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Global Economic Order

Policymakers in Pakistan need to pay more attention to what is happening in the country related to climate change.

By Shahid Javed Burki | October 2024


It is not an exaggeration to say that the year 2024 has been a year of significant elections. So far, millions of people across the globe have gone to the polling booths to elect those who will occupy policymaking positions in the countries of which they are citizens. Going in alphabetical order, there were elections in Bangladesh, the European Union, France, several German states, and Pakistan. The next big election will be on November 5, when the Americans will choose who will occupy the White House from 2025 to 2029. The decision by President Joe Biden not to seek a second term in office, which the Constitution allowed him. He was abandoned by the influential leadership of the Democratic Party, which he had served for several decades. A consensus had developed among the party’s leadership that Biden no longer had the physical strength and mental sharpness to govern for another four-year term. He opted out of the race and endorsed Kamala Harris, his Vice President, to contest the next election. Harris had an unusual background. She was the daughter of a Black Jamaican father and an Indian mother. If elected, she will be the first woman to lead the United States and the second Black person to occupy that presidential office.

Once the year 2024 comes to an end, and results are available from the major elections held during the year; what are the significant issues the new leaders will need to confront?

In this brief write-up, I have focused on five issues that confront the world at this time in global history. At this point, I can identify five issues most elected leaders will confront. One is what kind of political system would be sold to people around the globe. After the end of the Second World War, there was a consensus that the people should be governed by an inclusive system of governance in which the leadership was chosen in elections held at regular and specified intervals.

Second, which country or group of countries should oversee the system of governance across the globe? Third, there is growing concern that the global economic order that was put in place after the Second World War no longer had the support of the people across the globe. Fourth, there is now broad recognition among those who know that the world is heading towards a major catastrophe unless the emissions of greenhouse gases are brought under control. Fifth, and finally, how should ventures into space be regulated? Since I don’t have the space to discuss all five issues, I will focus in this short article on just two: tensions in the global economic order and the need to deal with global warming.

The post-Second World War economic system was based on two crucial principles. One, no country would work alone, but the world’s economic affairs would be based on the consensus among nations. The result would be an economic order guided by a cluster of institutions that would be broadly representative and follow agreed governance principles. Several institutions were created to govern globally. These included the United Nations and the system of organizations that formed part of the collective body. The International Monetary Fund (IMF) was to regulate the financial system that would save the world from repeating the chaos that led to the Second World War. The World Bank Group and the associated regional development banks would provide affordable capital to developing nations – the group that is now called the “Global South.” Eventually, the World Trade Organization (WTO) was created to regulate the flow of goods and services among nations.

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