Chapter 2 Megatrend One: The global shift of power from West to East

2 Megatrend One

The global shift of power from West to East


AFRICA IN THE NEW WORLD
How global and domestic developments will impact by 2025

 

Jakkie Cilliers

 

Monograph No 151, October 2008

 

The (relative) decline of the West


In recent decades, countries all over the world have experienced rates of economic growth that were once unthinkable. Hundreds of millions of people have been lifted out of poverty, creating new centres of regional prosperity and wealth. And it is clear that at least the first half of the 21st century – possibly longer – will belong to Asia.

 

American resilience


In an excellent article, ‘The future of American power’, Fareed Zakaria6 argues that the future of the United States in the next decade or two is not so much about the ‘world without the West’, or indeed the decline of the United States, but really the ‘rise of the rest’ – a process that will see the relative decline of the economic power of the United States and the European Union in their share of global gross domestic product (GDP), industrial production and world trade. His view is that the global dynamism and dominance of the US economy is not about to disappear, although its relative contribution may decline as the world economic cake expands. (That of Europe will decline even faster, given the lack of political unity, limited military power and ageing population.)

In June 2008 the China Internet Network claimed that China had overtaken the United States in having the largest number of Internet users (253 million) and thereby became the world’s biggest market with a 50 per cent growth rate over the preceding year. The growth potential remains huge – for even at these numbers only 19 per cent of Chinese people have access to the Internet compared to the 70 per cent (220 million) in the United States. With growth rates of 60 per cent to 70 per cent per year the Internet market is the fastest-growing consumer market sector in China – dominated by Chinese companies such as Baidu, Sina, Tencent and Alibaba, not by American companies such Google or Yahoo.7

Less well known is the fact that Internet and cell phone usage in Africa is growing at double the rate of that in China.

The decline of the United States from its position as global superpower has been the source of commentary for several decades – and has defied every bout of prediction about its imminent eclipse. Of the top 22 companies in the world, Americans lead half – from a country with less than 5 per cent of the world’s population. By all indication, the United Sates will still be the dominant global power by 2025–2030, although no longer with the largest economy. It will therefore have experienced a decline in its current dominant position – but Americans (and Europeans) will individually still be substantially wealthier than anyone else for the foreseeable and long-term future.

According to The world in 2050 the economies of the group of the Emerging Seven (E7) consisting of China, India, Brazil, Russia, Mexico, Indonesia and Turkey will, by 2050, be around 50 per cent larger than that of the current G7 (the United States, Japan, Germany, the United Kingdom, France, Italy and Canada). China will remain the fastest-growing economy for the next few years and overtake the United States to become the largest economy in the world by around 2025 (or earlier, as reflected in figure 1 below), but due to its rapidly ageing population will gradually be overtaken in terms of growth rate (although not level of GDP) by India (around 2015) and Brazil (around 2025). India will have grown to almost 90 per cent of the size of the US economy by 2050, at which point the Chinese economy will be about 30 per cent larger than that of the United Sates – but individually people will still be much, much poorer than the average American.

 


The younger and faster growing Indian and Brazilian populations will be able to sustain a more stable rate of growth up to around 2030 before also experiencing a gradual deceleration as their populations also begin to age.8 The economies of Mexico, Brazil, Russia, Indonesia and Turkey are projected to grow from around 3–8 per cent of the size of the US economy today to around 10–25 per cent by 2050.

In the broader scope of things, the current patterns of production and consumption are unsustainable, even in the medium term.

Some would argue that declining population growth is generally a ‘public good’. Yet the decline in birth rate significantly below the magic ‘replacement figure’ of 2,1 children per woman – such as is happening in southern and eastern Europe, to levels of 1,3 children per woman – will be economically devastating for those countries if it is not offset by an influx of migrants. At these rates a country’s population will contract by half in 45 years and the demands for welfare and health care will go through the roof while tax collections from a declining worker-age population decrease to an unsustainable level. In reality northern Europe with its more effective gender equality programmes does much better in the fertility stakes than southern Europe, but neither does as well as the United States with its most recent figures of 2,1 children per woman, the highest of all developed countries. Others (France and Britain) attract significantly more migrants, so that Britain will have 11 million more people in 2031, partly offsetting their low fertility rates.

