RABIGH: Helmut Schmidt, former chancellor of Germany, delivered an uncompromising assessment of the present state of the world at the 27th annual plenary meeting of the Council for International Understanding (CIU) yesterday. King Abdullah Economic City is host to this year’s annual meeting of the CIU, an independent international organization consisting of more than 30 statesmen who have held the highest offices in their countries.
The meeting featured Schmidt’s keynote address that centered on the current financial crisis but took in concerns as diverse as the “clash of civilizations,” an arms race in space and an enduring solution to the Palestine-Israel problem.
He noted that the current financial crisis had stemmed from “contagious, outrageous and reckless greed of financial managers, spreading from New York to London and to the rest of the world,” and the failure of the political class in some countries neglecting their duties “to watch over the well-being of their respective economies, particularly so in the United States.” The hardest hit as always were the least developed countries.
Schmidt quoted the International Labor Organization’s estimate that 50 million workers might lose their jobs by the end of this year and that 100 million more, according to the World Bank, could be pushed into poverty. This could lead many countries to relapse into national egoism and various forms of protectionism.
“It is therefore urgently necessary to create a reliable system of regulation and supervision over all kinds of financial institutions, including regulatory capital standards and all kinds of traded financial instruments,” he said, adding that financial regulations are only national and that as financial activity is now global, there should be international regulation.
Holding a broader vision of the world, Schmidt thought it “a positive change for the world to see a more balanced and more rational figure at the helm” in the US after a decade of unilateralism. “The cooperation between the US and the other six billion human beings can never be based on military means and threats and military intervention,” he warned. “This simple insight is particularly obvious in the field of financial and economic recreation in which the US has a special responsibility.”
He touched on the theme of cooperation in the area of US policy toward Afghanistan, Pakistan and Iraq. “They (the US) do need the cooperation of other players in those areas. And the Americans do need more respect and tolerance for the Islamic part of mankind. In any case, it seems clear to me that the days of America being the one and only world power are over.”
He suggested that China was now a world power and thought that within the next 20 years, China and India would rank as two and four in the world’s largest economies respectively.
Despite the unsolved problems over Kashmir and Taiwan and North Korea’s nuclear ambitions, Schmidt foresaw no large international conflicts as both China and India acted very cautiously and responsibly in the arena of international and global affairs.
Turning to the Middle East, Schmidt said the region is definitely that part of the world with the greatest number of potential conflicts. The Middle East contains the largest oil reserves of the world. At the same time, an expanding terrorism in parts of the Middle East and southwest Asia contributes to global dangers.
He noted that almost every Arab leader had accepted the existence of Israel as a fact and thought that the only long-term solution to the enduring Israeli-Palestinian conflict would be a two-state peace settlement based on the borders of 1967. “Among others, this was proposed by King Abdullah in 2002, when he was crown prince of Saudi Arabia. One can only hope that his statement made in January this year will be taken seriously by Israel.”
Schmidt noted that in terms of foreign policy and peace, Saudi Arabia was one of the few moderating countries in the region. Due to its vast oil reserves and its current account surplus, it is also one of the most important Muslim countries.
“Therefore this Council for a long time has proposed inviting Saudi Arabia to economic summit conferences. One can only welcome its presence recently in Washington and in London. I would also join those outside this country who have welcomed King Abdullah’s recent reform proposals.”
