Ever since the failed World Trade Organisation meetings in Seattle, it has become apparent that the now-familiar protests accompanying such events merit serious attention. I believe they have three components.
The most visible is a radical, violent and nihilistic type of movement, which uses media coverage of these international meetings as an opportunity for violence and destruction. These are fringe elements but they do require a heavy security response.
There are two other movements that are deeply felt, non-violent and require a different response. The first is the movement against globalisation, which is viewed by some as a process in which rich countries exploit poor countries and increase the disparity between rich and poor. Separate but related to this is an increasingly vocal environmental movement. These movements targeted the spring meeting of the World Bank and the International Monetary Fund in Prague and, more recently, the Group of Eight industrialised countries' meeting in Italy as symbols of what they oppose and as the agents of the world's rich nations.
So far, the answers to these protests have essentially focused on the security side: more police, shorter meetings, more remote locations. That is not a very promising response to what is, at a certain level, a challenge to western capitalism as the best system to deal with global poverty. And it is a response that will fail because it is devoid of intellectual content.
I have believed for some years that the time has come for a new Bretton Woods conference. The role of institutions created 50 years ago needs to be updated to suit the needs of a world that has changed beyond all recognition. Both the World Bank and the IMF have been indispensable but it is essential to review their role in a world where the economic agenda is now set by the movement of private capital coupled with rapid technological innovation and the primacy of intellectual property.
In spite of strenuous efforts over the years by the international financial institutions and the leading industrialised countries, poverty and disease are still rampant among most of the world's population, and wealth differentials seem to be increasing rather than narrowing. I strongly believe in the benefits of globalisation and of modern capitalism but I also believe these are not obvious to everyone. Furthermore, they are not available to many people throughout the developed and developing worlds.
It is easy for some to view globalisation as a process that benefits capital at the expense of labour; that imposes austerity on developing countries to protect western bondholders; that benefits the private sector while discriminating against the public sector; and that preaches open markets for rich-country exports while demanding protection from poor-country imports.
A new Bretton Woods, convened by the president of the US with the secretary-general of the United Nations, would include representatives of the developing world as well as of the developed world; it would also include representatives of non-governmental organisations and private sector leaders. It would have a number of aims. First, it would determine the facts behind the assertions of anti-globalisation protesters. Second, and based on the findings, it would recommend policies to address the most contentious issues, particularly the impact of globalisation on developing countries.
Fortunately, world leaders are beginning to show a change of thinking. The Bush administration, for example, has signalled one aspect of possible reform by suggesting that World Bank lending to poor countries be switched to grants as opposed to loans. The political problems created by debt forgiveness plans suggest that grants are a superior alternative.
To many, loan forgiveness appears to be foreign aid given twice: once when the loan is made and once when it is forgiven. Grants, by contrast, are a one-off exercise and can be tied to a number of conditions to make them more effective for the recipient country.
Even so, grants must be accompanied by a new and acceptable way to finance the World Bank and enable it to accomplish its aims. And that would almost certainly require a new operating structure. These are some of the issues that need to be reviewed - while the answer to protest is to be firm with the hooligans, it is vital to recognise that the status quo has many faults.
A new Bretton Woods conference with broad participation of the private sector and NGOs would help stop a trend that will surely get worse if no action is taken. True, such a meeting would be controversial but it would be a serious response to real issues. It would also challenge the protesters to be constructive.
That is very different from holding ever-smaller meetings in ever-remoter locations while insisting that what we are doing is best for everyone. Historically, such an ivory-tower mentality has invariably led to the most serious consequences.
The writer is a former US ambassador to France