The reasons for these disparities are not hard to find: ‘You might say that in order to promote fertility, your society needs to be generous [such as in Sweden or Norway] or flexible. The USA isn’t very generous, but it’s flexible. Italy is not generous in terms of social services, and it’s not flexible.’9

The relative shift in the global importance and size of the US economy should not, however, be conflated with a general move away from Western values, systems and indeed even of a global financial and trading system heavily skewed towards the rich and powerful. The attraction of ‘the West’ will not disappear any time soon, nor will the impact of Western lifestyles, music and popular culture, despite the resurgence of China, India, Brazil and others.

The United States has built and extended its global influence on the back of the British Empire and it shares many values with the largest economic block in the world, the European Union. Before the American dream, Britain was the most successful exporter of a particular ‘English way of life’ – one that was admired, watched and copied throughout the world. English spread as a global language spoken from Cape to Cairo, from the Caribbean to Calcutta. Neither Spain nor France managed to equal the impact of the British Empire, which probably surpassed that of the Roman (and possibly that of the Chinese) Empire in its global dominance.

The US economy with its GDP of $1410 trillion is not in decline and despite an emerging trend to greater multipolarity (or nonpolarity, as some would have it), predictions about substantive loss of US global influence and power in the period under review are probably presumptive. Whereas Britain’s unrivalled economic status lasted for a few decades, US economic hegemony has already lasted for more than a century and has consistently accounted for at least a quarter of world output. Although the European Union today is a larger economy than the United States, it does not parallel US global influence and will experience a sharper relative decline in its slice of the global economy in the years to come, largely as a result of its ageing population. Most importantly, despite their economic competition, the North Atlantic Free Trade Area (NAFTA) and the European Union share many common values regarding the nature of the global trading system, democracy, human rights and governance. Even in 2025, the US economy will still be twice the size of China’s in terms of nominal GDP per capita and it is – and will remain – militarily dominant throughout this period, spending more on its military muscle than the next 14 countries combined.

The declining utility of US hard power

US military expenditure at $534 billion in 2007 (a little over $700 billion if operations in Afghanistan and Iraq are included) could be viewed as a consequence of its global economic and political dominance. The United States has no enemy against which it is preparing this massive military capability and it is trapped in the classic security dilemma – one that Europe with its much lower levels of defence expenditure has avoided. The more the United States spends to arm itself and to remain safe, the more insecure it feels, not least because its very military expansion is triggering asymmetrical responses, including the use of terrorism. Fear is driving insecurity and military spending – almost like South Africa, where fear of crime increases year on year although government spending on combating crime is going through the roof.

The inordinate domestic influence of the US military-industrial complex on foreign policy has compounded a situation in which the steady increase on hard power detracts from US legitimacy. Diplomacy and other instruments of engagement have been all but marginalised in the old adage of ‘if the only instrument you have is a hammer, every problem becomes a nail’.

Speaking to an admittedly partial audience at the US Global Leadership Campaign in June 2008, even George W Bush’s Secretary of Defense, Robert Gates, expressed his concern about the creeping militarisation of US foreign policy:
In the campaign against terrorist networks and other extremists, we know that direct military force will continue to have a role. But over the long term, we cannot kill or capture our way to victory. What the Pentagon calls ‘kinetic’ operations should be subordinate to measures to promote participation in government, economic programs to spur development, and efforts to address the grievances that often lie at the heart of insurgencies and among the discontented from which the terrorists recruit ... It has become clear that America’s civilian institutions of diplomacy and development have been chronically undermanned and underfunded for far too long – relative to what we spend on the military, and more important, relative to the responsibilities and challenges our nation has around the world ... Broadly speaking, when it comes to America’s engagement with the rest of the world ... it is important that the military is – and is clearly seen to be – in a supporting role to civilian agencies.11
The more the United States arms itself with new sophisticated weaponry and talks up the hype about the proliferation of weapons of mass destruction (always by others, not itself), the less secure and more fearful its people. As the largest source of nuclear proliferation, the United Nations and its fellow members on the UN Security Council (also the five nuclear powers in the Nuclear Non-Proliferation Treaty) will be increasingly unable to reverse the trend towards nuclear arms at a time of a massive expansion of the nuclear power industry. As greater fear galvanises military spending, the United States inevitably fuels global insecurity.

