Monday, April 20, 2009

The Course of Nations

I was browsing through the Times of India yesterday and my eyes fell upon the column Swaminomics. I do not follow the column normally, I used to read the centre page of ToI for Jug Suraiya once, but never anything else. However, what made me read the article was the headline: "It's Goodbye Chindia and Hello Chimerica". The article revisits the relevance of the term "Chindia" - China and India hyphenated during the years 2003-2008. Swaminathan points out that the recently concluded G-20 meeting could have been a G-2 meeting for US and China seemed to be the only countries that mattered.

I think the article is on the dot and timely. Perhaps this idea is a well known idea among geopolitical experts, but the point is China has really left us behind as an emerging star. To put it in clearer terms, pre-2008, if someone had asked me to bet on the emerging super powers in say 30 years time, I would have put my money on China, India and Russia. Post the crisis I would put all my money on China. It is not a matter of China growing at 11-12% and we growing at 9% (at the peak) What matters is the thinking in the political establishment. To quote from the article:

"India scarcely matters. It is still a country that instinctively seeks aid and foreign concessions. On the international scene it is a taker, not a giver. China, however, is now a giver. In the proposed expansion of the IMF's lending,China has offered to supply $40 billion, against $100 billion from Japan and possibly the US. India does not figure in this giver's list, it would rather be a receiver."

There are many critics of the US. There are pages and pages written about US and its hegemony. There is some justification to that. But where was the action when the US became vulnerable during this crisis. Chavez can rail all that he wants, but when this crisis hit, did Venezuala emerge as a beacon for the world? Did Chavez or Castro demonstrate the power of an alternative model? The EU also did not emerge as a clear counter. We are still left looking at the Dow Jones and S&P for cues. And the world is rallying on the news that there are signs of economic recovery in China.

The rise and fall of nations is to me, the most exciting aspect of history. If you want to go back and study history, I say, start with post-15th century history. Pre-15th century is important,yes, but the history of various nation states is more interesting and instructive.

Between 15th-16th centuries, Spain, with its "conquesting" sailors and access to riches in South America was the most powerful nation in the world. From the 17th century to World War II, Britain was the most powerful nation in the world. In between, Britain faced a challenge to its supremacy first from the French and later in the 19th and first half of 20th centuries from Germany. Post World War II, with a weakened Europe, US became the most powerful nation in the world. A great part of the credit goes to the visionary Marshall Plan, where the US came up with a huge package for European Reconstruction. In other words, when the older powers were reeling, the US emerged as the financial big brother.

What is important to understand is the following: unlike a corporation where there is a hierarchy which an employee negotiates to get to the top, there is no such hierarchy in world politics. All the global organizations are more or less influenced. The struggle to be the most powerful nation is a simple, Darwinian struggle and the nation that has the resources and is willing to commit them for the fight will win. You can say it crudely like a two-bit gangster would say, "No one hands anything to you. Ya gotta take it" (Jack Nicholson in "The Departed") Or you could say politely that China has a strategic vision in world politics. Either way, the motivation is the same.

The nature of the resources has changed with time, pre WW II it was guns and tanks. Now, it is economic might. During this crisis the most powerful nations in the world were on their knees begging for money. If you had the money and were ready to twist some arms, the prospect of jumping to another league was there.

At this stage, a qualification is necessary. I am not saying that just because China aspires to be a superpower, we must too. There is no need. Especially, if China had been somewhere far away, near Australia or something, we could have said, "Good for them" and gone about our lives. And just because they are neighbours does not mean we too must strive to equal them every way. Swaminathan's point of Chindia being dead is right on. If there were delusions in that direction, they must be disabused of. My point is: while crises are tough, and unfair to many, they create cracks in the power structure which the underdog or upstart can exploit.


Kartik said...

I think China has so much of dollar reserves that it has interest in becoming Chimerica. When India will have as much interest (and money) then only India should become giver.

It's like you have got one rupee to spend on food, clothes and charity. even if it's not reaching fully where it should, at least the priorities are clear.

themiddler said...


Agreed. One must do charity only after the house is in order. Just that I am surprised to find China having the money to do this kind of funding.

Anonymous said...

The thing with China, how they've been able to come up so suddenly lies in Deng Xiaoping's guiding philosophy about keeping a low profile. China has succeeded so far, but now it has to raise its profile. For some reason, I have this feeling that the world is going to be a lot more hostile towards China than the US or USSR. China is not seen as a responsible country...But then, there are only some things money can't buy, for everything else there'll be SDRs (I just realise I've writte quite a bit of crap here....but what the makes me feel good :))

Desba said...

However corrupt China may be... one thing they have got to change everything inside is a powerful central administration. Their speed of execution compensates for everything they lack. No wonder these people crying for democracy in China have nothing to complain about.

India will take a long time to even settle all its debts

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