16 MAY 1996

Introduction

 A UNU Public Forum on The United Nations in the 21st Century (UN21) was held at United Nations headquarters in New York on 16 May 1996. The Forum focused on a five-year project launched by the UNU in Tokyo in November 1995, whose primary objective is to explore possible alternative models for international organizations, the United Nations most central among them, that would best meet the needs and expectations of the international community in the coming century.

 The UN21 project’s analytical framework focuses on three different dimensions of the world body — the United Nations as an actor, an arena, and a tool. Firstly, the United Nations is a global actor in its own right. Although it is not a sovereign entity that can govern its member states, it plays a semi-autonomous role in most issues where it is involved. The UN’s role as a global actor varies from one issue area to another. In certain areas it acts as a "global manager" playing an active role in global governance. In other areas it acts as a "global counsel" assuming nothing more than an advisory role in international affairs. In reality, the UN acts as both a global manager and glo-bal counsel. Secondly, the UN serves as an arena where member states can get together to discuss issues. It is also an arena in which various actors engage in political maneuvering. Its various deliberative bodies, most notably the Security Council and the General Assembly, provide just such an arena. Today an increasing number of non-state actors utilize the organization as an arena in which to participate. Thirdly, the UN also serves as a policy tool by which various actors advance their interests and non-governmental organizations target political processes to advocate their causes. Given these three dimensions of the UN, it is of vital importance to recognize that the UN performs very complex, often seemingly contradictory functions in world affairs. Accordingly, we need to employ a balanced strategy while undertaking UN reform. If we fail to keep the UN’s multifunctions in perspective, we run the risk of falling into conceptual disarray. Ignoring any of three dimensions of the world organization would mislead any restructuring efforts of the UN system.

 The principal components of the project are five core research groups: (1) States and Sovereignty; (2) Global Citizenship; (3) Market Forces; (4) Regional Arrangements; and (5) International Organization. In an effort to generate policy-relevant outcomes and specific policy recommendations, these research groups will address a different issue area each year. This year’s annual theme is peace and security. Research for successive years will focus on development (1997), the environment (1998), human dignity (1999) and governance (2000).

 The project seeks to make a contribution toward defining the role that the United Nations should play in meeting current and future challenges. It aims to produce a steady stream of timely, academically sound, policy relevant and action-oriented studies, which could contribute to the deliberative process now unfolding among scholars and practitioners both within and outside of the United Nations system.

 The purpose of the Public Forum was to provide an opportunity for the project’s research organizers to present interim reports on the progress of their research groups to members of the United Nations Secretariat and agencies, the diplomatic community and academia for feedback and comments. The Forum began with opening statements by Professors Heitor Gurgulino de Souza and Takashi Inoguchi, Rector and Senior Vice Rector of the UNU respectively. The panel discussion was moderated by Professor Thomas Weiss, Associate Director of the Thomas J. Watson Institute for International Studies at Brown University. The project’s research organizers — Professor Atul Kohli of Princeton University (States and Sovereignty), Professor Volker Rittberger of the University of Tubingen (Global Citizenship), Professor Heizo Takenaka of Keio University (Market Forces), Professor Muthiah Alagappa of the East-West Center (Regional Arrangements), and Professor Michael Doyle of Princeton University (International Organization) — served as panel discussants.

 States and Sovereignty

 Professor Kohli began the panel discussion with an overview of his research group which focuses on the changing nature of states and sovereignty. The design of the current UN system is premised mainly on a world organized as a system of states. As we move into the next century, however, sovereign states are under pressure form both "above" and "below." Global forces — economic, technological and cultural — are forcing states, even powerful states, to reorganize and to reconceptualize conventional notions of sovereignty. The room for weaker states to maneuver is additionally constrained by the preferences of powerful states. Moreover, many states are being challenged from "below," as groups within them redefine themselves as a "people," or even a "nation," and demand greater rights of self-determination; a number of existing states are bound to become failed states of the future. None of these developments spell an end to the world of states; states remain and are likely to remain powerful global actors, well into the 21st century. Nevertheless, these emerging trends do focus attention on the changing nature of states and of the state system.

