Archive for May, 2012

By Walter Lohman

The “rise of the rest” presents the United States with its two principal manifestations in China and India.  There are no two relationships more important to American success in securing its interest in the emerging global environment and shaping a new order.

The official U.S. relationship with the People’s Republic of China (PRC) is fundamentally a poor one, and will long remain so.  The U.S. and China have conflicting national interests and governing ideologies.  The challenge is to manage the conflicts in ways that minimize the impact on each country and others in the international system.

Take two examples the Chinese have described as “core interests.”

On Taiwan, the U.S. and PRC are diametrically opposed.  The PRC believes Taiwan a part of its territory; the U.S. position is that the status of its sovereignty is unsettled.  The PRC reserves the prerogative to use force to settle the question; the U.S. is ambiguously committed to Taiwan’s defense.  The PRC holds up the 1982 U.S.-China Communiqué as requiring the U.S. to gradually reduce arms sales to Taiwan; the U.S. holds that the Taiwan Relations Act (TRA) mandates it supply Taiwan arms necessary for it to “maintain a sufficient self-defense capability.”

Add to this the restraints imposed by Reagan’s Six Assurances, particularly the policy of not pressuring or mediating between the parties across the Straits, not consulting with the PRC on arms sales to Taiwan, and not altering the terms of the TRA, and neither side has any room for compromise.  The best officials can do is state their positions and agree to disagree.  There is no way to reconcile the positions.   The only thing that will change this state of affairs is a 180-degree change in Taiwan’s disposition toward its sovereignty, and that means much more than the thaw that has occurred in cross-Straits relations since 2008.

There is a similar direct conflict concerning the South China Sea.  The Chinese have two alternative bases for the rights they claim in these waters, one historical and one legal.  Under either of them, they lay claim to rights over all of the land and most of the sea.  Land claims there are not America’s concern, but claims, direct or derivative, over the sea are in direct conflict with historic American interest in the freedom of the seas.

Protecting U.S. interests vis-à-vis the PRC means maintaining a highly capable forward deployed military, tending American alliances and keeping allies capable, and asserting its rights and prerogatives physically as well as diplomatically.  It means maintaining a consistent, persistent set of policies.  It means keeping lines of communications active, but being completely comfortable with achieving nothing in terms of bilateral relations.  Flexibility is a one way street for the Chinese.  Staying firm and managing any fallout is the best approach.

The rise of India represents the opposite challenge. The basics of the U.S.-India relationship are good.  The U.S. and India have mostly coincident, and few diametrically opposed, interests, and very similar governing ideologies.  The challenge here is managing the relationship in a way that maximizes its opportunities.

Two examples illustrate the convergence of U.S.-India interests.

First, China.  American concerns about Chinese military modernization and intentions in the Western Pacific roughly mirror Indian concerns about Chinese capabilities and intentions in its own neighborhood. The PRC’s active challenge to India’s northern borders and its sponsorship of Pakistan tie together India’s two greatest security threats.  Indeed, many in New Delhi believe they see Chinese encirclement in Chinese outreach to their neighbors.

The PRC achieving its territorial ambitions east of its territorial seas and along the Indian border simultaneously is unlikely.  By the same token, leaving it unchallenged on one could result in increased pressure on the other.  The U.S. and India have an obvious mutual interest in restraining Chinese ambition in both areas in order to prevent realization of it in either.

Both countries’ relationships with China are complex.  Both have economic interests, investment and trade, and interests in the international economic system at stake.  The Indians have an imperative similar to America’s to manage conflicting interests in a way that minimizes their impact on bilateral relations, economics and the international system.

Second, terrorism.  Long before the attacks of 9/11, India was a tragic victim of terrorism, suffering literally thousands of incidents a year.  Since 9/11, the U.S. has become much more sensitive to India’s predicament and a set of common interests it had not previously recognized.

This is most stark in their converging views on Pakistan.  Whereas once the American policy establishment reflexively viewed India as one side of an India-Pakistan problem, that dynamic has receded in priority as a result of India’s forbearance and Pakistan’s slide into near state failure.  India today is largely seen by the U.S. as a partner in counter-terrorism solutions; Pakistan is seen as essentially an undeclared state sponsor of terrorism, ambivalent about the very proposition of counterterrorism and its choice of security allies.

Common interests on counterterrorism are also apparent in the U.S. and Indian perspectives on Afghanistan.  Both have an interest in a stable and peaceful Afghanistan, free from the grip of the Taliban.  The U.S. is, of course, leader of the international coalition to help ensure this, although its sense of urgency is diffused across thousands of miles.  India is one of Afghanistan’s largest aid donors, and its interest is much closer to home.

