Too Big to Jail

 Too Big to Jail
Simon Johnson

2012-02-22

WASHINGTON, DC – Among the fundamental principles of any functioning justice system is the following: Don’t lie to a judge or falsify documents submitted to a court, or you will go to jail. Breaking an oath to tell the truth is perjury, and lying in official documents is both perjury and fraud. These are serious criminal offenses, but apparently not if you are at the heart of America’s financial system. On the contrary, key individuals there appear to be well compensated for their crimes.

As Dennis Kelleher of Better Markets has argued, the recent so-called “robo-signing” settlement – in which five large banks “settled” their legal liability for carrying out fraudulent foreclosures on mortgages – is a complete sell-out to the financial industry.

First, there was no serious criminal prosecution – meaning that no one will be charged with a felony, and no one will go to jail. In terms of affecting executives’ incentives, this is the only thing that matters.

Even the terminology used to frame the discussion is wrong. Kelleher, an attorney with extensive experience in private practice and the public sector, tells it like it is: “‘robo-signing’ is massive, systematic, fraudulent, criminal conduct.” Alternatively, as he points out, we could just call it “lying, cheating, and stealing.”
 
Second, the civil penalties in this settlement – a form of fine – are minuscule relative to the size of the companies involved. As Shahien Nasiripour, one of the best reporters on this issue, dryly put it: “None of the five lenders have said they expect to incur a material charge due to the settlement.” In other words, from a corporate perspective, the penalty is a trifling affair.

Third, such fines are, in any case, paid by the companies’ shareholders, not by their executives or board members (all of whom carry insurance). In the rare cases in which fines have been levied on individuals, either their insurance policies picked up most of the bill, or the penalties were trivial relative to the cash compensation that they received while committing their crimes – or both.

As if all of this weren’t bad enough, the banks reportedly will be able to use government money to write down the value of mortgages, which amounts to subsidizing them to pay their own meaningless fines.

The Obama administration and its allies have worked hard to sell its roughly $20 billion settlement with the banks as one that will have a meaningful impact on the housing market. But nothing could be further from the truth. As Kelleher points out, the United States has “more than 10 million homes under water” (the outstanding mortgage exceeds the house’s value). “Twenty billion dollars doesn’t make a dent in that: one million homes at $20,000 loan forgiveness is it.”

In fact, the Obama administration’s settlement with the mortgage lenders is consistent with its track record on all of its policies related to the financial sector, which has been abysmal. But it is also puzzling. Why would the administration continue to bend over backwards to be lenient towards top bankers under these circumstances?

I honestly do not believe that the administration’s stance reflects any form of corruption – payments made to individuals or even to political campaigns. And, in this case, it does not even appear to reflect the lobbying power of big financial players. That power certainly explains why the Dodd-Frank financial reforms enacted in 2010 were not stronger, and why there is now so much opposition to effective implementation of that legislation (for example, there is currently a huge fight around the “Volcker rule,” which would limit proprietary trading by megabanks). But mortgage lenders’ criminal activities are another matter.

Indeed, at stake in the mortgage settlement are fundamental and systemic breaches of the rule of law – perjury and fraud on an economy-wide scale. The Justice Department has, without question, all of the power that it needs to prosecute these alleged crimes fully. And yet America’s top law-enforcement officials have consistently – and now completely – backed off.

The main motivation behind the administration’s indulgence of serious criminality evidently is fear of the consequences of taking tough action on individual bankers. And maybe officials are right to be afraid, given the massive size of the banks in question relative to the economy. In fact, those banks are bigger now than they were before the crisis, and, as James Kwak and I documented at length in our book 13 Bankers, they are much larger than they were 20 years ago.

Top bankers want to make a lot of money. They also want to stay out of prison. Political leaders can huff and puff as much as they want, but, without a credible threat of poverty and time behind bars, bankers have no reason to comply with the law. For them, it’s all about the trade – and you can be the sucker in public policy as easily as you can be the sucker in an individual loan agreement.

The message to bank executives today is simple: build your bank to be as big as possible – and then keep growing. If you manage to become big enough, you and your employees are not just too big to fail, but also too big to jail.

The Obama administration has just made everyone else the sucker.

Simon Johnson, a former chief economist of the IMF, is co-founder of a leading economics blog, http://BaselineScenario.com, a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-author, with James Kwak, of 13 Bankers.

