The "new south" - key to a sustainable future (8 September 1995)



The profound changes laking place in the new South, provide hath new imperatives and new opportunities to forge a new set of cooperative global relationships which move beyond outmoded, traditional notions of north and south. They must take into account both the shift of economic growth and political weight towards the new South as well as the continuing entrenchment of dire and debilitating poverty.


Speech by Maurice Strong, Chairman of Ontario Hydro and Chairman, Earth Council, to the Royal Institute of International Affairs

Thank you for those kind words of introduction. If the truth be known, I am the more honoured in being invited to be here today before the Royal Institute to share with such a well-informed body, some of my perceptions as to the prospects for a secure and sustainable future on the eve of the 21st Century.

I have been fortunate to have been a party to many of the key events in the movement towards sustainable development, from the embryonic Declaration of Stockholm agreed to at the UN Conference on the Human Environment in 1972, to the historic meeting of the Earth Summit in Rio de Janeiro just over three short years ago.

Over that period, and continuing up to the present, there have been some key milestones, some surprises and setbacks. But my own hopes have been sustained by the fact that the environmental concerns first pointed. out by a handful of scientists, conservationists and futurists are now more widely shared by people everywhere. And by evidence the solutions to the problems we face are possible when the will to resolve them is sufficient.

Secure future

The main thesis I will present in these remarks is that the prospects for a secure and sustainable future for the human community will largely be determined by the nature and direction of the major changes which are transforming the developing world into what I will call the "new South" and the ways in which we in the traditional industrialized countries contribute and respond to these changes.

As we move into the 21st Century, human ingenuity and the miracles wrought by our mastery of science and technology have produced a civilization beyond the wildest dreams of earlier generations and given us the tools with which to shape an even more exciting and promising future. But these same forces have also given rise to some serious and deepening imbalances which must be seen as ominous threats to our common future.

These threats stem primarily from the concentration during: this century of economic growth, and its benefits, in the industrialized countries and population growth, with its attendant costs and pressures, in the developing countries, which is is accentuating rich-poor differences both within and amongst nations and compounding the problems of managing cooperatively the risks to our common future arising from the growing pressures on the Earth' s resource and life-support systems.

Today's world order

Today's "world order" is much different from that which prevailed at the time of the Stockholm Conference in 1972. The line between the traditional have and have-not nations is blurring as the result of the economic progress being made by some developing countries. There has also been a movement towards democratization of the political process in some key countries of Latin America and Asia and the emergence of a multi-social democracy in South Africa.

The more rapidly developing countries of Asia and Latin America are leading the revitalization of the global economy, challenging its domination by the traditional industrialized countries and re-shaping the geo-political landscape. A recent World Bank report points out that even in the two decades from 1974 to 1993, developing countries as a whole grew at a rate slightly higher (3%) than the rich industrial countries (2.9%) and are expected to grow by almost 5% per year in the next decade compared with 2.7% in the traditional industrial countries.

On this basis, as The Economist noted in a survey of the global economy. China will replace the United States as the world's largest economy by 2020, and 9 of the top 15 economies of the world will be today's developing countries. India will replace Germany as the fourth largest economy. And the same survey projects that developing countries' share of world output will grow to 62% by 2020 while that of the rich industrial countries will decline to 37%. It is always dangerous to put too much weight on surveys based largely on the extrapolation of current trends. There seems little doubt that the direction pointed up by the Economist is valid. As the recent crisis in Mexico demonstrates, the rapidly developing countries are vulnerable to severe setbacks. But through a combination of radical and enlightened policy changes and the support of the international community, the setback to Mexico seems to have been a temporary one and its economy is now on the move again.

A major transformation

The basic character of the economies of the developing countries is also undergoing a major transformation. Although most of the poorest and least developed have been largely by-passed by this movement, many others have moved beyond their traditional role as exporters of raw materials and commodities. Manufactured goods now constitute some 60% of developing countries exports as compared to only 5% in 1955. And their share of world manufacturing exports rose from 5% in 1970 to 22% in 1993.

