Emerging powers must be at the global high table [Economy]

If countries like China and India are denied, they have only two choices: either continue to accept a second-class seat in the existing system, or challenge the system itself

Amid the understandable focus on the backlash against globalization so apparent around the world, with the increasing conviction that “Davos Man has no clothes”, anguished op-eds ask: Can globalization be saved? But in the process, we seem to have lost sight of a larger development—that the future of the international system that arose in the immediate aftermath of World War II is itself being called into question.

After two World Wars, numerous civil wars, colonial oppression, and the horrors of the Holocaust and Hiroshima, the far-sighted statesmen of the mid-1940s decided that liberal internationalism, based on the United Nations charter and allied institutions, was the only way to prevent more carnage. For seven decades, that system has largely achieved its goals.

The “old world order” built in 1945 broadly ensured world peace and prevented a third World War, although at the cost of shifting many conflicts to the global periphery. And it did not benefit only the developed world; it also ensured decolonization, promoted development, and found ways to accommodate the voices of newly emerging countries, even if it hasn’t always accommodated their aspirations.

Yet, it is clear that existing arrangements are no longer adequate, as countries like China and India have demonstrated in their demand for greater clout—and in their willingness to explore smaller groupings like Brics (Brazil, Russia, India, China and South Africa) to pool their resources and push for a new order. The existing world powers, however, have made it clear they will not cede influence so easily, even if their leaders complain about the very institutions where their influence is exercised.

Change has been excruciatingly slow in coming. It is absurd that China’s voting power in the World Bank was the same as Belgium’s till 2010 and at the International Monetary Fund (IMF) the same till just over two years ago. But the G20’s effort to create parity in these institutions between the advanced economies and the emerging and transition countries had ground to a halt. Although US leaders technically agreed to IMF voting reforms at the Pittsburgh meeting of the G20 in 2008, the US Congress did not ratify them till a modest change finally occurred in December 2015, nearly eight years later.

It is important to note that countries like China and India— unlike, say, Germany and Japan a century ago—are not seeking to overturn the world order. They seek to obtain redress within the broad framework rather than destabilize the framework itself. All that the “emerging powers” want is a place at the high table. After all, countries realize that in the global system, you are either at the table or on the menu. What the emerging powers have been doing so far is not challenging the global system as much as calling for a new design for world order.

They are entitled to play a key role in helping shape the global order. The international system of the 21st century will have to be more like the World Wide Web: a place of networked partnerships, with links in all directions, some overlapping, others not. The leading lights of the new global system will need to renegotiate its rules of the road; those who have been rule takers for long now feel ready to be rule makers.

India is well qualified, along with others, to help write those rules and define the norms that will guide tomorrow’s world. Rather than confining itself to being a subject of others’ rule-making, or even a resister of others’ attempts, it is in the interests of a country like India (and within India’s current and future capacity) to take the initiative to shape the evolution of these norms as well as to have a voice in the situations within which they are applied. We have the capacity, the resources and the technological skill to help craft global approaches in a variety of areas from cyber space to outer space. But right now, we have no locus standi to do so.

If countries like China and India are denied a place at the global high table, they have only two choices: either continue to accept a second-class seat in the existing system, or challenge the system itself. China, confronting the inadequacies of Bretton Woods, has made it clear that it has little choice but to build its own structures, in its image and in a different mould. The Brics’s New Development Bank is essentially the Chinese showing the world that in the absence of a level-playing field within the existing system, they are prepared to construct their own playing field. In this case, India was happy to play along: it had an interest in sending the same message, though its capabilities are very different from China’s.

This is not surprising. As countries acquire economic and military power, they start exercising their geopolitical muscle. The challenge for advocates of world order is to accommodate emerging powers within a framework of universal and stable rules and global structures that ensure everyone a fair deal, appropriate for their size, capabilities, and contributions to the international system. The leaders of the developed West will have to reconcile themselves to this, and make room with grace, instead of undermining these institutions by stubbornly clinging on to their positions of privilege within them.

They are not, however, doing so. Today’s world leaders appear to lack the breadth of vision and the generosity of spirit of those who created the post-1945 world order. By controlling access to the system they dominate and barring the door to new entrants, they have left those outside little choice. A country like China has shown, through its Belt and Road Initiative, that it is capable of constructing an entirely alternative global system to the prevailing one. What that might mean for the world order established in 1945 is anybody’s guess.

Globalization can still be rescued, but we need to allow new players to do the rescuing. Don’t send in the Marines.