 

Copyright: Project Syndicate, 2012.
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Self and the City

Self and the City
Daniel A. Bell and Avner de-Shalit

2012-02-17

BEIJING – What is the big story of our age? It depends on the day, but if we count by centuries, then surely humanity’s urbanization is a strong contender. Today, more than half of the world’s population lives in cities, compared to less than 3% in 1800. By 2025, China alone is expected to have 15 “mega-cities,” each with a population of at least 25 million. Are social critics right to worry about the atomized loneliness of big-city life?

True, cities cannot provide the rich sense of community that often characterizes villages and small towns. But a different form of community evolves in cities. People often take pride in their cities, and seek to nourish their distinctive civic cultures.

Pride in one’s city has a long history. In the ancient world, Athenians identified with their city’s democratic ethos, while Spartans prided themselves on their city’s reputation for military discipline and strength. Of course, today’s urban areas are huge, diverse, and pluralistic, so it may seem strange to say that a modern city has an ethos that informs its residents’ collective life.

Yet the differences between, say, Beijing and Jerusalem, suggest that cities do have such an ethos. Both are designed with a core surrounded by concentric circles, but Jerusalem’s core expresses spiritual values, while Beijing’s represents political power. And a city’s ethos shapes more than its leaders. Beijing attracts China’s leading political critics, while Jerusalem’s social critics argue for an interpretation of religion that holds people, rather than inanimate objects, sacred. In both cases, despite objections to the ruling ideology’s specific tenets, few reject the ethos itself.

Or consider Montreal, whose residents must navigate the city’s tricky linguistic politics. Montreal is a relatively successful example of a city in which Anglophones and Francophones both feel at home, but language debates nonetheless dominate the political scene – and structure an ethos for the city’s residents.

Hong Kong is a special case, where the capitalist way of life is so central that it is enshrined in the constitution (the Basic Law). Yet Hong Kong-style capitalism is not founded simply on the pursuit of material gain. It is underpinned by a Confucian ethic that prioritizes caring for others over self-interest, which helps to explain why Hong Kong has the highest rate of charitable giving in East Asia.

Paris, on the other hand, has a romantic ethos. But Parisians reject Hollywood’s banal concept of love as a story that ends happily ever after. Their idea of romance centers on its opposition to staid values and predictability of bourgeois life.

In fact, many cities have distinctive identities of which their residents are proud. Urban pride – what we call “civicism” – is a key feature of our identities today. This matters in part because cities with a clear ethos can better resist globalization’s homogenizing tendencies. It is worrying when countries proclaim their timeless and organic ideals, but affirming a city’s particularity can be a sign of health.

Chinese cities seek to counter uniformity via campaigns to recover their unique “spirit.” Harbin, for example, prides itself on its history of tolerance and openness to foreigners. Elsewhere, Tel Aviv’s official Web site celebrates, among other attractions, the city’s progressive role as a world center for the gay community.

Urban pride can also prevent extreme nationalism. Most people need a communal identity, but it may well be better to find it in one’s attachment to a city than in attachment to a country that is armed and willing to engage in conflict with enemies. Individuals who have a strong sense of civicism can make decisions based on more than mere patriotism when it comes to national commitments.

Cities with a strong ethos can also accomplish political goals that are difficult to achieve at the national level. China, the United States, and even Canada may take years to implement serious plans to address climate change. Yet cities like Hangzhou, Portland, and Vancouver take pride in their “green” ethos, and go far beyond national requirements in terms of environmental protection.

Urbanization is blamed for a wide variety of modern social ills, ranging from crime and incivility to alienation and anomie. But, by infusing us with their unique spirit and identity, our cities may, in fact, help to empower humanity to face the most difficult challenges of the twenty-first century.

Daniel A. Bell is Professor of the Arts and Humanities at Jiaotong University, Shanghai, and Professor of Ethics and Political Philosophy at Tsinghua University, Beijing. Avner de-Shalit is Chair for Democracy and Human Rights and Dean of Social Sciences at Hebrew University, Jerusalem. They are co-authors of The Spirit of Cities: Why the Identity of a City Matters in a Global Age.

