Asia’s Place in 21st Century Global Governance (Part II)

By Jean-Pierre Lehmann | Monday, August 03, 2009

With so many economic and political differences, is it possible that the interests of Asia’s major players can ever coincide? In the second of a two-part series, Jean-Pierre Lehmann describes possible scenarios for the future of the international system.

South Korea, India, Indonesia and China — as is the case for the rest of the continent — should share a common interest in trade.

All four are strongly dependent on foreign trade and would suffer considerably in protectionist global market economy. And all four are members of the WTO.

India was actually a signatory member of the GATT, Korea acceded in 1967 and Indonesia joined in 1986 when the country undertook a deep program of economic reform.

China applied for membership of the GATT in 1986 and after 15 years of painstaking negotiations (which were interrupted for a while following the Tiananmen massacre in 1989) it finally acceded to the GATT’s succeeding institution, the WTO, in Doha, Qatar, in 2001.

China, India and Indonesia have, at least on the surface, been allies in the arena of the Global South in its campaign versus the North.

In the WTO trade ministerial meeting in Cancún, Mexico, in September 2003 (which was meant to be a half-way mark to concluding the Doha Round) China and India along with Brazil and South Africa, formed what was initially known as the G-22, of which Indonesia was a member. This was supposed to be the group that would confront the North’s bullying and unfair tactics and policies.

Korea was not part of the Northern alliance, known as the Quad, comprising Canada, the EU, Japan and the United States. Instead, it joined a smaller grouping, known as the G10, which includes smaller but generally advanced economies, such as Switzerland and Taiwan. They have a common aim in resisting agricultural trade liberalization.

In both the Cancún and the subsequent Hong Kong WTO ministerial meetings in 2005, Korean rice farmers engaged in militant demonstrations. One committed suicide in Cancún and one drowned in Hong Kong Harbour.

However, in spite of their interests and in spite of their undoubted clout, whether for demographic or economic reasons, neither China, nor Indonesia, nor Korea have been especially influential or pro-active in the course of the Doha Round negotiations.

In contrast, India has been hyper-active and highly influential, though generally — or at least such is the perception in Geneva — as an obstructionist. Indeed the consensus view is that it is the United States in the North and India in the South are the main obstacles to a conclusion of the Doha Round.

Though there has been a possible warming of relations between the two countries on trade following their respective elections, this has as yet had no impact on Doha, nor is it generally expected to.

Western dominance since WWII has resulted in the mission of spreading democracy, respecting human rights, promoting the rule of law domestically and internationally and fostering an open global market economy. The West did not always practice what it preached, but there was nevertheless a reasonably clear “mission statement.”

At the moment, it is not clear what the Asian KIICs might share as a common mission, or indeed as common values.

Assuming that the G20 remains the de facto centre of global governance, as the successor to the G7, Korea, India, Indonesia and China will be the key players of the new Asian hemisphere.

As the second decade of the 21st century approaches, however, the scene is reminiscent of a Pirandello play. We know who the actors are, but we (and they!) have no idea what is the script.

There are many scenarios for the future of the planet as globalization and global governance shift to Asia.

One is the “clash of civilizations” concept made famous by the late Samuel Huntington and embraced by a number of opinion leaders in both East and West. That thesis is not, however, the most persuasive.

As has been explained, while the centre of economic gravity may well have shifted to Asia and will continue to do so, there is no perceptible Asian “bloc” emerging — nor an “Eastern” counter version to the “Western” system of global governance.

There is no strong bond uniting the four KIICs. Things look even more tenuous when including the other two Asian players, Japan and Saudi Arabia.

A number of tensions and fault-lines between the Asian states hinder the prospect of an Eastern alliance comparable to the Western alliance of the last 60 years.

Another scenario could be a state of lawless anarchy as the Western system disintegrates without any re-integrating principles or force to replace it.

Yet another scenario, would be that the Asian powers gradually absorb and becomes the main custodians of the “Western” system. The Western system of post-World War II global governance has rested on the principles enunciated in the Atlantic Charter co-signed by Franklin Roosevelt and Winston Churchill in 1941.

By 1991, as the Soviet system disintegrated and countries pretty much throughout the world, notably in Asia, underwent major reforms, the Atlantic Charter can be said to have become practically universal.

