World Affairs in the New Millennium

Forum 2000
Prague Castle, Prague
Czech Republic
October 15, 2001

Once more, thanks to President Vaclav Havel for his foresight in organizing these distinguished seminars.  The Forum 2000 seminars were held long before the awful events of September 11 changed our world – and with it most conventional thinking:  not only about national security, but also about international affairs and domestic policy issues.

As a result of these terrible events, we in the USA learned some harsh lessons:  The very policies and technologies that we and other OECD countries used to create today’s economic globalization – also created global interdependence.  We also globalized terrorism, crime, drugs and arms trafficking, money laundering, tax evasion and increased the risks of disease epidemics. Global mass media, films, TV and the Internet spread images of unattainable consumer lifestyles, advertising of luxuries, and much culturally degrading programming.

While nothing excuses mass murder and criminal terrorists, we need to understand the frustration of the world’s billions of poor and dispossessed as they try to better their lives.  Many retreat into religious fundamentalism and futile attempts to restrain their children from the forbidden fruits and temptations of Western culture.

These attempts at preserving their own cultures from the Western influences go beyond Islam.  I have encountered similar attitudes in Europe, Latin America, Asia and among indigenous peoples worldwide.  They too see the invasion of Hollywood, global TV fare and violent videogames as degenerate and pathological – destroying their values and undermining their cultures, education and parental responsibilities.  Indeed, many US parents feel the same way and their protest movements against US media forced the V-chip and ratings systems on reluctant media moguls.

Deeper lessons involve what many other countries see as US arrogance and the unilateralism that until recently characterized the current Bush Administration.  The lone US abrogation of the Kyoto Protocols on global warming angered many countries – as did our refusals to ratify treaties on land mines, nuclear proliferation, chemical and biological weapons, the international criminal court, small arms trafficking and even earlier conventions on core labor standards, the rights of women and children.  In many cases the US has thus infuriated its friends and allies as well.  A Newsweek/Princeton Survey of September 20th found 64% of Americans believe that a major reason for the terrorist attacks were “Resentment of US military and economic power in general”; 68% cited “Opposition to US ties to Israel and US policies toward the Palestinian situation.  A combined 67% cited “Resentment of the impact of US culture such as movies and popular entertainment in Muslim countries” and 73% cited “Economic hardships in Muslim countries created by Western capitalism” as both major and minor reasons for the attacks.

Mercifully, Mr. Bush has since September 11 reversed this disastrous course – most crucially by getting Congress to pay up $584 of the over $1 billion of back dues owed to the UN.  As I predicted in my September 20 editorial, this was Mr. Bush’s Win-Win Option and it did clear the way for the September 29 UN Security Council’s resolution and the General Assembly’s October 1 week-long Special Session on Global Terrorism.

Lessons still to be learned include coming to terms with our wasteful fossil fueled US economy – which perpetuates our 60% dependence on oil – mostly from OPEC and the Middle East and other Arab countries.  This bankrupt energy policy got us into the Gulf War and continues our support for dictatorial regimes, particularly the Saudi royal family.  These and other roots of US military presence in the Middle East and what is seen as our bias toward Israel have left the US even more exposed to terrorists and Islamic fundamentalism.  Opposition to the Gulf War and US presence in the Gulf Region was cited by 75% in the same Newsweek/Princeton poll as major (53%) and minor (32%) reasons for the attacks.

So how best can the US defend itself against these sophisticated new terrorists – who are conducting a clever campaign to try and hasten US disengagement from the Middle East and support for a Palestinian state?  These policies are contrary to mainstream US goals and those of many of our allies. Therefore, the world is in danger, not only from global terrorism, but a continuing conflict of major proportions – a possible World War Three.

I am not a military strategist, nor a conventional national security specialist.  I am a systems thinker synthesizing beyond most academic disciplines.  Never were “outside-the-box” thinking and strategies needed more.  We have already seen Mr. Bush change course.  He is wisely moving from unilateralism to the realization that the global interdependence the US did so much to create requires cooperation with many countries in the broadest coalition. Until October 7, Bush reined in the hawks in his Administration and the Pentagon and rightly cautioned the US public on the need for patience and a variety of approaches to global terrorism.  Since then, US strikes on Afghanistan have ignited opposition that may destabilize Pakistan and other countries.  The loss of 4 UN workers is tragic, as are all losses of innocent civilians.

Since today’s terrorist threats involve suicide attackers and are low and high-tech and global – only systemic approaches are likely to be effective in the short and the long run.  These include:

A complete re-think and reorganization of current US Pentagon force structure to address these new global terrorists, cyber warfare and many low and high tech surprise strategies, for which large weapons systems are unsuited if not useless.  This includes canceling missile defense, which was always an unfeasible and irrelevant holdover from the dreams of scientists and weapons contractors hitched to President Reagan’s Star Wars.  Many experts on cyber warfare, better intelligence, low-intensity and terrorist strategies, who have labored in obscurity at the Pentagon for over a decade, will now need to be recognized and funded adequately.