 

Copyright: Project Syndicate/Institute for Human Sciences, 2012.
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Lighting the Dark Continent

Lighting the Dark Continent
Achim Steiner, Adnan Amin and Kandeh K. Yumkella

2012-02-15

NAIROBI – Nineteenth-century European explorers called Africa the “Dark Continent,” because to them it was vast and largely unknown. Today, Africa may still be dark, but for a very different reason: it is chronically short of electricity. Indeed, nocturnal satellite images show that, except for some parts of southern and northern Africa, it barely twinkles.

The United Nations has designated 2012 the International Year of Sustainable Energy for All. Its official launch in Africa in mid-February will not “switch on” the continent in a flash – but it can help to jump-start global efforts towards that goal, thereby enhancing the lives and livelihoods of millions of people.

Attempts have been made before to electrify Africa, with mixed results. But this time can be different. Many countries are already testing the technologies and policies needed to bring energy to rural areas and growing cities. Innovative investment mechanisms and sharply falling manufacturing and installation costs of renewable energy technologies, including wind, advanced biomass, and solar power, are essential to unlocking the continent’s potential.

In Kenya, new drilling techniques are tapping the country’s geothermal energy resources, adding hundreds of megawatts of generating capacity in recent years. Kenya is also about to begin construction of sub-Saharan Africa’s largest wind farm.

In Egypt, investment in renewable energy rose by $800 million, to $1.3 billion, in 2010, owing to the solar thermal project in KomOmbo and a 220-megawatt onshore wind farm in the Gulf of Zayt.

In Morocco, the provision of solar photovoltaic kits to isolated villages has helped to raise access rates to electricity in rural areas from less than 15% in 1990 to more than 97% in 2009. The country has been chosen as the first location to develop a 500 MW concentrated solar plant as part of the Desertec Industrial Initiative.
Instead of waiting for a grid to come to a town or village, renewable energies can be swiftly deployed in remote areas. Distributed generation using renewables can also help to reduce the risk of massive power outages and resulting reliance on expensive diesel power, which currently can cost up to 5% of a country’s annual GDP – a problem that affects 30 of the 48 countries in sub-Saharan Africa.

Innovative schemes are underway: in parts of Africa, for example, mobile phone companies have begun piloting ways to provide customers access to solar energy. Electricity is supplied on a pay-as-you-go basis and tied to phone bills, unlocking market opportunities for isolated farmers.

But more is needed. Africa is endowed with vast untapped renewable energy resources that can provide electricity for all at an affordable cost. The potential of wind power alone is more than 1,000 gigawatts, or more than five times the continent’s current total installed generating capacity. The potential output of solar energy is ten times higher, in excess of 10,000 GW, while only 5% of the region’s estimated hydropower resources has so far been exploited. In parts of Africa, sustainably developed biomass could provide fuels to assist in meeting growing demand for transportation fuels.

With Africa having yet to build nearly two-thirds of the additional capacity that it will need in 2030, the continent faces a unique opportunity to benefit from recent advances and cost reductions in renewable power-generation technologies, thereby leapfrogging the energy path taken by industrialized countries.

The story is not limited to electrification. In Ghana, an African Rural Energy Enterprise Development project, supported by the UN Foundation, has helped small entrepreneurs to scale up and supply 50,000 homes with cleaner, more efficient cooking stoves, while generating manufacturing and service jobs and cutting health-damaging emissions in houses. There are similar stories across Africa – and, again, significant need for further progress.

The International Year of Sustainable Energy for All coincides with the year of the Rio+20 Summit, when, marking 20 years since the Earth Summit of 1992 paved the way towards sustainable development, world leaders will meet again to achieve that goal. One cooperative decision that world leaders can take when they meet again in Rio de Janeiro is to reduce or phase out the more than $500 billion of global fossil-fuel subsidies, the benefits of which reach less than one-tenth of the poorest 20% if the world’s population.

It will be a challenge, but a gradual, well-designed, and properly communicated set of policies could accelerate the quest for more sustainable sources of energy. A good place to start is the public sector: procurement by governments and local authorities can play an important role in shifting economies towards cleaner forms of energy. Building the banking sector’s capacity and managing exchange-rate risk in some African countries would also help to realize Africa’s potential for sustainable energy production.

Many barriers remain, but today they are no longer insurmountable. Governments, the private sector, and civil-society groups in Africa and beyond should support the UN Secretary-General’s initiative, by nurturing the new generation of entrepreneurs and innovators who will bring light to 600 million African citizens whose lives and livelihoods remain benighted.

