The Global Power Structure, Norms and the Future of the Liberal International Order

By Rajesh Rajagopalan

The shape of the global order is largely a function of the prevailing global power balance.  Since 1945, this global order has been liberal mainly because it was established and managed by a hegemonic power that perceived an interest in a liberal international order.  Will the relative U.S. decline and the ‘rise of the rest’ lead to the decaying of this established order?  American decline has often been exaggerated, and the fate of the rising powers is far from certain.  Nevertheless, there are three conditions that could lead to the end of this liberal international order.

First, if a new hegemon – say, China – were to rise to replace the U.S., the international order would reflect the norms favored by the new hegemon and this might not necessarily be a liberal one.  But it is difficult to predict what kind of global order a new hegemon might create because that will largely depend on the kind of ‘myths of empire’ that are dependent on domestic politics rather than international imperatives.

Though it is possible (though far from inevitable) that another hegemon would rise at some point, this is unlikely to happen in the next two decades.  We have had two dramatic transitions in the global system in the last century, but both happened as a consequence of the collapse of major powers. The end of the Second World War saw the demise of not just Germany and Japan but many European great powers, leaving a bipolar order dominated by the U.S. and the Soviet Union.  The collapse of the Soviet Union in 1991 converted that bipolar system into a unipolar one.

While there are plenty of predictions of other great powers rising, there are none that suggest the U.S. will collapse.  And short of that, what we are likely to witness are gradual rather than dramatic changes in the balance of power, and these will take a lot longer than two decades.  Hence, the possibility of a new global order framed by another global hegemon is not very likely in the immediate future.

The second possibility, more probable than the first, is the rise of several new powers such as China, India and Brazil who grow strong enough to share the stage with the U.S., even if they do not necessarily match the U.S.  Such a multipolar order could gradually erode the current international liberal order.  But this will not be because these powers do not share the norms of the current liberal international order, but because the coordination and management problems become greater as the number of great powers populating the international system grows.

This is why the debate about whether emerging powers are liberal is missing the point.  Even if we assume that they entirely share these liberal norms, a multipolar world will be one in which power contestations will make norm-maintenance difficult.  Contra Keohane, the global order will be a lot less cooperative, and a lot more conflictual and difficult to manage, after hegemony.

But the current unipolar order will become multipolar only if a number of new great powers rise, and the rise of great powers is notoriously difficult to predict.  Twenty years ago, Japan was thought to be rising as a new global power before Japanese growth began to fade.  Over the last decade, rapid Chinese and Indian growth has spurred similar expectations.

But most people seem to forget that China and India were thought to be rising powers in the 1950s too, before China’s Cultural Revolution and India’s economic stagnation took them out of the race for the subsequent three decades.  Maybe they will be luckier this time, but the enormous domestic challenges these two states still face should at least make us cautious in treating their rise as inevitable.

The third possibility has been little discussed but it deserves greater attention – the likelihood that the U.S. declines as a power with global managerial capacity but no other power rises to take up the slack.  This reverses many current expectations: instead of others rising to meet the U.S., the U.S. declines to meet the others at a much lower level of capability.  Such a system would not be so much global as regional, dominated by regional hegemons that are strong enough to control their immediate environs but who have insufficient capacity to act globally.

Such a region-based international order might be the most damaging — because it could spell the end of global norms in both the economic and the security realms.  Who would enforce nonproliferation or trading norms if no great power has the capacity to act globally?

In summary, then, the key indicators to look for are not whether rising powers share the norms of the current international order but how their potential rise – and U.S. decline – reshape the structure of global power.

Rajesh Rajagopalan is Professor of International Politics at Jawaharlal Nehru University, New Delhi.

By dtwining Posted in GT2030

The Good and Bad News About the Parallel Rise of China and India: A Japanese Perspective

By Tsuneo “Nabe” Watanabe

What is the impact of the rise of China and India on the international liberal order in 2030? The implication is profound enough to affect not only developing economies but Western politics.