Depending on the outcome of the November 2008 US presidential elections, the future may see some adjustments in this regard, but it is difficult to even fathom a Democratic Party presidency under Barack Obama and Vice President Joe Biden taking on the domestic defence sector and its key allies in the pro-Israel, anti-UN and fundamentalist Christian sectors that have come to dominate US foreign policy instincts. At the same time it is important to recognise that there have been important shifts in the relative importance of various sectors within the United States and the global economy since the warning on the threat of the military-industrial establishment that was sounded by President Dwight D Eisenhower during his farewell address as president in 1961.12 Eisenhower warned about the threat of ‘the conjunction of an immense military establishment and a large arms industry ... and ... the acquisition of unwarranted influence’ at a time when the United States had a 3,5 million person military compared to fewer than 1,5 million today (with another 1,5 million in reserve). At that point the US military budget exceeded the total net income of all US companies. Today, the US defence budget is less than that of the top fifty most profitable US companies, but there has been a significant consolidation. In less than a decade, the more than fifty major defence suppliers have contracted to five or six dominant super-suppliers, including Boeing, Lockheed Martin, Northrop Grumman, General Dynamics and Raytheon, companies that have all increased sales 10 per cent per year every year since 2001. These are no longer just US suppliers, but global providers of defence equipment that also provide private security services through subsidiaries such as Vinnell Corporation (owned by Northrop Grumman), Kellogg Brown and Root (owned by Halliburton), MPRI and Dyncorp International. Indeed, the combined revenue of just the top two US companies, ExxonMobil and Wal-Mart, dwarfs US defence expenditure by 50 per cent.

The distribution of power has clearly shifted since those heady days during the Cold War, ‘away from the United States and Europe, but also away from nations’.13

The United States and Africa

The United States did not have a consistent regional policy towards Africa until the second term of President William (Bill) Clinton, but Africa has increased in importance after that. In 1998, Clinton became the first US president to visit Africa – an event that followed his administration’s decision to withdraw American troops from Somalia in 1994 and the subsequent failure to respond to the genocide in Rwanda. Congress passed the African Growth and Opportunity Act (AGOA) in 2000 and the executive branch undertook various initiatives to encourage trade, the private sector and democratic transition in the years following. To some considerations around oil were key to this growing interests since, by 2007, petroleum accounted for a 93 per cent share of overall AGOA imports.14 At the same time US humanitarian instincts are strong and provided an important, if politically less influential impetus to foreign policy towards Africa.

President George W Bush visited Africa in the third year of his first term and paid his second visit in February 2008 against the backdrop of increased US concern about the importance of Africa in the US ‘global war on terror’. The establishment of a single US military command for Africa, AFRICOM, which is currently under way, also occurred under his watch.

Sub-Saharan Africa is less a victim of the US war on terror than most other regions. A recent Gallup poll in 139 countries found that sub-Saharan Africans were significantly more positive to the current US administration than any other region in the world, possibly as a result of that. Some 62 per cent of Africans have a positive view of the United States compared to the next highest, 33 per cent of Asians, with the highest levels of support found in the Central African Republic (92 per cent) and Malawi (87 per cent).15 Yet the US military eventually had to place the relocation of its African Command (AFRICOM) from Stuttgart in Germany to Africa on hold in the face of concerted African resistance to its location on the continent.

The global challenge for the United States is increased economic competition, particularly from China, compounded by its recent history of parochial political leadership. Following its brief unipolar moment after the collapse of communism, the United States now faces a more multipolar environment, but not to the extent that will challenge its military dominance, although on every other dimension – industrial, financial, social and cultural – the distribution of power is shifting, moving away. In this post-American world, more actors and places will define the world and the ability of future US governments to work outside multilateral networks and institutions (as done by President Bush) can only be retained at the risk of accelerating its steady loss of influence and legitimacy.

 

Europe and the United States


While the World Competitiveness Report for 2007/08 lists the United States as the most competitive economy, seven out of the remaining nine in the top ten are from Europe, namely Switzerland, Denmark, Sweden, Germany, Finland, the United Kingdom and the Netherlands.16 With almost 500 million citizens, the European Union generates an estimated 30 per cent share of the world’s nominal gross domestic product. The European Union’s GDP is now greater than that of the United States, but the EU does not yet act in a unified political fashion and opts for defence on the cheap – relying on the United States for its physical protection from extreme threats, although defence companies such as EADS, BAE Systems and Finmeccanica are all part of the top ten global aerospace and defence companies. The average economic growth of western Europe has also slowed, from 5,8 per cent in the 1950s to 2 per cent in the 1990s and 1,5 per cent in the five years until 2005.17