A central thesis in Kishore Mahbubani’s book, cited above, is that the West is no longer living up to its own principles, hence, as power shifts to the East, this is in good part due to its implementation of “Western principles.” When Greece declined as a state, Hellenism lived on for centuries and spread to many neighboring emerging civilizations, including Rome, Persia and the Arabs.

In a recent article in the Financial Times, Mahbubani and former Massachusetts Governor William Weld further re-enforce the point by asserting that Asia is most likely to be the custodian of the open global market economy and its Atlantic Charter-based governance architecture. After all, as the authors point out: “Asian economies only began to perform well when they accepted and implemented Adam Smith’s theories of free-market economics”.

This is the most optimistic scenario and possibly the most likely to evolve after a period of turbulence and uncertainty. It will not arise from deep philosophical musings, but from a recognition on the part of Asian leaders that doing so is in their best enlightened self-interests.

But very much depends on other events. While economic power is shifting to Asia and the Asian middle class is rising, there are formidable dark clouds hovering above the silver lining.

Nuclear proliferation in Asia is clearly a big and very real menace. As recent terrorist events in Mumbai and Jakarta, among others, remind us, there is an explosive political element at work. In spite of the rising middle class, there is also a huge amount of poverty. And there is the monumental issue of climate change that hinges on the actions that Asian economies are willing to take.

It is by no means all gloom and doom. There is reason to believe that Asia may emerge not only as the center of economic gravity, but also as a center of genuine global governance.

However it is important to remember that scenarios do not evolve into reality because of some deus ex machine. It is not “things that happen”, but people who make things happen.

For the most desirable scenario to become reality, both Atlantic and Pacific thought leaders will need to work very hard to make it happen.

Asia’s Place in 21st Century Global Governance (Part I)

With ever greater economic power, how will Asian countries influence international politics? In the first of a two-part series, Jean-Pierre Lehmann describes the importance of the diverging cultural and political scenarios in major Asian players such as India, China, South Korea and Indonesia.

he global center of economic gravity has been moving steadily towards Asia for the last three decades, a trend intensified by the current crisis.

In the words of Kishore Mahbubani, we are witnessing the rise of “the new Asian hemisphere,” which implies “an irresistible shift of global power to the East.”

Asia’s rise has brought into question the current global institutional framework and highlighted the imperative of reform. There is little sense, however, of what more Asia-oriented global governance would look like. Insights might be gleaned from the recently established G20, especially as it is likely to replace the G7/G8.

Current full membership of the G20 includes: five Europeans (France, Germany, Italy, the UK and the European Commission; two Eurasian nations (Russia and Turkey); five from the Americas (Canada, US, Mexico, Brazil and Argentina); one African (South Africa); one Oceanic (Australia); and six Asians (Japan, Korea, India, Indonesia, China and Saudi Arabia).

For the purposes of this article, Japan can be put to one side. Despite recent doldrums, it remains a formidable economic entity — but it is also an established 20th century power and not an emerging 21st century power. Though geographically in the “far East,” it has been a close ally of the West for over a century.

All of Japan’s alliances have been with Western nations — Britain from 1902 to 1922, Germany and Italy during World War II, and the United States since World War II.

At the other Asian extreme, its “far West,” Saudi Arabia, can also be put aside. Saudi identity is mainly as an Arab nation. Though in recent years there has been a growing Asian-Arab investment arc, Saudi Arabia is otherwise not actively engaged in Asian affairs.

This leaves us with Korea, India, Indonesia and China (the KIICs) as arguably the forerunners of what a future, more Asian system of global governance could look like.

What can one say about the KIICs?

Three (China, India and Indonesia) are geographically and demographically huge, together comprising over 40% of humanity. By force of sheer size, they would seem to deserve a place at the global table. Korea, on the other hand, is a medium-sized nation with a population of 48 million.

All four are successful economies. Korea, Indonesia and China are among the 13 economies identified by the United Nations Commission on Growth as having maintained an average annual GDP growth rate of 7% for 25 years or more since 1950.

Though India has been a comparative laggard — with high growth having only been generated since its reforms in the early 1990s — on the present course it should be joining this august group in the next few years.

The four economies differ considerably. Korea is an advanced/high income economy as classified by the IMF and World Bank, and is a member of the rich nations’ club, the OECD. China, India and Indonesia are low income countries with huge (and generally poor) rural sectors.