There is good news and bad news about the impact of China’s and India’s rise on international order in 2030.  The bad news is that China may continue to be a potential game-changer to the international liberal order because of the undemocratic nature of its Communist regime and anti-Western sentiment among its ranks.  It would be very difficult for any Chinese leader to introduce democratic governance within 20 years unless the country experiences either (1) further miraculous economic growth combined with more equal distribution of wealth or (2) catastrophic damage to the current Communist regime combined with charismatic or smart party leaders able to introduce democratic rule instead.

Anti-Western sentiment has been shaped in the Chinese mind by the way history is taught, with a focus on China’s experience with Western and Japanese imperialism in the late 19th and early 20th centuries.  By the year 2030, Chinese leaders may struggle to identify a new source of legitimacy to pacify a frustrated population, as the current “Chinese dream” will no longer be attainable to many.  The Chinese dream is that economic growth will eventually make all Chinese people richer and happier.  But it is clear that economic growth cannot remain high forever.

In addition, the government will confront a rapidly aging society in which fewer workers will be responsible for taking care of an enormous elderly population.  At that stage, people’s frustration with socio-economic inequalities may become acute; it could easily transform into resentment against Communist rule.  The Chinese government may be tempted to exploit nationalism in the name of anti-Western imperialism.  Some ideologues may argue that many Chinese remain poor because of exploitation from the global economy, which they can present as a new form of Western imperialism.

The good news is that there is no imperialism or Western conspiracy in the current world.  Rather, there is strong evidence of a decline in relative economic advantage among developed countries such as the United States, Europe and Japan as well as a rise of emergent economic powers such as China and India.  Emerging economies have been successful not through imperialistic mercantilism but via liberal commercialism, which guarantees a level playing field for business competition irrespective of national origin – an outgrowth of globalization made possible by the liberal international order.  Burma’s current leaders seem to understand the possibilities of such an order and have decided to move toward democratization as a means of joining it.  Few world leaders dare to follow the North Korean model of autarky, which suffers the poorest economic performance and fuels permanent worry over potential revolts by desperate people disconnected from the global economy.

The bad news for India in 2030 is that its population, by then the world’s largest, may continue to suffer enormous socio-economic inequality.  It is also likely to be difficult for Indian leaders to transform the country’s socio-economic system rapidly given its deep civilizational roots.

The good news for India in 2030 is that its long tradition of democratic rule, despite continuing challenges to governance, should continue to exert a stabilizing effect on national unity.  The Indian people should enjoy rising living standards thanks to their country’s exposure to global markets.  Sustained economic growth under democracy will be a great asset in persuading other developing countries to deepen connections to the global economy while protecting human rights and rule of law at home.

India also suffered from Western imperialism as a colony of Great Britain.  Unlike China, however, democratic legitimacy is grounded in India’s experience in fighting for its independence, guided by the principles of founding fathers like Mahatma Gandhi and Jawaharlal Nehru.  This legacy has reinforced the stability of Indian democracy despite socio-economic difficulty.

How should we handle these two rises as we look to 2030? Despite their differences, the ascent of India and China will be important for the Western democracies insofar as they offer potential models for the international economic order and serve as engines of global growth.  Western democratic countries (including Japan) need to continue to persuade newly emerging countries how international liberal order is eventually beneficial for all.  Policy toward them should combine economic engagement with a military hedge against potential game-changers.

At the same time, Western leaders need to address their own domestic opposition, who suffer from economic globalization. They must find a way to alleviate damage to the weak and poor people in their nations from intensified competition from the global economy.  They will likely find it necessary to adjust their domestic political-economy models, shaped by the relatively smaller and less-connected world of the 20th century.

With such remedies, Western leaders can persuade their own disgruntled constituencies that liberal international order will still be a guarantor of their own wealth and peace in the 21st century.  If Western leaders mismanage domestic politics and popular antipathy towards globalization grows, the world could confront a genuine crisis moment.  By presenting new challenges to the liberal international order, the rise of China and India may provide the developed nations not only business opportunities but, more importantly, the opportunity to address shortcomings in our own politics and economies.

Tsuneo “Nabe” Watanabe is a Senior Fellow of The Tokyo Foundation.

By dtwining Posted in GT2030

West vs. Rest

By Su Chi

I think the demise of the post-WWII, U.S.-led liberal world order is much exaggerated. The impact of the Rest on the West is limited and transient.

