How to Run the World

by Parag Khanna

  Human rights are one arena in particular that must be contested from the bottom up, not the top down. The very notion of the United Nations as a central vehicle for promoting human rights is paradoxical: Because the United Nations is premised on national sovereignty, it avoids controversial cases such as Tibet. Almost all countries sign official UN human rights treaties, knowing that more attention is paid to whether they sign than whether they implement. Meanwhile, Amnesty International not only thrives on challenging government transgressions, but can even have more leverage than the United Nations within some countries. Given how reluctant authoritarian regimes are to listen to other governments, it is at least as likely that agile NGOs can slip under the radar in Belarus, Uzbekistan, and Myanmar as it is that intergovernmental diplomacy will put real pressure on such regimes. So the European Union and other governmental bodies increasingly fund NGOs that lobby to end the death penalty and curb torture, rehabilitate child soldiers, and advocate prisoner rights. These relationships between progressive governments and risk-taking NGOs are the key axis for improving human rights today, not the UN Human Rights Council.

  “Torture is entirely man-made—it can be ended in the twenty-first century,” declares Karen Tse, founder of the fledgling nonprofit organization International Bridges of Justice (IBJ). That would be a tall order given that there are more slaves in the world today than perhaps in any time in history, and torture is still the way of life and death for countless prisoners around the world. Democratic India allegedly has one of the highest custodial death rates in the world. In Cambodia, policemen even run brothels. Official human rights bodies launch fact-finding missions and prosecute Khmer Rouge henchmen from the country’s brutal 1970s, but do little to shut down the torture chambers of today. Tse is adamant about the way forward: “You can’t protect human rights through reports. The past six decades have been about declarations; the time is now for action.”

  So how do we actually create human rights, one victim at a time? Cambodia has had laws on the books since 1992 that allow for every citizen’s right to a lawyer, but today few prisoners ever see lawyers, and if they do, it’s only after police have beaten confessions out of them. “Most torture happens during ordinary criminal investigations. Compared to this, political torture is relatively insignificant,” Tse explains. “For most of the rest it’s just about lacking the resources to defend oneself.” If public defenders don’t get access to prisoners early, they will simply be considered “scum” who are “guilty by virtue of how long they’ve been locked up, no matter how arbitrary the arrest.” Effective defense requires rapid response, so IBJ trains public defenders in as large a class size as possible, even in public squares in Cambodian villages, giving them the confidence to confront both police and prison officials. It publishes manuals (in local working languages) on how to uphold criminal law while respecting citizen rights—which are often more useful than the laws themselves. “The law can’t be locked up in the president’s drawer: It has to be in the hands of the judges or lawyers who are dealing with dozens of cases a day.”

  IBJ’s toughest test has been China, whose official response to the U.S. State Department’s 2009 report criticizing the country’s human rights record was “Mind your own business.” But here’s what they told Tse: “If you’re willing to work with us and not against us, then you’re welcome here.” China has proven more responsive to quiet dialogue and constructive, incremental recommendations than public shaming. Tse thus couches her work not as a moral crusade, but as an administrative upgrade, such as implementing habeas corpus rights so that the government at least publicly acknowledges when people are detained and informs their relatives. For this project she found the most credible and effective local partner on the inside—the Communist Youth League—which barged into police stations nationwide and demanded to hang up posters listing the rights of the accused (including the right not to be tortured and the right to counsel). As in Cambodia, the task was not to convene international workshops to draft a new code, but rather to make the existing one visible.

  NGOs don’t just promote human rights through dialogue with governments. Their shame campaigns can also turn sneaky companies into labor champions in short order. After Nike’s shoe-making sweatshops in Indonesia were exposed, it quickly raised wages and implemented worker-training programs there. The same has happened with Monsanto after it was accused of covering up dioxin contamination in its products, leading the company to invest in genetically modified crop varieties that require no pesticides. To impact corporate behavior you have to work as fast as companies do. The Business and Human Rights Resource Center tracks the human rights impact of more than thirty-six hundred companies in 180-plus countries, updating its website every hour. Such real-time transparency can deter companies from making decisions that harm workers and the environment. When reputations and bottom lines are at stake, companies respond and change—and do so far more quickly than governments.

  Human rights are adopted by example, not design. Even though naming and shaming is its modus operandi, Human Rights Watch (HRW) has made as much progress in recent years with difficult regimes as any Western government—while also proving how the two efforts can complement each other. When states such as Jordan and Libya want to get closer to the West, they need the public validation that comes from giving access and demonstrating progress to HRW. Companies now turn to HRW for guidance on how to manage the reputation fallout associated with doing business in countries with labor rights and torture issues—the United Arab Emirates, for example. HRW usually tells them to stay in-country rather than withdraw, but to improve conditions for their employees, including ensuring higher wages. This way, it is companies, not countries, that set the standards that others eventually follow.

  The End of Corruption?