Whereas in U.S.-China relations, ideology acts as an accelerant on conflicting interests, in the U.S.-India relationship, ideology is a salve for underperformance.  Despite differences in approaches to developments in the Middle East, market disappointments in India, or deliberate political shots at Indian immigration to the U.S., common values offer the U.S.-India relationship an underlying confidence that sustains it through the criticism.  Flexibility and patience are assets in U.S.-India relations as there is an inherent sense of inevitability about the relationship.

The way the United States manages these vastly different relationships will not only enable it to secure its direct interests — it will shape the impact from “the rise of the rest.”  In short, a world in which common U.S.-India aspirations are met and Chinese ambition restrained will be a better place.  Achieving this requires two very different approaches.

Walter Lohman is Director of Asian Studies at the Heritage Foundation.

By Indrani Bagchi

As American power meets new claimants for a place at the top table, we are no longer looking at a single narrative that was almost a mantra for how nations conducted themselves. In the rise of the rest we are witnessing new ideas of the the exercise of power and different notions of how the world is structured.

More than any other power, it is in the rise of China and India that we find the tussle of two compellingly different narratives. Of particular interest is how the two developing giants exercise power as regional hegemons.

China is following a path to power wholly its own. China is much less likely to interfere in the internal affairs of sovereign states. This could mean that states can have their own models of economy or government without risking a diminution of Chinese patronage. In return, though, Beijing will demand that smaller, less powerful states explicitly recognize China’s primacy.

Leaving aside India, China has resolved its land border disputes with almost all its neighbors. That has not stopped it from aggressively pursuing expansionist territorial ambitions either in the South China Sea, or with pliant nations on its borders, like Myanmar and  Laos. Buoyed by impressive economic and military growth, China has picked fights with the Philippines, Japan and Vietnam over sovereignty issues.

As India has grown, its primary foreign policy has centered around what it calls a “peaceful periphery.”  From the Maldives to Nepal, Bangladesh and Sri Lanka, India has encouraged liberal democracy, however imperfect that might be.

Two factors have and will continue to temper India’s support for such an international order. First, India’s security concerns will trump many other issues. In Myanmar, India engaged the military government in favor of holding out for justice for Aung San Suu Kyi because it can only work with the Myanmar military to counter many northeast insurgencies, many of whose leaders live in the neighboring country.

Second, India has not shied away from involving itself in the domestic politics of a neighboring country if its stability is crucial for India. In the Maldives, India supported the new government after a controversial transfer of power in February – because the Maldives is the bridgehead for New Delhi’s Indian Ocean strategy. India has quietly but forcefully opposed Nepal’s Maoists from fashioning a left-wing authoritarian state on its doorstep, all the while encouraging Nepal’s political parties to choose democratic forms of governance.

A third factor, often unarticulated is China. China’s activities along India’s periphery, often encouraged by India’s neighbors as insurance against Indian hegemony, have alarmed New Delhi to the extent that in many cases, India is willing to compromise on the fundamental principles of liberal democracy that it itself lives by.  On the other hand, China’s own boorish behavior in its neighborhood has propelled some towards a sympathetic India.

As “others” like India and China rise, some trends are clearly visible. We might be returning to the old balance-of-power paradigm here, which makes it particularly interesting. India will weigh in with the principles of a Western international order, except that it wants to be in the tent. China is already in the tent, but clearly an outsider. Beijing will take decisions based less on what kind of world it wants to see and more on open self-interest, bordering on mercantilism.

With some exceptions, China has been fairly successful until now. India, meanwhile, is in the midst of serious policy crisis — making it rather like a deer caught in the headlights, leading many to ask whether some Chinese characteristics might not be more attractive.

In the end, the India story of a pluralistic, liberal democracy, is much more attractive. But the Chinese model appears more efficient.

Indrani Bagchi is Diplomatic Editor of the Times of India.

By John Lee

The economic rise of countries outside the post-WWII Western alliance provides a potential challenge to the pre-existing liberal order — for the simple reason that these emerging powers had little role in the creation of the liberal order. American leverage and influence must be understood within the context of the global liberal order. Any successful challenge or dilution of this order will weaken America’s global role and leadership. Although we cannot predict the future, we can point to important and difficult-to-alter domestic and structural factors that will significantly influence how these emerging powers view the future global liberal order, and their place within it.

As the two most populous nations, there is understandable attention to the re-emergence of China and India. It is widely assumed that authoritarian China will have far more difficulty integrating into the liberal order than democratic India.

This assumption is correct, but nevertheless poorly analyzed or understood. It is well known that the international liberal order is characterized by rules-based competition, dispute resolution processes and open economic and trading systems. Less well understood are the implications of such an order.