The United States indeed suffers from huge financial difficulties, its worst-ever political gridlock, severe budgetary deficits, high unemployment and, not least, dismally low national morale. But compared with other industrialized countries, even the Rest, the fundamentals of U.S. society are still very strong.

First, demographically, the United States is one of the few countries still enjoying net growth. While others are losing their “demographic bonus,” the United States is still gaining. Second, technologically, the United States continues – in fact, for decades now – to be by far the leading country in the entire world. China and India, in particular, lag far behind. If the so-called “third industrial revolution” is to emerge in the near future, the West, particularly the United States, would stand to gain most. Third, despite its financial troubles, the United States continues to be the destination for large amounts of foreign capital – governmental or private, clean or dirty.

It is difficult to imagine a country with these fundamental advantages going into irreversible decline in the long term. Hence the current pessimism in the West is justified mostly on the psychological level and for the short term.

Problems in China are more systemic. And the Beijing leadership is acutely aware of them. Therefore, while the young, the middle- and lower-level cadres, and even the military oftentimes exhibit signs of complacency, the elders, the higher officials and the civilian leaders are much more cool-headed and even modest – in my view, genuinely so.

China’s economic growth has indeed been nothing short of spectacular in the three decades since 1979. But its costs are also all too plain, even to untrained eyes. The huge income gap between the new rich and the poor, the sharp divisions between the coast and inland and between the urban and rural areas, the prevalent corruption in the party and government, the drained resources as well as thoroughly polluted environment and, last but not least, the rising expectations and participation of the increasingly restless middle class — all call for structural reforms in the new China.

Yet, the nature of oligarchy renders any solution slow and ineffective in the long run, unless a strong consensus can be reached within a unified leadership. Because China is at the stage of leadership transition in 2012 and 2013, it is difficult, if not impossible, to envision a radical reform program. Most likely, the Party and government would continue to manage these internal problems on ad hoc basis.

So far they have been successful. In the near term they may also be successful in sustaining high economic growth. But in the longer term they have to struggle to attain a dynamic balance between economic development and political/societal stability. And this has to be managed by a relatively consensual leadership as well as a relatively incorrupt (thus more credible in the public eye) party/government machine. Both are gigantic challenges.

The neighbors of the Rest share some of the worries of the West about the rise of the Rest. But at the same time they are concerned that they inevitably will bear the brunt of the external costs if somehow the Rest stumbles on structural reform.

It may be in the interest of all if China is to slow down its growth and start tackling its long-term problems in a systematic way. The West and the Rest – and their smaller neighbors, particularly Taiwan – may just as well learn to cooperate and help one another. Doing that, they are also helping themselves.

Dr. Su Chi is Chairman of the Taipei Forum and formerly served as National Security Advisor (Secretary General of the NSC) to the President of Taiwan.

By dtwining Posted in GT2030

With the Rise of the Rest, Not Only the Balance of Power But the Balance of Ideas Will be Decisive

By Michael Green

I accept the broad argument behind Fareed Zakaria’s “rise of the rest” thesis, but also see some flawed assumptions in his worldview.  It is probably true that the narrative of the 21st century will be about the relative decline in American and Western power because of the rise of China, India, Brazil and the rest — rather than a decline of American aggregate power resulting from imperial overstretch or some internal contradictions.

Indeed, the rise of the rest signifies the success of post-war American strategy more than its failure.  In that sense, we are not Rome or even Britain.  Zakaria has that right.  But the “rise of the rest” thesis still has several flaws:

1.         The rise of the rest is not inevitable:  China, India, Brazil and South Africa face fundamental internal contradictions and a looming middle-income trap in their development.  This is particularly true of China, given demographics, endemic corruption, environmental challenges and problems of regime legitimacy.  A dramatic reversal of Chinese economic growth could be one of the most threatening developments to international security since rejection of convergence by Beijing would lead in the direction of mercantilism and hypernationalism (a la Japan and Germany in the 1920s-30s).