Adnan Amin is Director-General, International Renewable Energy Agency; Achim Steiner is Executive Director, UN Environment Programme; Kandeh Yumkella is Director-General of the UN Industrial Development Organization. 

 

Copyright: Project Syndicate, 2012.
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Germany’s Sunshine Daydream

Germany’s Sunshine Daydream

Bjørn Lomborg

2012-02-16

COPENHAGEN – One of the world’s biggest green-energy public-policy experiments is coming to a bitter end in Germany, with important lessons for policymakers elsewhere.

Germany once prided itself on being the “photovoltaic world champion”, doling out generous subsidies – totaling more than $130 billion, according to research from Germany’s Ruhr University – to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned, and to phase out support over the next five years. What went wrong?

There is a fundamental problem with subsidizing inefficient green technology: it is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic (PV) capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

According to Der Spiegel, even members of Chancellor Angela Merkel’s staff are now describing the policy as a massive money pit. Philipp Rösler, Germany’s minister of economics and technology, has called the spiraling solar subsidies a “threat to the economy.”

Germany’s enthusiasm for solar power is understandable. We could satisfy all of the world’s energy needs for an entire year if we could capture just one hour of the sun’s energy. Even with the inefficiency of current PV technology, we could meet the entire globe’s energy demand with solar panels by covering 250,000 square kilometers (155,342 square miles), about 2.6% of the Sahara Desert.

Unfortunately, Germany – like most of the world – is not as sunny as the Sahara. And, while sunlight is free, panels and installation are not. Solar power is at least four times more costly than energy produced by fossil fuels. It also has the distinct disadvantage of not working at night, when much electricity is consumed.

In the words of the German Association of Physicists, “solar energy cannot replace any additional power plants.” On short, overcast winter days, Germany’s 1.1 million solar-power systems can generate no electricity at all. The country is then forced to import considerable amounts of electricity from nuclear power plants in France and the Czech Republic. When the sun failed to shine last winter, one emergency back-up plan powered up an Austrian oil-fired plant to fill the supply gap.

Indeed, despite the massive investment, solar power accounts for only about 0.3% of Germany’s total energy. This is one of the key reasons why Germans now pay the second-highest price for electricity in the developed world (exceeded only by Denmark, which aims to be the “world wind-energy champion”). Germans pay three times more than their American counterparts.

Moreover, this sizeable investment does remarkably little to counter global warming. Even with unrealistically generous assumptions, the unimpressive net effect is that solar power reduces Germany’s CO2 emissions by roughly eight million metric tons – or about 1% – for the next 20 years. When the effects are calculated in a standard climate model, the result is a reduction in average temperature of 0.00005oC (one twenty-thousandth of a degree Celsius, or one ten-thousandth of a degree Fahrenheit). To put it another way: by the end of the century, Germany’s $130 billion solar panel subsidies will have postponed temperature increases by 23 hours.

Using solar, Germany is paying about $1,000 per ton of CO2 reduced. The current CO2 price in Europe is $8. Germany could have cut 131 times as much CO2 for the same price. Instead, the Germans are wasting more than 99 cents of every euro that they plow into solar panels.

It gets worse: because Germany is part of the European Union Emissions Trading System, the actual effect of extra solar panels in Germany leads to no CO2 reductions, because total emissions are already capped. Instead, the Germans simply allow other parts of the EU to emit more CO2. Germany’s solar panels have only made it cheaper for Portugal or Greece to use coal.

Defenders of Germany’s solar subsidies also claim that they have helped to create “green jobs”. But each job created by green-energy policies costs an average of $175,000 – considerably more than job creation elsewhere in the economy, such as infrastructure or health care. And many “green jobs” are being exported to China, meaning that Europeans subsidize Chinese jobs, with no CO2 reductions.

Germany’s experiment with subsidizing inefficient solar technology has failed. What governments should do instead is to focus first on increasing research and development to make green-energy technology cheaper and more competitive. Production should be ramped up later.

In the meantime, Germans have paid about $130 billion for a climate-change policy that has no impact on global warming. They have subsidized Chinese jobs and other European countries’ reliance on dirty energy sources. And they have needlessly burdened their economy. As even many German officials would probably attest, governments elsewhere cannot afford to repeat the same mistake.

Bjørn Lomborg is the author of The Skeptical Environmentalist and Cool It, head of the Copenhagen Consensus Center, and adjunct professor at Copenhagen Business School.

