globalisation and governance - united...

Globalisation Globalisation and and

GovernanceGovernance

Sir Paul JudgeSir Paul Judge

UNPANUNPAN

3030thth November 2007November 2007

Digital Links InternationalDigital Links International

AgendaAgenda

Case StudyCase Study

GlobalisationGlobalisation

DevelopmentDevelopment

Future GrowthFuture Growth

ManagementManagement

The Country With PotentialThe Country With PotentialForeign AffairsForeign Affairs•• Increasing Increasing

intercontinental intercontinental agreementsagreements

•• Five neighbouring Five neighbouring countries with historic countries with historic border disputesborder disputes

CultureCulture•• Strong indigenous Strong indigenous

historyhistory•• Famous musical and Famous musical and

dance traditiondance tradition•• Many local art collectorsMany local art collectors

GeographyGeography•• Area: 2.8 million sq kmArea: 2.8 million sq km•• Coastline: 5,000 km Coastline: 5,000 km •• Highest point: 7,000 mHighest point: 7,000 m

EconomyEconomy

•• Growing faster than Growing faster than EuropeEurope

•• One of the world's 10 One of the world's 10 wealthiest nationswealthiest nations

•• Technology has Technology has transformed the economytransformed the economy

•• Rapid expansion of Rapid expansion of agricultureagriculture

•• Huge foreign investment Huge foreign investment in infrastructurein infrastructure

•• 6% of global central bank 6% of global central bank gold reservesgold reserves

•• Exports per head 9 times Exports per head 9 times global averageglobal average

Spanish is the main language

1907 1907

Growth Rates in GDP/CapitaGrowth Rates in GDP/Capita

1913-29 0.9 1.3 -0.4

1929-50 0.6 1.3 -0.7

1950-73 2.1 3.5 -1.4

1973-89 -1.3 2.1 -3.4

1989-00 2.6 1.6 1.0

Argentina OECD 16 Difference

1900-13 2.6 1.6 1.0

GDP dropped 10.9% in 2002

0

100

200

300

400

500

600

700

800

1900 1913 1929 1950 1973 1989 2000

Argentina

OECD 16

GDP/CapitaGDP/Capita

Comparative Argentina/16 OECD Comparative Argentina/16 OECD GDP/CapitaGDP/Capita

0

10

20

30

40

50

60

70

80

90

1900 1913 1929 1950 1973 1989 2000

Comparative Argentina/16 OECD Comparative Argentina/16 OECD 100 Years of GDP/Capita100 Years of GDP/Capita

0

10

20

30

40

50

60

70

80

90

1900 1913 1929 1950 1973 1989 2000

2020thth Century Argentine GovernmentCentury Argentine Government1906: Strong government in place1906: Strong government in place1914: Exports cut by World War 11914: Exports cut by World War 11916: Radicals gain power against previous regime1916: Radicals gain power against previous regime1919: General strike1919: General strike1930: Global depression led to army coup1930: Global depression led to army coup1943: President overthrown1943: President overthrown1945: Peron comes to power with union support1945: Peron comes to power with union support19461946--52: 52: EvitaEvita in power alongside husbandin power alongside husband1955: Peron overthrown1955: Peron overthrown1958: New leader liberalises but brings inflation1958: New leader liberalises but brings inflation1966: Peronist coup1966: Peronist coup1970: Army coup1970: Army coup1973: Peron returns as President, dies in 19741973: Peron returns as President, dies in 19741976: Army coup1976: Army coup

GlobalisationGlobalisation

••Greater InterconnectivityGreater Interconnectivity

••Action:Action: Increase in the significance Increase in the significance

and volume of flows across countries and volume of flows across countries

and culturesand cultures

••Reaction:Reaction: Increasing impact of Increasing impact of

global forces on local lifeglobal forces on local life

Early GlobalisationEarly Globalisation3.5m BC:3.5m BC: Hominids walk uprightHominids walk upright

•• Footprints in the sandFootprints in the sand

1.6m BC:1.6m BC: Homo ErectusHomo Erectus

•• Much easier to walkMuch easier to walk

0.9m BC:0.9m BC: Humans in ChinaHumans in China

•• Invent fire so can move NorthInvent fire so can move North

10,000 BC:10,000 BC: South AmericaSouth America

•• Earth inhabitedEarth inhabited

3,000 BC: Agriculture developsAgriculture develops

•• Babylonian, Egyptian, Greek and Babylonian, Egyptian, Greek and

Roman empiresRoman empires

World Population 0World Population 0--1750 AD (m)1750 AD (m)