2.         Balance of power still matters:  The “rest” are competing with each other more than they are aligning together.  For those closest to China (India, Indonesia, etc.) there is a premium on maintaining a stable equilibrium vis-à-vis Beijing.  India, Australia, Indonesia, Japan and Korea are all more likely to align with each other and the United States for the foreseeable future than to bandwagon with China because of trade.  Zakaria rejects balance-of-power logic in the 21st century in favor of a concert of power with China and “the rest.”  The United States should pursue cooperative security everywhere possible, but Asia will be a zone of balance of power as well.  The key will be not to retreat and not to ask countries to choose between Washington and Beijing.  They all want us there.

Moreover, international institutions such as the UN, G-20 and WTO are going to be harder to manage with the assertiveness of  “the rest.”  These institutions will still matter despite the governance nightmares, but action will increasingly require ad hoc coalitions among like-minded states on trade, security, humanitarian crises and the like.  It follows that alliances will remain critical as the operational base for such coalitions and that action will follow in concentric circles outwards from those alliances to like-minded states and then to regional and global organizations.

3.         Ideational power mattersHegemonic stability rests on a set of norms and institutions that are empowering for member states in the system.  Numerous polls in Asia demonstrate that the so-called “Beijing consensus” of authoritarian development does not have any traction compared with universal norms of good governance, rule of law, and democracy.  Even though American material power is declining in relative terms, American ideational power is increasing.   That does not always translate into direct American influence – particularly with post-colonial states like India or South Africa — but it is a great deal more important than “soft power” in terms of creating trust and gradually closer alignment between the United States and many of the “rest” – particularly in Asia.  Beijing does not have that ideational advantage with countries that matter.

4.         The United States has sources for rejuvenated strength.  Our demographics, energy profile and innovation put us well ahead of “the rest” in terms of economic competition in the future….as long as the politicians do not muck it all up.

Michael J. Green is Senior Advisor and Japan Chair at the Center for Strategic and International Studies and an Associate Professor at Georgetown University.

By dtwining Posted in GT2030

Understanding China in A Profound Sense: A View from Beijing

By Shi Yinhong

To understand China profoundly and anticipate world politics in the coming decades is an increasingly necessary intellectual and practical task, though obviously far from easy. In recent years not a few people, though in different terms and discourses, have argued that a modernizing and modernized China will retain its essential and dynamic “Chineseness” in a new era of contested modernity — and that the rise of China as both a “civilization-state” and a nation-state is ending the dominance of the West over the modern world, ushering in a new era of global diversity in value validity and power distribution. No one can argue convincingly against this general prediction.

However, it goes too far to assert that China’s age-old Middle Kingdom mentality and sense of superiority will reassert themselves. Modern China has been full of dramatic changes because China’s fate and life since the mid-19th century has occurred in the context of a globalizing world. In this sense, Chineseness is not something static, but rather dynamic and evolutionary.

A relatively newly component of Chineseness is the belief of contemporary China in something like particularism for every nation, along with some elements of universalism in a highly globalizing world. That is to say: what is most important and decisive is China’s own practice and experience. What is best for Washington or others is not necessarily best for China, just as what is best for China is not necessarily best for any of the others. The peoples of the world should and are fully entitled to move on their own roads according to their respective practices, experiences, and decisions.

This already deeply embedded idea, first launched by Mao Zedong in his finest hours in the 1930s and 1940s and embraced by Deng Xiaoping as the most important  “philosophical” foundation for his reform and other statecraft, is definitely not like traditional (or Confucian) ideology — which treated Chinese cultural superiority or even power domination as an unquestionable and universally applicable value. Both the Chinese Confucian Empire and a China following the West (whether in the sense of a Woodrow Wilson or a Lenin) without self-confidence has passed into history, and probably will never return.

Having said all the above on China, one could remind the American Superpower of the fundamental assessment in The Histories by Herodotus, the founding father of Western historiography and the great narrator of the Persian War some 2,500 years ago. It is the philosophy articulated by the Athenian leader and great strategist Themistocles after Salamis:

It was not we who accomplished this, but the gods and heroes, who did not want to see a single man ruling both Asia and Europe.