 

Copyright: Project Syndicate, 2012.
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The Perils of 2012

Joseph E. Stiglitz

2012-01-12

KOLKATA – The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F. Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.

In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realizing the “American Dream.” Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment checks had run out. Headlines announcing new hiring – still not enough to keep pace with the number of those who would normally have entered the labor force – meant little to the 50 year olds with little hope of ever holding a job again.

Indeed, middle-aged people who thought that they would be unemployed for a few months have now realized that they were, in fact, forcibly retired. Young people who graduated from college with tens of thousands of dollars of education debt cannot find any jobs at all. People who moved in with friends and relatives have become homeless. Houses bought during the property boom are still on the market or have been sold at a loss. More than seven million American families have lost their homes.

The dark underbelly of the previous decade’s financial boom has been fully exposed in Europe as well. Dithering over Greece and key national governments’ devotion to austerity began to exact a heavy toll last year. Contagion spread to Italy. Spain’s unemployment, which had been near 20% since the beginning of the recession, crept even higher. The unthinkable – the end of the euro – began to seem like a real possibility.

This year is set to be even worse. It is possible, of course, that the United States will solve its political problems and finally adopt the stimulus measures that it needs to bring down unemployment to 6% or 7% (the pre-crisis level of 4% or 5% is too much to hope for). But this is as unlikely as it is that Europe will figure out that austerity alone will not solve its problems.   On the contrary, austerity will only exacerbate the economic slowdown. Without growth, the debt crisis – and the euro crisis – will only worsen. And the long crisis that began with the collapse of the housing bubble in 2007 and the subsequent recession will continue.


Moreover, the major emerging-market countries, which steered successfully through the storms of 2008 and 2009, may not cope as well with the problems looming on the horizon. Brazil’s growth has already stalled, fueling anxiety among its neighbors in Latin America.

Meanwhile, long-term problems – including climate change and other environmental threats, and increasing inequality in most countries around the world – have not gone away. Some have grown more severe. For example, high unemployment has depressed wages and increased poverty.

The good news is that addressing these long-term problems would actually help to solve the short-term problems. Increased investment to retrofit the economy for global warming would help to stimulate economic activity, growth, and job creation. More progressive taxation, in effect redistributing income from the top to the middle and bottom, would simultaneously reduce inequality and increase employment by boosting total demand. Higher taxes at the top could generate revenues to finance needed public investment, and to provide some social protection for those at the bottom, including the unemployed.

Even without widening the fiscal deficit, such “balanced budget” increases in taxes and spending would lower unemployment and increase output. The worry, however, is that politics and ideology on both sides of the Atlantic, but especially in the US, will not allow any of this to occur. Fixation on the deficit will induce cutbacks in social spending, worsening inequality. Likewise, the enduring attraction of supply-side economics, despite all of the evidence against it (especially in a period in which there is high unemployment), will prevent raising taxes at the top.

Even before the crisis, there was a rebalancing of economic power – in fact, a correction of a 200-year historical anomaly, in which Asia’s share of global GDP fell from nearly 50% to, at one point, below 10%. The pragmatic commitment to growth that one sees in Asia and other emerging markets today stands in contrast to the West’s misguided policies, which, driven by a combination of ideology and vested interests, almost seem to reflect a commitment not to grow.

As a result, global economic rebalancing is likely to accelerate, almost inevitably giving rise to political tensions. With all of the problems confronting the global economy, we will be lucky if these strains do not begin to manifest themselves within the next twelve months.

Joseph E. Stiglitz is University Professor at Columbia University, a Nobel laureate in economics, and the author of Freefall: Free Markets and the Sinking of the Global Economy.

 

Copyright: Project Syndicate, 2012.
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Seizing Sustainable Development

Jacob Zuma and Tarja Halonen

2012-02-06

HELSINKI/JOHANNESBURG – The world is on an unsustainable path, and must urgently chart a new course forward, one that brings equity and environmental concerns into the economic mainstream. To do so, we must put sustainable development into practice now, not in spite of the economic crisis, but because of it.

Our challenges today are many. Economies are teetering, ecosystems are under siege, and inequality – within and between countries – is soaring. Taken together, these are symptoms that share a root cause: speculative and often narrow interests have superseded common interests, common responsibilities, and common sense.