0

100200

300

400500

600

700800

900

0 200 400 600 800 1000 1200 1400 1600 1800

1750 World Population (bn)1750 World Population (bn)

0.2, 21%

0.0, 1%

0.1, 15%0.5, 63%

Europe

Western Offshoots

L.Am/Africa

Asia

European Dark AgesEuropean Dark AgesMexico

Persia

Cambodia

Java

China

Proportion of Global GDPProportion of Global GDP

0%10%20%30%40%50%60%70%80%90%

0 1000 1500 1600 1700 1820

AsiaEuropeWesternL. Am/Africa

ChinaChina

European ExplorationEuropean Exploration

Prince HenryChristopherColumbus

Vasco de Gama

Francis Drake

Magellan


0%

10%

20%

30%

40%50%

60%

70%

80%

90%

0 1000 1500 1600 1700 1820


1750 GDP/Capita ($)1750 GDP/Capita ($)

0

200

400

600

800

1000

1200

Europe L. Am/Africa Asia

England in the 1750England in the 1750’’ssPopulation of 6 million doubled since 1700Population of 6 million doubled since 1700•• Trade increasingTrade increasing•• Enclosures and cottage industriesEnclosures and cottage industries•• Steam power beginningSteam power beginning

George II on throneGeorge II on thronePrime MinistersPrime Ministers•• Henry Pelham, Duke of Newcastle, Duke of Henry Pelham, Duke of Newcastle, Duke of

Devonshire and Earl Waldegrave Devonshire and Earl Waldegrave

The Age of EnlightenmentThe Age of Enlightenment•• Samuel Johnson, Edward Gibbon, Thomas Samuel Johnson, Edward Gibbon, Thomas

Chippendale, David Garrick, Thomas Sheridan, Chippendale, David Garrick, Thomas Sheridan, George StubbsGeorge Stubbs

Through Westminster Bridge 1746Through Westminster Bridge 1746

Whitehall from Richmond House 1747Whitehall from Richmond House 1747

Horse Guards and Banqueting Horse Guards and Banqueting House 1749House 1749

Northumberland House 1752Northumberland House 1752

St PaulSt Paul’’s Cathedral 1754s Cathedral 1754

The RichThe Rich-Servants and carriages

-Large houses

-Country visits

-Clubs

-Controlled Parliament

-Purchased positions

-Protected by law

HogarthHogarth

Gin Lane Beer Street

The PoorThe PoorComparative affluence Comparative affluence brings people to the citybrings people to the city

Half the population on Half the population on less than $3,700 per yearless than $3,700 per year

Family lived together in Family lived together in one roomone room

Shared a standpipe, no Shared a standpipe, no seweragesewerage

No medicineNo medicine

Imprisonment for debtImprisonment for debt

Parish welfareParish welfare•• Apprentices: from 7 Apprentices: from 7

•• WorkhousesWorkhouses

Bills of Mortality 1750Bills of Mortality 1750--7474Age % % Cum0-1 33.6 33.62-4 9.1 42.75-9 3.6 46.3

10-19 3.4 49.720-29 8.0 57.730-39 9.3 67.040-49 9.7 76.750-59 7.9 84.660-69 8.1 92.7

70+ 7.3 100.0

-33.6% died in their first year

-A further 9.1 % by the age of 4

-49.7% by the age of 20

-Only 50% chance of reaching your 20th

birthday

Technological ChangeTechnological ChangeCholera

World Population (bn)World Population (bn)

