The rise of Asia and the West’s response (Part 2)

Mahbubani’s three scenarios and Asia’s March to Modernity
 
Kishore Mahbubani discusses some variables in, and alternatives to, the current international order and its transformation process, particularly in the economic sphere, distinguishing three scenarios:
 
- Asia’s March to Modernity;

 
- The retreat of Western economies into Protectionist fortresses;
 
- Western triumphalism.
 

First scenario. For Mahbubani, the rise of the West, at the time, transformed the world. The rise of Asia will result in an equally significant transformation. In this scenario, Asia’s "March into Modernity" will be of the highest historic importance. "If it succeeds, it will ensure a more peaceful, stable and prosperous world " (Mahbubani, 2008:14).
 
Mahbubani defines modernity within the framework of "the physical and ethical universe of Western societies" (Mahbubani, page 2). He views the spread of Asia - and the developing world in general – in terms of access to goods and the current dignified, middle-class Western standard of living. The author stresses that in rural areas of India, 700 million farmers and villagers now account for the largest proportion of consumption in the country, while 390 million Indians still live on one U.S. dollar a day or less (Mahbubani 2008 : Pgs. 16 and 17).
 
However, Mahbubani cannot fail to confront the criticisms of China for its closed political regime. According the author (Mahbubani 2008:18) "when many Western observers look at China they cannot see beyond the lack of a democratic political system" and are not cognizant of "the widespread democratization of the human spirit taking place".
 

This may be so, but certainly it is certainly a debatable point. The author himself later acknowledges that the Chinese Communist Party has passed the “point of no return” and is struggling and facing a new reality and that there is an opening of minds and culture that is unstoppable. (Mahbubani 2008: 146).
 
Mahbubani stresses that modernity and the march towards it "leads to an almost inevitably to greater adherence to the rule of law", to "an order based on rules." In the case of China, he states that the government understands that no modern economy works without an effective rule of law in issues such as property rights.

An integral part of the march to modernity is the implementation in Asia of a free market economy. It has become a "pillar" of development, just as it was in the West 150 years ago. The author views the Chinese case as being symptomatic of the double-natured economy - stemming from Deng Xiaoping’s modernizations - which includes a market-based and centrally-planned economy. Compare the progress of Singapore - one of the 4 Asian Tigers - which grew at an average annual rate of 8.6% between 1965 -1995, from a GDP of U.S. $ 1 billion to U.S. $ 86 billion - with that of Schenzhen, the first of China’s special economic zones that was "a small fishing village" (Mahbubani, page 54) in 1979. Its population increased from 30,000 to 11 million and its economy at 28% per annum between 1980 and 2004, representing 13% of China’s total exports.

Another that dimension of the march is the "astonishing" level to which Asian researchers have come to dominate in science and technology. China allocated 1.3% of GDP in 2005 (versus 0.6% in 1995) and Korea increased funding in this area from U.S. $ 9.8 billion in 1994 to U.S. $ 19.4 billion in 2004. This process is not spontaneous and the author points out that in the case of India, Prime Minister Nehru founded the first institute of technology near Calcutta in 1951.
 
The March to Modernity is the pre-eminent arena and will lead, according to Mahbubani, to a more ethical and peaceful world by various means and, among them, will be the overcoming or reduction of poverty, which will facilitate the improvement of education, health and other fields.

Second scenario. Faced with this scenario, the West has two choices: accept the modernization trend and work together with Asia in "opening up the world order" or a second scenario involving a retreat into their own fortresses in terms of politics and economics.
 
As of early 2008, the West seems to travelling in both directions; the latter being the strongest. A major indication of this is the declaration of President Sarkozy in June 2007: "The word 'protection' is no longer a taboo." To Mahbubani for many decades after the West praised the virtues of free trade with Asian countries, "the truth is that large parts of the West are losing faith in free trade" (Mahbubani, page 26).

Although there has always been protectionism in the developed countries of the capitalist world, after Bretton Woods in the 1940s, they experienced a gradual liberalization, which was followed by a dramatic increase in international trade (exports jumped from $ 58 billion in 1948 to $ 9 trillion in 2004). A consolidation occurred at the Uruguay Round (GATT) and with the creation of the WTO in 1994. This meant that "the West remained loyal to its principles while maintaining the open global trading system" (page 27) and that the current system became one of the most open systems to date.

However, in parallel, new winds of change have been blowing since the end of the Cold War. Western countries (mainly the United States) have trade deficits with Asia. The United States increased its debt with China from $ 34 billion in 1994 to $ 202 billion in 2005). This and other factors have created the basis for a reversal of free trade practices.

Governments are sensitive to political trends. Political support for protectionism has grown in both Europe and the United States. "The European Union has begun to retreat into a mindset of Fortress Europe” causing “damage to global interests"(Mahbubani, pages 29 and 34). For the author, "the major threat to the boom would be the United States losing confidence in free-market ideology which allowed the global economy to boom during the 1990s" (Mahbubani, page 37).