China is emerging as both the world’s largest trading and manufacturing nation, totally dwarfing India and Indonesia. India is a global leader in information technology. Korea is one of the world’s leading trading nations, and is an important source of inward investment in all three countries.

In cultural/religious terms, Korea is predominantly Buddhist, albeit with one of Asia’s largest Christian minorities (30%). India is predominantly Hindu, with a strong Muslim minority (over 10% of the population) and other religious communities.

Indonesia is the world’s largest Muslim nation, but with roughly 15% of the population comprised of religious minorities, including Christians, Buddhists and Hindus. Lastly, China is “Confucianist-Communist,” but with important religious minorities that experience diverse degrees of suppression.

Ethnically, Korea is a quite homogenous nation, and China is predominantly Han-Chinese at 92% of the population. However, both India and Indonesia are among the most heterogeneous countries on the planet.

Managing diversity has been a huge challenge for both nations and both have met it reasonably successfully, albeit with some dangerous flash-points.

Politically, India has been a democracy since independence in 1947. Both Korea and Indonesia have democratized peacefully from military dictatorships: Korea since the late 1980s, and Indonesia since the late 1990s.

Along with Saudi Arabia, Indonesia is the only predominantly Muslim country on the G20. It is also one of the infinitesimally few predominantly Muslim countries that is democratic.

China is what is termed a “Market-Leninist” state, combining an open market economy with a closed Leninist form of political dictatorship. There are hardly any vestiges of Marxism, let alone Maoism, in China — under the previous president, Jiang Zemin, even bourgeois entrepreneurs were brought into the Communist Party.

In all four countries (as well as in the other two Asian G20 members, Japan and Saudi Arabia) the death penalty is permitted. According to Amnesty International, in 2008 China, Saudi Arabia and the United States accounted for the highest number of global executions.

Indonesia, India and China feature among the most corrupt nations, according to Transparency International. Korea is in a different league, though among OECD countries it ranks as one of the most corrupt (but less so than Italy!).

China, India and Indonesia are heavy emitters of greenhouse gases and are recalcitrant on climate change issues. They are more likely to delay than accelerate the agenda. Korea, on the other hand, appears proactively engaged in meeting the next great challenge of its development.

Not only is it investing heavily in multiple new engines of “qualitative” (welfare enhancing) and sustainable (low carbon) growth, but it also has a very ambitious and commendable green agenda, known as the “Green New Deal”. Climate change mitigation and sustainability are the top priorities of its current five-year plan. The government is investing $40 billion over a four year period with a view to creating 960,000 “green jobs.”

This is a region of the world with numerous geopolitical fault-lines. Both India and China are nuclear powers, with the former having not yet signed the Nuclear Non-Proliferation Treaty (NPT). South Korea lives under the constant menace of North Korea and has a strong American military presence.

All four have border issues with one or several of their neighbors that could deteriorate into acute tension or indeed outright conflict, depending on the circumstances.

For instance, India has been at war with two of its neighbors, Pakistan and China. For China, there is the Taiwan question. And then there is one of the most dangerous situations: The simmering dispute between China and Japan over what the former calls the Diaoyutai Islands and the latter the Senkaku. This territory is claimed by both and prized by both for its energy resources.

In terms of relations between the four: Korea was historically a “vassal state” of China, and they share a number of cultural affinities, notably Confucianism.

South Korea has significant and close economic ties with China, infinitely more so than the North. But in the geopolitical game, North Korea remains an ally of China. Korea has traditionally had no ties with India or Indonesia, nor does it have any particular cultural affinities with either.

India and China have had relations over the millennia, though in recent decades there has been a good deal of rivalry and mutual suspicion between the two. Cross-border trade and investments, however, are booming, and there are attempts at building a sturdier bilateral political relationship.

Ties between Jakarta and Beijing have been quite distant. In fact, for several decades, not only were there no diplomatic relations between Jakarta and Beijing, but Chinese imports were forbidden — as was anything that carried Chinese written text. However, there is a small (3.5% of the population) but economically powerful Chinese minority in Indonesia.

India was a big influence historically on Indonesia, though it waned long ago. In the 1950s their respective heads of government, Jawaharlal Nehru and Sukarno, were active in the creation of the non-aligned movement. Today both nations are closely, even if informally, allied to the United States.