No liberal system can function effectively without the significant separation of political, economic, legal and administrative agency and agents. Governments genuinely committed to a liberal system of rules and competition use the tools of state to uphold the agreed rules of the game, most notably when it comes to protecting the agreed rights of their citizens against their own officials. In economic activity, they voluntarily give up much of their capacity to intervene in legitimate competition between firms, engineer economic outcomes, and determine the winners and losers in the hurly-burly of global economic competition. Conflating economic, political and foreign policy goals should be the exception rather than the norm.

This is the problem with the seductive belief that authoritarian China will be increasingly ‘integrated’ into the liberal order and emerge as a defender of such an order. China is moving in the opposite direction of what ‘responsible stakeholders’ in a liberal order ought to be doing.

The country’s failings in protecting the fundamental rights of its own citizens and in subjecting the Communist Party (CCP) to the ‘rule of law’ are well known. When it comes to economics, its state-dominated political economy is deliberately designed to ensure that the CCP retains an interventionist and decisive role in engineering economic outcomes through support for and protection of its state-owned-enterprises – domestically and increasingly internationally.

It is clear that the separation of economic, legal, judicial and administrative agency from politics would necessarily entail the dilution of the CCP’s relevance, standing and therefore power. The structure of the Chinese political-economy – and the CCP’s mindset – is instructive. And if this mindset will be as difficult to alter as I suspect it might, the prospects of authoritarian China emerging as a constructive player in a global liberal order are slim.

India is also emerging from a socialist past, albeit a softer and democratic one. However, the separation of political, judicial and economic power is already established in India, albeit imperfectly enforced. Moreover, the driving forces behind India’s economic emergence are the private rather than state sector. This means that New Delhi has no option but to increasingly relinquish its control over the economy and society for India too continue its rise.

Indeed, the domestic habit of separating economic and foreign policy from regime objectives is already well-grounded in India and is likely to continue. Although India will continue to have significant disagreements with America over important foreign policy issues, the nature of India’s rise is far more conducive to it emerging as a constructive contributor (if not defender) of the global liberal order.

The analysis of domestic structures, which give rise to government habits and behavior, can be applied to other emerging giants such as Brazil and Indonesia. Both are young democracies. But the natures of their political economies are less established than in China or India.

The entrenching of agreed limits on the government’s role over the economy, bureaucracy and courts in these countries will bode well for their willingness and ability to rise as effective contributors to any future liberal order – and make it more difficult for countries such as China to resist, challenge or alter key aspects of the existing liberal order. But their emergence as authoritarian economic powers will mean the weakening of the global liberal order, and reduce America’s capacity to exercise leadership and influence in a future time.

Dr. John Lee is the Michael Hintze Fellow and Associate Professor at the Centre for International Security Studies, Sydney University, and a scholar at the Hudson Institute.

Rising Powers and a New Emerging Order

By Richard S. Williamson

The international system remains relatively unchanged since Western allies, led by the United States, created the post-World War II international architecture to contain communism and create conditions for prosperity and peace – especially their prosperity and peace.  Now we face a different reality: Western powers are experiencing economic crisis, China and India are on pace to rank among the top three economies by 2050, and rising economies will potentially rival the G-8 in the decades to come.  In spite of these recalibrations to the world’s economic equilibrium, most rising powers continue to participate in multilateral organizations as outsiders or, at best, marginal actors.  If multilateral institutions no longer correspond to the reality of international affairs, how will this impact their influence in the decades to come?

The United States has benefited from the array of international multilateral institutions.  They can provide a broad acceptance, or legitimacy, for actions.  They provide a means for buy-in and burden-sharing.  The dialogue, deliberations, and debate, while often cumbersome and time-consuming, can result in better informed and improved decisions.  And it is my experience serving in ambassadorships to United Nations bodies in New York, Vienna, and Geneva that usually the United States can prevail on matters important to it if we put in the time, diplomacy, and encouragement required.  When a vital national interest is at stake, as was at play in Kosovo and Iraq, the United States can and will circumvent the encumbrances of the UN.

Furthermore, multilateral institutions have a reach that enables them to play a critical role in norm-setting, whether in international civil aviation or counter-terrorism.

Combined, these elements provide a measure of predictability which benefits the less mighty and the mighty.  The practices, processes, and procedures of multilateral institutions provide comfort to the less strong that the mighty will take into account past practices, norms, and others’ perspectives.  The great elephant will not trample the grass willy nilly.  Yes, the United States and others reserve the right to act unilaterally when they must in their vital national self-interest, but that will be the exception.  Normal events will be handled within the guardrails established and accepted.  The less mighty feel less need to form alliances to oppose or constrain the mighty.  Both sides of that equation benefit.

But as the power within these institutions increasingly fails to reflect power in the real world, they will lose legitimacy.  Respect and adherence to these institutions and their restraints will weaken and circumvention practices will increase.

So far China and other rising economies are not engaging in a direct assault or an open rejection of the established architecture.  But they are keeping their options open.

