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The Challenge of Global Leadership

We need to rediscover a spirit of common purpose and community …

Thank you First Minister for those kind words, and to all members of the Scottish Council for Development and Industry for that warm welcome.

I am delighted to be with you tonight for this celebration of Scottish innovation and international success.

I want to add my warmest congratulations to all those who have just received International Achievement Awards.

To receive recognition from your peers is always, I think, the highest accolade.

It is no surprise to me to learn that you have been celebrating international achievement tonight.

For Scotland and its people have always had the courage and imagination to look over the horizon.

My own experience working for the United Nations suggests that there is scarcely a place on earth where Scots have not made their home nor a positive contribution.

In terms of leadership, too, I can’t think of a country of comparable size to match your influence across political thought, economics, industry and society.

Scotland, in fact, is a country which could be said to have embraced the opportunities and demands of globalization long before the term was coined.

So I can think of few better audiences with which to discuss global leadership than this country’s political and business leaders.

Nor indeed, given the economic and political turmoil in Europe and across the world, is there a better time.
Ladies and gentlemen, globalization has brought great progress and prosperity.

Enhancing our mutual interdependence also means that threats cross borders more easily and demand a collective response.

At the start of this century, there was clear recognition of the challenges this posed.  It was generally agreed that no state could isolate itself from actions or events elsewhere in the world.

In the United Nations Millennium Declaration, global leaders affirmed their determination to make globalization a positive force for all so “it became fully equitable and inclusive”.

A major outcome was the Millennium Development Goals with their universal commitment to tackle poverty and the gross inequalities which scar our world.

As Secretary-General, I asked a group of wise men and women to come up with ideas on how the UN and its member states could work together to meet new challenges and change.

They identified six clusters of threats –  war between states; violence within states, including large-scale human rights abuses and genocide; poverty, infectious disease and environmental degradation; nuclear, radiological and biological weapons; terrorism, and transnational crime.

It was clear that only concerted multilateral action could provide the protection needed.

It was clear, too, that this required us to overhaul global governance so our political and financial institutions were more effective, representative, accountable and legitimate.

Ladies and gentlemen, as we look around our troubled world today, it is clear we have not lived up to these ambitions.

There remain deep-seated imbalances in the workings of the global economy which are both ethically unacceptable and politically unsustainable.

None of our institutions provide adequate democratic oversight of global markets, or redress basic inequities between societies

Neither do our institutions of governance adequately meet the pressing demands from people and countries for fair representation.

The composition of the United Nations Security Council, with unique decision-making authority vested in its five permanent members, reflects a world of 1945 not 2011.

Our global financial and economic institutions, too, are in desperate need of reform.

In 1990, the OECD countries represented around 60% of the world’s GDP. By 2025, this figure will fall to 30%.

Yet these same economies remain dominant in the decision-making structures of the IMF, World Bank and World Trade Organization.

Here too the high hopes for the Doha Trade Round have achieved far too little in a decade.

On the MDGS, progress is under threat. The reduction in development assistance means that many countries and communities may see progress reversed.

There is perhaps no clearer example of the need for collective action than climate change.

It is an all-encompassing threat to our lives and to future generations.

The evidence of change – about which science had warned – is on our television screens almost every night.

In the Horn of Africa, a devastating drought has pushed 13 million people into famine.

The flooding in Thailand – the worst in 50 years- will lead to a 25% cut in rice production.

Almost every country – and including, I understand, Scotland – has experienced record lows or highs in temperatures, or prolonged droughts or floods in recent years just as scientists had predicted.

In many parts of the world, the availability of fresh water and productivity of fertile land is being diminished.
This is affecting food supplies which are already failing to meet the needs of one in seven of the planet’s population.

Yet we have seen an abject failure of leadership to agree the universal, ambitious and legally binding framework needed to reduce greenhouse gas emissions and invest in adaptation and green technologies.
The current global economic crisis is perhaps the most stark example of the consequences of our failures of governance.

The impact of the crisis has hit hundreds of millions of people, increasing anger and frustration at governments and corporate leaders.

Citizens across the world are angry at the private greed and institutional failure which plunged the global economy into the severest crisis for generations.

They understand that financial institutions around the world behaved recklessly, driven by a culture which put short-term profits over long-term benefits.

Our global financial institutions, too, turned a blind eye to the dangers being run.
The result of these failures is that Governments around the world are struggling with massive debts and low, unproductive growth.

We are seeing as well billions of people who played no part in these mistakes suffering the pain in terms of lost jobs, squeezed incomes, debt and poorer quality of life.

And it is ironically the younger generation, who are least responsible for the failures of public and private institutions, that are being hardest hit.

The International Labor Organization reports that global youth unemployment is now as much as three times the adult rate.