When China Rules the World

The Rise of the Middle Kingdom and the End of the Western World
by Martin Jacques
London, Allen Lane, 2009.

“When you’re alone and life is making you lonely, you can always go: downtown.” So warbled the British singer, Petula Clark in the 1960s. However, today if solitude is your constant companion, I would suggest that you purchase a copy of this riveting book and read it on the bus and in airports – as I have been doing in recent days, with the dramatic words on the bright red cover of this weighty tome blaring insistently – and no doubt you will find, as I have, that your reading reverie will be constantly interrupted by a stream of anxious interlopers curious to know what the future may hold.

For like Petula Clark, the author too hails from London, though the startling message he brings decidedly differs from her melancholy intervention. For it is the author’s conclusion that sooner rather than later, China – a nation ruled by a Communist Party – will have the most sizeable and powerful economy in the world and that this will have manifold economic, cultural, psychological (and racial) consequences. Strangely enough, Jacques – one of the better respected intellectuals in the North Atlantic community – does not dwell upon how this monumental turn of events occurred. To be sure, he pays obeisance to the leadership of Comrade Deng Xiaoping, who in 1978, opened China’s economy to massive inward foreign direct investment, which set the stage for the 21st Century emergence of the planet’s most populous nation. Yet, for whatever reason, Jacques – who once was a leading figure in the British Communist Party – does not deign to detail to the gentle reader how Beijing brokered an alliance with US imperialism, that helped to destabilize their mutual foe in Moscow, which prepared the path for the gargantuan capital infusion that has transformed China and bids fair to do the same for the world as a whole.

Still, it is noteworthy that this book’s back-cover carries blurbs from the conservative economic historian, Niall Ferguson of Harvard (Henry Kissinger’s authorized biographer); the leading historian, Eric Hobsbawm; the well-known Singaporean intellectual and leader, Kishore Mahbubani (who has written a book that mirrors Jacques’ earthshaking conclusions); and a raft of Chinese thinkers who do not seem displeased nor surprised by his findings.

Within a few decades, according to the author, the size of China’s economy will surpass that of the US (intriguingly, he envisions that Mexico’s will be in fifth place behind India and Brazil – a result that may have more impact on imperialism’s declining fortunes than the rise of Beijing). Thus, the author is unsparing in his critique of US imperialism; having experience with the decline of Great Britain from its once stratospheric heights, he speaks with authority when he avers that “imperial powers in decline are almost invariably in denial of the fact.” However, the changing of the guard today will be much more sweeping that that which led to Washington supplanting London. For not only will the new hegemonic force be a Communist Party, he argues – despite imperialism expending trillions of dollars to precisely forestall the flourishing of Moscow Communists – but, likewise, this will not be just a switch from European to Euro-American elites. “For reasons of both mindset and interest,” he asserts, “the United States and the West more generally, finds it difficult to visualize, or accept, a world that involves a major and continuing diminution in its influence.” Repeatedly, he argues, “we have come to take Western hegemony for granted. It is so deeply rooted, so ubiquitous, that we think of it as somehow natural”; instead, he says, “Western hegemony is neither a product of nature nor is it eternal. On the contrary, at some point it will come to an end” – and that time has arrived, he avers. Choosing his words carefully, the author says China’s rise “threatens Western societies with an existential crisis of the first order, the political consequences of which we cannot predict but will certainly be profound. The assumptions that have underpinned the attitudes of many generations of Westerners towards the rest of the world will become increasingly unsustainable and beleaguered.” For, says Jacques, “the emergence of Chinese modernity immediately de-centers and relativizes [sic] the position of the West. That is why the rise of China has such far-reaching implications.”

There are signs of this decline: it cannot be avoided that “the United States has ceased to be a major manufacturer or a large-scale exporter of manufactured goods, having steadily ceded that position to East Asia.” Yet, as the author sees it, the rise of China is simply a reassertion of historic trends with the era of British, then US ascendancy, seen as the anomaly. For, he declares, as late as 1800, China was the planet’s leading economic force but it was then that the accumulated wealth and power brought by the African Slave Trade and colonial dispossession began to assert itself more forcefully, leading to what has been referred to colloquially, as “the rise of the West and the decline of the rest.” Echoing historians like Walter Rodney, the author cogently writes, “without the slave trade and colonization, Europe could never have made the kind of breakthrough it did.”

