Death of the Doha Dialogue of the Deaf

Time for a New Beginning for Global Market Momentum and Legitimacy Dear Friends I have been very sceptical of Doha succeeding. In 2004 the Evian Group held a session entitled: “Is Doha a dying duck?”. On that occasion, as on many others, I was told that I was unduly pessimistic. I do not know how many times it was announced that a breakthrough was round the corner. And much of this was coming from the trade policy makers. Only a month ago, at a luncheon a senior EU trade official confidently stated that Doha was going for a make-or-break, and he strongly believed that it would be “make”. This was in reference to Potsdam. Well there was no make, but no one (why, for heaven’s sake?) is prepared to confirm officially that it is yet “break”. The dead horse may be around a while longer, even though the smell is becoming quite putrid. I do not want to pretend here to omniscience. I have often been wrong. But on Doha, I have been pretty much convinced all along that I was right. Why? First, forgive me for coming out with the cliché that we live in a very different world: the “paradigm has shifted”. Indeed, the world is undergoing what is arguably its most profound transformation for over half-a-millennium. As a former Indian MBA student of mine commented once: “when there are periods of profound transformations, there are three kinds of actors: those who make things happen, those who watch things happen (and adjust), and those who wander what happened”. The trade policy community, with some notable exceptions, is in the third category. Perhaps the point was especially driven home at the trade session in Davos in 2006, when the Brazilian minister, Celso Amorim, rightly pointed out that the discussions between the ministers were going round in circles and consequently the usually fully packed main auditorium was virtually empty. Doha has been a dialogue of the deaf in very restricted circles. One of the main causes for the paralytic state we are in is that the right lessons from Seattle were not drawn. At a working dinner at the Canadian embassy in Geneva shortly after the Seattle fiasco, with the WTO officials and representatives still shell-shocked, the point was made to then WTO Director General Mike Moore that what was needed was inspiration, leadership and inclusive global consultation. In other words, the trade policy makers should spend more time talking – and, much more important, listening – to multiple stakeholders in and across frontiers to gain legitimacy and confidence. Some, to be fair, did that. But it was not enough and it was not sustained. And it was often more speaking than listening! Far too many in the policy community remained aloof and often arrogant. In this profoundly fast changing universe, many (most?) people are anxious. As the trade policy makers failed to make the economic and social (welfare) case for the global market economy, protectionists and populists gained the high ground. Worse, trade policy makers continued using antiquated mercantilist jargon that seriously undercut the objectives they were supposedly trying to reach. As was stressed at the Evian meeting convened in Washington DC in February this year, trade ministers and officials have made no real effort to “market” the benefits of Doha. What was not understood is that whereas in the previous paradigm all this did not matter, in the early XXI century global information age paradigm it matters one hell of a lot. The result is that the global market economy is (a) broadly misunderstood, (b) highly suspect by stakeholders pretty much throughout the world, consequently (c) enjoys hardly any support or legitimacy. The Doha Round was launched in the shadow of of 9/11 , without any broad support, hence it was flawed from birth . The illegitimacy of Doha also derives from having called it a “Development Round” without any rigorous attempt to define what that means and how to measure it. Lessons from South Africa for Global Solidarity, Momentum and Legitimacy So what do we do now? While I know many people I respect will disagree with me, I think it is time definitely, once and for all, to pronounce Doha dead. Even if the Round were to “succeed”, however defined, it would be no more than a Pyrrhic victory in the much broader campaign to establish a robust institutional framework for global business in the XXI century. Doha has not done any good. It has not brought the world community closer together. It has not made the global case for free trade. It has not legitimised the rules-based multilateral trading system. Indeed, it has undermined it considerably. It has not created genuine dialogue, let alone understanding, between communities and stakeholders. By failing to advance and legitimise the multilateral agenda, it has spawned potentially highly dangerous discriminatory preferential bilateral agreements. It has intensified centrifugal forces. And, as I argued in a previous communiqué (Sustainable Global Business Requires Foundations and Trust), instead of generating trust, it has fostered mistrust. It is time to call a spade a spade: Doha has been a disaster. Hence, time to call it quits. Time to bury Doha. In the time between the former communiqué (22 June) and this one, I have had a few experiences that have given more food for thought. In particular, my colleague, Professor Benoit Leleux, Director of the IMD MBA programme and I accompanied the entire IMD MBA class (90 participants, 42 nationalities, average age 31) on an intensive and very well prepared study trip to South Africa. The challenge was to try to understand