Just as important, the US must redress its serious decline in funding diplomacy and intelligence, which has lost much ground to weapons-procurement.  The “prevent and deter” strategies of diplomacy, coalition building, multilateral treaties, information and financial strategies must be balanced again with those of “attack and destroy” weaponry.

Most of all, the US should also repay the $500 million of still-outstanding UN dues (some still owed to our European allies for US-approved UN peacekeeping missions).  A Harris Poll September 19th found 95% of Americans think building a coalition of many countries to support the US is very (79%) or somewhat (16%) important and 84% believe it very or somewhat important to get the support of the UN.  The UN must be seen as the world’s most important international body, since only the UN can convene all nations.  The US can help in revitalizing the UN by supporting new permanent members who should be part of the Security Council, including Japan, Germany, Brazil, India and South Africa and probably Indonesia as well.  The US should then take the lead in abolishing the veto – which is counterproductive as it is also in the hands of Russia and China.

A properly funded UN with a revitalized, democratized Security Council could then sponsor the proposed United Nations Security Insurance Agency (UNSIA). Military approaches can be replaced by insurance, as in the (UNSIA), a public-private, civic partnership between a reformed UN Security Council, the insurance industry and the hundreds of civic humanitarian organizations in conflict-resolution and peace-building.  Any nation wanting to cut its military budget could apply to UNSIA for a peacekeeping “insurance policy.”  The insurance industry would supply the political risk assessors and write the policies.  The “premiums” would be pooled to fund properly trained peacekeepers and rapid-deployment of the existing networks of civic and humanitarian groups.  The “deliverable” would be properly trained UN peacekeeping forces and rapid-deployment of civil society groups for confidence-building and humanitarian aid.  The UNSIA proposal is backed by several Nobel Peace Prize winners and is taught in many university courses.  (See The UN: Policy and Financing Alternatives, futures, Elsevier Scientific, UK, March, 1995)  Redeploying military budgets and providing alternative security structures are the sine qua non and bedrock of sustainable human development.

Another crucial set of reforms involve taming our global casino of some $1.5-$2 trillion of hot money sloshing around the planet every day.  Finance ministries have called for a “new international financial architecture” since the Asian meltdown of 1997.  NGOs propose taxes on currency speculators, (Tobin Tax) supported as well as by George Soros and many other market players.  With deregulation taking down all the firewalls between countries’ economies, we now have a global roller coaster of bouncing currencies and synchronized recessions.  Mr. Bush has also wisely reversed his former opposition to the OECD and G-7 crackdown on money laundering in order to follow Al Qaeda’s money trails.

Scenarios of global economic recession were on the horizon before the awful attacks of September 11 on the symbols of finance, world trade and US military power.  Instead of the US leading a coalition of bombing raids I have advocated countries with large inventories and backlogs of unsold food, clothing and other consumer goods to start air-lifting those surplus goods and parachuting them to refugee camps in Afghanistan and bordering areas.  Starving Afghans, whose UN and other food and humanitarian aid cut off as a result of the US attacks can fill their stomachs and find new strength to resist their Taliban oppressors.  Unfortunately, instead of immediately implementing this humanitarian airlift for its own sake, the US waited and combined token food drops with its air strikes – reducing their humanitarian value to a public relations exercise.

Still, it seems that unsold commodities, medical supplies, consumer goods, radios and magazines will continue to float down from the skies.  The Taliban will become further discredited for their economic failures.  As unsold inventories are reduced in stagnating economies in Europe, Asia, North and South America, production can be revived and people re-employed.  These economies and companies will rediscover the power of bartering.  Surplus goods for peace and helping smoke out Al Qaeda would be a fraction of the cost – as well as avoiding the casualties of weapons and military strikes.

Money-based systems, policies and national accounts, such as GNP are only half the story – and limit our thinking and strategies.  Money does not equate with wealth, a broader term, which includes human creativity, intellectual and social capital and ecological assets.  Outside the box of conventional economics lie a wealth of creative strategies based on barter, reciprocity, mutual aid, sharing and cooperation.  This hidden parallel economy is estimated at $16 trillion annually, but money-free and therefore invisible to economists. These strategies used by the other half of humanity, the poor and those bypassed by globalization, are all considered irrational and primitive by market economics with its competitive strategies of maximization of self interest and profitability. Those of us who advocated airlifting surplus supplies, food and unsalable consumer goods to Afghans follow the logic of game theory, not economics.

The UN Summit on Financing for Development will take up all these issues of reforming global finance in Mexico, March 2002.  Many of the proposals I and my partner Alan F. Kay, of the Center for Defense Information’s board, will be official background documentation for this Summit.  These proposals include the UNSIA and the FXTRS, a computerized, screen-based method of currency-trading.  FXTRS allows central banks to catch money-launderers, and tax speculators – reducing currency volatility and creating emergency currency reserves when currencies may be attacked by speculators.  Since these flows of hot money are 90% speculation, even a .01% tax (of little consequence to traders) could raise up to $50 million a day.  These funds can be directed to childhood vaccinations, education, micro-finance of village enterprises, rural solar electrification and other forms of efficient, resource-saving development.

