andreas dombret : the merits of and challenges for global cooperation speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at a reception to celebrate the 30th anniversary of the bundesbank's representative office, tokyo, 22 may 2017. * * * 1. introduction governor kuroda deputy governor nakaso ladies and gentlemen it is wonderful to be back in tokyo, this extraordinary city. i am happy to see so many of familiar faces and so many important stakeholders here with us today. tonight we are celebrating the 30th anniversary of the bundesbank ’ s representative office in tokyo. actually, we are ten days early : the representative office started its work on 1 june 1987. but what are ten days among friends? to mark the occasion, i would like to say a few words on the merits of global cooperation. 2. the merits of cooperation nowadays, international cooperation is under attack from nationalist, populist movements. their claim : we are better off on our own. and i must say that – from an economic point of view – some of the frustration is rational, since the advanced economies have been undergoing a substantial economic transformation due to trade and technological change, which always has both winners and losers. yet, i cannot agree with the conclusion that we should heavily limit or even withdraw from international trade and global cooperation. why, you may ask. the answer is simple : evolution. one of the key insights of the theory of evolution is " the survival of the fittest ". many people conclude from this that “ competition ” is what makes our species so successful. and while that is not wrong, it falls short of explaining why the human species is one of the most successful on earth – meaning that it has spread over most regions of the planet and massively increased in number ; because it is cooperation and the division of labour which make our species so successful. evolutionary biologists have shown that there are only a few species – between ten and twenty, depending on the exact definition – on the planet that are capable of cooperating in a complex manner. and these eusocial species, as they are labelled, are the most successful species on the planet. the fittest to survive will be those who can compete and cooperate. in other words : while competition within a species is important for progress, cooperation may be even more important. this is actually programmed into our dna. let me explain by giving an example. in two scientific studies, cap

##uchin monkeys1 and chimpanzees2 proved that primates are programmed to be fair and place a high value on social contracts. in these studies, two primates were each offered a snack in return for carrying out a simple task. the two animals would get either a tasty grape or a less tasty piece of vegetable. all 1 / 4 bis central bankers'speeches of the animals preferred the grapes, but they also liked the vegetables – they would eat the latter, as long as both primates got the piece of vegetable. you can probably see where this is going : once one of the two animals got a grape and the other a vegetable, the latter would refuse to eat his snack, even though he had eaten it when both got the vegetable. to express their feeling that this was unfair, several of the disadvantaged primates actually threw the pieces of vegetable at the researchers! the study with chimpanzees revealed a further very interesting finding : if one chimpanzee got a grape and saw the other receiving the vegetable, the one with the grape would in most cases also refuse to eat the tasty grape. what a conscience! primates clearly seem to be programmed to cooperate. but why then the recent tide of populism and nationalism, you may ask. well, it may be because redistributive and restructuring tendencies in developed economies, globalisation and technological change in particular – while having created huge welfare gains for our societies – have also been penalising significant segments of our societies. this has created political tension and conflict over time – the great recession was a tipping point at which the frustration grew. this has led people to be frustrated with globalisation and free markets. but we should be careful not to throw out the baby with the bathwater : trade and globalisation have brought us more gains than losses. so rather than resorting to protectionism, we should improve international cooperation. 3. focused global cooperation yet, when talking about global market liberalisation and economic cooperation, we hear extreme, ideologically motivated solutions all too often : for instance, populist nationalism promises that everything will get better if we build new walls between our societies. at the other extreme are those who favour hyper - globalisation, that is, no borders to economic activity at all and full harmonisation. history has proven that both solutions are mere ideologies. the theories of both sides have proven to be unrealistic and, to a considerable extent, plain