In light of these forecasts, the G-7, which today does not include a single developing country, is clearly becoming an anachronism. The current "world order" continues to be rooted in the past, particularly our notions as to north-south relationships. We in the West have not yet really begun to appreciate and come to terms with the immense geo-political implications of this shift of economic power to the south. Despite the movement towards a global economy and more open trading system, I see signs of a "fortress north" mentality developing in the wealthy industrial countries which would not bode well for future relationships with the developing world.

The major movement of economic growth to the south is evoking mixed feelings, and responses, from the traditional industrialized countries, the "OECD" countries. On the one hand, their export industries have welcomed - and been quick to exploit - the opportunities that have opened up in the rapidly growing economies of the developing world. A recent OECD report postulates that if China, India, and Indonesia continue to grow at current rates, without changing current patterns of income distribution, some 700 million people in these three countries alone - more than the combined populations of America, the European Union and Japan, will, by 2010, have an average income equivalent to that of Spain. This compares with only 100 million today.

On the other hand, OECD countries increasingly look on developing countries as competitors. Low labour costs and rising productivity are making their manufactured products highly competitive in northern markets - helping to keep consumer prices down but evoking strong and growing resistance from those in the industrial countries who see their investments and jobs at risk.

Powerful choices


There is a chorus of powerful voices including that of British financier and European Parliamentarian Sir James Goldsmith, predicting that freer trade with developing countries will lead to massive movement of industry to the Third World and large-scale unemployment in OECD countries as well as in developing countries. Similar concerns are beginning to surface in Japan.

While the borders have been opening to trade in goods and services and flows of capital, the movement has been in the opposite direction in respect of the flows of people. No sooner had the Berlin Wall come down symbolizing removal of the boundaries that had separated east and west in Europe, new walls are being erected against those who are uprooted, dispossessed and persecuted. This comes at a time when political turbulence, conflict and economic hardship in the developing world, as well as in parts of Eastern Europe and the former Soviet Union, are creating increased pressures for emigration. In a very real sense, these barriers are creating a new iron curtain separating rich and poor. For
the same countries that are tightening their borders against the poor and dispossessed welcome and even woo those with capital and marketable skills.

The probability is that we have thus far seen only the tip of the iceberg of human trafficking on a global basis. The new South continues to be home to most of the world's poverty and much of its conflict at the same time as it is generating the lion's share of economic growth. But the developing world has never heen homogenous and the new South is much less so. The rapid changes occurring there are deepening the processes of differentiation, particularly between those that are growing and those that continue in the grip of economic stagnation and poverty. These changes have immense implications for all of us. In environmental terms alone they could he decisive for the human future.

For if the developing countries follow the same growth pathway taken by the more mature industrialized countries, their impacts on the larger global environmental risks we face will undoubtedly move us beyond the thresholds of safety and sustainability. Our environmental future will be largely determined by what happens in the developing world.

Right to grow

Yet we who have largely created these risks, and benefited most from the processes of industrialization that have given rise to them can scarcely deny the right of developing countries to grow. Nor would it be fair or reasonable for us to act unilaterally in imposing constraints on their growth in the name of environment.

Some of the most environmentally devastated areas of the world are in the former Soviet Union and eastern Europe. We have a compelling interest in helping to ensure that they rebuild their economies on an environmentally sound and sustainable basis. I will not focus on them here except to say that they are a critically important part of the problem and must share fully in the solutions to them.

The new South is contributing more and more to the larger global risks such as those of climate change, ozone depletion, degradation of biological resources, and loss or deterioration of arable lands. China has already become the second largest source of C02 emissions and will almost certainly succeed the United States to the dubious honour of becoming Number 1. Meanwhile, in our countries, as these issues have somewhat receded from our own immediate experience, it has become more difficult to maintain the levels of public interest and commitment required to support the actions needed to deal with them. This year's hot summer in Europe and America, whatever its real causes, has brought the issue close to home for many. But we cannot wish for the heat and climatic turbulence to continue just to make the point. It is sobering to remind ourselves that all of the environmental deterioration and risks that have arisen to date have occurred at levels of population and economic activity that are much less than they will be in the period ahead.