  In a memorable scene from the Hollywood thriller Syriana, an American oil executive is outraged at being indicted for paying for the private school tuition for the son of a Kazakh government official in exchange for a lucrative energy contract. Flailing his arms and stomping his feet, he whines incredulously, “Corruption is what keeps us warm at night! Corruption is how we win!” It’s easy to point to several high-profile cases of mega-corporations handing over briefcases of cash to government officials and declare all companies corrupt, but corruption is a two-way street. Corruption is as much a fact of life as birth and death, and almost requires no definition: You know it when you see it. In countries from Nigeria to India, the more ministers there are, the more corruption there is. The U.S. Foreign Corrupt Practices Act of 1977 has diminished American firms’ ability to bribe foreign leaders, but it hardly stops anyone else. In a world desperately driven by profit at all costs, can shame curb this most universal social disease?

  Enter Peter Eigen, a German lawyer with the audacity to take money from the world’s governments and multinational corporations and then shame them for their misdeeds. After twenty-five years running World Bank programs in Latin America and Africa, Eigen in 1993 founded Transparency International (TI), a Berlin-based NGO perpetually collecting data from media outlets, businesses, governments, and civic groups that are compiled into its highly visible Corruption Perceptions Index report, the gold standard in the naming and shaming of countries. TI today remains so unimpeachable in its own credibility that it also bestows an annual Integrity Award, which in 2008 went to Guardian journalist David Leigh for uncovering British Aerospace Systems’ murky weapons deal with Saudi Arabia—an issue Tony Blair would have preferred to sweep under the rug.

  Eigen’s formative experiences with the World Bank taught him that discussing corruption as an external official has little impact. Rather, TI needed to work from the bottom up to support local anti-corruption groups and accredit them as its national chapters. TI has also established websites for whistle-blowers from Nigeria to Cambodia to confidentially feed information. Such high-quality real-time data becomes an important signal to investors as well: When a country’s ranking falls, it has
to explain itself to those who hold the purse strings. Upon becoming the country’s ethics and governance investigator, John Githongo, the head of Kenya’s TI chapter, uncovered one of Africa’s greatest looting schemes by Kenyan ministers. He then fled into exile in London to expose the charade—all while Kenya was earning top marks from bilateral donors and the United Nations.

  Nothing holds a country back like audacious and endemic corruption, which eviscerates all efforts to provide public welfare. Anti-corruption efforts like those of TI are therefore a vital public service. But TI no longer works alone. Under its umbrella, companies such as mobile phone supplier Alcatel have preached reduced corruption from South Africa to Russia as a way to save money and gain a more predictable business environment. After being exposed for paying more than $1 billion in bribes in ten countries to gain preferential contracts, the engineering conglomerate Siemens agreed to spend $100 million on such anti-corruption training and education programs in emerging markets.

  The opportunities for corruption only grow—not recede—as many countries climb the development ladder and democratize. In Indonesia, local and provincial authorities have gained more and more autonomy from the central government, and everyone wants a piece of the action on oil and gas or mining deals. Indonesia’s government can’t force Sumatran politicians to abide by global standards of transparency and fair play—not that it would, anyway. Instead, one has to go inside the companies making investments to coach them in how not to cut corners.

  This is what AccountAbility does. A British nonprofit founded in 1996, AccountAbility digs deep into its clients’ culture to embed sustainable practices in a manner invulnerable to market whims and local conditions. Its experts go on-site with leaders and staff, mentoring from top to bottom, pushing tangible change from within. By working with the leadership of some of the largest companies, including Nike and Nissan, it kicks off a process of strategic sustainability that ripples through massive supply chains.

  But AccountAbility is more than a corporate watchdog. Its Global Accountability Report evaluates UN agencies, development banks, and NGOs as well—all of whom have plenty of room to improve on measures such as whether their members control their budgets and how consultative they are with other stakeholders. Democracy cannot solve these problems, but collaborative governance can. This means leveraging private investment to build transport infrastructure and make water management more efficient, but in the context of partnerships in which business and government recognize mutual obligations and monitor each other.

  Make no mistake: Corruption was not a big diplomatic issue between governments and companies before Transparency International and AccountAbility came along. It was TI that lobbied actively for the Organization for Economic Cooperation and Development Anti-Bribery Convention and the UN Convention Against Corruption—and to close loopholes in both. Now transparency has become a buzzword at both the IMF and the World Bank, and the U.S. Millennium Challenge Account uses TI criteria in determining which countries will receive American aid. Corruption is now on the diplomatic agenda, and diplomacy will be more effective as a result.