As Co-Chairs of the United Nations’ High-Level Panel on Global Sustainability, we have been asked by UN Secretary-General Ban Ki-moon to work with 20 of the world’s most eminent leaders in grappling with these issues. Our task is clear: propose how to provide greater opportunity for more people with less impact on our planet.

A quarter-century ago, the Brundtland report, named for former Norwegian Prime Minister Gro Brundtland, called for a new paradigm of sustainable development. It stated that durable economic growth, social equality, and environmental sustainability are mutually interdependent. Human well-being depends on their integration.

We are convinced not only that this concept is sound, but also that it remains more relevant than ever. Now we need to put theory into practice by moving sustainable development into mainstream economics and making clear the costs of action – and inaction – today and in the future.

By 2030, as the human population swells and appetites increase, the world will need at least 50% more food, 45% more energy, and 30% more water. Our planet is approaching, and even exceeding, scientific tipping points. This has serious implications for how we manage the global commons – and for reducing poverty: if developing countries are to realize their legitimate growth aspirations, they will need more time, as well as financial and technological support, to make the transition to sustainability.

Yet we remain optimistic. Representative democracy is now the world’s dominant form of government. Advances in science have given us a better understanding of climate and ecosystem risks. Billions of people are connected by technologies that have shrunk the world and expanded the notion of a global neighborhood. We believe that we can summon the wit and the will to choose our future, rather than have it choose us.

The greatest risk lies in continuing down our current path. In 2030, a child born this year will come of age. We cannot mortgage her future to pay for an inherently unsustainable and inequitable way of life.

So, how do we begin to tackle the massive challenge of retooling our global economy, preserving the environment, and providing greater opportunity and equity, including gender equality, to all? The Panel’s report, Resilient People, Resilient Planet, offers suggestions.

First, we need to measure and price what matters. The marketplace needs to reflect the full ecological and human costs of economic decisions and establish price signals that make transparent the consequences of action – and inaction. Pollution – including carbon emissions – must no longer be free. Price- and trade-distorting subsidies should be made transparent and phased out for fossil fuels by 2020. We also need to build new ways to measure development beyond GDP, and propose a new sustainable development index by 2014.

Second, we must put science at the center of sustainability. We live in an era of unprecedented human impact on the planet, coupled with unprecedented technological change. Science must point the way to more informed and integrated policy-making, including on climate change, biodiversity, ocean and coastal management, water and food scarcities, and planetary “boundaries” (the scientific thresholds that define a “safe operating space” for humanity). To see the big picture, we propose a regular Global Sustainability Outlook that integrates knowledge across sectors and institutions.

Third, we need to provide incentives to take the long view. The tyranny of the urgent is never more absolute than during tough times. We need to place long-term thinking above short-term demands, both in the marketplace and at the polling place.

Limited public funds should be used strategically to unlock greater private investment flows, share risks, and expand access to the building blocks of prosperity, including modern energy services. The UN’s Millennium Development Goals – aimed at, among other things, halving global poverty by 2015 – have served us well. Governments should develop a post-2015 set of universally applicable Sustainable Development Goals that can galvanize long-term action beyond electoral cycles.

Fourth, we should prepare for a rough ride ahead, because extreme weather, resource scarcity, and price volatility have become the “new normal.” We need to strengthen our resilience by promoting disaster risk reduction, adaptation, and sound safety nets for the most vulnerable. This is an investment in our common future.

Fifth, it is crucial to value equity as opportunity. Inequality and exclusion of women, young people, and the poor undermines global growth and threatens to unravel the compact between society and its institutions. Empowering women has the potential to reap tremendous benefits, not least for the global economy.

Ensuring that developing countries have the time – and the financial and technical support – to make the transition to sustainable development ultimately benefits all. Promoting fairness and inclusion is the right thing to do – and the smart thing to do for lasting prosperity and stability.

No expert panel, including ours, has all the answers. But if we work together, we can help to steer our world onto a safer, more equitable, and more prosperous course. We call on leaders across all sectors of society to join us. The need is urgent; the opportunity, enormous. Let us seize it.

Jacob Zuma is President of the Republic of South Africa. Tarja Halonen is President of the Republic of Finland. They serve as Co-Chairs of the UN Secretary-General’s High-level Panel on Global Sustainability. 

 

Copyright: Project Syndicate, 2012.
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