In spite of posturing by rising powers, many experts have speculated that as rising powers like China gain more influence, they will not overturn the current system’s rules and principles, but instead seek to gain more authority within the existing order.

Another potential course of action for a rising power is to engage with the existing international system while seeking over time to revise the architecture.

In response to calls for China to become a responsible stakeholder, Bates Gill and Michael Schiffer have pointed out that Beijing may reasonably conclude that the international community is populated by irresponsible stakeholders – and that there is little advantage in acquiescing to existing structures unless they are adapted to fit China’s policy preferences.

Rising powers may seek to design new arrangements that take account of their growing interests, just as Washington helped create the United Nations after it walked away from the League of Nations after World War I.  Over time incremental actions could make the current architecture obsolete – a more dramatic outcome than a mere bending of norms.

There are indications that incremental institutional changes already are underway; note the creation of new energy institutions by states dissatisfied by existing regimes.

The United States is not in decline.  But our traditional allies in Europe face an ongoing economic and political crisis, less appetite to meet their obligations in NATO, and less capacity to meet other responsibilities.  Meanwhile, with the rapid rise of China and other dynamic economies such as India, Brazil, and Turkey, the relative preeminence of the United States is changing.  New ways and means will develop to account for these newer influential voices and their interests.

That’s the reality.  How we think through these developments, and our willingness to lead in shaping the changing world, will determine our own capacity to project our power, protect our interests, and advance our values.

Ambassador Richard S. Williamson served in various senior positions in the Reagan White House and the State Department and he has served in four ambassadorships.  He currently is a Senior Fellow at the Chicago Council on Global Affairs.

Crunch Time for China?

From the draft Global Trends 2030 report:

Most of the emerging economies weathered the 2008 financial crisis well. In the coming decade, we will probably witness not only relative economic gains by China, India, and Brazil, but also the increasing importance of emerging regional players such as Colombia, Indonesia, Nigeria, South Africa, South Korea, and Turkey. However, developing countries will face their own challenges, especially in continuing the momentum behind their rapid growth.

The health of the global economy will be increasingly linked to how well the developing world does—more so than the traditional West. The developing world already provides more than 50 percent of global growth and 40 percent of global investment. Its contribution to global investment growth is more than 70 percent. China’s contribution is now one and a half times the US contribution. In the World Bank’s baseline modeling of future economic multipolarity, China—despite a slowing of its economic growth—will contribute about one-third of global growth by 2025, far more than any other economy. The world economy no longer depends on US consumers but on investment growth in emerging countries.

Nevertheless, China will face stiff hurdles to achieving that goal in the 2030 timeframe. The country’s population will start aging rapidly….  China has averaged 10-percent real growth during the past three decades; by 2020 the economy will probably be expanding by only 5 percent, according to several private sector forecasts….  China faces the prospect of being trapped in middle-income status—of its per capita income not continuing to increase to the level of the world’s advanced economies. Many Latin American countries faced a similar situation in the 1980s and were unable to avoid the trap because of income inequality and their inability to restructure their economies….

An economically difficult transition could mean an equally difficult political one in the case of China.  Slower per capita growth will increase the difficulty  of meeting rising expectations, potentially sparking discontent. A political crisis would make it harder for China to meet its economic goals. A prolonged political and economic crisis could cause China to turn inward, blaming external forces for its problems at home.

Although the leadership and much of the middle class are now wedded to globalization because of China’s startling success over the past 30 years, suspicion of the outside world lingers and, similar to historical cases elsewhere, could reemerge as a powerful political force if Chinese economic development stalls….

By David Kang

The “rise of the rest” will be both less transformative and yet more consequential than many may think. The continuing emergence of other centers of economic vitality will be less transformative than some fear because all countries today unquestioningly accept the basic foundations of the Western, “Westphalian” international system. All countries accept the idea that nation-states and sovereignty are the basic units of global relations, and that these relations are non-hierarchical and bring with them a set of responsibilities.

Furthermore, countries like China and India are slowly joining the existing set of international institutions and norms, not challenging them. For example, China has joined the WTO, the UN, the IMF, and many other of the existing regional and global multilateral institutions that govern economic and diplomatic relations among countries. Not only has China increasingly joined these institutions in the past 30 years, it has worked within them and adjusted to them, not necessarily challenged them.  As Shiro Armstrong notes, “By any reasonable measure, the institutional reforms that China signed onto when it acceded to the WTO have been implemented faithfully, and disputes with major partners have mostly been contained within the WTO system.”

In sum, emerging countries do not offer any alternatives to the existing liberal international order, nor do they show any signs of searching for alternatives. Instead, countries such as China and India appear to accept unquestioningly the basic rules and norms of the international order.