In the words of a modern classicist,

If we go back through the earlier books of The Histories, we understand what Themistocles is talking about: there is an economy, a natural order to the world, that makes it necessary to check the Persian ambition….  [A]s Xerxes puts it, ‘to make Persian territory end only at the sky, the domain of Zeus, [so that] the sun will not shine on any land beyond our borders.‘  In Herodotus’ understanding, that is not the way the world works; something that goes too big will in its turn become the focus of tisis, “retribution”, and become small again.”

(Cited in “Explanatory Notes” to Herodotus, The Histories, translated by Robin Waterfield, with an Introduction and Notes by Carolyn Dewald [Oxford: Oxford University Press, 1998], p. 693).

Shi Yinhong is Professor of International Relations at Renmin University.

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Why the World Needs America

By Kati Suominen

The global economic order – the post-war framework of global governance built on rules-based institutions and free and open markets – is largely America’s creation. It has been the midwife of growth and globalization that have produced prosperity around the world. Much debate in recent years has centered on the impact of such rising powers as China and India on the American order. The focus needs to turn to a different question: can the United States uphold the order it authored?

As the Great Crisis of 2008-09 unfolded from America around the world, a chorus of critics rose to declare the United States a declining nation and to call an end to the current global economic order. In countless depictions, America was passing the baton of global stewardship to emerging nations, and a new world order led by China was thought to be waiting in the shadows.

But the American order persists, and the aftermath of the crisis has in some ways only reinforced it. Its new institutions, the G-20 and Financial Stability Board, are but sequels to U.S.-created entities. Investors have deemed America the safe haven, and the dollar has persevered as the world’s reserve currency. The mission and capacities of the Bretton Woods twins, the IMF and the World Bank, have only been expanded. Protectionism has by and large been held at bay, and the WTO is alive. No country has resigned from these institutions; rather, outsiders are demanding a seat on the coveted IMF Executive Board or an invitation to the charmed club of the G-20. Nations have opted in, not out of, the American order.

The outcome to a good extent reflects a fact of global governance: there are no rival orders that would match the growth and globalization produced by the American order. But while the order is peerless, it is also periled. The deepening Eurozone troubles and the deadlocked Doha Round are among a few illustrations that the institutions of the American order are hard-pressed to deal with the challenges in the 21st-century world economy, let alone manage the competing demands of the old and new powers.

This is hugely problematic for the world and America’s place in it: a defective order will cease to garner support from the adherent nations. Instead of effectively coordinating policies and rallying behind common institutions, major powers are trapped in a Prisoner’s Dilemma, clashing over policies to restore growth, elbowing for an edge in global commerce, and jockeying for power in global economic institutions. Some, perhaps China, appear to be philosophically at odds with the American order itself.

The challenge is that the core of the global order, the United States, is ailing at home and failing to lead abroad. A central tenet of global economic governance is that someone has to coordinate the play; somebody has to keep it all together. During the critical 1945-1948 construction of the global economic order, the world came together — and was kept together — due to American strength, vision, and leadership, not because multilateralism was in vogue and everyone had a say. The leading nations were able to launch institutions that would shape the course of the 20th century because there was a towering actor aware of its national interest in an integrated world economy.

It was American power and leadership that created and sustained the world economic order. A global power with global interests, the United States kept it all together: paid a disproportionate share of the workings of global institutions, brokered differences among nations, and provided critical public goods – a global reserve currency, deep and predictable financial markets, an open trade regime, and vigorous economic growth. Coordination with other nations was seldom easy.

Today, leadership is again required. Again it must be American. Emerging economies prefer to free-ride rather than take responsibility in global governance, while Europe and Japan are neither able nor willing to lead. There are no substitutes for U.S. leadership: while the cast of characters on the global stage is larger and more disparate than before, leadership runs thin.

The quintessential question is not whether America can lead; it is whether Washington is willing. Solutions to the gaping deficits have lost out to political posturing, even though they undermine the dollar, exacerbate global imbalances, arrest America’s economic dynamism – and hurt U.S. credibility in world affairs. Europe’s crisis threatens America’s fragile economic recovery, but Congress is balking at an IMF response, and the administration, entering a re-election bid, is more interested in fiscal stimulus than solvency across the Atlantic. U.S. trade policy has been adrift far too long, and Doha’s travails jeopardize the very global trading system America has championed in the post-war era.