A series of paradoxes


A series of paradoxes is developing which will soon confront both industrialized and developing countries with some very painful tensions and challenges. While efficient and competitive economies produce more gross national product, the benefits accrue disproportionately to the minority which have capital and knowledge to deploy. This class is highly mobile and those in it can move their "assets and activities" across national borders.

Meanwhile, the continued existence of extreme poverty with its attendant deprivation and suffering affecting some 1.3 billion of the world's people is an affront to the moral basis of our civilization. All the more so in that the means to eradicate it clearly exists. What is needed is the assertion of a new political and moral will which would in tum produce the social and economic innovation required to devise the means to deal effectively with it. It is inextricably linked with the environmental, social and economic challenges we face and in human terms must be our highest priority.

The gaps between rich and poor, privileged and underprivileged, are deepening, both within and amongst societies. This process, if it is not reversed will inevitably lead to greater social tensions and potential for conflict.

In the early stages of a major new cycle of economic growth, these pressures may be relieved as some of the benefits trickle down to the poorest sectors of society, This happened in the US between 1929 and 1969, and there is evidence that it is now occurring to some extent in countries like India. But the fact that modem, competitive industrial societies require proportionately less labour and more capital will ultimately lead to widening, and entrenchment, of the rich-poor gap, as the current experience of the United States and the United Kingdom demonstrates.

Emerging dilemmas


Democratic, market capitalism must find ways of dealing with these emerging dilemmas or risk becoming the victim of its own success. It must become just as effective at meeting society's environmental needs as it is in generating economic growth. A recent article in "The Economist" - hardly a radical publication - stated that "if the Marxist prediction of a proletariat plunged into abject misery under capitalism has so far been unfulfilled, the widening gap between haves and have-nots is causing some to think that Marx might yet be proved right on this point after all".

The globalization of capitalism is producing a new and universalizing culture symbolized by CNN, brand name consumer products like Coca-Cola, MacDonald's and Levis, pop music, shopping malls, international airports, hotel chains and conferences. To the privileged minority who participate fully in this culture it provides an exciting and expanding range of new opportunities and experiences. But for the majority, particularly in the non-western world who live on its margins and feed on its crumbs, it is often seen as alien and intimidating. Caught up in the dynamics of modernization of which they are more victims than beneficiaries. it is no wonder that many react with anxiety and rejection, seeking refuge and identity in their own traditional values and cultures. The clash between modernism and fundamentalism has deeply rooted secular as well as religious dimensions and is producing a new generation of conflict and turbulence.

A countryman of mine, Professor Thomas Homer-Dixon cites the growing potential for eco-conflicts as a result of competition for land and other resources that become locally scarce and competition for shared resources like river systems and common areas like the oceans. The recent confrontation between Canada and the European Union over-depleting fish stocks is a portent of this.

New forms of disease

Meanwhile, medical scientists warn of the growing risks of emergence of new forms of disease and the resurgence of new strains of traditional communicable diseases, like tuberculosis and malaria. While these problems will arise primarily in developing countries, there is no way in which we can be isolated from them or their consequences.

What, then, is the answer to this bewildering complex of forces that are shaping our future? The Earth Summit held in Rio de Janeiro in 1992 and the subsequent conferences on human rights in Vienna, Population in Cairo, the Social Summit in Copenhagen and now the Women's Conference in Beijing have pointed up the need for more concerted, cooperative and integrated action by the world community to deal with these issues. The Earth Summit produced two landmark conventions, one on Climate Change and one on Biological Diversity and initiated the Convention on Desertification which has now been agreed in addition to the Declaration of Rio, and a program of action to give effect to it, Agenda 21.

With all their shortcomings, the Rio Agreements represent the most extensive and comprehensive program of action for the future of our planet ever agreed by governments. And the fact that they were agreed - word by word - by virtually all of the nations of the world, most of them represented at the highest levels, provide them with a unique degree of political authority. But, as I made clear in my final statement at Rio, this does not guarantee that these agreements will be implemented.