 The questions that will guide the research of the research group on states and sovereignty include: How are new challenges altering states and the state system on the one hand, and on the other hand, what type of a United Nations will facilitate peace, prosperity and human dignity within this changing state system? The focus of the group’s collective research efforts will be less on the reform of specific UN institutions and more on an analysis of the changing parameters within which a future UN may function. States and the state system are clearly one such parameter.

 The changing nature of states may be viewed as being closer to one of the following two ideal types. On the one hand, we could conclude that the world is becoming less state-oriented in the sense that global norms of statism and sovereignty are weakening, and that important functions hitherto performed by states will in the future be performed by such non-state actors as markets, supranational organizations with "pooled sovereignty," and/or by non-governmental organizations. Alternatively, we could find that states are refocusing and reorganizing in the sense that the global system of states is very much intact but, given global economic and social changes, states are abandoning some traditional roles and acquiring new ones. These are "big" issues and thoughtful scholars will differ in their judgments. Within these broad sets of concerns, the group’s researchers have been asked to link their conclusions to what the future shape of the UN may be.

 For the first year the group will focus on the relevance of these broader themes to peace and security. The central concern of the research will be to analyze the changing nature of states and of the state system in the issue area of peace and security: Is the post-cold war world radically different as far as global peace and security issues are concerned? Has the usefulness of military power undergone any serious change? Are major future conflicts likely to resemble conventional conflicts of the past (e.g., inter-state warfare) or new types of conflicts, such as civil wars in failed states, more likely to dominate the peace and security agenda? Irrespective of the type of conflict, what type of peace and security role is the major global actor, the United States, most likely to play in this changed world? What role can a future UN play in facilitating global peace and security?

 Given that the whole exercise has policy recommendations as its goal, the research group will not shy away from normative issues. Irrespective of the analysis of empirical trends, should states and the state system be moving in the direction that they are moving? Why or why not? How can prevailing trends be altered?

 The following four papers comprise the studies undertaken by the group:

 • The Changing Nature of the State System

This paper analyzes broad system-level changes in the global political economy as they bear on issues of peace and security. The paper in the end will develop an argument about whether the world we live in is becoming less state-oriented or not.

 • The Nature of the United States as a Global Power

This paper examines the changing peace and security role of the US in the post-cold war era. It addresses such questions as: What are the US’s major peace and security concerns in the new era? How are the contradictory pressures towards isolationism and global assertiveness likely to evolve? What role is the US likely to play in solving (or maybe even in instigating) global conflicts?

 • The Problem of Failed States

This paper looks at the forces that typically underlie failed states (failed in the sense that they are unable to perform the quintessential task of maintaining order within their borders). Are these forces on the rise? Why? What, if anything, can and should be done to address this problem? Is this a key peace and security issue that will demand the future attention of the UN?

 • The Role of Emerging Powers

The final paper analyzes the security implications of new and emerging powers, such as China, India, Iran, Iraq and Israel. It seeks to provide some sense of how ambitious nationalist and/or aggressive a range of emerging powers are likely to be and how much regional and global room exists for the accommodation of such ambitions.

 Global Citizenship

Professor Rittberger, research organizer for the group on global citizenship, began his presentation by noting that the intense scholarly and political attention given to the concept of "global citizenship" — even though it had its predecessor in the literature on transnationalism in the 1970s — is a fairly new phenomenon. It is certainly no coincidence that it picked up considerable momentum with the dissolution of the Soviet Bloc, which initiated a lively debate about the future order of international relations. The role that an allegedly globalizing civil society was to play in this new world order emerged as a focal point of this discussion.