However, the rise of these other countries will be more consequential than some may think, as well. The United States does not have extensive experience in actually sharing its leadership role with other countries, nor is it used to being a follower in anything. Yet it is quite likely that over the next generation some countries may challenge the right of the U.S. to lead the liberal international order.

The time may come when the U.S. lives within institutions of our own design, but which are increasingly influenced and perhaps led by other countries, whose preferences on specific issues may not be the same as Washington’s.

For example, Vinod Aggarwal and Steve Weber recently argued that “emerging markets will be increasingly bold in asserting their views about the management of the global economy,” and that we should expect to see increasing challenges to U.S. domination of the IMF and World Bank. Others point to the loss of the dollar as the unquestioned reserve currency in the world; indeed, just this week China and Japan agreed to directly trade their yen-yuan currencies, eliminating the role the U.S. dollar plays in setting the exchange rate between the 2nd and 3rd largest economies in the world. The countries of ASEAN and China, Japan, and South Korea increasingly have created a set of regional institutional mechanisms covering a variety of economic relations without the presence of the U.S.

The key issue in world politics, however, is not about power, but about leadership. And the key aspect to leadership is whether other countries are willing to follow. If there are no followers, there is no leader. Viewed in this light, none of the emerging countries have yet presented new ideas for managing the international order that garner enthusiastic followers. In fact, China, India, Brazil, and other emerging countries do not even appear to be attempting to do so at this stage.

As for China in particular, can China ever return to its historical position as a center of cultural, economic, and political innovation, where other states admiringly look to it as model, guide, and inspiration? There is grudging respect for Chinese economic accomplishments over the past three decades, to be sure. But there is just as much wariness about Chinese cultural and political beliefs. The Chinese people—as evidenced by the hysterical response to protests about Tibet in the spring and summer of 2008—show that they are far from comfortable with their own position in the world and how they are perceived by others.

Given the central role of the United States around the globe, there is almost no chance that China will replace the U.S. and become the unquestioned leader in global economic affairs. The United States—even as it adjusts to changing and difficult circumstances—is not going to disappear. The United States remains too central and too powerful, and American (and Western) ideals have become too deeply accepted around the globe, for the United States not to be important.

Perhaps the most important question is whether the United States, with its very Western way of viewing the world, and China, with a potentially different way of viewing the world, can come to some type of accommodation and agreement on each others’ roles and their relations with each other. While to date both the United States and China are working to accommodate each other and stabilize their relations, that process is far from complete. How these two countries manage East Asian (and global) leadership, the status they accord each other, and how other regional countries come to view them will be central aspects of whether or not the future of East Asian international relations is one of increasing stability.

Despite some domestic troubles, America will remain the most powerful, and richest, country in the world for the foreseeable future. However, the era of clear leadership, implicit dominance, and deference from other countries may be slowly ending. Put a little more bluntly, the question for the United States may come down to this: What if China actually rises peacefully – can the U.S. live with that?

David C. Kang is Professor of International Relations and Business at the University of Southern California, where he also directs the Korean Studies Institute and the East Asian Studies Center. His latest book is East Asia Before the West: Five Centuries of Trade and Tribute (Columbia University Press, 2010).

By Sarah Raine

Since its foundation in 1949, NATO has been the cornerstone of the defense of the liberal international order.  Yet as this 20th century alliance for regional territorial defense confronts the more amorphous and global security challenges of the 21st century, so the alliance has to adapt.  Should it fail to do so, NATO will survive as a collective defense organisation, but it will not thrive.  It will be the regional alliance which handles, for example, severe disorder on the periphery of the Eurozone, or the rise of violent nationalism in states that find themselves on the outside of a reworked European project.   But it will not be the type of alliance which, in 2011, conducted six operations on three continents.  To thrive, NATO has to evolve into a hub of global security with a network of partners across the globe.

As about 60 member states, partners and international organizations assembled in Chicago for the biggest summit in NATO’s history, the superficial signs of adaptation were there.  But the reality is that the present network is unhealthily dependent on the United States, whilst the relevant capabilities of NATO’s European members – and in some instances even their aspirations to such capabilities- are becoming ever more limited.   Only 10 NATO member states chose to participate in Operation Unified Protector in Libya, and only six demonstrated both the capability and the willingness to conduct air strikes.

In contrast, amongst “the rest,” defense spending is on the rise.  This year defense spending in Asia is set to exceed spending in Europe for the first time in modern history.  One recent Economist projection based on current trends foresaw China’s defense spending overtaking U.S. defense spending around 2035.

Europe’s extreme dependence on the United States for NATO’s hard security capabilities is bad for stakeholders in the liberal international order and bad for the alliance. Some aspects of this dependency are unlikely to change.  Absent an unforeseen existential threat, defense budgets are not about to rise any time soon.  Meanwhile, pragmatic concerns over the retention of sovereign control of military capabilities will continue severely to limit the impact of any belated conversion to the pooling and sharing of European military resources.

