core sector communique

Global Economic Systems Grow More Inclusive

By MacKenzie C. Babb

Staff Writer

Washington - Global economic and political governance has undergone a major shift to include more countries during the past 40 years and will need to continue expanding to effectively tackle the world's most pressing issues, according to U.S. Under Secretary of State Robert Hormats.

Noting that international governance has "changed very dramatically" during recent decades, Hormats commended the participation of a growing group of nations in international financial institutions and global economic deals. Speaking during a Council on Foreign Relations meeting in Washington March 12, the under secretary called for current participants in the global economic system to continue welcoming new countries during the coming years.

Global governance "has to involve a wide range of other countries in the process of developing the rules and the norms and the consensus that will enable the world economy to work effectively in the 21st century," Hormats said.

He said that in addition to traditional powers, emerging economies will "have to play a major role if you're going to make any progress on financial issues or trade issues or environmental issues or nonproliferation issues or virtually any other major issue in the global economy." Hormats said the United States' relationship with China is, and will continue to be, "extremely important."

"Almost every major policy issue is going to be easier to resolve and will be resolved more rapidly if the United States and China work together," the under secretary said.

Hormats said that as global governance has grown to include the participation of more countries, measures of national power have also shifted.

"During the Cold War, power was based on essentially the accumulation and projection of military power," he said. "Now, increasingly, power and influence is measured in terms of national economic strength."

The under secretary also praised the growing participation of civil society and nongovernmental organizations in global affairs and the formation of foreign policy.

"Governance is not just about government; it's about mobilizing the talents of people around the world," he said, calling nongovernmental organizations "a wonderful way of pulling that talent together."

While in the past there was very little involvement by the average citizen in forming foreign policy, Hormats said, governments now must develop policies that reach "well beyond the capitals and well beyond the major institutions" to informed citizens everywhere.

He said collaboration among governments, civil society groups and citizens now is easier than ever because of advances in communications technology, such as smartphones and tablets.

Hormats spoke ahead of the meeting of the Group of Eight advanced economies May 18-19 at Camp David in Maryland. The heads of state from Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States are set to discuss a wide range of issues, including the state of the global economic recovery.

(This is a product of the Bureau of International Information Programs, U.S. Department of State.)