Put succinctly: the European Union has developed a single market through a standardised system of laws which apply in all member states, guaranteeing the freedom of movement of people, goods, services and capital. It maintains a common trade policy, agricultural and fisheries policies, and a regional development policy. Fifteen member states have adopted the euro as common currency and it has developed a role in foreign policy, representing its members in the World Trade Organisation (WTO), at G8 summits and at the United Nations – although not in the Security Council. The Union has also developed a role in justice and home affairs, including the abolition of passport control between many member states under the Schengen Agreement.18

Europe’s influence and power reflects what has widely become known as ‘soft power’. When first coining the phrase, US Assistant Secretary of Defense Joseph Nye noted that ‘soft power rests on the ability to shape the preferences of others ... It is leading by example and attracting others to do what you want.’19 Europe does much more than this. Through its support of human rights, democracy and governance reform (often through non-governmental organisations), Europe is a significant international player – an ideological power – and it has the advantage that every new country that joins the family of liberal democracies expands its influence as the principles and institutions appeal as a universal worth. While US post-9/11 actions have served to discredit democratisation and human rights as imposed Western values, the European Union has worked hard to reduce the damage caused by America’s recent forceful unilateralism.

The European Union is also the largest aid donor and market for goods from developing countries (including Africa). At a time when multilateral institutions such as the United Nations, the International Monetary Fund and the World Bank strive for reform to remain relevant, many internationalists see the European Union as setting an example for the management of global problems through ‘leading by example where possible’ (in emissions trading if not in agricultural policy). In the process, ineffective and cumbersome as it may be, Europe serves as a moral compass to the United States, and sometimes others.

Europe could compete with the United States – but the lack of a demographically vibrant society and its current complicated governance systems will probably ensure a steady loss of ground to both the US and others in the years ahead – unless Turkey joins and the new European Union constitution sees the light of day. Its future lies with the (inevitably Muslim) countries to its south and east. According to David Calleo, writing in Europe’s World in mid-2008: ‘Not only do these neighbours offer growing markets and investments, but they are Europe’s natural resources for raw materials and energy. Europe also needs good relations with the Muslim world for the sake of its own domestic stability.’20

But instead of seeing immigrants from Muslim countries as a source of new blood that will allow Europe to grow and expand its influence, some view European expansion to the Mediterranean rim as being complicated by a history of Christian/Muslim wars going back centuries – a forgotten legacy that has been brought back into focus by the apparent inability to integrate minorities (Turks in particular) into its social system. For Europe the threat of terror attacks by alienated domestic communities is real, demonstrated by the devastating incidents in Madrid in March 2004 and London in July 2005. These fears were compounded by the violent protests of disenfranchised immigrant youth in France in October/November 2005 that eventually required President Jacques Chirac to declare a national state of emergency. Abortive terrorist attacks in Germany and Denmark in 2008 and arrests in Barcelona early in 2008 have seen Europe closing its borders, tightening and restricting its immigration policies, and sealing itself off from poor, hungry and hard-working communities – despite its liberal foreign aid policies.

The aged and declining population of Russia provides little source of innovation (although of oil and gas) and European enlargement to the east – now including Poland, the Czech Republic, Slovakia, Bulgaria, Hungary, Slovenia, the three Baltic states and Romania – has probably reached its limit for some years (as the official and potential candidate countries will add little, with the exception of Turkey). So a key driver of Europe’s future is going to be the eventual decision on the integration of Turkey with its large Muslim population and what it does with the Mediterranean rim, its southern frontier towards Africa.

The steady drift to right-of-centre politics accentuated by past immigration and integration policies complicates these decisions as more than a million immigrants settle in western Europe annually. Many of these people are from Muslim-majority countries in North Africa, the Middle East and South Asia. Confrontations with Muslim conservatives over education, women’s rights, and the relationship between the state and religion are starting to chip away at the left-of-centre political coalitions that have been instrumental in building and maintaining Europe’s welfare states and that have been at the forefront of promoting European integration. These stronger right-wing parties are generally anti-European Union and their electoral success will impact upon the speed at which the Union can further integrate.

