Putting “global public goods” in place will cost money, and a new international mechanism is needed to get action on them, UN and World Bank officials said in Singapore yesterday.
“Global public goods” denotes the big international factors which, if damaged, can cause development and economic damage: public health, a clean environment, stable trading and financial regimes, and peace.
The International Task Force on Global Public Goods, launched in Singapore yesterday, proposes to create a new group, a Global 25, to act as a catalyst for actions by national governments and multilateral institutions.
Ernesto Zedillo, co-chair (with Tidjane Thiam) of the task force said Monday: “There is a problem of leadership, business as usual will not make it to the general global public good we need to face existing challenges.”
The G25 would be made up of finance ministers and central bank governors of the Finance G20 which includes the G7, European Union, Argentina, Brazil, China, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey, plus the leaders of the IMF, World Bank and the chairs of the IMFC and Development Committees.
Kemal Dervis, UNDP administrator, said: “There is a need to bring together the Bretton Woods institutions with the UN,” to push for action on developing global public goods. The G25 would overcome the sectoral focus of multilateral institutions, he said.
The priorities selected by the task force are: preventing infectious diseases, tacking climate change, enhancing financial stability, strengthening the international trading system, achieving peace and security and generating knowledge.
The world’s richest economies – Canada, the European Union, Japan and the United States – were reprimanded by the panel for blocking agriculture negotiations that caused the Doha round talks to collapse. These countries, “among the biggest beneficiaries of the mlultilateral trading system,” must reduce trade barriers and subsidies without loopholes and set up an “aid for trade” fund to compensate the poorest countries for their loss of trade preferences and build infrastructure to allow exports.
Financing these global public goods will take about $15 billion annually. Some funds could be raised by a carbon tax that would be paid by polluters, which is strongly recommended by the panel, and a proposed tax on international air travel.
Asked whether the panel considered a windfall tax on profits of commodities producers who are benefiting in today’s international trading system, Zedillo said no, stressing that the multilateral trading system is considered a public good.