Yet in a world of the rising rest, it is both realistic and practical to expect European member states to pay more attention to the cultivation of security dialogues beyond NATO’s borders — including joint exercises and the expansion of military training, exchange programs and port visits.  European NATO member states such as the UK and Germany are belatedly ramping up their diplomatic engagements in Asia and Latin America, but the development of parallel military-to-military dialogues is lagging behind.  (In Asia, Europe’s preservation of the arms embargo on China and its promotion of arms exports to friendly powers like India are not insignificant, but it is strategy more by default than by design.)

In the encouragement and coordination of a broader security strategy by NATO’s European members to engage “the rest,” the example offered by U.S. Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell, with his February 2012 visit to Brussels and London to discuss common interests in the Asia-Pacific, is noteworthy.

However, even in the event of this broader outreach materializing, antipathies on the part of the “rest” towards this Cold War-era alliance of the West will be hard to overcome.  Meanwhile, NATO’s own abilities to defend the liberal international order are becoming more limited as security stretches beyond traditional geopolitics to include issues such as economics and resource management.

The community of values which NATO represents in hard security terms will therefore need bolstering through cooperation in other fora.  Parallel organizations of like-minded allies will have to emerge, incorporating those states committed to issues such as freedom of trade, the protection of intellectual property, and the primacy of the rule of law.  The Trans Pacific Partnership has potential to develop into one such organization.  A similarly inclusive initiative in the maritime arena based around the protection of sea lines of communication could also be considered.

The rise of the rest does not need to mean an end to the thriving of the West.  But the continued preservation of the liberal international order will be best protected by a security alliance that evolves beyond shared cultural and historical affinities to engage new partners in new arenas — and by the promotion of parallel economic and resource communities which are inclusive by outlook but disciplined in the values and standards demanded of their members.

Sarah Raine is a Berlin-based Fellow of the International Institute for Strategic Studies and the German Marshall Fund of the United States.

By Mark Leonard

One of the big stories of the last 60 years has been the creation of a European-inspired legal order in the shell of an American security order.  The Westphalian order of Bretton Woods has given rise to a new idea of order that gives greater sway to individual rights, institutionalized cooperation, and an idea of security based on legal interdependence and pooling sovereignty to deal with common problems.  This is often called – in short-hand – the Western liberal order – and I think that the biggest global risk is the threat to that order.

The Western liberal order has faced threats over the last few years – but mainly asymmetrical ones, including populist states like Cuba and Venezuela or non-state actors like Al Qaeda.  But now there is a conventional challenge: the rise of “post-colonial superpowers.”  The rising powers of the 21st century – China, India and Brazil – are all relatively new states forged by movements of national liberation whose experience of globalization has been bound up with their new sense of nationhood.  For the West, globalization is destroying sovereignty — but for these new former colonies it is creating sovereignty on a scale never experienced before.  This surge in economic power is also leading to a questioning of Western ideas on sovereignty and the liberal rules of the road.  Let me provide two illustrations.

The first is the rise of the G-20 as the main mechanism for global economic decision-making.  People have focused on who sits around the table — EU members held half the seats in the G-8, and they account for just a quarter of the G-20.  But – from the perspective of the liberal order– it is worrying is that the G-World seems to be one where global governance takes place within informal institutions governed by the balance of power rather than treaty-based institutions that pool sovereignty.  For me this shows that we have been naïve in thinking that integrating rising powers into global institutions will turn them into so-called “responsible stakeholders.”  It is right to engage and involve rising powers in global institutions, but it is now clear that rather than being transformed by their membership of the institutions, the rising are dramatically changing the nature of the institutions themselves.

A more dramatic illustration of the trend against Western liberal values is the Arab Spring.  After 1989, democratization and Westernization went hand in hand.  When countries of Eastern Europe threw off autocratic rule they wanted to join the West.  Now Arab countries are democratizing – but they are not turning towards the West.  In many ways they are going through a “second decolonization,” emancipating themselves from Western client states in the same way that earlier generations freed themselves from Western rule.  Although the revolutionaries themselves may have been using Facebook and working for Google, the politics they will unleash will be challenging for the West.  I do not think we will see fundamentalist Islamists coming to power across the region – but in Egypt we can already see some of the challenges.

These trends are made more extreme because of the way that America is trying to re-invent its leadership for a “post-American world.”  On the one hand, Americans continue to believe that we will transform rising powers by integrating them into existing institutions (in spite of much evidence to the contrary).  On the other hand, they think that Europe’s over-representation in the existing institutions is a threat to the consolidation of that order.

