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Many nation-states straddling the fine-line between the developing and developed world (Russia, China, Brazil, Turkey, South Africa, India et al.) have led the charge away from the dominating concepts of unfettered free-markets even before the market collapse, in 2008. The sudden shift by so many have cause many political scientists to declare this as the end of America’s dominance in capital markets, though these statements seem to be more of an affirmation of the obvious rather than a prophetic vision of the future.  For some, the shift in global markets have brought about claims of an increasingly multi-polar world, basing their assertions primarily on the need to reform inter-governmental institutions and finding more relevant programs coming from the G-20, rather than the G-7.

The more likely future scenario is one written about by Richard N Haass. In The Age of Nonpolarity: What Will Follow U.S. Dominance, he asserts that “the principal characteristic of twenty-first-century international relations is turning out to be nonpolarity: a world not dominated by one or two or even several states but rather by dozens of actors possessing and exercising various kinds of power”. Haass states that this new period will be “characterized by numerous centers with meaningful power”, which will be brought about because “states are being challenged from above, by regional and global organizations; from below, by militias; and from the side, by a variety of nongovernmental organizations and corporations”. The shift in influence, from international to regional, and the rise of sovereign wealth funds has created a diametric shift away from the status quo, which has diminished the power and prestige of the Western system.

The policy decisions introduced and implemented by the developing world will have a profound affect on international markets, for these countries are major sources of workers and technology as well as capital and consumers. The motivation behind the rise of the developing world stems from dissatisfaction with Western economic policies – some could viably argue it was due to institutionalized, exploitative agendas – and interventionism, coupled with the lack of interest in seeing nations develop a stable and secure future. Fear has risen for many Americans – particularly the nationalists – that the nation’s standing is being diminished in a time of economic turmoil. China’s increasing strength and Brazil’s successful revival has led many to believe that the United States will soon fall in importance, leading the country to be vulnerable to outside influences.

Eventually some nation-states will surpass the United States in GDP rankings; however, this does not mean that they will be able to exert any more influence on American behavior then before. China and India’s fast paced growth will be offset by their large populations and social obligations leaving limited room for financing overseas investments and influencing international relations – on an economic level. Moreover, Japan’s shrinking population, ageing demographics, and ill-will between the federal government and central bank will not allow the country to play a large role in the future of the international system.
On the other side of the United States, the European Union is becoming increasingly disjointed and the economic collapse has ushered in a consideration for reorganizing the regional currency. Lastly, Russia’s commodity-based economy and increasingly authoritarian government will hamper the country’s ability to inspire outside investors to believe that the state is worth their investments.
Countries in the global South tend to focus more on developing regional strategies than fostering international prowess.

Many countries in the developing world have turned their backs on the fundamental principles defining the Western dominated market system and began to construct regional alliances devoid of strong Western influence. The success of these alliances stems from a desire to strengthen communitarian and pluralistic philosophies, in which the nation-states institute self-serving policies while being concerned with their neighbor’s future development. It seems that the concepts of concern for others and willingness to rise as a collective are alien to many in the West. These developing world interests may not define all policies they implement, though the desire to initiate universally positive policies is stronger in weaker economies than in the developed world.

In focusing on regional interests, the authors of Beyond the Washington Consensus stated that the developing world has “better terms of trade, aid, and investment than Northern countries – including substantial cancellations of debt; by so doing they also intensify competitive pressures on Northern countries to provide Southern countries with better terms than they otherwise would”. The pressures put forth by the developing world may be duplicitous and wholly self-serving to a few, stronger developing nation-states, but the transformative period overtaking the international system has given credence to – in thus a louder voice to – states struggling to achieve a more stable environment.

China has been deemed the leader of the developing world and has been asked by the West to take on more responsibility in international affairs. One the one hand, it makes sense for the West to imply that China needs to become a leader in world events, in order to share the burden of being increasingly involved in stabilizing regional and national crises. On the other hand, the West is implicitly acknowledging that they no longer have the capacity to fulfill the obligations it has created for itself throughout the world, to become the policemen of the international system. What has been occurring is the proverbial ‘rise of the rest’, which has moved beyond the initial through of political and economic jostling for supremacy, but has moved toward a fight over national models and plutocratic ideologies.

The West has willingly marginalized itself in industrial policy – by distancing itself from the concepts via outsourcing – and has increasingly limited sway in the programs being implemented by international organizations; these noticeable transitions represent a clear shift in the consensus accepted by the world community. The transition is a new concept for many in the West and will cause increased tensions between global powers, because this will come as a surprise for many current office holders, in the developed world, that continue to ignore the obvious in order to peddle their own concepts of reality.

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Comment Preferences

  •  Tip Jar (4+ / 0-)

    "Politics is a means of preventing people from taking part in what properly concerns them." - Paul Valery

    by Epsilon on Fri Apr 01, 2011 at 05:42:18 PM PDT

  •  Ecomnomists and political scientists (0+ / 0-)

    Like to generalize about the battle for mind-share between the so-called Washington Concensus and Beijing Concensus, the former being Democracy-Free Market Capitalism and the later Technocratic Authoritarianism with a large state sector.

    But this is oversimplification, intelletually lazy and seems contradictory to the facts.

    Developing nations have various economic, cultural and political situations and will find their own models. While they will look to places like China and Brazil as leaders with models worth emulating, just the difference between these two nations suggests there is not a one-size-fits-all model and does not need to be for countries to find common ground for cooperation to the extent they find benefitial, and also suggests such relationships will tend to be more fluid. I would add that neither are static; while Brazil has found greater success by strengthening the reach of the state in the economic and social sectors, China has gone both direction at once with a economy that has transitioned from 100% state to >60% private in just 30 years, but more recently, accelerating the social and economic development process by reasserting the role of the state as a central planning mechanism generally to positive effect.  It seems the latter part is what developed nations seem to, by turns, envy and repudiate as "unfair", having bought into a model that seems to have reached it's limits yet insisting that taking a different path is somehow against the rules (countries suh as Sweden being notable exeptions).

    The current issue (March/April) of Foreign Affairs may interest you as it has several articles that touch on this subject from different perspectives and one rather thought-provoking article on the impact the Tea Party Movement may have on US foreign policy.

    Sorry I missed your first part, will go back to have a look now.

    T+R

    What about my Daughter's future?

    by koNko on Sat Apr 02, 2011 at 04:04:10 AM PDT

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