The United Nations and Global Markets – Understanding the Scene
It is hard to underestimate the power of the United Nations as a global institution this month when more than 100 heads of states and thousands of dignitaries gathering in New York to attend the United Nations General Assembly annual meeting and other satellite events. The stakes are high. Officials from all over the world meet up to network, share their view on current political events, and unite around important global initiatives.
Despite the significant challenges of building a post-Arab Spring Middle East or the good old East-West strategic tensions, the Palestinian question is at the center of the diplomatic debates this and next week at the United Nations. How should we read the current discussions at the United Nations on a potential unilateral declaration of a Palestinian state?
It seems like we are all confused, and rightly so. The Palestinians are still undecided on their strategy vis-à-vis the Security Council and the General Assembly. The Palestinian people themselves feel that this United Nations maneuver will not take them very far as most likely the dispute will be solved bilaterally in the future by negotiations between Israel and Palestine.
United Nations members themselves are confused. Since many of them are not certain about the motives of the potential Palestinian move and its consequences, there is a strong feeling of indecisiveness. Frankly, most of them care more about global economic governance, terrorism, and other internal challenges that require bilateral or multilateral solutions. They have been exhausted by the Middle East crisis.
Although many scenarios are possible, there are three leading options. One option is that the Palestinian request to the Security Council may be blocked altogether by the majority members due to last minute diplomatic efforts or by a U.S. veto down the road. The Security Council will then discuss the request in the coming months, which will slow the acceptance process. Another possible scenario is that the Palestinians decide to go to the General Assembly for a declaratory resolution. Although the General Assembly cannot accept a non-existing state as a member, the Palestinian observer status can potentially be upgraded to a higher status similar to the Holy Sea. Such resolution can also allow Palestine to join multilateral treaties and institutions that can be used in the diplomatic war between the Palestinians and Israel. The International Criminal Court is one of them.
The third option is less likely but should be mentioned. The Palestinians can decide to postpone the United Nations discussion in order to continue and find ways to initiate bilateral negotiations.
This analysis supports the view that even if the General Assembly will eventually support a Palestinian state, with or without defined borders, the short-term effect on the region would be limited. Indeed, as I asserted in other forums, the impact would be more significant long-term as the Arab Spring and a divided Palestine could strengthen extreme groups in the region, which would eventually lead to instability in societies, commerce, and capital markets. This is why we should all pay more attention to current events in Egypt and Syria as certain political groups might try to take advantage and use the current United Nations affair in order to divert the world’s attention.
Since the United Nations has practically delegated any substantive economic policy discussions to other multilateral forums, such as the G-20 in its new form or the OECD, its ability to utilize this opportune time to send positive signals to global markets or provide global economic governance solutions to the new crisis are rather limited. However, the United Nations can serve as a strategic tool for member states by creating the ‘diplomatic noise’ that impacts the world outside its corridors. It is exactly that noise that creates confusion and anxiety in global markets. As the saying goes, this is the world of the United Nations, and there is the real world.
The United Nations, therefore, can serve as the world’s litmus paper. As global citizens watch governments unable to coordinate and adopt bold polices which can solve serious threats, such as the global debt crisis, the breakup of the Euro zone, and rising protectionism, the United Nations epitomizes this frustration. As the United Nations becomes more of a vehicle than a solution, the inability of the organization to bring parties to negotiate a peace agreement can be perceived as another example of incompetence and politicization of the world’s real challenges. Those who are looking for more trust or lack thereof in global institutions should follow these events closely.
One Response to “The United Nations and Global Markets – Understanding the Scene”
What a shame to have to protect your own people from your own people, When you figure out what causes it tell it to Obama.