This is leading a declining America increasingly to turn against Europe.  As Walter Russell Mead has written, “Increasingly it will be in the American interest to help Asian powers rebalance the world power structure in ways that redistribute power from the former great powers of Europe to the rising great powers of Asia today.”  The liberal order can probably survive the dismantling of America’s hegemony — but can it survive the political and economic marginalization of the EU?  A little-commented fact is that it was the EU’s normative agenda — rather than U.S. hegemonic power — that gave legitimacy to the liberal order of the 1990s.  If the United States was the sheriff of the liberal order, the European Union was its constitutional court.

Mark Leonard is Co-Founder and Director of the European Council on Foreign Relations, the first pan-European think-tank. He is the author of Why Europe Will Run the 21st Century (2005) and What Does China Think? (2008).

By Dhruva Jaishankar

Glance at most newspapers or current affairs magazines today and you would not be blamed for thinking that the fabric of the liberal order – marked by democratic governance, liberal values, free markets, stable peace, and strong institutions – is inexorably fraying.

The U.S. and European economies appear caught in a vicious cycle of burdensome entitlements, high unemployment, slow growth, spiraling debt, and political gridlock. China is thought to be successfully advancing an alternative model of governance marked by single-party leadership and state-led, market-driven growth. Russia continues its reversion to authoritarianism. The Middle East is experiencing unprecedented political upheaval, primarily to the benefit of the region’s Islamists. Iran and North Korea are seeking the ability to annihilate their neighbors with nuclear weapons. India and Japan, the largest and wealthiest non-Western democracies, are beset by political stasis and economic stagnation. And international institutions – whether the United Nations, European Union, World Trade Organization, or International Atomic Energy Agency – appear increasingly impotent. It is little wonder then that thoughtful commentators and leading policy intellectuals are predicting a de facto G-2 (or “G-Zero”), a “Zero-Sum World”, or the “Return of History”.  “That Used to Be Us,” “Time to Start Thinking,” and “It’s Even Worse than it Looks,” other declinists note ruefully in the titles of several recent books.

Such pessimism also has popular resonance. Today, two-thirds of Americans believe their children’s employment will be worse than their own. Most already think that China’s economy is larger than that of the United States, when in fact it is still less than half its size. A Pew survey last year showed that citizens of the former Soviet Union (including the Baltic states) were far less enthusiastic about their countries’ shifts to democracy and market economies than they were at the end of the Cold War. And faith in the European project is dissipating rapidly across the continent. Meanwhile, institution-building as it pertains to world trade, climate change, and nuclear disarmament appears to have stalled.

And yet the first drafts of history are often destined for the rubbish bin. Predicting the decline of the liberal order (often inextricably linked to narratives about the future of democracy, liberalism, free markets, peace, and global institutions) is an age-old pastime.  Whether Sputnik, the 1973 oil shock, major terrorist attacks, or post-colonial wars, a wealth of supporting evidence has been used to prophesize the end of the free world. In fact, the picture is far rosier than one might infer from the torrent of pessimism currently emanating from the Western commentariat. Consider the following:

-          Democracy is advancing. 65% of countries evaluated by Freedom House can be counted as electoral democracies, a slight increase since 1995 and a significant increase since 1990. However, a higher proportion of people (53%) are living in electoral democracies today than at any other time in history. And of those 3.75 billion people, 70% now reside in the developing world.

-          Liberal values are spreading gradually. 76% of independent countries today are considered free or partly free by Freedom House, an improvement over 72% in 1995 and 63% in 1990. The standards of acceptable behavior concerning the treatment of marginalized groups – whether ethnic or religious minorities, women, or the economically disadvantaged – have also risen across the board.

-          Market liberalization is progressing, if fitfully. Although the overall quality of world economic freedom, as measured by the Heritage Foundation’s Index of Economic Freedom, has declined slightly since 2008, the figures have improved for every region outside the United States and Europe.

-          Trade is booming. After a slump in 2009, global trade rebounded strongly with 14.5% growth in 2010 followed by 6.5% growth in 2011 according to figures compiled by the World Trade Organization.

-          Liberal democracies are delivering. According to the UNDP, every country for which data is available – both democratic and non-democratic – has experienced improvements in human development (health, education, and income) since 2000.  Developing non-democracies marginally outperformed developing democracies over this period (1.28% as compared to 0.91% per annum), but the apparent ‘democracy tax’ is chimerical given non-democracies’ lower bases, their resource exports, and – in some especially egregious cases such as North Korea and Somalia – inadequate data. It should also be noted that in terms of human development the likes of Ghana, India, Bangladesh, and Mongolia have outperformed China, Pakistan, Vietnam, and Iran over the past decade.

-          The world is becoming more stable and peaceful. Violence – whether interstate wars, civil wars, political disturbances, or organized crime – has dropped steadily since 1991. Deaths resulting from war-related violence have fallen 45% since the 1990s, and 70% since the Cold War, according to figures compiled by the Peace Research Institute-Oslo. Crime-related fatalities have also declined in roughly three-quarters of all countries over the last decade.