Since then, concepts like "global citizenship," "world polity," "international civil society," or "global civil society" have become part of the vocabulary of the scholarly and political discourse. The debate about which of these terms most adequately describes the witnessed phenomena does not need to be traced in detail. What is more important is to explicate the fundamental convictions that all scholars and practitioners using the concept of global citizenship, global civil society, world polity, etc., have in common. They all share the conviction that it is necessary to go beyond state-centered and inter-governmentalist approaches if one wants to understand what governance in the 1990s and beyond is all about. Furthermore, they all believe that looking at intersocietal linkages as the basis for political action and change is the way to go about this task. Following the original Latin concept of civilis societas, or civilized community, global civil society is commonly defined as a "sphere" of social interaction distinct from (but at the same time interconnected with) the state system or the global economic system. This sphere is composed of multiple heterogeneous social networks spanning across national borders which have been established and are reproduced by the interaction of non-state actors. Each network is united, more or less, by common norms and codes of behavior and operate within what John Ruggie calls a "global, non-territorial region."

Who, then, are the actors of global civil society? The spectrum is as diverse as the goals, capacities and strategies of these actors. A defining characteristic of civil society actors is that they are non profit-making. Within this category, we can distinguish different types of actors, including international non-governmental organizations (INGOs), Transnational Social Movement Organiza-tions (TSMO), and epistemic communities. To argue convincingly that transnational societal actors need to be incorporated into a theory of international relations, we need to go beyond the mere observation that these actors have proliferated. We need to be able to show that societal actors can either change policy processes and outcomes by influencing state behavior or by acting as quasi-political autonomous actors. We also need to develop hypotheses concerning the conditions under which these actors are likely to exert influence or engage in autonomous political action in different issue areas.

Like the other research groups, the group on global citizenship will focus its research efforts for the first year on the issue area of peace and security. It can be expected that the end of the Cold War may have even further enhanced the opportunities for transnational societal actors to act on security problems. One can witness a diversification of activities and of civil society actors in the peace and security issue area. There is a discernible shift from the previous concentration on the East-West conflict and the problem of nuclear disarmament towards regional and local security risks in the post Cold War era. Transnational non-governmental organizations have become engaged in conflict prevention efforts directed at diverse ethnic and religious groups as well as in post-conflict reconciliation. But there is also a "dark side" to this development: The end of the systemic conflict has opened up space for the activities of insecurity-promoting transnational actors such as fundamentalist religious movements and terrorist groups as well as criminal organizations.

More specifically, the research group on global citizenship endeavors to make a contribution to answering the following questions: Who are the agents of global civil society? What role do non-state actors, especially NGOs, play in international politics and in the UN system, in particular, today? What roles should non-state actors play in international relations and the UN system of the 21st century? The group will undertake research on the following subjects:

• Channels of Influence and the Impact of Transnational Epistemic Communities Aimed at Reducing the Risk of Nuclear War (Pugwash, IPPNW, etc.)

• Security-Endangering Non-State Actors: Transnational Arms-Dealers

• The Endangering of Internal Society by Transnational Criminal Organizations and Networks (Mafia, Drug Cartels, etc.)

• The ‘CNN-Effect’ on International Security

Market Forces

In the mid-1970s, 2.7 billion people lived in countries that explicitly adopted a so-called market economy system. Today, however, this number has grown to 5.4 billion following the transitional experiences of the former Soviet Union to a market economy, economic reforms in Eastern Europe, and the aspirations for a "socialist market economy" among some countries in Asia. Professor Takenaka, research organizer for the group on market forces, observed that this shift signifies not only a numerical increase, but also the intensification of economic interdependence through market forces across countries, the evolution of economic integration from shallow to deeper integration and, subsequently, policy changes in the market economy.

Market forces have wide powers. Once businesses and consumers have economic incentive through market mechanisms, even a gigantic political power cannot stop the powerful forces of markets. At the same time, we face two basic problems. Firstly, market forces are undoubtedly in-strumental in realizing the optimal allocation of re-sources and in en-hancing economic development. However, it is possible that market mechanisms could depress economic structures through market failures. For example, as a result of rapid globalization, income distribution has been distorted. This not only holds true for international levels but also for domestic levels. In the case of the United States, the average income is growing but income distribution is becoming increasingly unequal. We see this happening on a global scale as well. Hence, we can say that the application of market forces as the impetus for economic progress should be accompanied by a solid policy framework to reduce market failures. In this process international organizations will need to play a significant role.