0

1000

2000

3000

4000

5000

6000

7000

1750 1800 1850 1900 1950 2000

2000 World Population (bn)2000 World Population (bn)

0.8, 13%

0.3, 6%

1.3, 21%3.6, 60%

Europe/ex-USSR

Western Offshoots

L. Am/Africa

Asia


0%10%20%30%40%50%60%70%80%90%

010

0015

0016

0017

0018

2018

7019

1319

5019

7319

98AsiaEuropeWesternL. Am/Africa


0%10%20%30%40%50%60%70%80%90%

0100

0150

0160

0170

0182

0187

0191

3195

0197

3199

8Asia

Europe

Western

L. Am/Africa


0

5,000

10,000

15,000

20,000

25,000

30,000

Europe/ex-USSR Western L. Am/Africa Asia

The Rich The Rich -- 17501750-Servants and carriages

-Large houses

-Country visits

-Clubs

-Controlled Parliament

-Purchased positions

-Protected by law

The West The West -- 20072007••Appliances and carsAppliances and cars••Large housesLarge houses••International travelInternational travel••Clubs and hobbiesClubs and hobbies••Dominates global Dominates global organisationsorganisations••Buys influenceBuys influence••Controls immigrationControls immigration

The Poor The Poor -- 17501750Comparative affluence Comparative affluence brings people to the citybrings people to the city

Half the population on Half the population on less than $3,700 per yearless than $3,700 per year

Family lived together in Family lived together in one roomone room

Shared a standpipe, no Shared a standpipe, no seweragesewerage

No medicineNo medicine

Imprisonment for debtImprisonment for debt

Parish welfareParish welfare•• Apprentices: from 7 Apprentices: from 7

•• WorkhousesWorkhouses

The Poor The Poor -- 20072007Movement to the Movement to the townstowns

2 billion people have 2 billion people have no water or sanitationno water or sanitation

11 million children die 11 million children die annually from annually from treatable diseasestreatable diseases

Fluctuating commodity Fluctuating commodity pricesprices

CorruptionCorruption

Harsh lawsHarsh laws

Cultural changeCultural change

Annual Health Expenditure ($)Annual Health Expenditure ($)

2,735

710

500

1,000

1,500

2,000

2,500

3,000

High Income Low/Medium Income

Developed Country Education Developed Country Education Expenditure ($PPP/Pupil)Expenditure ($PPP/Pupil)

02,0004,0006,0008,000

10,00012,00014,000

Norway

Austria

Switzerla

ndUnite

d StatesCanada

France Italy

Germany

JapanNew

Zealand

Israel

Australia

Average

Developing Country Education Developing Country Education Expenditure ($PPP/Pupil)Expenditure ($PPP/Pupil)

0

500

1,000

1,500

2,000

2,500

Russia

BrazilMexic

oThailand

Turkey

Morocco Peru

China

Kenya IndiaIndonesia

Bangladesh

Average

Developed/ing Country Education Developed/ing Country Education Expenditure ($PPP/Pupil)Expenditure ($PPP/Pupil)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Developed/ing Country Education Developed/ing Country Education Expenditure ($PPP/Pupil)Expenditure ($PPP/Pupil)

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Developed Developing

Ways to DevelopWays to DevelopCharity (Private Giving)Charity (Private Giving)•• US $15 bn, UK $US $15 bn, UK $11 bn, Total $20 bnbn, Total $20 bn

AidAid•• Government redistribution: Total $Government redistribution: Total $8080 bnbn

TradeTrade•• Invisible handInvisible hand•• Merchandise Exports ($bn):Merchandise Exports ($bn):

AsiaAsia 1,9011,901Latin AmericaLatin America 378378AfricaAfrica 171171

2,4502,450

CharityCharity

2004 Government Aid2004 Government AidCountry $ Million % GNP

United States 18,999 0.16

Japan 8,859 0.19

France 8,475 0.42

United Kingdom 7,836 0.36

Germany 7,497 0.28

Netherlands 4,235 0.74

Sweden 2,704 0.77

Spain 2,547 0.26

Canada 2,537 0.26

Italy 2,484 0.15

Other 14,400

Total 80,573

Aid Per Capita (Current $)Aid Per Capita (Current $)

0

2

4

6

8

10

12

14

16

1960 1965 1970 1975 1980 1985 1990 1995 2000

Trade Trade –– The PotentialThe Potential

Oxfam: Oxfam: ““If Africa, East Asia, South Asia, If Africa, East Asia, South Asia,

and Latin America were each to increase and Latin America were each to increase

their share of world exports by one per their share of world exports by one per

cent, the resulting gains in income could cent, the resulting gains in income could

lift 128 million people out of poverty. In lift 128 million people out of poverty. In

Africa alone, this would generate $70bnAfrica alone, this would generate $70bn --

approximately five times what the approximately five times what the

continent receives in aid.continent receives in aid.””

