Third FES-SWP North-South Dialogue
Global Governance Challenges
Reshaping Globalisation: A New Order for Financial Markets
Berlin
May 15 and 16, 2003
The FES-SWP North-South Dialogue
The FES-SWP dialogue invites scholars from think tanks in industrialized and developing countries to discuss key global governance issues. The first dialogue was held in April 2000 with a discussion on regional and global security arrangements. In February 2002, the second conference on climate change was held in Berlin.
Financial Markets: a North-south issue
The third dialogue focuses on the international financial markets--a topic that doubtlessly calls for a global response. Since the collapse of the Bretton Woods system, financial markets have been excessively volatile. In many crises, countries in the South have been hit by the sudden withdrawal of capital and a collapsing exchange rate. These crises have not only affected economies that have shown a poor performance. In a number of cases praise for successful economic development preceded the crash.
But the discussion is not limited to financial crises. Since 1996, capital flows to developing countries are declining dramatically, from a net inflow of $ 234.4 billion in 1996 to a net outflow of $ –1.4 billion in 2001. But not all capital flows show the same trend: Foreign direct investment proved to be a reliable source of capital. In 2001, developing countries received a net inflow of foreign direct investment of $ 162.7 billion. However, in the same year there was a net outflow of bank credit and other borrowing of $ –163.9 billion, capital that was primarily financing the ever growing US current account deficit.
These are alarming trends that are bad news for both the developing world and the sustainability of our current economic regime. The supporters of globalization promised that more capital would flow from industrialized countries to the South. The opposite takes place. Developing countries that have opened their own financial markets have frequently been confronted with financial crises, volatile exchange rates and a lack of foreign capital. Furthermore, in trade a similar problem continues to exist: The OECD countries in many areas still keep their own markets protected and even increase their level of protection, e.g. the US steel tariffs.
Topics for discussion for the dialogue
Against this background, the FES-SWP dialogue will cover the following themes:
- Exchange rate regimes: Is the bipolar view still correct? What options do developing countries have after Argentina?
- Monetary regionalism: Is this new approach a promising option?
- Capital flows and the bailing-in of creditors: What can be done, what is realistic?
- Global Governance I: Should the IMF become a global lender of last resort?
- Global Governance II: Perspectives for international bankruptcy procedures
AGENDA as of April 7, 2003
Wedesday, May 14
Arrival of Participants
20:00 Welcome Dinner
Thursday, May 15
09:00 Welcome and Introduction
to the North-South Dialogue
Christoph Bertram, SWP
Jürgen Stetten, FES
09:30 Session I
chair: Heribert Dieter, SWP
The Financial Crises of the 1990s: What have we learned?
Introductions
· Asia: The unexpected shock (J. Gosh)
· Mexico: The first crisis of the 21st century? (N.N.)
· Brazil: The unavoidable crisis? (Marcus Miller, University of Warwick, United Kingdom)
Topics for discussion:
· The role of capital inflows before the crises
· Internal political responses to the demand for liberalization
· Bad supervision and crony-capitalism: Sufficient explanations?
10:45 Coffee break
11:15 Continuation of discussion
13:00 Lunch break
Thursday, May 15 (cont.)
14:00 Session II
chair: NN
Exchange rate policy: No new answers to old dilemmas?
Introductions
· Which exchange rate regime for emerging markets? (Rainer Schweickert, Kiel Institute for World Economics, Germany)
· Floating exchange rates: South Africa’s experience, (John Myburgh, South Africa)
· Exchange rate policy after Argentina: A free float as the only alternative? (Heribert Dieter, German Institute for International and Security Affairs, Berlin)
Topics for discussion:
· The benefits of stable exchange rates
· Instability in the core – stability in the periphery? Exchange rates between dollar and euro
· The regime of Bretton Woods – a blueprint for tomorrow?
15:30 Coffee break
16:00 Continuation of discussion
19:00 Roundtable:
New Arrangements for Sovereign Debt Restructuring - Building-Blocs for Global Economic Governance?
Chair: Christoph Bertram
Speakers:
· Hans-Helmut Kotz, Landeszentralbank Bremen, Niedersachsen und Sachsen-Anhalt
· Jürgen Kaiser, Erlassjahr-Kampagne
· Geoffrey Underhill, University of Amsterdam
· Roberto Frenkel, Argentina
Friday, May 16
09:00 Session III
chair: Jürgen Stetten
Governing credit markets
Introductions
· Options for improved governance (Aziz Ali Muhammed, G-24)
· New proposals for governance (Stefany Griffith-Jones, University of Sussex, United Kingdom)
· The chances of implementing governance proposals (Geoffrey Underhill, University of Amsterdam, The Netherlands)
Topics for discussion
· The role of precautionary measures in shaping financial markets
· The provision of liquidity in global financial markets
· Restructuring bonds: The importance of an international bankruptcy court
10:45 Coffee break
11:15 Continuation of discussion and conclusions
12:30 Lunch
14:00 Excursion
For further information on the organizers
kindly visit
www.fes.de
www.swp-berlin.org
5