Secondly, one should pay attention to the fact that the characteristics of market forces vary depending on the historical, social and cultural aspects of a given country, and that these differences could lead to economic disputes. We are witnessing both competition and cooperation among different types of market economies, which at times could bring about trade friction.

Based upon these considerations, the research group on market forces will be guided by the following questions: How will the changes in the political and social environments effect market economy? Con-sequently, how will this influence economic performance? What kind of strategies will governments and international organizations need to pursue in order to respond to these changes? Conversely, how will changes in markets forces effect political and social environments, especially in the area of peace and security? Case studies on several regions in which the interaction between political, environmental and market forces has been distinctive since the end of the Cold War will be conducted. This will include an analysis of the implications for the world economy. Furthermore, the group will put forth proposals on the role of the United Nations system to facilitate the promotion of economic development and political stability in the 21st century.

The situation today presents great opportunities and challenges for the global economy and, in particular, for market forces. It cannot be denied that there are many difficult economic problems to be solved in the world. However, we should recognize that a number of factors have enhanced or strengthened the supply side of the economy, which can be termed "positive supply shocks." For example, the so-called peace dividend may make it possible to utilize resources once used for military purposes for productive investments, such as building factories and increasing infrastructure, etc. In addition, the globalization of the economy has provided inexpensive investment input (which presents the opposite case of the oil crisis of the 1970s). Furthermore, the so-called technological revolution, especially in the area of communications and information, has accommodated the dramatic increase for labor productivity, especially white collar labor. Although these developments will be accompanied by short-term adjustment costs, such as problems of unemployment, in the mid- and long-term, these factors can contribute to the reinforcement of the supply side of the economy and market forces. It is therefore necessary to examine globally the application of these positive supply shocks.

During the project’s first year, the group will discuss market forces in relation to peace and security. The following studies will be undertaken:

• The End of the Cold War and Its Economic Implications

This paper focuses on changes and developments in the global economy as a result of the end of the Cold War. It primarily examines the impact on the market economy of the changes in circumstances revolving around peace and security issues.

• Economic Development and Military Expansion in Asia-Pacific

The second paper discusses how the changes in market forces or economic expansions have effected the security situation in the case of the Asia-Pacific region. This paper analyzes the relationship between significant economic growth in the region and increases in military expenditures.

• From War-Place to Market-Place: Lessons from Indo-China

The third paper examines the dynamic interactions between environmental changes in peace and security and the market economy. Moreover, it analyzes the implications of the experiences in the region on the rest of the world.

Regional Arrangements

Professor Alagappa, research organizer for the group on regional arrangements, began his presentation by noting that regional arrangements are commanding greater attention in the maintenance of international peace and security in the post-Cold War era. And there are many attempts to broaden and strengthen existing arrangements in Europe, revitalize those in Latin America and Africa, and forge new ones in the Asia-Pacific. In the early days of the United Nations, regional arrangements were seen as in competition with global arrangements. And to some degree, this is reflected in the provisions for regional arrangements in the UN Charter.

Increasingly, regional arrangements are being viewed in a much more complimentary way. Both policymakers at the national level and those at the United Nations have called for an increase role on the part of regional arrangements. This view is becoming more widely accepted because the demands on the United Nations have increased many fold, while the resources available to the UN have been cut back. There is an added pressure on regional arrangements to assume greater responsibility in the maintenance of international peace and security. This view was formally stated by the UN Secretary-General in a report prepared on UN peacekeeping in the post-Cold War era. He states that "the Security Council has and will continue to have primary responsibility for maintaining international peace and security, but regional action as a matter of decentralization, delegation and cooperation with the United Nations could not only lighten the burden of the Council, but also contribute to a deeper sense of participation, consensus and democratization in international affairs."