As he sees it, the heretofore ubiquitous “Washington Consensus” of “free markets”, privatization and deregulation will be replaced by a “Beijing Consensus” wherein “the state is hyperactive and omnipresent…..the Chinese model of the state is destined to exercise a powerful global influence, especially in the developing world, and thereby transform the terms of future economic debate. The collapse of the Anglo-American model in the wake of the credit crunch will make the Chinese model even more pertinent to many countries.”

He discounts the perception that China’s apparent failure to comport with democratic norms as perceived from Washington, compromises its model of development. In Britain, he says, it was only in 1918 “over 130 years after the beginning of the Industrial Revolution, that women (over 30) won” the right to vote and in the U.S., it was not until 1965 that voting rights for African-Americans were solidified in law. Moreover, those in Washington who obsess about “democracy,” rarely – if ever – examine the dearth of democracy “at the global level” – e.g. the Security Council of the United Nations (where Africans do not have a permanent seat and Asians are under-represented) or the World Bank (where US nationals rule) or the International Monetary Fund (the bailiwick of Western Europeans). The “global order,” concludes the author accurately, “has been anti-democratic and highly authoritarian” with little objection from Washington – and China’s rise will complicate this scenario tremendously, he suggests.

However, Jacques does seem to be concerned about how China approaches the matter of “race.” He acknowledges the obvious, which – tragically – is not the norm in the North Atlantic community: “white racism has had a far greater and more profound – and deleterious – effect on the modern world than any other.” Jacques, no dummy, is sufficiently perspicacious to acknowledge that “Jesus was whitened in the Western Christian tradition” as a function of the rise of white supremacy. As the author view things, “American supremacy has been associated with the global dominance of the white race and, by implication, the subordination and subjugation of other races in an informal global hierarchy of race.” This is bound to change, he says, for “the rise of China to surpass the West will, over time, inevitably result in a gradual reordering of the global hierarchy of race.” Jacques asserts that “with the rise of China, white domination will come under serious challenge for the first time in many, if not most, areas of global activity.”

On the other hand, I think he could have done a better job in limning this profound area for nowadays hysteria is mounting in Washington about China’s inroads in Africa, the site of a storehouse of precious metals and petroleum necessary to propel a dynamic economy. And news media in the US particularly seem to believe that a “new colonialism” and “new racism” is arising in Africa – with China as the chief culprit. Troubling is the assertion by the author that Chinese-Americans “did not join with black Americans in the major civil rights campaigns” in the US – which happens to be untrue. He harps on the allegation that in China negativity is associated with darker skin. This declaration underpins his notion that changes on the racial front brought by China’s ascent will be of most significant moment for those of African descent, which is rather surprising given the overall tenor of this text. It is disconcerting that Jacques, who has been deeply influenced by the Marxist tradition, fails to ground his racial analysis in the potent realm of property relations and note that white supremacy was turbo-charged in the US because of the direct association of Africans with chattel and the uncompensated expropriation of this form of wealth.

Unfortunately, like many North Atlantic intellectuals, Jacques disparages Japan – which remains the world’s second largest economy and surely, has severe adjustments to make because of US imperialism’s decline and China’s rise. However, the single biggest flaw of this book may be the failure of imagination that causes the author to fail to foresee that just as Washington helped to build up Beijing as a counterweight to Moscow, it is now building up India as a counterweight to China – and this factor will no doubt buoy Japan, whose exceedingly close relationship with India stretches back 2500 years to the founding of Buddhism. Tokyo will probably be a major beneficiary of Washington cozying up to New Delhi, just as Beijing benefited from the crusade against Moscow.

Nonetheless, the author should be congratulated if only for being sufficiently courageous to seek to extrapolate current trends and ascertain what the future may hold: this is not a simple nor easy task. Furthermore, unlike many in the North Atlantic, the author does not hesitate to scrutinize US imperialism critically, referring to the “material and existential crisis that will be faced by the United States” as a direct rule of China’s ascent. The US, he says, has “remained largely blind to what the future may hold, still basking in the glory of its past and present and preferring to believe that it would continue in the future.”

Yet, methinks that this blindness is slowly but surely disappearing as the interlopers who have interrupted – with evident anxiety – my reading this book on buses and in airports well suggests. The author has tackled what may be the most important issue of the new millennium and that alone merits congratulations.