Archive for May 30th, 2012

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.