North Africa and Europe

Economic growth and energy interdependence will propel the Arab-African states along the Mediterranean, such as Libya, Morocco, Tunisia, Algeria and Mauritania, towards Europe.21 Many of these countries, including Egypt, have substantial potential with large youthful populations (ages 15–64), similar to that with Taiwan and South Korea before their takeoff in the 1960s and 1970s. Foreign investment, much of it originating from within the region, will increase integration between these Arab-African economies (from a very low current base) and drive private-sector development. With improved educational systems able to produce a more technically skilled work force, current authoritarian systems will in time experiment with political liberalisation. Recently France has blown new life into the stalled Barcelona process to identify and address issues in the Maghreb that hinder progress towards a Mediterranean Union.22

As the Mediterranean region develops a common energy market, the future of the countries along the Sea will become increasingly intertwined and interlinked with Europe. In the process a substantial portion of African-Arabs in North Africa will be provided with new opportunities and options for a very different future from that which holds sway today. The pressure on Europe will be massive as the Middle East and North Africa region experiences the largest increase in life expectancy. In this process European core interests, collaborative relations with Muslims to the south and Russians to the east – its source of natural resources for raw materials and energy – could increasingly be at odds with those of the United States if the latter retains its fixation on a global war on terror and remains intent on keeping Russia down and out, rather than integrate a resurgent Russia into the global system.

But this is an extreme view. Ultimately the transatlantic partnership is too important for both Europe and the United States, based on a common heritage and multiple institutional linkages that now date back more than a century – and massive cross-Atlantic economic interdependence that is even more intense that that along the Pacific rim. Hence German Chancellor Angela Merkel‘s 2007 Transatlantic Economic Partnership is, in the words of US Deputy Secretary of the Treasury George Kimmitt, the ‘the most important transatlantic economic initiative ever to come from any EU Presidency’.23 The initiative’s focus is evidence that cross-border investment continues to rise in importance amidst ongoing calls for investment protectionism from an increasingly inward-looking United States.

The rise of the rest


Like all great powers, the United States is primarily concerned with the protection and advancement of its national interests and has historically sought to contain and where possible constrain the development of potential contenders. It has not been able to do that in the case of China. At the conclusion of President Richard Nixon’s historic first trip to the People’s Republic of China in 1972, the two governments issued the Shanghai communiqué, a statement that formed the basis for Sino-American bilateral relations in subsequent years. In the communiqué, both nations pledged to work toward normalisation of diplomatic relations. The United States acknowledged the notion that there is only one China and reaffirmed its interest in a peaceful settlement of the Taiwan question. The statement enabled the United States and Mainland China to temporarily set aside the issue of Taiwan and to open trade and other contacts. In 1979 the United States broke off relations with Taiwan and established full diplomatic relations with the People’s Republic of China.

US nationalism meets China

The rise of China saw US relations change from containment, to engagement, to that of strategic stakeholder – a term first coined by then Deputy Secretary of State Bob Zoellick in September 2005. The reasons for these changes are not difficult to fathom. The volume of trade between the United States and China is currently growing at an average rate of around 20 per cent per annum – from less than $2,5 billion in 1970 to $302 billion in 2007.24 To China, the United States is its second largest trading partner and largest purchaser of Chinese goods.25 The ability of the United States to consume is only matched by China’s ability to produce.

Events of 9/11 hastened a process of maturing Sino-US relations as requests for cooperation in the US-led ‘global war on terror’ included Chinese support to counter the threat of the proliferation of weapons of mass destruction (with North Korea and Iran) as well as support on issues such as Darfur and Myanmar/ Burma. These were despite tension around economic and trade policies, largely due to US complaints regarding the value of the Chinese currency, the RMB, and consecutive Chinese trade surpluses.

 


Inevitably, once US presidential candidates graduate to the White House, their rhetoric on the Chinese threat to US jobs succumbs to the needs of realpolitik. Thus the view of presidential candidate George W Bush who saw China as a competitor (during his 2000 presidential campaign) differs quite substantially from that of President George W Bush who has to engage and deal with China on a much more equal footing that he would undoubtedly prefer.

Today, China is an important strategic partner of the United States – although the US simultaneously seeks to balance China’s regional influence by maintained strategic relationships with a number of other Asian-Pacific countries, particularly Japan and India, as well as South Korea and Australia, Thailand, the Philippines and Singapore.

The pursuit of economic development and the political reunification of Taiwan continue to lie at the heart of Chinese foreign and domestic policies and will remain thus for much of the period under discussion in this monograph. Beijing does not seek to establish itself as global competitor to the United States or for international influence but rather to avoid international entanglements that could disrupt the country’s ability to focus on its domestic challenges. All other issues are secondary. This view is reflected in the Chinese rhetoric about a more balanced, harmonious world, rather than for big-power status – its peaceful rise. It is also an approach that will undoubtedly change over time as China’s relative power increases and as resource competition requires greater political leverage.

