrolled market processes that fail
to assume responsibility for the people.
I believe
there are many lessons to be learnt from this crisis.
Let me
make a few additional remarks:
It
seems that no region of this planet can escape this crisis, even if
the impact on China is different from the impact on, for instance,
the United States. The global economic system has made all of us
vulnerable to disruptions that occur elsewhere in the world. The
crisis, which began in the United States and then spread to Europe,
has reached the emerging markets and the less developed countries
– countries that already bore the brunt of the financial and
monetary crises in the 1980s and 1990s.
Financial
crises are not natural disasters that occur out of the
blue.
Most of
the financial crises after World War II were preceded by
deregulation measures that were recommended – or even
prescribed – by supranational institutions. After short
periods of recovery, it is the poor countries that seem to be hit
primarly by financial market turbulence. Hence, the urgency of
reforming the regulatory framework has long been recognized, but no
consequences have been taken.
The
present global crisis has again laid bare the inadequacies of the
existing global financial architecture. Financial markets are
beyond the reach of public opinion, parliaments and the electorate.
While financial markets work globally, there is no global civil
society, no global legal code, no global democracy. Now we have the
chance to build accountable global institutions that represent a
broad range of ideas and viewpoints and support sustained and
equitable development.
Ladies
and Gentlemen,
The
grave nature of the financial crisis should not deflect our
attention from dealing with other challenges, such as climate
change and the anti-poverty targets of the United Nations, defined
as the Millennium Development Goals. World poverty, climate change,
rising wealth and income gaps between
the rich and the poor, social imbalance as well as the loss of the
primacy of politics are the challenges world society faces in the
21st century.
Ladies
and Gentlemen,
While it
is mandatory to tell the people the truth about this crisis, we
must also highlight the differences between now and the crisis of
the 1930s. People need to know how much the political environment
has changed for the better. Today, the international community can
use political and economic tools that simply did not exist in the
interwar period. 80 years ago we must not overlook or underestimate
the strengths of our current political and economic
systems.
Measures
to fix the financial system must be coupled with greater efforts to
tackle extreme poverty, inequality and climate change. The credit
crisis should also be seen as an opportunity to rebuild the world
financial system in a way that underpins sustainable and equitable
economic development. This requires, first of all, that we
reinstate the primacy of politics over economics. Globalization
bears many advantages, but global capital and trade have to obey
ethical, ecological and legal rules – that is, common
standards set by democratically accountable global institutions.
Furthermore, the fiscal stimuli necessary to combat the crisis
could be partly used to invest in new jobs, in renewable or green
energy and infrastructure projects. It is well known that these
investments generate multiple dividends: high employment effects, a
steep reduction in environmental costs and competitive
technological advantages.
Ladies
and Gentlemen,
The
mistakes that we make today – and the things we do right
– will feature prominently in tomorrow’s history
books.
As
after World War II, when the world community laid the groundwork
for 30 years of prosperity and growth built on international
economic cooperation, this crisis is also an opportunity. The G-20
summit in London two weeks ago was in my opinion a positive sign
that this opportunity will be seized.
The
world community is heading in a new direction – on financial
regulation and on the support for the developing world, for example
– but there is still a long way to go before the job is
completed. This process requires tremendous efforts in the legal,
the political and the intellectual sphere. Most of all, it requires
the commitment and participation of the civil society. I hope
– and I am confident – that this conference will
contribute to a constructive discussion and exploration of these
issues.
And, of
course, I hope you will enjoy your stay here in Vienna.
© 2010 The Federal President of the Republic of Austria : imprint : legal notes : contact