Trade Trade –– Not a Level Playing FieldNot a Level Playing FieldAgricultural SubsidiesAgricultural Subsidies•• Rich countries spend $1bn every day on Rich countries spend $1bn every day on

agricultural subsidies: agricultural subsidies: $350 bn per year$350 bn per year•• 800 million people live on less than a dollar a 800 million people live on less than a dollar a

dayday

Tariff barriers Tariff barriers •• Imports of commodities, textiles and other Imports of commodities, textiles and other

exportable items are restricted or surchargedexportable items are restricted or surcharged•• These barriers cost developing countries These barriers cost developing countries

$100bn a year$100bn a year -- more than they receive in more than they receive in aid. aid.

Intellectual propertyIntellectual property•• Drugs, seeds, geneticsDrugs, seeds, genetics•• Charges do not reflect ability to payCharges do not reflect ability to pay

Possible Average Growth Rates Possible Average Growth Rates 20002000--5050

PopulationPopulation GDP/CapitaGDP/Capita GDPGDP

Europe+ExUSSREurope+ExUSSR (0.2)(0.2) 1.51.5 1.31.3

Western OffshootsWestern Offshoots 0.50.5 2.02.0 2.52.5

Latin America/AfricaLatin America/Africa 1.41.4 3.03.0 4.54.5

AsiaAsia 0.70.7 5.05.0 5.85.8


0123456789

10

2000 2025 2050

Asia

L. Am/Africa

Western Offshoots

Europe/ex-USSR


0.8, 13%

0.3, 6%

1.3, 21%3.6, 60%

Europe/ex-USSR

Western Offshoots

L. Am/AfricaAsia

0.7, 8%

0.4, 5%

2.6, 29%5.2, 58%

Europe/ex-USSR

Western Offshoots

L. Am/AfricaAsia

2000

2050






AsiaAsia 0.70.7 5.05.0 5.85.8

GDP/Capita ($)GDP/Capita ($)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2000 2025 2050

Western OffshootsAsiaEurope+exUSSRL.Am+Africa


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Europe/ex-USSR Western L. Am/Africa Asia






AsiaAsia 0.70.7 5.05.0 5.85.8


0%10%20%30%40%50%60%70%80%90%

010

0015

0016

0017

0018

2018

7019

1319

5019

7319

9820

2520

50


Three Aspects of GovernanceThree Aspects of GovernanceObjective administrationObjective administrationAdam Smith accepted that his Adam Smith accepted that his invisible hand could not operate invisible hand could not operate unless the state providedunless the state provided•• SecuritySecurity•• JusticeJustice•• Infrastructure Infrastructure

Forms of PowerForms of Power•• HardHard•• EconomicEconomic•• SoftSoft

Would you tell me if you generally trust Would you tell me if you generally trust them to tell the truth, or not?them to tell the truth, or not?

0102030405060708090

100

Doctors

Teacher

sProf

essors

Judges

ClergyScie

ntists

TV news r

eaders Polic

eOrdin

ary pe

ople

Pollster

sCivil

Servants

Union o

fficials

Business

Leade

rsGovt

. Minis

ters

Journalis

ts

Objective Administration Objective Administration -- T.I.M.E. T.I.M.E. TTransparencyransparency•• Reasons given for decisionsReasons given for decisions

IIntegrityntegrity•• No financial or similar obligations to No financial or similar obligations to

others that might influence official duties others that might influence official duties

MMeritocracyeritocracy•• Choices on appointments or contracts Choices on appointments or contracts

should be made on meritshould be made on merit

EEfficiencyfficiency•• World class methods and standards World class methods and standards

should be usedshould be used

Adam SmithAdam Smith’’s 3 Duties of Governments 3 Duties of Government

The first duty:The first duty: securitysecurity: protecting the : protecting the society by means of a military forcesociety by means of a military force

The second duty:The second duty: justicejustice: establishing an : establishing an exact administration of justiceexact administration of justice

The third and last duty:The third and last duty: infrastructure infrastructure erecting and maintaining those public erecting and maintaining those public institutions and public worksinstitutions and public works•• facilitating the commerce of the society facilitating the commerce of the society such as such as

good roads, bridges, navigable canals, etcgood roads, bridges, navigable canals, etc

•• promoting the instruction of the peoplepromoting the instruction of the people