Taken together, these trends augur well for the future of the liberal order as the West declines and the ‘rest’ rise. And anecdotal evidence suggests things might only get better. Burma and Egypt are experiencing historical elections. Political intrigue and infighting in China, coupled with decelerating growth, have led to serious questions the world over about the viability of the Beijing model. Vladimir Putin faces popular protests in Russia, while Bashar al-Assad might not be leading Syria by the end of the year. The leaders of major countries meet more regularly and discuss a wider range of issues than ever before. And while details and implementation remain problematic, all the world’s major powers are in agreement about the challenges the global order faces, from economic protectionism and weapons of mass destruction to climate change.

Optimism should always be tempered by caution, and none of these realities should engender hubris, but the underlying basis of the liberal order is certainly alive and well. The only difference is that the West may no longer be able to claim ownership over it.

Dhruva Jaishankar is a Transatlantic Fellow for Asia at the German Marshall Fund of the United States.

The Emerging “Contra-Polar” World

By  C.  Uday  Bhaskar

The emerging international global order to my mind is better described as a polycentric heptagon – an uneven seven-sided polygon  comprising the United States, Russia, China, the EU, India, Japan and Brazil. The USA, EU and Japan represent one strategic entity with shared security interests; Russia and China are conscious of their non-Western orientation; and India and Brazil  are the equivalent of swing states  that  have the potential  to acquire greater relevance in the heptagon.

The rise of the “rest” would imply the four non-Western members viz: Russia, China, India and Brazil – which also form the BRIC group. Collectively the cumulative comprehensive power index of the US-led grouping will be  of a higher order for the next two decades.  The re-ordering will occur as and when China overtakes the USA as the world’s most prosperous nation by way of overall GDP — and how Japan / East Asia responds to this change.

The US-led international order, and the selective interpretation of what constitutes “liberal” as well as the exigencies under which certain values are to be protected, will be either resisted or challenged by the “rest” – but in an uneven, issue-based manner. To that extent, it may be in order to qualify the emerging global ambiance as a “contra-polar” world, where contradictory policy pursuits and contrarian impulses are the norm.

This would be a sharp contrast to the black-and-white binary division of the Cold War.  A heptagon  covered by a gray sheen may be the more valid characterization of the emerging global environment consequent to the “rise of the rest.”

Asian geopolitics will be critical for the texture of the emerging contra-polar world in which the China-Japan-India triangle will subsume these complexities and contradictions. Will the imperative of globalization as manifest in trade, commerce and investment be the principal consideration for bilateral relations — or will emotive nationalism roil the triangle?  Will the United States be a quiet spectator as China seeks to create a unipolar Asia?  Will the rise of China be as peaceful as Beijing would like the world to believe, or is there a revisionist agenda that will be progressively unveiled?  The contestation in the South China Sea could well be the bellwether for the posture that China will adopt in the future.

Thus China’s profile (by way of comprehensive national power) and the manner in which it orients itself — as supporting the existing status quo, or pursuing a revisionist  path to maximize Chinese interests — will define the degree to which the international order is under threat, or being challenged.  Path dependency will be an important determinant and here the “swing” stance adopted by Russia, India, and Brazil apropos China’s posture will be of considerable salience.

While the BRIC nations have a correspondence by way  of being more in the “developing nation” category than in the  G-7 / high per-capita grouping, their strategic interests are often at variance and exude latent adversarial traits.  The Russia-China-India relationship is illustrative.

Within Asia, the deeper tussle is whether authoritarianism as represented by China is the more viable model for the future – or whether democratic dissonance and disorder as manifest in India will be the proverbial tortoise that will finally prevail.

Managing contradictory compulsions is the challenge for the heptagon and invoking the principle of quantum computing may not be invalid.  The Western world is undergoing a process of transmutation – and certain rhythms and  practices will  have to change since they are unsustainable.  Lifestyle rhythms and consumption practices are already under strain and the changes that are on the anvil are being driven from within.

On the external front, the revisionist impulse that will challenge the existing international order is more likely to come from China, which has chosen a very different value system and where the concept of being “liberal” has negative connotations. The strategic culture associated with China is indicative of a deep-rooted conviction (certitude?) that the post-1949, Mao-derived  model is the more successful – and is to be deified, defended and propagated when the time is opportune.

India, on the other hand, may be a resistant power – in the sense that it can resist change or stricture if  applied to it – and these are traits associated with the pachyderm.  But its distinctive strategic culture is more reactive and empathetic with the status quo that in principle supports the liberal, democratic order.

C. Uday Bhaskar is a Fellow at the National Maritime Foundation, Delhi and Adviser, South Asia Monitor.