Brian Holmes
Tue, 08 Mar 2011 19:00:18 -0800
< barak> zaujimave.. z kosiara sucasnej geopolitiky.. aj ad arab spring..
01:53 < barak> tvrdia ze ziadna velmoc sa nechce uchopit role globalneho policajta lebo je dost bizi sama so sebou, co globalizacia standardizovala sa zacne pomaly rozpadat, a staty zacnu viac chranit vlastne trhy protekcionizmom
/ !!!! “global public goods” (mostly security, a sordid boon) !!!???
/ spinava dobrocinnost (OLPC?), alebo co tym mysli?
Ian Bremmer and Nouriel Roubini
/ 8 ben IV sc & 4 men V ar 59
Last month we had a strong debate on Nettime about the nature and
meaning of the Arab Spring. The nature of it is up to the participants
to say, but in my view the fall of authoritarian regimes in North Africa
represents at least a partial collapse of one of the pillars on which
the transnational state-form of the present was founded, way back in the
late seventies-early eighties when Trilaterlaism (or “Triad Power”)
first got off the ground, on the backs of workers in the Arab world, in
Latin America, and then increasingly in China. Now the rise of the BRIC
countries and the development of the Gulf has entirely overtaken that
old hegemony.
In this paper by Nouriel Roubini and his wunderkind sidekick Ian
Bremmer, the ineffectiveness of the present G-20 becomes the signal of
chaos in the world system. Far from an abstract fancy hatched among the
students of Immanuel Wallerstein, world hegemony is a daily concern of
the corporate classes because of its provision of so-called “global
public goods” (mostly security, a sordid boon). Roubini and Bremmer
don’t see anyone delivering the goods in the near future.
I’m sending the article because it nails the central point on which my
analysis of the Arab Spring is based: the collapse of the Trilateral
system that was perfectly represented by the members of the G-7.
However, the paper was written before the events in Egypt and anyway,
it’s not certain these guys can look beyond the sagging values of
economic growth. What I see in the future is a wide-open world where
everyone can make a difference amidst the most unexpected circumstances.
For the moment at least this is an incredibly light period, a time for
escaping gravity. It’s a time for invention. Learn some new moves in a
zero-G world.
ciao, BH
***
Foreign Affairs, January 31, 2011
“A G-Zero World”
The New Economic Club Will Produce Conflict, Not Cooperation
Ian Bremmer and Nouriel Roubini
This is not a G-20 world. Over the past several months, the expanded
group of leading economies has gone from a would-be concert of nations
to a cacophony of competing voices as the urgency of the financial
crisis has waned and the diversity of political and economic values
within the group has asserted itself. Nor is there a viable G-2 — a
U.S.-Chinese solution for pressing transnational problems — because
Beijing has no interest in accepting the burdens that come with
international leadership. Nor is there a G-3 alternative, a grouping of
the United States, Europe, and Japan that might ride to the rescue.
Today, the United States lacks the resources to continue as the primary
provider of global public goods. Europe is fully occupied for the moment
with saving the eurozone. Japan is likewise tied down with complex
political and economic problems at home. None of these powers’
governments has the time, resources, or domestic political capital
needed for a new bout of international heavy lifting. Meanwhile, there
are no credible answers to transnational challenges without the direct
involvement of emerging powers such as Brazil, China, and India. Yet
these countries are far too focused on domestic development to welcome
the burdens that come with new responsibilities abroad.
We are now living in a G-Zero world, one in which no single country or
bloc of countries has the political and economic leverage — or the will
— to drive a truly international agenda. The result will be intensified
conflict on the international stage over vitally important issues, such
as international macroeconomic coordination, financial regulatory
reform, trade policy, and climate change. This new order has
far-reaching implications for the global economy, as companies around
the world sit on enormous stockpiles of cash, waiting for the current
era of political and economic uncertainty to pass. Many of them can
expect an extended wait.