Europe vs AsiaEurope vs AsiaSmithSmith’’s three government duties in Europes three government duties in Europe•• Security:Security: weak armies and little popular supportweak armies and little popular support•• Justice:Justice: good but often slow/expensivegood but often slow/expensive•• Infrastructure:Infrastructure: nimbys and priority to shortnimbys and priority to short--

term social expenditureterm social expenditure

Pay people more not to work than Pay people more not to work than China/India pay people to workChina/India pay people to workTrying to require a 35 hour week while Trying to require a 35 hour week while Asian businessmen are trying to work out Asian businessmen are trying to work out how to achieve a 35 hour dayhow to achieve a 35 hour day““Needs to get worse before it gets betterNeeds to get worse before it gets better””Can 1.5% GDP/capita growth be achieved?Can 1.5% GDP/capita growth be achieved?

EducationEducation

Types of PowerTypes of PowerHistorically: HardHistorically: Hard•• Military: China and India have massive armiesMilitary: China and India have massive armies•• Modern history shows limits of forceModern history shows limits of force

Currently: EconomicCurrently: Economic•• Growth in GDP/Capita: China and India Growth in GDP/Capita: China and India

achieving 8+%achieving 8+%•• Needs continuing Security, Justice, Needs continuing Security, Justice,

Infrastructure improvementInfrastructure improvement

With convergence: Soft (cultural and With convergence: Soft (cultural and persuasive)persuasive)•• Internationally, greater interconnectivity needs Internationally, greater interconnectivity needs

greater compatibility and diplomacygreater compatibility and diplomacy•• Internally, with economic growth, softer Internally, with economic growth, softer

benefits become more importantbenefits become more important

ManagementManagement

A ProfessionA Profession

•• Major Effect on CommunitiesMajor Effect on Communities

•• Theoretical Framework and Useful Theoretical Framework and Useful TechniquesTechniques

•• Ethics and Continuing EducationEthics and Continuing Education

Rate of ChangeRate of Change

•• IncreasingIncreasing

•• Technological ChangeTechnological Change

•• GlobalisationGlobalisation

Achieving Management Achieving Management Excellence Excellence -- Key SkillsKey Skills

1 Managing People2 Leadership3 Team Working4 Customer Focus5 Managing Operations6 Verbal Communications7 Time Management8= Coaching & Counselling8= Functional/Technical Skills

Leadership Leadership -- Challenge For AllChallenge For All% Preferred Characteristic

55 Inspiring - Acting as role model41 Strategic Thinker - Articulating a clear vision36 Forward looking - Interpreting the future26 Honesty - Strong ethical values and integrity23 Fair-minded - Consistent and unbiased21 Courageous - Energy creating and risk taking20 Supportive - Engaging and supporting others19 Knowledgable13 Ambitious10 Imaginative5 Loyal4 Self-controlled

Leadership Leadership -- Challenge For AllChallenge For AllCharacteristic Preferred Actual Difference

Ambitious 13 38 25Knowledgeable 19 39 20Self Controlled 4 14 10Loyal 5 14 9Fair-minded 23 25 2Supportive 20 21 1Imaginative 10 11 1Forward looking 36 31 (5)Honesty 26 21 (5)Courageous 21 8 (13)Strategic Thinker 41 21 (20)Inspiring 55 11 (44)

Leadership Leadership -- Challenge For AllChallenge For AllQuality Of LeadershipQuality Of Leadership

0%

20%

40%

60%

80%

100%

Chairm

anCEO/M

DDire

ctors

Senior

Man

agers

Middle

Manag

ersJu

nior M

anag

ersLow / QuiteLow

High/ QuiteHigh

ConclusionConclusionHistoricalHistorical•• Increased interconnectivity is a longIncreased interconnectivity is a long--term trendterm trend•• Asia has usually been most advancedAsia has usually been most advanced

SocialSocial•• Early societies had major inequalitiesEarly societies had major inequalities•• Current world like 18Current world like 18thth Century LondonCentury London

EconomicEconomic•• Trade is main generator of wealthTrade is main generator of wealth•• Interconnectivity brings income convergenceInterconnectivity brings income convergence

GovernmentalGovernmental•• Key security, justice and infrastructure roleKey security, justice and infrastructure role•• Good management is essentialGood management is essential

Don’t cry for me, Argentina

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