Across the European Union some 23 million people between the ages of 16 and 24 out of work.
As I know both political and business leaders here in Scotland understand, the concern goes beyond the short-term individual stress of joblessness and loss of energy and talent to the economy.

There is also a real worry over a lost generation to our economies and a long-term alienation from our societies.

Across the world we are already seeing – even in mature democracies – young people turning their backs on elections or being attracted by divisive and extreme political philosophies.

Their frustration and anger is driven by a burning sense of injustice and the sense they are “too small” to matter.

Ladies and gentlemen, we can’t afford to return to business as usual – something the public, if not always their leaders, seem to understand.

So it is no surprise that citizens across the world have taken to the streets to protest about the unfairness of this future.

This breakdown in trust is not of course confined to developed countries.

The Arab Awakening – which has transformed the political dynamics of an entire region – reflects the disconnection between long-serving rulers and their people, and anger at political systems seen as corrupt, unaccountable and unresponsive to the hopes and concerns of their citizens.

You may not consider these criticisms of global governance and leadership fair or think I am exaggerating.

But you cannot doubt the dangers they pose to the health and well-beings of our societies.

I understand what a difficult time this is for both corporate and political leaders.

It is not that long, after all, when I had some of the responsibilities you now bear.

The demands for action on you have never been greater, the stakes scarcely ever higher.

At the same time you may rightly feel that your room for maneuver has never been less.

But I remain, too, a believer in our ability to change to make the world safer, fairer, more equitable and prosperous.

It requires us to rediscover a spirit of common purpose and community – something which remains strong, even in these individualistic times, in Scotland.

Here, and very appropriately given his long association with Glasgow, I want to return to one of the most influential voices in this country’s great history.

Adam Smith is rightly regarded as the father of modern economics, someone who drew attention to the importance and creative power of the markets in driving progress.

But Smith did not believe that the markets alone should decide our fate.

He argued in “The Theory of Moral Sentiments,” that prudence, humanity, justice, generosity and public spiritedness must also guide our decisions. We need urgently to rediscover these virtues.

We must find a way to harness the creative forces of the market so it works in the long-term interests of us all.

We must ensure that policies enhance opportunities for productive investment, job creation and help meet people’s essential needs.

Ladies and gentlemen, this rebalancing must begin at home.

The global economic crisis has underlined the importance of State institutions in setting the right frameworks for growth and sustainable development.

Look, for example, at the opportunities that tackling climate change can bring – something I know which has already concentrated minds here.

Greening our economies can provide hi-tech jobs, stimulate enterprise and productivity in a way which helps us overcome environmental concerns.

Many economists believe the green transition will have an economic and social impact equivalent to the first industrial revolution.

Already, the global market in low-carbon and energy-efficient technologies is projected to triple to $2.2 trillion in 2020.

Given Scotland and the UK’s leadership in energy technology, it is no surprise to see you seizing these opportunities.

You are setting a lead which we can only hope that others must follow and help galvanize long-overdue international action.

Perhaps even more urgent is collective action to repair the damage to the global economy.

You do not need to be a teenage radical to believe that the rapid rise of global financial interests has eroded vital checks and balances.

Scotland, like the UK, has paid a heavy price for such recklessness. Few are arguing now for less regulation in financial markets.

We need to find the courage to tackle the immediate crisis in Europe and beyond without slashing living standards of millions of people.

Debts, of course, have to be repaid. Budgets have to be balanced.

But if austerity is the only answer, then anger will boil over and our actions may fail to meet even their narrow objectives.

We need as well to reform our global financial institutions so they can prevent such mistakes being repeated and reflect all voices and interests in the world economy.

I am sure I am not alone in seeing the paradox of asking China to rescue the Eurozone while denying them commensurate influence in our global economic institutions.

Richer countries must also meet their commitments on aid and not use the economic crisis to break their promises to the poorest people on the planet.

The target of 0.7% of GDP on development assistance is only a tiny fraction of public spending. Yet it is vital to tackle poverty and promote peace and stability.

Here I want to pay tribute to the UK Government for meeting its international obligations.

A country and people with such a global outlook understands that development is not only morally right, but also in your own long-term national interests.

Ladies and gentlemen, all my working life I have pushed for countries to cooperate in finding solutions to the world’s problems on the basis of our community humanity.

Never has this way forward been more needed.

Without leadership, policies and practices rooted in social justice, respect for human dignity and dialogue, our efforts to address global challenges are doomed to failure.

Without solidarity and democratic accountability, we will not build cohesive societies or combat inequality and injustice, upon which our security depends.

This needs courage, vision, determination and an ability to look beyond narrow short-term interests.

These are qualities which Scotland has in abundance.

Thank you for letting me share my thoughts and I wish you every success in the future.

“We can’t afford to return to business as usual …”