Emerging Powers and the Changing Landscape of World Politics

Overview

•Extent to which the 21st century will be

shaped by a global power shift

• Implications that such a restructuring of the system might have for the pattern and dynamics of world politics

Identifying the Current Trends in World PoliticsTransformation

Loss of confidence in Western states as a result of ever-worsening financial meltdown, Global Financial Crisis 2008-9 and Eurocrisis.

Global Financial Crisis 2008-9The worst global downturn in the economy since the 1930s.

Most often discussed causes of global financial crisis:• Sophisticated financial innovations linked to rapid changes

in computer technologies and deregulation of financial markets.

• Proliferation of computer technologies and unquestioned faith in the wisdom of markets created a demand for and acceptance of less regulation.

• Low interest rates. • Subprime loans, especially mortgages. In an environment

that encourages consumption over savings, easy credit fuelled the housing crisis.

• Speculation in general, especially on housing.

Eurocrisis(I)

• The global downturn in the global economy had revealed the dreadful finances of many European states, most particularly those who had joined the Euro.

• Since 2008, the member states, the euro area and the European Union as a whole are suffering from serious economic and financial problems.

• They need to ensure financial stability, support growth and employment and improve economic governance.

• The global economic and financial crisis plus the public debt crisis that followed exposed structural weaknesses in some European economies(such as unsustainable levels of public or private debt or declining competitiveness.)

• Crisis also revealed systematic shortcomings in the architecture of the EMU itself.

Eurocrisis(II)• The economic crisis has become a political crisis. In

Eurozone countries the crisis has provoked protests and backlash against austerity measures.

• The economically stronger economies are providing financial assistance to the weaker economies. This is perceived as “bailing out” other countries that have failed to implement “responsible” policy choices.

Disagreements among key policymakers over the appropriate crisis response

Slow and complex EU policy-making process

Who can rescue Europe?

America?

IMF?

China? Europe as a place which had given birth to

modern capitalism is now waiting the world largest communist state China for a rescue. China’s immense surpluses seemed to be the only way out of Europe’s crisis.

The ongoing transformation of world politics •Transformation can be defined through

evident shifts in power and influence across the world

Europe; the club of wealthy European countries brought low by underwhelming growth and even worse macroeconomic policy

America; unable to fix the problem

China; confident enough in itself

Rise of BRIC’s•China; world’s factory and a “Top 10”

economy

• India; promising information technology

•Russia; commanded the World’s largest reserves of fossil fuels

According to the 2001 report of Goldman Sachs by 2035 BRICs

would overtake the combined GDP of the G7(U.S., U.K., France, Germany, Italy, Canada and Japan).

Asian Ascendancy or Multiple Centres of Power and Influence?Emerging Powers Western World • Creative and pragmatic diplomacy

• Economic success

• Confidence and a desire to take a place on the world stage

• Growing investment in military modernization

(e.g China’s growing capabilities to use its military arsenal beyond its borders—including notable improvements in its navy, air force, missile defense, cyberwarfare, and space program—are causing concern in the West)

• Long-term economic decline compounded by the catastrophic events of Financial Crisis 2008-9

• Debts worth 100 per cent of their GDP, while emerging economies have around 35 per cent.

Defining the North Atlantic EraMacro Level• A long phase of

technological advance, maritime exploration and industrialization

• Most powerful

• Advantage in all technologies

• Vast bulk of global GDP

Micro Level• Better living standards

• Higher level of education

• Long life expectancy

• Reduced infant mortality

• Control of many diseases

The Post-Cold War Period

Liberal model of politics+

A capitalist vision of economics +

Monopoly of Western ideas

Western understanding of how states and societies should be run and how relations between those entities ought to be organized

Are these circumstances

coming to an end?

Emerging Economies and Global Powers

• Economic forces working to level out the very uneven distribution of wealth across the world will be the most important factors shaping the world in the coming century.

• Change as a result of redistribution of power across the system. Flattening out of the economic discrepancies between the rich and at least some of the less well-off.

“The rise of everyone else” (?)

Economic performances and growth rates of BRICs

• In 2008, emerging powers grew by 6.1 per cent , while wealthy economies could only manage 0.5 per cent. In 2010, emerging powers grew by 2.6 per cent and the advanced economies shrank by 3.2 per cent.

(IMF, 2010:2 cited in Beeson and Bisley, 2013, p. 16)

China • China launched a modernization programme in 1978. • Between 1975-1999, the average annual GDP growth

rate was 8.1 per cent. • Since 1979, the economic output of China has

quadrupled. • China is now the second largest economy in the world,

world largest exporter, leads the world in manufacturing, creates around two-thirds of the world’s electronic goods, world largest producer of steel, cement and coal.

• In the aftermath of the 2008 global financial crisis, it became the key engine of growth for the world economy with a remarkable political clout.

India•As a result of series of liberalization reforms

in the early 1990s, the Indian economy has been transformed.

•Since the adoption of teh reform programme the Indian economy has grown at an avarge annual rate of just over 6 per cent.

• India has become linked into the global economy through a vast IT industry, it is an attractive venue for foreign direct investment and its productivity is growing.

Russia

•Russia has capitilized on its huge hydrocarbon deposits and the sustained high prices for the commodities including diamonds and gold.

•Russia’s annual GDP growth has avaraged 6.8 per cent since 2000.

•Russia will enjoy prosperity so long as commodity prices remain buoyant.

Brazil

•Brazil experienced striking economic prosperity but not at the levels of China or India.

•Brazil’s commodity endowments, strong labour market and excellent returns on Foreign Direct Investment seem promising.

Factors Behind their Success

Their physicality; geographically substantial, located in strategically

significant parts of the world and they have large populations

+Will

Western Decline

US growing dependence on credit from emerging economies

It seems like West relies on two things;(1)Credit of the rest of the world(2)Importing cheap manufactured goods

and energy

• Shifting productive processes to low labour cost countries has helped Western countries to maintain their economic well-being at relatively low cost

•As a result, they maintained lower consumer good prices, this in turn allow speculation in property markets that led to the bubbles in the US and UK

•They relied on low energy prices

Consequences of emerging powers prosperity•Price increase in commodity and food

•Price increase in commodities such as iron, aluminium, coal, copper and zinc to record high.

•More energy consumption led to higher price of oil, gas and coal.

What Pertains Changes

• Basic features of the international system

• Distribution of power within the system

• Number of states with influence

• The way they advance their interests

• Content of the norms and principles underpinning the system

References

•Beeson, M. and Bisley, N., 2013, 2nd ed., Issues in 21st Century World Politics, Palgrave Mac Millan, Chapter 2