the dynamics, immense hurdles and quite extraordinary evolution of that society, the process of ending apartheid and community confidence building, the challenges that lie ahead and the current and future roles and responsibilities of business leadership. It was a remarkable trip that exposed us to some fascinating and courageous people and to very profound reflections. We were, among other things, very fortunate to have had as interlocutors some of the key actors and negotiators on both the white and black sides. It is too easy to forget that by no means was this quite fantastic outcome a foregone conclusion or that it was easy. Apartheid may have been instituted in 1948, but the separateness and suspicion between the communities went back several centuries; on the black side the wounds were deep, while on the white side the anxiety was high. As they stressed, while South Africa is referred to as a “miracle”, it was no miracle, it was hard, hard, hard grind, with many disappointments and many fears on the journey. When they were asked what was it that kept things going, even in the most desperate time, speaker after speaker stressed the importance of that four letter word: TALK. As one commented, you have to talk all the time: before a crisis, during a crisis, after a crisis. Keep talking. The term talk here refers of course not to the pantomime engaged in by the trade policy makers, but to genuine dialogue, and genuine dialogue encompassing multiple stakeholders, all those who feel affected. Without in any way wishing to trivialise apartheid, I think one can argue that the world community is increasingly reflecting a kind of global apartheid. It is not just the growing huge income inequalities that appear to be happening on a planetary scale. Perhaps it is as much, if not more between what John Micklethwait (current editor of the Economist) and Adrian Woolridge in their excellent book A Future Perfect: The Challenge and Hidden Promise of Globalization referred to as the “cosmocrats”, the new elite who believe they have everything to gain from globalisation, and those who feel (rightly or otherwise) they may have everything or at least a lot to lose from globalisation. A problem, and one that Micklethwait and Woolridge alerted their readers to, is that while the “cosmocrats” are very much on their own wavelengths, they may not be communicating with their non-cosmocrat compatriots. In other words, while Chinese, Danish, South African, Jordanian and Chilean investment bankers are likely to encounter absolutely no cultural barrier in talking to each other, they may encounter very serious cultural barriers speaking to their own compatriots who are not globalised. Cosmocrats must make the effort to engage all members of the global community, all stakeholders, in genuine dialogue. As things stand in mid-2007, with a very volatile and fragile global community, this appears more of an imperative than ever. I should quickly add that after South Africa, I went to Argentina where the Evian Group had convened a capacity building three-day workshop bringing together multiple stakeholders from Latin America to discuss governance, the private sector and sustainable development. Participants included trade union leaders from mining districts, some quite assertive NGOs, as well as officials, entrepreneurs, business executives, journalists, etc. Here were people (about 60 in all) with very different standpoints and initially a quite high degree of mutual suspicion. I would not say that by the end everyone was in agreement – this would be unlikely and in any case not desirable. But the suspicion had by and large disappeared, there was a good deal of mutual respect and camaraderie. There was also a commitment to maintain the dialogue and to bring the dialogue to other stakeholders. So, Doha should be declared defunct. The lessons should be drawn. There should be the establishment of an Eminent and Emerging Eminent (to ensure robust representation from the next generation) Persons Group that should define the global agenda for a genuine global dialogue, with, as in South Africa, an emphasis on truth (there have been so many distortions in the course of this painful Doha debacle) and an emphasis on seeking to bring about reconciliation between the different perspectives. While dialogue will be fostered, the selection of the people in the Eminent and Emerging Eminent Persons Group must also ensure that of vision and leadership are among their main attributes. This could be a preliminary step to the convening of a much more ambitious “Bretton Woods” for the XXI century. Of course not all problems will be solved. Probably after this exercise the global environment will still be volatile and fragile. But progress should be achieved and hopefully fracture prevented. Above all, this global dialogue should be a means to foster momentum and legitimacy to the global market economy and provide a greater sense of solidarity within the global community. There are, to paraphrase from the subtitle of Micklethwait and Wooldridge, many “hidden promises” in the global market economy. It would be a tragedy should they not be realised. Many other details and implications need to be addressed. We will be doing so in future communiqués, in discussions in the Evian Group Brains Trust, in the in the Evian meetings worldwide, and in the Warwick Commission deliberations (https://www2.warwick.ac.uk/research/warwickcommission/). In the meantime of course I invite you to make comments and suggestions. Yours ever Jean-Pierre

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