Although regional arrangements are receiving greater attention, ultimately, their significance and place in the post-Cold War security architecture will be determined by their capacity to prevent conflicts, their ability to promote the security of participating states, and the comparative advantage they hold in managing conflicts vis-a-vis other actors, including states, NGOs, the private sector and the United Nations. With this in view, the research group on regional arrangements seeks to take stock of the development of regional arrangements, the security roles that regional organizations have played in conjunction with the UN as well as on their own, their effectiveness in managing regional conflicts, the interactions with the UN with a particular focus on comparative advantage, and the problems and prospects for the future. These issues will be explored with a view to making recommendations on the possible security roles of regional arrangements.

The group’s research will take a geographical approach and look at the regions of Europe, Africa, Asia and Latin America. This approach will allow for the examination of the regions’ institutional history, density and capacity which vary widely across these areas. An examination of issues such as conflict prevention, conflict containment and conflict termination will be embedded within the regional approach.

The research group on regional arrangements seeks to address the follow questions: What is the relationship between the UN and regional arrangements as envisaged in the UN Charter? Has practice conformed or deviated from this? How and why? How is a regional arrangement to be defined and how many types of regional arrangements exist? What is the nature and density of regional arrangements in various parts of the world? What are the roles and capacities of these regional arrangements, and what is their formal link to the UN? How do the various regional organizations in a particular region relate to each other? What are the conflicts that typically confront regional institutions? When and why do regional institutions become involved or stay out of regional conflicts? What are the roles and strategies available to and deployed by regional institutions in conflict prevention, conflict containment and conflict termination? How have regional organizations sought to involve the UN in the management of conflicts? How has the UN been able to use regional organizations in the management of international peace and security? What has been the dominant pattern of interaction between the UN and regional organizations? What is the comparative advantage of each? What are their strengths and limitations? What is and should be the division of labor between the UN and regional organizations? How has coordination taken place and, in cases where regional institutions have taken the lead, how have they been accountable for coordinating the efforts? The studies undertaken by the group are as follows:

• The State of Security Regionalism: Past, Present and Future

• The Role of Regional Arrangements in Conflict Prevention

• The Role of Regional Arrangements in Conflict Settlement and Resolution

• The UN and Regional Organizations: Division of Responsibilities and Interaction

International Organizations

Research Organizer, Professor Doyle, noted that the specific task of the research group on international organizations is, first, to assess the current record, present capacities and future potential of international organizations. International organizations clearly differ from the other actors the project is examining. Each international organization is a composite made up of more powerful, coherent actors who define, to a greater or lesser degree, the identity and capacities of the international organization.

In the framework employed by UNU’s project concept paper, international organizations can be viewed as arenas, tools and actors. International organizations are arenas in which states, NGOs and corporations play out their ambitions. Even though the particular regime underlying each international organizations — the UN Charter for the UN — shapes the terms of the contest, the contest is the result of outside actors seeking to enhance their power, profit, principles and prestige. International organizations thus are also tools with specific capacities that are more or less useful for those outside actors. But international organizations also are actors; institutions empowered by their constituents, endowed with a semi-independent identity by their charters, staffed by a semi-autonomous civil service. This research group will therefore draw special attention to the ways in which international organizations, because of their global character, can set new norms through mechanisms as treaties and resolutions, can judge legitimately the behavior of states through institutions such as the International Court of Justice, the Security Council and the General Assembly, and implement some of those norms through, for example, peacekeeping and in some cases peace enforcement.

The extent of the UN’s autonomous role has ranged from global "counsel" — the role the UN has played in the development and environmental areas and may soon (if the post-Somalia "coalitions of the willing" model spreads) be limited to in peace and security — to a more activist role of "manager" — the role that the World Bank and IMF have played in development and finance and that the UN has sometimes held in peacekeeping.