The United States must reform at home to lead abroad. Needed are uncompromising fiscal discipline, cuts in taxes and red tape on American businesses, and a lock on long-term policies that harness the productivity of America’s next generations and newcomers. Abroad, multilateral, regional and bilateral policies and instruments need to be upgraded and aligned to pre-empt instability and renew the drive to integrate the world economy.

America needs a thriving world economy as much as the world needs America. Promising unprecedented wealth in the United States and around the world, a stable, integrated, and growing 21st century world serves our national interests. But such a world is America’s to make.

Kati Suominen is a resident fellow at the German Marshall Fund of the United States. This essay draws on her new book, Peerless and Periled: The Future of America’s Leadership in the World Economic Order (Stanford University Press, 2012).

By dtwining Posted in GT2030

The Global Leadership Deficit

By Walter Ladwig

Accounts of both American decline and the rise of peer competitors are substantially overstated in the popular media.  However, with the American public seemingly exhausted by a decade of war and financial crisis, the stability and continuation of the liberal international order forged in the wake of World War II faces a significant challenge from an increasing lack of global leadership necessary to make the system work.

Hegemonic Stability Theory suggests that the perpetuation of a particular international order—such as the present open and liberal world economic order—requires the leadership of the dominant state in the international system.  The absence of such leadership can have disastrous consequences.  For example, Charles Kindleberger has argued that the lack of global leadership by a dominant economy was a key cause of the economic chaos which occurred between the world wars and fostered the Great Depression.

This example illustrates the twin requirements of global leadership: capacity and will.  In the interwar years, Britain had the will but not the capacity to lead the world economy, while the United States may have had the capacity, but certainly lacked the will, to lead.

The present international order, the institutions that underpin it (e.g. the UN, the World Bank, and the IMF), and even the process of globalization are largely the product of American initiative and American leadership.  What happens to this system if that leadership no longer exists?  Some scholars are sanguine that norms and institutions can take on a life of their own in the absence of a leading state that will enforce the international “rules of the road.”  However, if the “rise of the rest” means that these structures do not represent the existing distribution of power, there are reasons to doubt that such arrangements can continue to function effectively.

The optimistic and pessimistic cases are likely to be put to the test since the present international system clearly faces a leadership deficit.  The United States still possesses the capacity to lead—particularly when working in conjunction with its allies—but increasingly lacks the will to do so.  The American public is overwhelmingly focused on the country’s skyrocketing debt and its disappearing jobs.  Support for foreign commitments is down and scepticism about the impact of globalization is up.  Neither political party is likely to win power by challenging these sentiments.

For the better part of the last decade-and-a-half, Europe has been focused on internal consolidation.  The present economic crisis suggests that all available political capital will be dedicated to keeping the EU and the euro intact for some time to come, with little time or attention available for matters further afield.

The so-called emerging powers, such as China, India, Brazil and Russia, all face significant constraints on their will and capacity to provide global leadership.  These stem from a lack of domestic stability, questions surrounding the sustainability of their economic growth, or unfavorable demographics.  Moreover, many of these countries possess incompatible interests and objectives that would prevent them from exercising leadership in concert.

The “rise of the rest” is likely to enhance this global leadership deficit as the increasing multipolarity of global politics means no single country will possess sufficient capacity to lead.  What kind of impact might this have?  A reduction in global initiatives and an increase in regionalism would seem likely as the institutions of global governance prove to be increasingly ineffective.  Gridlocked WTO negotiations, for example, may give way to regional free trade agreements undertaken by “coalitions of the willing.”

More worrying is the prospect that problems which truly require a global response, like climate change or nuclear proliferation, will get punted because they are too difficult to deal with.  If Kindleberger is right, we should expect that a global leadership deficit will presage increasing volatility in international politics for some time to come.

Dr. Walter C. Ladwig, III is a Visiting Fellow at the Royal United Services Institute for Defence and Security Studies (RUSI) in London.

By dtwining Posted in GT2030