  Part Three

  A WORLD OF NEED

  Chapter Eight

  By Any Means Necessary

  Poor countries are often rich in two things—people and natural resources—but most don’t manage either of them well. To succeed, nations and their people must do something: Find a niche in the global marketplace. We have no global playbook to get countries on the path to success, but success has an essential ingredient: Doing one thing well. Right now there are quite a few countries with the potential to leap into the global economy. But rather than pretending to be disciplined enough to copy China, most of them would do better to look closer to home for the next best model they can actually emulate. In countries as diverse as the Persian Gulf states, Mauritius, Malaysia, and Vietnam, top-level public and private coordination, with both foreign and domestic investors and businesses, has proven to be the way to put people to work efficiently and extract resources profitably. For poorer countries, India’s eclectic and experimental approach, which combines hybrid business-government commissions and philanthropic industrialists, is becoming a model of and for our anything-goes neo-medieval world.

  Even across Africa, multinational corporations and China are raising the stakes, turning the continent from the final frontier to the hottest frontier market. Hundreds of millions of people in Africa could live better if China’s hunger for natural resources could be married with the West’s concerns for good governance. What about countries that can’t get even the basics right, squandering the one precious resource they may have? The world can no longer afford for them and their resources to go to waste—mega-diplomacy can make them run their countries right.

  Nothing Succeeds Like Success

  China is the world’s factory floor, India its back office, Russia its gas station, and Brazil its farm. These are the “BRICs”: Brazil, Russia, India, and China. You’ve been told already that if you’re not invested there, you’re missing the future. And yet they didn’t get to this vaunted position by following Western prescriptions; they did just one thing well and have expanded from there. Brazil is now an industrial and energy power also; Russia is growing its agricultural production; India has become a major player in steel, manufacturing, and biotechnology; and China has moved up the value chain to semiconductors and satellites. The growing spending power of BRIC middle classes has Western retail brands scrambling, while the success of BRIC companies has blurred the traditional boundaries between North and South and realigned global economic relations faster than any multilateral negotiation. They are now part of every conversation about how to run the world.

  Since Goldman Sachs first coined the term “BRIC,” corporate labels have captured investors’ imagination, reminding us that credit-rating agencies often have more influence over a country’s prospects than the World Bank does. Indonesia, Egypt, and other countries now clamor to earn such labels that increase their visibility and attractiveness to investors from the United States, Saudi Arabia, and China. Malaysia’s leadership explicitly brands its country “Malaysia Incorporated” to emphasize its fusion of public and private credentials. It takes its lesson from neighboring Singapore, the most respected government in the world—not least because it is modeled on and run like a company. In effect, it is not just companies, but also countries, that are represented on stock exchanges. Financial newspapers worldwide often refer to “Brand India” as if it is synonymous with the real thing.

  Without capitalizing on a niche and growing from there, many economies will forever lie in the purgatory of underdevelopment. There is no one strategy for capitalizing on raw materials under the ground, the manpower of citizens, and the knowledge they possess. There are, however, certain common elements.* Successful countries manage to balance foreign and domestic priorities: giving access to multinationals while also catering to local businesses that want protection from outside competition so they can develop into a robust industrial base for the country. Often it just requires the confidence to invest in oneself. Brazil now issues local currency bonds—which have paid out handsomely in recent years—and provides a long-term capital lifeline to diminish the impact of financial crises.

  Over the past decade, a string of Persian Gulf statelets and emirates has risen up to collectively function as a crossroads between Europe, Asia, and Africa. Surging ahead in sectors such as oil and gas exports, trans-shipment of goods, tourism, and Islamic finance, each is a model of public-private cooperation, both internal and external. Almost forty million passengers passed through the Dubai airport in 2008 (compared with sixty million at London’s Heathrow), and it received seven million tourists in the same year (more than all of India). Hundreds of companies have their regional headquarters in the city’s International Financial Center and Knowledge Village. In Qatar, Exxon is building the world’s largest natural gas liquefaction terminals—boosting that country’s exports a
nd Exxon’s profits. At the same time, it has become the hub for a growing number of Western universities that have established outposts in the Middle East. In Saudi Arabia, it was the national oil company Aramco, not the education ministry, that partnered with foreign universities to build the King Abdullah University of Science and Technology, bringing global educational standards into the sheltered kingdom. The common denominator in the success of these Gulf statelets is that old and ossified bureaucracies have been bypassed by new parallel public-private authorities singularly focused on getting the job done.

  The sensational allure of Gulf sheikhdoms, built on the back of third world Asian labor, has also perversely made their medieval stratification and hierarchy among citizens and foreigners acceptable to the world. Whether Riyadh, Doha, Abu Dhabi, Manama, Dubai—or any combination of them—becomes the economic engine of the Arab world, their success has inspired imitators to recognize the virtues of free trade, foreign investment, and lean bureaucracy. Special economic zones are popping up from North Africa to Southeast Asia, promoting their ironclad public-private synergy. The rival ports of Chabahar in Iran and Gwadar in Pakistan jockey to be called the “gateway to central Asia,” while Tangier and Tunis contend to be North Africa’s primary port of passage to Europe. Countries that want to catch up might have to set aside new physical spaces for high-productivity “charter cities” to be built from scratch, combining foreign capital and domestic labor. All of these experiments only reinforce our postmodern medievalism.