Three years after the Earth Summit, it is still too early to pronounce final judgement as to its results. Despite progress in a number of areas, it has to be said that there is all too little evidence of the fundamental change of course it called for. Although the first meeting of the Parties to the Climate Change Convention in Berlin earlier this year did manage to patch together an agreement that will keep the process of implementation and further negotiation alive, it highlighted the continuing differences that exist, particularly as between industrialized and developing countries, and the degree to which political will has receded since Rio.

Visible and acute environmental problems

Even the progress that has been made in dealing with many of the most visible and acute environmental problems of the United States and other industrialized countries is fostering a growing sense of apathy and complacency. Environmental journalist Gregg Easterbrook in his recent book "A Moment on the Earth" strikes a responsive cord in many when he says that environmentalists have been too pessimistic. But he also concedes that the progress that has been made in the industrialized countries has come about largely as a result of government regulations and incentives and confirms the importance of these rather than supporting the arguments for their recision or relaxation.

A new generation of enlightened leaders in both business and government is realizing that sound economic policies and practices must integrate environmental and social considerations. This was the basic message of the book, 'Changing Course' by the leading Swiss industrialist, Stephan Schmidheiny, and some 60 other Chief Executive Officers of major corporations, in their report to the Earth Summit. It called for fundamental changes in economic practices and behaviour based on a commitment to "eco-efficiency" . efficiency in the use of energy and resources and in the prevention, disposal and recycling of wastes. Eco-efficiency is good for business as well as for the environment.

The old maxim that 'knowledge is power' is now being accompanied by the realization that "knowledge is money" and therefore a primary economic resource. The growing drive to convert knowledge into proprietary intellectual property, could tend to reduce the total stock of knowledge and restrict access to the products of research and development for those who do not have the-means to purchase it. This could especially disadvantage those, particularly in developing countries, whose needs are greatest. Yet it is in our common interest to ensure that they have access to the best state-of-the-art technologies and techniques so that in the course of their own development they do not add unnecessarily to the pressures on the earth's environment and resources.

Influenced by example


We must leave "space" for developing countries to grow and to set them an example that enables them to avoid the abuses and the costs of our own growth experience. For they will be much more influenced by our example, and by evidence that sustainable development is in their own interest, than by our exhortations.

It is clearly in our own interest to ensure that the new South has both the incentives and the means to make the transition to sustainability. nus means facilitating their access to the latest state-of-the-art technologies and to the additional capital they will need to employ them. It would be unrealistic to expect that this would come through increases in foreign aid in traditional terms. But governments everywhere continue to spend hundreds of billions of dollars on direct and indirect subsidies for activities which run counter to sustainable development - as for example to chemically-intensive agriculture and to fossil fuels. These impose costly burdens on people as taxpayers and consumers as well as encouraging environmentally unsound and unsustainable practices. A reorientation and redeployment of these resources would provide all the resources required to effect the transition to sustainable development, at home and abroad, while improving economic efficiency.

Developing countries would also attract major new funds for investment in sustainable development if industrialized countries were willing to accord to the indispensable services they provide to the world community, as for example, as custodians of most of its precious and irreplaceable biological resources and life-supporting ecosystems - the real value of these services and reflect this in the terms of trade and the prices they pay for the relevant products of the developing countries. This will require radical changes in the current policies and priorities of governments and a substantial re-vamping of the system of incentives and penalties by which governments motivate the economic behaviour of individuals and corporations.

Energy for tomorrow's world


Energy is at the centre of the environment development nexus. Already consumption of commercial energy by the developing countries of Asia is growing at a faster rate than in OECD countries. The 1993 report of the World Energy Council's task force on "Energy for Tomorrow's World" estimated that by 2020 developing countries will need some $30 trillion of new investment in energy facilities if they meet their growing needs on the basis of current patterns of use and efficiency. This is nearly 50% greater than the entire world GNP - clearly an impossible prospect.