It will also be in US longer-term interests for Mr. Bush to reverse the priorities of his Energy Plan – largely shaped by his campaign donors in the oil, gas, coal and nuclear power industry.  Not only is this fossil-fueled, Middle East oil-dependent future untenable on security grounds, it is also extremely wasteful and unsustainable on health and environmental grounds.  Energy independence – a laudable goal – can be better achieved at lower cost, greater efficiency, while creating new jobs in the now rapidly emerging solar-based renewable energy industry.  Wind power in the agricultural Midwest is the USA’s “OPEC” – and is already augmenting farmers’ incomes.  Denmark now gets 13% of its energy from wind.

Solar photovoltaics are also taking off, jumping 43% in 2000 as prices dropped to $3.50 per watt.  Electric hybrid cars, like the Toyota Prius I own, get 50 miles to the gallon in traffic.  Fuel cell cars that run on hydrogen will be available from all major auto companies starting in 2-3 years.  Fuel cell generators will enable houses, apartment buildings and factories to get off the grid.  The future of energy is in decentralized micro-generation – not in building huge central power plants, miles of transmission lines and new oil pipelines.  As former OPEC oil minister Sheik Yamani noted recently, “The Stone Age didn’t end because we ran out of stones.” President Hugo Chavez of Venezuela, OPEC’s initiator, stated to OPEC’s Summit in 2000 that the only real sources of energy are solar energy and human talent.  Even OPEC and oil majors, BP and Shell, are planning their own post-petroleum futures in solar and hydrogen.  There are now lists of such alternative energy stocks available.  I have such a portfolio of these new companies and they have been performing well in this shell-shocked market.

Which brings me to the whole area of socially-responsible investing in these and other companies now positioned to succeed in this new Millennium.  The trade association of these investors, asset managers, mutual funds and pension funds is the Social Investment Forum (www.sif.org).  This segment of the financial industry is it’s fastest-growing – representing some $2 trillion in the USA alone – and growing in Europe and worldwide.  I have served on the Advisory Council of the Calvert Group Inc’s socially-responsible mutual funds since they were launched in 1982.  Calvert manages about $6 billion including a family of funds of such socially and environmentally responsible company shares (www.calvert.com).

We often forget how powerful each of us really is – as voters, consumers, investors and employees.  We can ”vote” every day with our pocketbooks by investing in America’s best companies and buying their products.  We can use the Shopping for a Better World pocket guide when we go to the supermarket – or click on their website www.shopforchanges.com for up to the minute information on corporate social performance.  Many corporations now have published Codes of Conduct.  In 1999 the UN Secretary-General Kofi Annan announced in Davos the UN Global Compact which asks corporations to sign on to its nine principles of good corporate citizenship: on human rights, labor and workplace standards and environmental protection.  I am proud to have introduced the Calvert Group to the UN Global Compact and that Calvert’s CEO, Barbara Krumsiek, has offered the Secretary-General Calvert’s donated services to help in spreading the principles and good practices of the UN Global Compact.

Further, industrial and developing countries must go beyond scoring their “progress” and “wealth” by means of the now out-dated Gross National Product (GNP) and its narrower domestic version, GDP.  These national accounts were introduced in Britain during World War II to maximize Britain’s war production.  They value tanks, planes and weapons and all material production, but set the value of human resources, social capital and ecological assets at zero. Much of my work and writings over the past 30 years has focused on overhauling such 19th century economics in light of 21st century realities and our changing global economy.

For the past 5 years I have partnered with the Calvert Group in developing a new scorecard and tool for assessing US trends in twelve key sectors of our society and economy, the Calvert-Henderson Quality of Life Indicators, launched in 2000 and are now updated and available for journalists, professionals, investors and interested citizens at www.calvert-henderson.com.  Our National Security Indicator was flashing warning signals long before September 11 about the changes needed that I mentioned, if we are to address the security and quality-of-life issues of this new Millennium.

Lastly, I want to draw attention to the Earth Charter, a set of 16 principles of global interdependence.  Recently, I participated in the nationwide satellite TV uplink from Tampa to introduce The Earth Charter to cities in North America.  The Charter has been adopted by several, including the city of Sanibel, Florida.  The Charter has circulated in 100 countries since the Rio de Janeiro Earth Summit in 1992.  I was honored to be present at the Peace Palace in The Hague when the Earth Charter was officially launched.  Check www.earthcharter.org.  Its principles outline our human responsibilities to each other, to our families, countries, communities, to all species and to the Planet’s biosphere.  Thank you.

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HAZEL HENDERSON, author, futurist and consultant on sustainable development.  Her
latest book is Beyond Globalization: Shaping a Sustainable Global Economy. www.hazelhenderson.com.  The Calvert-Henderson Quality of Life Indicators were partnered with the US based Calvert Group of socially-responsible mutual funds are at www.calvert-henderson.com.  Click on the National Security Indicator for background information.

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