The United Nations is one among many international, global organizations. Even in peace and security — the focal point of the UN’s global mandate — the International Atomic Energy Agency (IAEA) enjoys an independent mandate. In the area of economic development, despite several normative prescriptions for coordination, the UN has so far held a junior and peripheral role. The question of an appropriate division of labor and the need for coordination arise not merely between, for example, regional organizations and the UN, but also between the UN and other international organizations, some with over-lapping mandates.

The research group on international organizations also has a normative and policy agenda and seeks to identify ways in which needed capacity can be enhanced such that the UN can operate more ef-fectively in those issue areas in which it should enjoy relative advantages. How should the UN be structured to meet its responsibilities? What changes in major organs — the Security Council, General Assembly and Secretariat — can best further the UN’s purposes in peace and security, economic development, environmental balance, human dignity and effective governance? What resources will the UN require to meet those goals?

The research group will focus on how effectively international organizations have coped with the new security challenges of the post-Cold War international system. Stymied by Cold War deadlock for much of the past fifty years, the UN became what it was designed by its founders to be when a working consensus emerged on the Security Council in the late 1980s. For the first time in its history, the Security Council adopted the central role in international peace and security that the UN’s founders had written into the UN Charter in 1945. But together with remarkable semi-successes in collective security in the Gulf and in complex, multidimensional peacekeeping in Namibia, El Salvador, Cambodia and Mozambique, crises that revealed the limits of UN action overtook the organization in Somalia and Bosnia.

The group seeks to address the following questions: Has the UN’s role in peace and security changed and, if so, how? How did it make its decisions? What enhanced capabilities would be needed if the UN were going to continue to develop as a manager of global peace and security, ranging from a "UN army" to improvements in Secretariat management? Alternatively, what problems are likely to arise if the UN role is limited to global counsel, farming out security operations to great powers that may or may not be willing to undertake them? The studies undertaken by the group include the following:

• Lessons from Peacekeeping in the 1990s: A Comparison Across Cases

• Arms Control: The Role of International Organizations — IAEA and UNSCOM

• The Nature of Security Council Decisionmaking in Peace and Security

Questions and Comments

The discussion period following the research organizers’ presentations, included questions and comments on issues including transnational social movements and their role in international peace and security, the impact of the shift to market economies on civil society, the information revolution and its effect on nationalism and state sovereignty, the issue of arms control and its relationship to each research group, the relationship between domestic interests and foreign policy, the concept of human dignity and its relationship to human rights, and the relevance of the North-South issue, among others.

The following briefly summarizes some highlights of the discussion.

• How will the project address the issue of arms control and its relationship to each research area?

In his response, Professor Doyle noted that the division across the five research groups is, of course, artificial and that there are natural overlaps among all five. As a result, the research groups clearly will have to work together in order to effectively address issue overlaps. For example, the question of arms control and trade will be discussed by several panels during the project’s annual symposium to be held in Tokyo in November 1996, which will include an exchange of views among the paper authors and commentators. To the extent that some kind of constructive synergies can be found across the different groups on given issues, these issues will then be identified and discussed in the project’s annual report. Professor Alagappa added that his research group plans to examine to the issue of arms trade at the regional level.

• What does the term "human dignity" refer to and does it exclude human rights issues?

Professor Doyle explained that the use of the term "human dignity" is not at all meant to exclude human rights. In fact, it was chosen precisely because it includes human rights issues as well as some other considerations that have not been incorporated in a firm notion of rights, but are nonetheless extremely important. The objective is to look beyond some of the more conventional notions concerning the substance of rights in order to explore new terrain. According to Professor Inoguchi, human dignity can be conceptualized as a broad and expansive agenda which includes human rights, respect, justice, identity, and participation, among other things.

• How deeply will the issues of human rights and democracy be addressed?

Professor Doyle pointed out that democracy will be a key theme during the project’s fifth year when the annual theme will be governance. Moreover, he added that the issue of democracy will be addressed throughout the project’s entire course as it connected to many of the issues to be explored prior to the fifth year. He observed that the project’s final year will provide the research organizers with the opportunity to draw insights from all the previous years’ work. Indeed, the issue of human rights will be an extremely crucial part of this process since it is directly linked to the powerful norm of democracy.

