Dear Colleague,

The purpose of this note is to establish some boundaries for the challenge of developing a 2020 Vision. Our intent is for you to craft an International "Organization Chart" describing the mandates of the core International "Economic Institutions" in 2020 - what will the forms and mechanisms of global "economic" governance look like? We hope that this exercise (which Joe Stiglitz has subtitled "Beyond Mush") will disprove Heisenberg's contention that if you know where you are, you cannot know where you are going.

Scope

Current institutions which fall within our intended scope include the IMF, World Bank, WTO, UNDP, UNEP, ILO, WHO, and FAO. To limit the exercise, we suggest excluding the World Meteorological Organization, the International Maritime Organization, the International Telecommunications Union, the Universal Postal Union, and the International Civil Aviation Organization. The intention is to focus on the mandates for issues where the political, economic, and social challenges are still unresolved, and where there is considerable controversy. Other organizations - UNHCR, UNCTAD, WFP, UNESCO, UNIDO, WIPO, IAEA, and peacekeeping and observation forces - are in the grey zone.

The scope should cover mandates that deal with the critical transnational problems - such as post-armed conflict recovery; financial and economic crises - both prevention and resolution; climate change and declining biodiversity; international crime; and poverty and income inequalities, which lead to conflict, migration and environmental degradation. The scope should include consideration of whether there will be new or amended structures, mechanisms or institutions in the areas of competition, tax, and bankruptcy. Martin Khor, for example, has raised the question of an International Bankruptcy Court, and an International Regulator of Hedge Funds.

We should assume there will not be a Global Parliament. A second assumption is that the US Congress will still exist, with significant sovereigntest interests continuing to bedevil internationalists. The question is what to strive for: What is the best the world can do, pushing the envelope of the feasible set as far as possible?

Challenges

Population will be a driver. We may add close to a billion people by 2020, with much of this growth in the world's poorest countries. This growth will accelerate the use of natural resources and have consequential environmental impacts. Energy demand could increase by fifty percent by 2020, most from developing countries, bringing more pollution and global warming.

Pessimistic biodiversity forecasters believe that by 2020 half of the species alive today could be extinct. Critical water shortages are ahead, with one third of the world's population in countries currently suffering water stress. The state of water and environmental degradation are one factor leading to the increasing severity of infectious diseases. Forests and Fishery resources are being depleted at unsustainable rates. Food security may become a prime issue. Estimates are that more than one billion people will suffer from chronic malnutrition.

There is an increasing threat of new and emerging diseases and immune microorganisms. In the last twenty years, more than thirty new and highly infectious diseases have been identified. AIDS in sub Saharan Africa may decimate the urban professional class. By 2020, more people in Asia could have AIDS than in Africa. Future problems may come from synthetic bacteria from gene laboratories, migration influenza, and "Mad Cow Disease". Public health systems are collapsing in some parts of the world. One estimate is that most pharmaceutical research is dedicated to diseases affecting only the richest ten percent of the world's population.

There is an increasing divergence between rich and poor, not withstanding economic theory. There is growing inequality in the distribution of average incomes across countries, and in the internal income distributions within all countries. This divergence is observed in income measurement, either by purchasing-power parity terms or in terms of actual exchange rates. While poverty incidence rates have decreased, because of population growth, absolute numbers of people in poverty has increased. The increasing number of "losers" and growing income polarization provide protest a substantive basis and belies Tom Friedman characterization of anti-globalization protesters as the "well-intentioned and ill-informed being led around by the ill-intentioned and well-informed (protectionist unions and anarchists)".

Transnational crime has been characterized as the world's fastest growing industry. Illegal trafficking is going global. Drugs, nuclear materials, arms, counterfeit goods, illegal immigrants, and people enslaved into prostitution, cross national boundaries and regions. International crime is increasingly high-tech and organized.

The economic openness that leads to economic interdependence and growth has also resulted in increased volatility, crises, and disputes over rules and practices. Speculation and debt are significant problems.

Notions of national sovereignty differ in different parts of the world - there is no consensus on how to strengthen the international financial system to pursue liberalization, but prevent crises. In the case of bankruptcy, there will be more need for an organized workout mediation process. Trade practices will provide plenty of irritants and discrimination, with duty and quota-free access denied indirectly if not directly. New and sophisticated tariff barriers will emerge.

Conclusion

We are not suggesting readings on trends, future global governance challenges, diagnoses, or prescriptions. There is an intimidating explosion in the extent of the literature, and official and NGO Websites.

Please craft your Vision so that it can be framed in a 20 to 25-page paper (with a font no smaller than 10 point size). We hope that no one will use Mme de Stael's apology that she "had to write a long letter, because she did not have time to write a short letter."

To ensure the basis for a stimulating and constructive discussion, please provide Joe and I with a draft outline of your paper by June 15, 2001, and with the completed Vision paper by August 1, 2001. This will permit us to share the papers with the other participants early enough - so that when we meet the evening of August 29, 2001, we will move straight to the heart of the discussion. Minister Paul Martin, Chair of the G-20, has indicated that he will try to attend our closing session on August 31, 2001. In any case, the senior officials from Canada's Summit team, and Len Good, President of CIDA, have confirmed their attendance.

We look forward to the 2020 Visions, to see if a consensus will emerge on institutionalizing innovative initiatives (emissions trading, environmental accounting, incentive-based regulations, international taxation vehicles), on subsidiarity, or on some new ingenious ideas.

See you on August 29, 2001, in Victoria, if not before. I wish you effective visioning.

Gordon S. Smith Director Centre for Global Studies