A massive commitment to energy efficiency is the only answer. It is as essential in economics as in environmental terms - the most cost effective and sensible investment in the energy future of developing as well as more developed countries. My own company, Ontario Hydro, is carrying out a massive program of energy efficiency and recently joined with other electric utilities and policy institutes to form a Global Energy Efficiency Collaborative to foster the movement towards energy efficiency throughout the world.

Foreign aid is in decline and private investment now accounts for the principal flows of financial resources to the rapidly developing countries. Accordingly. we must develop the incentives and innovative financial mechanisms to ensure that private capital will be utilized for sustainable development. Such new financial mechanisms as tradeable emission permits can utilize markets to channel funds available for environmental improvement to the places where they can be employed on the most cost-effective basis. Only by the "greening" of private capital can we make the transition to sustainability provided for in Rio's Agenda 21.

A wide variety of new non-governmental actors is emerging which are becoming primary agents of change. In a thoughtful article in the Summer 1994 Issue of Foreign Affairs, Lester M. Salmon compared the growth in the numbers and influence of voluntary, non-governmental organizations in the last half of this century with the emergence of the nation-state system in the eighteenth century.

In the field of environment and sustainable development the most exciting and promising post-Rio developments are occurring outside of governments, where there has been a virtual explosion of activities and initiatives on the part of grass-roots organizations, citizen groups and other key sectors of society. One of the most promising vehicles for this is the establishment of National Councils for Sustainable Development in almost 100 countries, bringing together representatives of governments with those of civil society to develop their own national and local 'Agendas 21'. I am pleased to note that the U.K. government has established its N.C.S.D. under the Chairmanship of one of your most consistently enlightened and effective environmental leaders, Sir Crispin Tickel.

A unique product


The Earth Council, headquartered in San Jose, Costa Rica, is a unique product of the Earth Summit. It is a new kind of global, non-governmental organization, designed to act as a catalyst to facilitate and support implementation and follow-up of the results of Rio. In doing so, it consults with a network of some 20,000 organizations, most of them of a grassroots nature, and also including a broad cross-section of development, environmental. social and public policy leaders and experts throughout the world. Its principal mission is to help to link people at the community and grass roots level with the broad policy and decision making processes which affect them, and to amplify their voices in these processes, voices that are too seldom heard or heeded.

Not all non-governmental actors are, of course, of the benevolent kind. Organized crime built on the profits of drug trafficking and other illicit activities has been growing to an alarming degree, increasingly pre-empting the attention of government.

Developing countries which once saw pollution as a problem of the rich are now experiencing these problems in even more acute form than we did. The cities of the developing world are growing at rates beyond anything experienced in the industrialized countries - outstripping this capacity to provide even the most basic housing, infrastructure, health, education and social services to their exploding populations. Cities like Cairo, Manila, Bangkok, Calcutta and Mexico City are amongst the most polluted on earth. Many are faced with the prospect of environmental and social breakdown which would make them festering cauldrons of conflict, suffering and disease. The United Nations Conference on Habitat, the last in the series of great UN conferences of this decade, to be held in Istanbul, Turkey, next year will focus world attention on these issues.

A cooperative alliance


The need for a cooperative alliance with the new South and the nations of the former east bloc is particularly compelling when it comes to management of the "commons" beyond the jurisdiction of individual nations - the oceans comprising over two-thirds of the area of the earth, the atmosphere and, to a significant degree, the Antarctic. Perhaps the most important "commons" of all is the global system of inter-acting cause and effect relationships on which the survival and well being of all life on earth ultimately depends. The care and management of this system requires a degree of cooperative stewardship beyond anything we have yet realized. The multi-lateral institutions, particularly those established since World War II provide the institutional framework for the system of governance required to exercise such stewardship. But they are the newest, least developed, least appreciated and least supported of all the levels in our hierarchy of governance.

At the global level, the United Nations and its specialized agencies and organizations, including the World Bank and the International Monetary Fund, constitute the principal elements of this system. On the occasion of the 50th Anniversary of their establishment following World War II, there has been a plethora of studies and proposals for reforming and strengthening them. Particularly noteworthy among these is the report, "Our Global Neighbourhood" , of the Commission on Global Governance headed by Prime Minister Ingvar Carlsson of Sweden and former Commonwealth Secretary-General Sir Shridath Ramphal. This and other studies have produced some valuable ideas for fundamental changes in the United Nations and the Bretton Woods Organizations.

