New World Paradigm, Dr. Ash Narain Roy

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27 JUNE, 2010

A TRIBUNE SPECIAL

The new

geopolitical

paradigm

(The article is a reproduction)

We are witnessing the Atlantic era’s end and the

Asian Century’s advent, says Ash Narain Roy

"TODAY is like yesterday in a world without tomorrow”. This lament by a Latin American bard typified the painful present and the uncertain future of most of the third world for major part of the 20th century.

The United States, on the other hand, it was said, was born rushing into the future. As ‘Old World’, Europe had its own advantages. Colonisation and colonial exploitation allowed Europe to fatten itself on some one else’s feed. Japan worked hard to find its way to the top. While the first world held sway, the third world appeared destined to live in misery.

But as George Will says perceptively, “the future has a way of arriving unannounced.” Russia, the other super power, lost not only parts of its territory but also the zeal to fight. Its economy shrank and its global influence waned. The second world suddenly disappeared.

Today, the wheel seems to be turning full circle. The US, Europe and Japan are all in trouble. The US remains and will remain a vital global player that can enhance or restrict the aspirations of new powers. But it is on a declining curve nevertheless.

In 2003, the US accounted for 32 per cent of global output and the developing world’s share was 25 per cent. In 2008, these got neatly reversed. At a different level, while Brazil, Russia, India and China (BRIC) currently account for 14.6 per cent of world GDP, BRIC’s share in global economic development has exceeded 50 per cent.
 
A new Iron Curtain is rising in Europe. The fault lines of the new Iron Curtain are the same that divided Europe 50 years ago. Europe’s North-South divide is also becoming visible. German Chancellor Angela Merkel has blamed feckless Greeks and Latins for Euro debacle. Germans are proud of their wage discipline. Obviously, cultural Germans and cultural Latins are unable to meet half way in Europe. What an irony that the Euro which was launched with so much fanfare should become an engine of intra-European hatred.

Japan, a country known for its egalitarianism, has now discovered that it has a large and growing number of poor people. One in six Japanese, that is 20 million people, lived in poverty in 2007. The Japanese government had been keeping these statistics secretly. The poverty level in Japan is close to the figure for the US (17 per cent). Japan is walking a financial tightrope with a public debt mounting bigger than that of any other industrialised country.

Japan’s revenue is roughly 37 trillion yen and debt is 44 trillion yen in fiscal 2010. Its debt to budget ratio is more than 50 per cent. Without issuing more government bonds, Japan would go bankrupt by 2011.

Such is the state of affairs in the first world. The bi-polar world came crashing down after the collapse of Marxism. And now the unipolar world is on its way out. The liberal West had hoped that the new world order would emerge from the ruins of the Communist world. Instead, it seems to be emerging from the ashes of footloose capitalism and the market jehad. The market, says Alvin Toffler, is a tool, not a religion, and no tool does every job. Alas! To many it is too late to realise.

Where and how is this change happening? The centre of gravity of global politics is shifting from the North Atlantic to the East and the South. The rise of China and India is a game-changing phenomenon. The greatest strength of “chindia” is that it is a mega market for almost every product and service.

At a time when the US and Europe are wrestling with the financial mega crisis of 2008, both China and India are virtually booming. As far as India is concerned, thanks to its prudent monetary policy, it remained largely insulated from the crisis. The capitalist world is now realising the dangers of living beyond its means.

One could argue that after all, China and India are reclaiming their lost glory. The two were major economies in the 17th and 18th centuries. In a sense, one is witnessing a slow move towards a more equitable global equilibrium. According to one calculation, India and China could be back to contributing 50 per cent of the world’s GDP by 2020, which they did till the 19th century.

The present combined GDP of India and China in Purchasing Price Parity terms is bigger than that of the US, while the BRIC countries have among them a larger GDP than the European Union. In the next two years, India’s GDP will become bigger than that of all 10 ASEAN countries combined. In a decade’s time, India could overtake Germany and Japan.

China and India are not the only powers on the horizon. Brazil, South Africa and maybe, Indonesia have their stories to tell as well. Way back in 2003, President Lula of Brazil said very bluntly, “We will not accept any more participating in international platforms as if we were the poor little ones of Latin America, a ‘little country’ of the third world…This country has every thing to be the equal of any other country.” When George Bush visited Brazil a few years later, he acknowledged, “Brazil is big!”

The nuclear swap deal struck by Brazil, Turkey and Iran may not be the model that India would like to follow. But it has clearly demonstrated that the US power s being usurped. It is the pro-active approach of BRIC, IBSA (India-Brazil- South Africa), BASIC (Basic group of countries include Brazil, South Africa, India and China) and other such platforms that President Obama has thrown the G8 into the trash heap of history.

The G20 is now the primary workshop to deal with global financial crisis. After all, Obama has realised that the power grids of the existing anachronistic global institutions don’t match the real world.

The idea that China, India, Brazil and some others would lead the twenty-first century would have been dismissed only two decades earlier. If China had the Tiananmen Square baggage and India was stuck in the quagmire of the Hindu rate of growth, Brazil did not know how to deal with the debt bomb. The global economy was anchored in America, Western Europe and Japan.

Unlike the present world order, the new global order will be different. The western domination will not be replaced by another form of domination. The western coercive paradigm itself will be rejected. The rise of new powers will help put the wolf back in the cage. Mercifully, one single power dominating the world seems unlikely. President Obama said the other day, “No world order that elevates one nation or group of people over another will succeed.”

The world is witnessing a new geopolitical paradigm — the end of the Atlantic era and the advent of the Asian Century. Laurent Cohen-Tanugi, author of The Shape of the World to Come, calls it “a historic change.” It is the first time in modern times, says Cohen-Tanugi, that the wealth and world’s population are concentrated in the same place. While China, India, Brazil, Russia and certain others have a long way to go, hundreds of millions of people are actually coming out of poverty and joining the middle class.

This emerging world’s revolution is a historic comeback for countries like China and India. As is widely known, before the Industrial Revolution, China accounted for about 30 per cent of the world economy, India about 15 per cent and Europe about 23 per cent. We are now witnessing a comeback of the world’s old powers to the forefront again. Didn’t George Orwell tell us that who controls the past controls the future and who controls the present controls the past?

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The writer is Associate Director, Institute of Social Sciences, New Delhi and Contributing Editor for www.fnbworld.com.