BEIJING: Deputy Prime Minister Tharman Shanmugaratnam has reiterated a call for the world to develop a new cooperative international order to better tackle future challenges.
For this to be “effective and sustainable”, he said on Saturday (Mar 23) that a new relationship between China, the United States and other leading centres of global power is required.
Speaking at the China Development Forum in Beijing, Mr Tharman said that the important development of the last 30 years has been China’s integration with the global economy, although this story is “far from over".
“Today’s China is still one-third the level of productivity of the United States. There’s still tremendous potential not just for GDP growth, but for a rise in productivity, incomes and capabilities,” said Mr Tharman.
“We must build a new cooperative world order that involves a sharing of responsibilities and an updating of rules that enables China to take greater responsibility in maintaining an open world order."
Mr Tharman pointed out there have been pushbacks to this open order, which have much deeper roots than today’s governments.
The pushbacks, he said, are not because of a failure of globalisation, but are a result of an open order which has resulted in many people coming out of poverty.
If a new cooperative international order is not established, the world risks becoming more fragmented, said Mr Tharman.
“It will not happen suddenly. It starts with frictions. The frictions become harder and you get divisions, and you eventually get rifts between the leading global economic powers and rifts between different blocks in the global economy.
“That will weaken all nations. It does not just weaken multilateralism,” he said.
Mr Tharman said the world today faces future challenges that it is quite unprepared to deal with.
These include the challenge of development, as 1.1 billion young people below the age of 15 in Africa, South Asia and the Middle East will be in need of jobs.
There is also a crisis of global resources, with the world already falling behind in tackling climate change, for example.
The international monetary system is another issue, as countries cannot grow without risk of financial disruption in today's system.
Mr Tharman, who chairs the G20 Eminent Persons Group on Financial Governance, said the solution to these challenges is to reform global financial governance, which currently lacks coherence.
“It does not require new institutions, new multilateral institutions, new supranational institutions. It requires that we join up the existing institutions - global, regional and bilateral. Leverage on their strengths together. And critically, work together to reduce the risk of the investment environment in the developing world,” he said.
“We cannot return to the old multilateralism. There is no single conductor and we have several orchestras now. We need a new harmony. But we will only get a new harmony if everyone is playing from the same music score.”