A new age is dawning for the world. We stand on the threshold of an era in which the political, social, and economic organization will be different from anything we have known so far. In the next few decades, people from all over the world will expect the leaders of their countries to recognize the changing system and provide an appropriate collective response.

What is this new system? The economic, political, and historical data points to the emergence of a more diverse multi-polar power structure, featuring the emergence of the developing world and the consequent reordering of the international system.

As a recent World Bank report led by Nobel Price economist Michael Spence shows, during the past 30 years alone, the number of people living in high-growth economies or in countries with per-capita income at OECD levels has quadrupled—increasing from 1 to 4 billion—and the majority of these people live in the developing world.

The consequences of these radical changes, however, are difficult to predict, and require serious study. Globalization empowers developing countries, but it also poses challenges that call for greater cooperation if an efficient new international order is to emerge.

Benefits and Challenges of a New Global System

The development of emerging economies will definitively have positive social and political consequences. As the World Bank report stresses, because of sustained economic growth, “there is perhaps for the first time in history, a reasonable chance of transforming the quality of life and creative opportunities for the vast majority of humanity.” Sustained economic growth will allow hundreds of millions of people to escape poverty and raise their living standards to unprecedented levels; similarly, several poorer countries are even projected to become developed societies in the near future.

According to the International Monetary Fund, China’s per capita income measured in purchasing power parity (PPP) terms was US$503 in 1985 but will reach US$9,729 by 2013. In the same period, Brazil’s per capita PPP GDP will rise from US$4,545 to US$12,870, whereas Chile will see an increase from US$3,225 to US$19,520.

This development will have positive political and social consequences. The emerging world’s increased influence will create the conditions necessary for a more democratic international system. Stronger democratic institutions will facilitate reforms that will enhance the representation of states in the international institutions established after World War II.

A multi-polar international system, however, may be less stable than a bipolar system, and is weaker than the primacy of a single power such as that of the United States after the Cold War. It is clearly easier for two powers to reach agreement than for a larger number to do so.

Multi-polarity is also strategically worrisome. If nuclear arsenals increase, more states acquire nuclear power, and terrorist groups gain access to weapons of mass destruction, the world will become a more dangerous place. Moreover, other factors such as global warming, income inequality, unregulated migration, and potential backtracking on progress towards greater democracy could also interfere with the positive prospects that globalization offers for our future.

The world of the 21st century will therefore be more complex than in the past, demanding greater efforts to ensure its stability. The new emerging actors in the global arena will play a greater role than before. Even now, international leaders should take the opportunity to contribute to the era’s transition to an enhanced global governance. The shaping of the future lies in the hands of the global community.

Chile in a Globalized World

Chile is helping to address this global challenge through its own development. My country has been successful in taking advantage of the opportunities that globalization offers to developing nations by taking a hand in global governance. It is also contributing to the economic and social progress, as well as the overall stability, of Latin America.

With 16 million inhabitants, Chile is a medium-sized country. In order to further its own development and strengthen its ties to the rest of the world, it has opted for international integration and markets. Today, international trade represents over 78 percent of its GDP, and its network of trade agreements now includes 53 countries. Almost 4 billion people, principally in the Asia-Pacific region—60 percent of the world’s population—buy Chilean products.

Between 1990 and 2007, the Chilean economy expanded at an average annual rate of 5.5 percent. GDP doubled, and per capita income tripled to US$14,000 in PPP terms this year. Even more importantly, the poverty rate was slashed from close to 40 percent in 1990 to 13.7 percent in 2006.

Chile has emerged as a serious, modern, stable, and attractive country. It stands out in all international rankings of competitiveness, country risk, governance, transparency, probity, and human development. Our goal today is to hasten this positive transformation and to attain the status of a developed nation within a generation. To this end, our policy is based on three pillars.

First, Chile must increase its competitiveness and productivity through investment in human capital and innovation, science, and technology.

Second, Chile should strengthen its social cohesion and social capital. Here, our strategy is simple, but effective: The Chilean state must be able to guarantee not only political but also social rights, either through access to the market or through subsidies for lower-income families. This is why we are in the process of creating a system of social protection that will offer opportune and high-quality services to our citizens from the moment of their birth through to old age.

We seek economic growth in order to increase social inclusion, and we seek social inclusion in order to increase growth. This is the principle upon which my government’s new social protection network is anchored. There can be no trade-off between growth and social cohesion. Contemporary reality demonstrates—in Chile as in other countries—that these concepts are important and mutually reinforcing. Moreover, stable economic growth and public policies that promote social inclusion require a state that is highly democratic, modern, and dynamic.

Third, as part of Chile’s bid to attain development and contribute to the task of building a better 21st century, we are deepening and strengthening our international integration. This is occurring in line with the rest of Latin America.