Remember Japan?

In many senses US – and to a lesser extent European – responses to the speed at which China is rising are similar to those that accompanied Japan’s growth from the early 1970s into the 1980s when its meteoric rise triggered near hysterical reactions within the United States, then obsessed with the challenge that Japanese manufacturing presented to its own domestic base. Japan is still the third largest economy in the world after the European Union and the United States, accounting for 9,1 per cent of global GDP. Commentators often forget the heady days of the 1980s when the world had three centres of global finance: New York, London and Tokyo. Accounting for one-third of total global market capitalisation at its peak, Tokyo looked set to dominate the emerging ‘Asian Century’. Similar to Beijing, Tokyo maintained a passive and reactive stance during this period on almost all international issues. Then came the notorious lost decade, and today the Tokyo bourse lags behind even its smaller regional rivals, Hong Kong and Singapore, and the hype about Japan has been replaced by the hype about China.

Japan will face a number of structural challenges in the future – an ageing population (and hence shrinking workforce with the associated social burden), low household savings (meaning that there is little capital to fund Japanese companies), statis in its democracy, and cultural hostility to foreign partnerships. Regionally China uses Japan as a convenient scapegoat around which to mobilise Chinese nationalism, even as Japan is her major regional trading partner. Looking towards the future, Japan aims to piggyback on the breakneck growth in the rest of Asia and to again turn Tokyo into a global financial centre and a platform for high-value-added knowledge creation. Since 2001 Japan has aggressively sought foreign direct investment, which has more than doubled to $143,8 billion in 2007.26 But already today Japan appears to have been relegated to second-tier status in Asia behind China and its close affinity to the United States rather than Asia ensures continued Chinese political hostility.

The Chinese dragon

For its part China’s growth almost defies description. The size of its economy has doubled every eight years over three decades. It has grown by over 9 per cent per annum for almost thirty years and the average Chinese per capita income has increased nearly sevenfold. China today exports more goods in a single day than it exported in all of 1978.27

Despite these amazing figures, the domestic challenges that face China are immense, for it remains essentially a poor country with a vast underdeveloped hinterland. Around 15 million people migrate from rural areas to cities each year. Since it became a net oil importer in 1993, China’s oil imports have grown at 18 per cent a year on average, and imports accounted for 47 per cent of its total oil consumption in 2006.28 The following year the country also became a net coal importer. Despite a massive and increased reliance on coal, increasing domestic oil and gas production, the country imported around 163 million tons of oil in 2007.

The Chinese demand for energy is increasing exponentially and is, in the long run, unsustainable. Between 2002 and 2006 China increased her power generation capacity by 2 329,6 gigawatt, thereby exceeding total installed Japanese capacity. Apart from other factors, this places a heavy pressure on resources and the environment, and China will have to develop a new pattern of industrialisation and development in the medium/long term while diversifying its energy production to natural gas, hydro, nuclear and renewables. Annual targets have now been set to work towards greater energy efficiency, for more environmentally friendly sources of energy, including climate change mitigation and to promote technology innovation. The consequences of faltering Chinese growth rates and the country’s need for alternative paths to deal with its manifold internal and regional challenges are anyone’s guess. Nothing is pre-ordained – not even the continued rise of the Chinese dragon in the East.

 


Different to the United States, China is significantly engaged in UN peacekeeping – a dramatic change from its stance in the 1970s when China avoided participation in any multilateral peace operations, citing its normative concerns regarding state sovereignty and respect for the principle of non-interference in the internal affairs of other countries. In the 1980s China started providing financial support for UN peacekeeping and has sent 5 915 military personnel to participate in 16 UN peacekeeping missions since 1990. It has also expanded its engagement in disaster and emergency relief. Since 1990 China has contributed more peacekeepers than the rest of the P5 combined. In this manner China, which only contributes 2,67 per cent of the UN peacekeeping budget, probably matches in kind the much larger financial contribution by the United States of some 26 per cent.