THE OLD BOYS’ CLUB
Until the mid-1990s, the G-7 was the international bargaining table of
greatest importance. Its members shared a common set of values and a
faith that democracy and market-driven capitalism were the systems most
likely to generate lasting peace and prosperity.
In 1997, the U.S.-dominated G-7 became the U.S.-dominated G-8, as U.S.
and European policymakers pulled Russia into the club. This change did
not reflect a shift in the world’s balance of power. It was simply an
effort to bolster Russia’s fragile democracy and help prevent the
country from sliding back into communism or nationalist militarism. The
transition from the G-7 to the G-8 did not challenge assumptions about
the virtues of representative government or the dangers of extensive
state management of economic growth.
The recent financial crisis and global market meltdown have sent a much
larger shock wave through the international system than anything that
followed the collapse of the Soviet bloc. In September 2008, fears that
the global economy stood on the brink of catastrophe hastened the
inevitable transition to the G-20, an organization that includes the
world’s largest and most important emerging-market states. The first
gatherings of the club — in Washington in November 2008 and London in
April 2009 — produced an agreement on joint monetary and fiscal
expansion,increased funding for the International Monetary Fund (IMF),
and new rules for financial institutions. These successes came mainly
because all the members felt threatened by the same plagues at the same
time.
But as the economic recovery began, the sense of crisis abated in some
countries. It became clear that China and other large developing
economies had suffered less damage and would recover faster than the
world’s wealthiest countries. Chinese and Indian banks had been less
exposed than Western ones to the contagion effects from the meltdown of
U.S. and European banks. Moreover, China’s foreign reserves had
protected its government and banks from the liquidity panic that took
hold in the West. Beijing’s ability to direct state spending toward
infrastructure projects quickly generated new jobs, easing fears that
the decline in U.S. and European consumer demand might trigger
large-scale unemployment and civil unrest in China.
As China and other emerging countries rebounded, the West’s fear and
frustration grew more intense. In the United States, stubbornly high
unemployment and fears of a double-dip recession fueled a rise in
antigovernment activism and shifted power to the Republicans.
Governments fell out of favor in France and Germany — and lost
elections in Japan and the United Kingdom. Fiscal crises provoked
intense public anger from Greece to Ireland and the Baltic states to Spain.
Meanwhile, Brazil, China, India, Turkey, and other developing countries
moved forward as the developed world remained stuck in an anemic
recovery. (Ironically, the only major developing country that has
struggled to recover is the petrostate Russia, the first state welcomed
into the G-7 club.) As the wealthy and the developing states’ needs and
interests began to diverge, the G-20 and other international
institutions lost the sense of urgency they needed to produce
coordinated and coherent multilateral policy responses.
Politicians in Western countries, battered by criticism that they have
failed to produce a robust recovery, have blamed scapegoats overseas.
U.S.-Chinese political tensions have risen significantly over the past
several months. China continues to defy calls from Washington to allow
the value of its currency to rise substantially. Policymakers in Beijing
insist that they must protect their country during a delicate moment in
its development, as lawmakers in Washington become more serious about
taking action against Chinese trade and currency policies that they say
are unfair. In the past three years, there has been a sharp spike in the
number of domestic trade and World Trade Organization cases that China
and the United States have filed against each other. Meanwhile, the G-20
has gone froma modestly effective international institution to an active
arena of conflict.
THE EMPTY DRIVER’S SEAT
There is nothing new about this bickering and inaction. Four decades
after the Nuclear Nonproliferation Treaty, for example, the major powers
still have not agreed on how to build and maintain an effective
nonproliferation regime that can halt the spread of the world’s most
dangerous weapons and technologies. In fact, global defense policy has
always been essentially a zero-sum game, as one country or bloc of
countries works to maximize its defense capabilities in ways that
(deliberately or indirectly) challenge the military preeminence of its
rivals.