• Are we witnessing any trace of a shift from a state- or market-based system to a value-based world          society?

In his response, Professor Rittberger noted that the state system and the economy both rely on existing values, otherwise they would not work. For example, the economy would not be able to function without a work ethic. It is true that the system, as it has evolved today, relies less and less on a work ethic because it employs a decreasing fraction of society in the processes for which a work ethic in its traditional sense is required. On the other hand, the state, of course, also requires the inculcation and the observance of certain values, such as loyalty, as a resource that a political system has in its domestic society. It is not to be expected that everyone is loyal to the existing political order. If we take an economistic approach, we would have a difficult time explaining why rational, self-egoistic people would provide this diffuse loyalty to a political system and not operate on the basis of specific loyalty based upon exchange. In sum, we can see that both the economy and the state system are already based on certain values. The research group on global citizenship will need to look at whether or not value systems are changing.

• What criteria will be used to define a failed state?

According to Professor Kohli, for the research group on states and sovereignty the term "failed state" refers to those states that are unable to perform the quintessential task of maintaining order within their own borders. This does not include those states that merely do not do things well. Instead, the group will look at more extreme cases where the state comes apart and civil war engulfs, or it simply collapses. We have seen examples of failed states in Africa, the Balkans and Eastern Europe in recent years, but less so in other parts of the world. We must examine why these regions are vulnerable.

• Has the relevance of the North-South issue in the market economy waned in recent years and will it figure into the project’s research?

Professor Takenaka stated that in his view the North-South problem has not eased or disappeared. In fact, this problem is being exacerbated because the income distribution gap is expanding. As a result, the rich countries are becoming richer, while the poorer countries remain poor. On the other hand, we can see some positive examples among the developing countries, especially in the Asia-Pacific region. We can tentatively explain the success of these countries in following manner. Economic expansion in the Asia-Pacific region began during the early 1980s. At that time, Japan exported its capital goods and intermediate products to developing Asian countries. As a result, Japan indirectly exported production technology to these countries. These countries then formulated policy tools — especially through an increase in their savings rates and the solidification of their production bases — and eventually became producers in the world market. At the same time, the need for consumers to absorb these products grew and the United States became a very important absorber of these goods. This triangular process in the Pacific ignited the dynamic growth of Asia. We should, however, be careful not to generalize this growth mechanism itself. The research group on market forces will need to look at those countries that succeeded in expanding their market forces and those that did not.

• Is the process of globalization and rapid economic growth in certain countries, especially in the Asia-Pacific, lowering conditions in the US, Japan and other parts of the world? Will it cause social problems within these countries?

Professor Doyle observed that the transformation taking place on the global scene today can be compared to what occurred inside the global economies of 19th century Europe when heavy marketization took place. Through the process of marketization in England, France, Germany, local barriers were torn down and individuals found themselves exposed to the rigors of the markets and the movements of prices. As a result, jobs and livelihoods were placed in jeopardy, producing a social rebellion which we refer to as socialism. This process worked its way through the European political scene with more and less success in various areas. What we are now witnessing on a global scale is viewed by some observers as equivalent to the breakdown of special communal barriers to trade that existed in early 19th century Europe. Workers commanding high incomes and investors accustomed to substantial profits are suddenly confronted by global competition from those for whom the infrastructure is new, wages are low, and the ability and willingness to work long hours is very high. If this analogy holds true, we should expect to see some kind of social reaction to it. The question is whether it will be a constructive reaction and bring about a positive, new social order, or whether it will be destructive with destabilizing effects.

Professor Alagappa added that we should keep in mind that Asia as a whole is not experiencing economic growth. Moreover, even within the countries that are growing rapidly, income inequalities are also growing. This is not a problem that is peculiar to any one particular country or region. It is something that needs to be looked at across the globe regardless where growth is occurring.