Mahbubani fears that these negative trends, now present in trade, may transfer to foreign investment and political issues linked to security. In another area, Europe is slowing down the change process at the very institutions which shape global order, given its very high participation and veto power (Mahbubani, pages 40 and 41).

If this European "inflexibility" is replicated by the United States, "the painful stage of retreat (into protectionism)could well become a reality" (Mahbubani, page 42).

Third stage. The third scenario for our author is the Westernization of the world and the "ultimate triumph of the West." This scenario was prophesied at the end of the Cold War by the predictions of Fukuyama in his End of History theory and comments made by people such as then Secretary of State James Baker for a "new community of democracies between Vancouver and Vladisvostok", which left out Japan whereas it was already part of the OECD and the G-7, as well as India, the world's most populous democracy (Mahbubani, page 42).

Those visions would not have been realized, because the West's triumph over the USSR was not due to their political system but rather “the free market economy”. According to Mahbubani, the vision of Deng Xiaoping would have prevailed because China introduced a market economy, whereas Gorbachev preferred to emphasize democratic progress. He also considers that the triumphalism at the beginning of the 1990s did not continue because of the “belief that cultural differences did not matter because the West's liberal democratic society was applicable to all societies” (page 48).

The aspiration of an "eternal victory” never materialized. If the March to Modernity finally succeeds, the West will no longer be alone in its role as the party who is “responsible" for everything which occurs in the international community. It will be joined millions of other stakeholders who are equally responsible. “This may make the world more stable and peaceful, even for those living in the West”(Mahbubani, page 50).

We recognize that this is a new vision for those of us who consider ourselves Westerners.

Some visions for the near future and the global order

We should mention some of Mahbubani’s insights into the future of the Asian perspective in the coming decades.

Long-term growth in Asia will occur via its adaptation of the several “pillars” of Western culture: the free market, science, technology, meritocracy, culture of peace “the peaceful rise that China would approve of” (Mahbubani, page 81), the Rule of Law and education.

Asians have become “addicted” to education, making it accessible to the masses. At the same time, they have shown a great admiration for Western universities, from which Asians "have benefited enormously". Thus, India is the leads the world in international students with 76,503 students traveling to the United States during the 2005-2006 academic year. China followed with 62,582 South Korea with 58,847 and Japan with 38,712. Mahbubani stressed that "Western universities are truly unique in the sense that they do not see their mission as directed exclusively to the West." (Mahbubani, pages 90 and 91). Furthermore, the "brain drain" reversing and a study by the University of Chicago shows that 84% of Indian students are planning to return to India in the near future.

In his analysis of the current international system, Mahbubani gives his own vision. It is interesting as a basis for analysis:

- The current global institutions like the UN and its Security Council, the schemes of cooperation and governing the multilateral trading system "must evolve and change to adapt to new realities" (page 235);

- The new social and political order will require the application of principles of Western democracy - rule of law, social justice – and other old notions like associationism and pragmatism.

- There are only four viable candidates to provide global leadership at the present time: the United States, the European Union, China and India. The U.S. is obviously the strongest candidate, just as it has been since 1945. But the U.S. of 2008 is a country very different from that of 1945 and with less self-confidence. Europe is also a candidate who dominated during 200 years of world history, "but has not been able to extend its beneficence beyond its territory" (page 237).

- History teaches that "the leadership, during any era, is provided by the emerging powers." Thus, the U.S. replaced the United Kingdom (page 238). By the same logic, China should eventually assume "the mantle of global leadership" (page 238).

- There is a feeling of pessimism in parts of Africa, Latin America and the Islamic world regarding their prospects for development;

- China has woken up "but it lacks a vision for the world." The Chinese mind has always focused on the development of Chinese civilization. "China is ready today to be a stakeholder in the world order, but shows little interest in driving the creation of a new global order." (page 239) Its leaders are also aware that they need several decades to eliminate rural poverty.

The leadership of India is more cosmopolitan than that of China. According to Mahbubani, at a time when the West is convinced that it cannot coexist with the Islamic world, "the example of India, though imperfect, is better than any other. With the growing cultural distance between East and West, India could once again resume its natural role as a meeting point for the great civilizations." (page 239)

Japan emerged with the conscious desire to join the West. China has no such aspirations and the future direction of India is not fixed yet (page 165);

Instruments widely used in recent decades, the free trade agreements (FTAs) are of interest to Mahbubani, who gives them a role beyond the mere commercial. "In practice, they represent a strategic calculation that both parties have a long-term interest in forging a closer society, that is, if one party is interested in strengthening the other."(page 231)

-       Also our author raises the complex issue of democracy and global governance in a new world order. In his opinion "world government is not the answer. World governance is what is urgently needed."(page 242)

-       A thesis of Mahbubani: "The time has come for the West to consider the possibility that other nations and communities are just as competent, if not more competent, to handle regional and global challenges." (page 216)