International commerce is a different game; trade can benefit all
players. But the divergence of economic interests in the wake of the
financial crisis has undermined global economic cooperation, throwing a
wrench into the gears of globalization. In the past, the global economy
has relied on a hegemon — the United Kingdom in the eighteenth and
nineteenth centuries and the United States in the twentieth century —
to create the security framework necessary for free markets, free trade,
and capital mobility. But the combination of Washington’s declining
international clout, on the one hand, and sharp policy disagreements, on
the other — both between developed and developing states and between
the United States and Europe — has created a vacuum of international
leadership just at the moment when it is most needed.
For the past 20 years, whatever their differences on security issues,
governments of the world’s major developed and developing states have
had common economic goals. The growth of China and India provided
Western consumers with access to the world’s fastest-growing markets and
helped U.S. and European policymakers manage inflation through the
import of inexpensively produced goods and services. The United States,
Europe, and Japan have helped developing economies create jobs by buying
huge volumes of their exports and by maintaining relative stability in
international politics.
But for the next 20 years, negotiations on economic and trade issues are
likely to be driven by competition just as much as recent debates over
nuclear nonproliferation and climate change have. The Doha Round is as
dead as the dodo, and the World Trade Organization cannot manage the
surge of protectionist pressures that has emerged with the global slowdown.
Conflicts over trade liberalization have recently pitted the United
States, the European Union, Brazil, China, India, and other emerging
economies against one another as each government looks to protect its
own workers and industries,often at the expense of outsiders. Officials
in many European countries have complained that Ireland’s corporate tax
rate is too low and last year pushed the Irish government to accept a
bailout it needed but did not want. German voters are grousing about the
need to bail out poorer European countries, and the citizens of southern
European nations are attacking their governments’ unwillingness to
continue spending beyond their means.
Before last November’s G-20 summit in Seoul, Brazilian and Indian
officials joined their U.S. and European counterparts to complain that
China manipulates the value of its currency. Yet when the Americans
raised the issue during the forum itself, Brazil’s finance minister
complained that the U.S. policy of “quantitative easing” amounted to
much the same unfair practice, and Germany’s foreign minister described
U.S. policy as “clueless.”
Other intractable disagreements include debates over subsidies for
farmers in the United States and Europe, the protection of intellectual
property rights, and the imposition of antidumping measures and
countervailing duties. Concerns over the behavior of sovereign wealth
funds have restricted the ability of some of them to take controlling
positions in Western companies, particularly in the United States. And
China’s rush to lock down reliable long-term access to natural resources
— which has led Beijing to aggressively buy commodities in Africa,
Latin America, and other emerging markets — is further stoking conflict
with Washington.
Asset and financial protectionism are on the rise, too. A Chinese
state-owned oil company attempted to purchase the U.S. energy firm
Unocal in 2005, and a year later, the state-owned Dubai Ports World
tried to purchase a company that would allow it to operate several U.S.
ports: both ignited a political furor in Washington. This was simply the
precursor to similar acts of investment protectionism in Europe and
Asia. In fact, there are few established international guidelines for
foreign direct investment — defining what qualifies as “critical
infrastructure,” for example — and this is precisely the sort of
politically charged problem that will not be addressed successfully
anytime soon on the international stage.
The most important source of international conflict may well come from
debates over how best to ensure that an international economic meltdown
never happens again. Future global monetary and financial stability will
require much greater international coordination on the regulation and
supervision of the financial system. Eventually, they may even require a
global super-regulator, given that capital is mobile while regulatory
policies remain national. But disagreements on these issues run deep.
The governments of many developing countries fear that the creation of
tighter international rules for financial firms would bind them more
tightly to the financial systems of the very Western economies that they
blame for creating the recent crisis. And there are significant
disagreements even among advanced economies on how to reform the system
of regulation and supervision of financial institutions.
Global trade imbalances remain wide and are getting even wider,
increasing the risk of currency wars — not only between the United
States and China but also among other emerging economies. There is
nothing new about these sorts of disagreements. But the still fragile
state of the global economy makes the need to resolve them much more
urgent, and the vacuum of international leadership will make their
resolution profoundly difficult to achieve.