 


Peacekeeping serves as a vehicle for China to improve its relations with key UN players within the UN Security Council. China has also demonstrated flexibility in its long-held position on the use of force by peacekeepers but it has not yet contributed any combat troops to UN peace missions. Beijing’s hesitance is not only an aversion to modern UN peacebuilding doctrines but also shows a consciousness sensitivity to avoid being regarded as ‘too assertive’– either by the West or elsewhere such as in Africa.29

China’s growing engagement in UN peacekeeping reflects signs of a much more constructive approach in multilateral processes that is also evident elsewhere. It has, for example, also supported diplomatic efforts to find solutions to the crises in North Korea, Iran, Sudan and Myanmar/Burma in a manner that would have been unimaginable just a few years ago. In response to growing international outrage over its supply of arms to Sudan and questionable oil partnerships, the Chinese government appointed its first special envoy to Africa in May 2007 and is perceived to have played a generally constructive role in its engagement with the Sudanese government of President Al Bashir that sought a more constructive approach to the UN/AU hybrid peacekeeping mission in Darfur.

China, India, Africa and oil

In a comprehensive analysis of China’s thirst for oil, the International Crisis Group notes that Beijing’s concept of energy security is showing signs of evolving from a mercantilist approach based on distrust of international markets, and therefore a desire for physical control of oil supplies, to a more open approach favouring international energy markets and cooperation.30 In fact, far from trying to lock up supplies for China as many Western analysts accused CNPC, Sinopec and CNOOC of doing, these companies sell most of their oil produced outside of China on the open market.31 And a substantial case can be made for the view that since the Western major oil companies have largely locked China (and others) out of the lucrative oilfields in most of the major producers, emerging market countries have little choice but to pursue energy deals with problematic governments on the fringes of global mainstream oil production.

In achieving these goals China has relied on both substantive actions and symbolic gestures. For instance, the Chinese foreign minister has maintained a policy of making his first overseas trip of the year to Africa.

China has overtaken India in a largely unseen but vigorous competition for a slice of Africa’s lucrative minerals, its oil and its markets. Indians often complain that they lose energy assets to China as the latter integrates financial incentives with aid, infrastructure projects, diplomatic incentives and arms packages. In 2004, for example, China’s Export-Import Bank extended $2 billion in soft loans to Angola, which led Angolan company Sonangol to support the bid by China’s CNPC over that of India’s ONGC for a stake in an offshore block. But Indian-African growth is also going strong.

India’s trade with Africa exceeded that of China until as recently as 1999, but India-African trade is now dwarfed by China’s burgeoning trade with the region, which amounted to $73,3 billion in 2007, making it the region’s third-largest trading partner after the United States and European Union. China’s investment in Africa stands at approximately $8 billion; four times that of India, while China’s aid to African countries is matching that of major international organisations and Western donors.

Beyond the period under discussion in this monograph, New Delhi is possibly the most important post-China story of the future as the failure of India’s own family-planning policies has left it with a huge youth bulge. Its per capita GDP is still only $960. If adjusted for purchasing power parity (PPP) it is $2 100.32 On the back of an amazingly dynamic private sector and despite its crumbling infrastructure and impoverished villages, India’s poverty rate today is half of what it was twenty years ago. Different to Beijing’s central planning, or the dirigisme of Singapore with its neat, structured cities and orderly highways, India is in a messy process of developing the only way possible – from the bottom up. In doing so, India’s energy demands are expected to double by 2030, making it the world’s third-largest net oil importer, after the United States and China.

In the security sphere, the fact that 90 per cent of India’s trade volume and 70 per cent of its trade value is generated via sea transport has prompted India to play a more prominent role in protecting sea lanes of communication along the Indian Ocean. India established its first overseas surveillance facility in Madagascar in July 2007. India has reached defence agreements with several African states along the Indian Ocean rim, including Mauritius, the Seychelles, Madagascar, Mozambique, Kenya and Tanzania, and stepped up joint military exercises with states in the region. Joint naval exercises were held with South Africa and Brazil off Cape Town in May 2008, as well as joint naval exercises with Seychelles. These followed joint exercises between the air forces of India and South Africa in 2004 and naval exercises in 2005. India provided joint patrols off the coast of Mozambique during the AU summit in 2003 and the World Economic Forum meeting in 2004, as well as providing relief to African states hit by the Indian Ocean tsunami in 2004. Much more than China, India is a major contributor of peacekeepers on the African continent, being the world’s third-largest supplier of UN peacekeeping troops, second only to Pakistan and Bangladesh in 2008.

Brazil and Russia

The other economically significant member of the emerging powers is Brazil.

South America’s political map has not changed since the mid-19th century and the region reflects a degree of irrelevance from global geopolitical issues – exacerbated by the end of the Cold War (that had provided Central America with greater revolutionary relevance) and resurging waves of populism in key countries such as Argentina and Venezuela.33

Brazil has great economic potential – although it faces immense infrastructural needs and challenges. It was able to survive the civil wars and instability in the region largely through its geographical protection from contagion – by the Amazon jungle in the north, the Andes Mountains to the west, a river to the south, as well as the Portuguese language that isolated Brazil from its Spanish-speaking neighbours.