But the reality is that if we went back to the drawing board to renegotiate the terms of the United Nations Charter and the agreements establishing the constitutions of the other agencies and organizations of the system, it is unlikely under current conditions that agreement could be achieved on the kind of fundamental changes in their structures and mandates that these studies call for. The shortage is not of ideas, but of will. I believe at this point the most important priority is to improve the management and performance of these institutions which would go a long way towards restoring confidence in them and building the political will required for fundamental change.

Decisive for the human species


I am persuaded that the 21st Century will be decisive for the human species. For all the evidences of environmental degradation, social tension and inter-communal conflict have occurred at levels of population and human activity that are a great deal less than they will be in the 21st Century. Theoretically one can make a case that these problems will be manageable. But in practice it will require that we extend to the global level the kind of social discipline and cooperative management that some of the more successful modem societies. like the United Kingdom, the Netherlands, Denmark and Switzerland, have effected. Prospects for this are not promising. Some of the poorer and least developed nation states of Africa, particularly those which had artificial boundaries imposed upon them, are already proving to be virtually ungovernable. And the political and institutional structures of even the most rapidly growing developing countries is often fragile and vulnerable.

The risks we face in common from the mounting dangers to the environment, resource base and life support systems on which all life on earth depends, are far greater as we move into the 21st century than the risks we face or have faced in our conflicts with each other. All people and nations have In the past been willing to accord highest priority to the measures required for their own security. We must give the same kind of priority to environmental security. This will take a major shift in the current political mind-set. Necessity will compel such a shift eventually; the question is can we really afford the costs and risks of waiting.

Global alliance


A global alliance for environmental security would not require world government or the homogenization of cultures and behaviour. Rather it would require agreement on the fundamental boundary conditions which all nations and people must respect to ensure that our collective behaviour does not transgress the thresholds of safety required to ensure our common survival and well-being. It would require a major strengthening of the programs through which the scientific community seeks to identify and probe such thresholds, understand and monitor the human activities that impinge on them, give early warning of pending risks and opportunities and evaluate the evidence resulting from the continuing
process of change which affect these boundary conditions. The foundations for such a system already exist in such organizations as the Global Environmental Monitoring System (GEMS) of the United Nations Environment Program, the Scientific Committee on Problems of the Environment (SCOPE) of the International Council of Scientific Unions (ICSCU) and the intergovernmental Panel on Climate Change (IPCC).

In the final analysis, the behaviour of people as well as the priorities of society respond to the deepest moral, ethical and spiritual values of people. I am convinced that the radical changes now occurring in our society are producing a historic convergence between our traditional perceptions of relationships, between the practical aspects of human lile and its moral and spiritual dimensions. It has too often been assumed in the past that there is an essential dichotomy between the "real world" of practical affairs and the more ethereal, ideal world of morals and spirit.

Concepts of mutual respect, caring for, sharing with and cooperating with our brothers and sisters both at home and internationally can no longer be seen as mere pious ideals divorced from reality, but as indispensable prerequisites for our common survival and well-being.

The profound changes laking place in the new South, I submit, provide hath new imperatives and new opportunities to forge a new set of cooperative global relationships which move beyond outmoded, traditional notions of north and south. They must take into account both the shift of economic growth and political weight towards the new South as well as the continuing entrenchment of dire and debilitating poverty.

Both extremes, and the growing dichotomy between them, pose major risks to the security and sustainability of the human community which must move to the centre of our agenda for the 21st century. The primary task of this new global alliance will be to produce a comprehensive security regime which will ensure at least certain basic minimum standards of security for nations and peoples as well as to the integrity of the environment; resource and life systems of the planet as a whole. This may seem somewhat idealistic, even unrealistic, given today's conditions. But we cannot - must not - settle for less, if we are to avoid the risks and realize the opportunities that confront us in the new millennium.