WHO NEEDS TO DOLLAR?
Following previous crises in emerging markets, such as the Asian
financial meltdown of the late 1990s, policy makers in those economies
committed themselves to maintaining weak currencies, running current
account surpluses, and self-insuring against liquidity runs by
accumulating huge foreign exchange reserves. This strategy grew in part
from a mistrust that the IMF could be counted on to act as the lender of
last resort. Deficit countries, such as the United States, see such
accumulations of reserves as a form of trade mercantilism that prevents
undervalued currencies from appreciating. Emerging-market economies, in
turn, complain that U.S. fiscal and current account deficits could
eventually cause the collapse of the U.S. dollar, even as these deficits
help build up the dollar assets demanded by those countries accumulating
reserves. This is a rerun of the old Triffin dilemma, an economic
observation of what happens when the country that produces the reserve
currency must run deficits to provide international liquidity,deficits
that eventually debase the currency’s value as a stable international
reserve.
Meanwhile, debates over alternatives to the U.S. dollar, including that
of giving a greater role to Special Drawing Rights (an international
reserve asset based on a basket of five national currencies created by
the IMF to supplement gold and dollar reserves), as China has
recommended, are going nowhere, largely because Washington has no
interest in any move that would undermine the central role of the
dollar. Nor is it likely that China’s yuan will soon supplant the dollar
as a major reserve currency, because for the yuan to do so, Beijing
would have to allow its exchange rate to fluctuate, reduce its controls
on capital inflows and outflows, liberalize its domestic capital
markets, and create markets for yuan-denominated debt. That is a
long-term process that would present many near-term threats to China’s
political and economic stability.
In addition, energy producers are resisting policies aimed at
stabilizing price volatility through a more flexible energy supply.
Meanwhile, net energy exporters, especially Russia, continue to use
threats to halt the flow of gas as a primary foreign policy weapon
against neighboring states. Net energy consumers, for their part, are
resisting policies, such as carbon taxes, that would reduce their
dependency on fossil fuels. Similar tensions derive from the sharply
rising prices of food and other commodities. Conflicts over these issues
come at a time when economic anxiety is high and no single country or
bloc of countries has the clout to help drive a truly international
approach to resolving them.
From 1945 until 1990, the global balance of power was defined primarily
by relative differences in military capability. It was not market-moving
innovation or cultural dynamism that bolstered the Soviet bloc’s
prominence within a bipolar international system. It was raw military
power. Today, it is the centrality of China and other emerging powers to
the future of the global economy, not the numbers of their citizens
under arms or the weapons at their disposal, that make their choices
crucial for the United States’ future.
This is the core of the G-Zero dilemma. The phrase “collective security”
conjures up NATO and its importance for peace and prosperity across
Europe. But as the eurozone crisis vividly demonstrates, there is no
collective economic security in a globalized economy. Whereas Europe’s
interest rates once converged based on the assumption that southern
European countries were immune to default risks and eastern European
states were lined up to join the euro, now there is fear of a contagion
within the walls that might one day bring down the entire eurozone
enterprise.
Beyond Europe, those who make policy, whether in a market-based
democracy such as the United States or an authoritarian capitalist state
such as China, must worry first and foremost about growth and jobs at
home. Ambitions to bolster the global economy are a distant second.
There is no longer a Washington consensus, but nor will there ever be a
Beijing consensus, because Chinese-style state capitalism is designed to
meet China’s unique needs. It is that rare product that China has no
interest in exporting.
Indeed, because each government must work to build domestic security and
prosperity to fit its own unique political, economic, geographic,
cultural, and historical circumstances, state capitalism is a system
that must be unique to every country that practices it. This is why,
despite pledges recorded in G-20 communiqués to “avoid the mistakes of
the past,” protectionism is alive and well. It is why the process of
creating a new international financial architecture is unlikely to
create a structure that complies with any credible building code. And it
is why the G-Zero era is more likely to produce protracted conflict than
anything resembling a new Bretton Woods.