Expected to have the sixth largest GDP by 2050, Brazil currently conducts 1,2 per cent of world trade and has diversified products and partners. Brazilian multinationals such as Petrobras, Vale, Gerdau, Odebrecht, Itau Bank, WEG and SADIA have turned into international players. Brazil has growing foreign reserves, currently standing at $200 billion, and recently became a net foreign investor. The country is not embroiled in political conflicts and is generally seen to have a stabilising influence in the region. Domestically it has a problem with organised crime and extreme levels of income inequality, however. Brazil is expected to become an energy exporter in the near future and new finds could push its oil reserves from 11 to 50 billion barrels – close to the 77 billion reserves of Venezuela.

Brazil has gained particular international attention recently through its massive biofuel production. Currently sugarcane provides 16 per cent of Brazil’s energy requirements; other biomass provides 12,4 per cent. Brazil also has the largest rainforests in the world where deforestation contributes 75 per cent of its carbon dioxide emissions. This devastation contributes significantly to global warming both through the associated emissions as well as the destruction of one of the world’s most important ‘green lungs’. Apart from South–South cooperation – about which much is spoken but little actually happens – Brazil is of lesser relevance to the future of Africa than the United States, China or India, except for its active engagement in the oil sector in Angola and development in Mozambique.

Located between a resource-poor Europe and a resource-hungry and growing China, Russia will continue to use its resources as leverage to increase its global influence and will play an increased role in global energy politics due to its massive oil and gas reserves, but its impact on Africa will also be indirect. Currently a country with around 141 million people, Russia has an ageing and declining population that is projected to drop below 130 million by 2025. During this period the relative proportion of its Muslim minorities will steadily rise – itself a potential source of tension with its Orthodox Slav population. High rates of male middle-age mortality will probably ensure that Russia will escape the burden of dependants that will characterise western Europe and Japan.34

Initially Russia gained great power status as the heir to the Soviet Union, but until the presidency of Vladimir Putin was a weak state unable to compete or exert international influence beyond its ability to contest US dominance of strategic nuclear weapons. Different to its approach to China, the United States actively worked to weaken Russia and has adopted a hard line towards its former global competitor, to the extent of including neighbouring states within NATO, eliciting a resurgence of Russian nationalism and resource instrumentalisation.

Americans like to refer to Russia as ‘Saudi Arabia with trees’, but the reference reveals more about the US attitude towards their Cold War adversary than it reflects reality. Eastern Europe and the former Soviet Union have witnessed a significant decrease in poverty since the Russian financial crisis of 1998/99. A 2005 World Bank study found that while more than 60 million people in these areas still live on less than $2 per day, almost 40 million people moved out of poverty from 1998 to 2003. Three key factors have contributed to poverty reduction: growth in wages, growth in employment, and more adequate social transfers.35 Russia will impact on Africa is either as a source of armaments or through its potential alliance with a country such as China but as a major depository itself does not need African minerals.

Recent events in Georgia, when Russia invaded the breakaway province of South Ossetia in August 2008, revealed that the United States does not have the ability to control the territorial ambitions of Russia to reassert itself in its sphere of influence.

The next two decades will see tremendous growth in countries such as Mexico, Turkey and Indonesia. Developments there will have less impact upon Africa than the global shifts in economic fortunes of the United States, European Union, China, India and Russia.

Global culture?

Ultimately the rise of China, India and others are unlikely to challenge the inter­national system as did Germany and Japan in the 19th and 20th centuries – developments that led to international war and severe and violent disruptions. Because of the growing geopolitical and economic clout, China and the other members of the presumptive new powers, including Brazil and Russia, will have a high degree of freedom to customise their political and economic policies rather than adopting Western norms. Since culture essentially follows power, a world in which Chinese, Indians, Brazilians and Russians are all richer and more confident will therefore be a world of enormous cultural diversity and exoticism, but will still retain many of the characteristics of the West, for it will exist within the framework of a Western civilisation that has dominated the world for several centuries.36 Or perhaps more vividly: ‘The world we are entering will look like Bollywood. It will be thoroughly modern – and thus powerfully shaped by the West – but it will also retain important elements of local culture.’37

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