August 26, 2008
Courtesy Of TimesOnline
Serious sport, George Orwell said, is war minus the shooting. If so, the Beijing Olympics were a world war that the United States believes it won (with most medals in total) but which the rest of the world agrees was won by China (with the most golds).
The Olympics have been a friendly battle between the Great Powers that mirrors how the world’s wealth and might is moving from West to East. Away from the Bird’s Nest, there is an even more worrying competition of ideas. Terrorism and global warming have already burst on to the stage this century as two existential threats to people around the world. Without the nihilism of the 9/11 attacks or the apocalyptic warnings of climate change, the arriviste autocracies – China, Russia and the Gulf – have emerged to challenge not just the legitimacy but also the desirability of Western-style democratic liberalism.
In this same Olympic fortnight, Russia waged and won a real war with Georgia, which it followed yesterday by threatening to bar Nato access to Afghanistan through Russian-controlled territory. The Abu Dhabi Investment Authority, already a saviour of the US banking giant Citi-group, made quiet moves towards acquiring a key stake in the Daimler corporation. And Barack Obama finalised his choice of Senator Joe Biden as running-mate, chiefly for his credentials in foreign policy.
The irony of this choice may be how little of Mr Biden’s foreign policy experience proves relevant. For in confronting the new autocracies the next US president must grapple with political philosophies that are much less susceptible to ridicule than global jihad, and much more likely to upend the Western model of liberal democracy that has underpinned the prosperity of the free world since 1945.
The autocrats, chief among them Hu Jintao and Vladimir Putin, have thrived by offering their citizens dramatic increases in personal wealth in return for political subservience. In the process they have defied Western forecasts of mass yearnings for democracy.
For close to two billion people, the results include a carefully nurtured nationalism of the kind on show in Beijing, and the burden of massive and corrupt bureaucracies. For Western governments the rise of the autocracies is even more troubling. It has obstructed countless efforts at the UN and elsewhere to reach an enlightened consensus on problems whose only hope of solution lies in international cooperation. From Zimbabwe to Gaza and Georgia to Darfur, the victims dominate the news.
In January 1991 the first President Bush told Americans in an Oval Office address that the collapse of Soviet communism presented an opportunity “to forge for ourselves and for future generations a new world order; a world where the rule of law, not the rule of the jungle, governs the conduct of nations”. The following year Francis Fukuyama announced the end of history with the victory of democracy and free markets in the Cold War. The opportunity hailed by Mr Bush Sr has not yet been taken, and Mr Fukuyama has been shown to be flat wrong. History is back with a vengeance: a new chapter has begun in which Western democrats, broadly defined to include much of South America and the Far East, must win some of the most basic arguments about freedom, representation and the law all over again.
Western consumers grasp all too well the role of their spending habits in the new new world order. Soaring global energy demand has driven oil prices from $16 a barrel in 2001 to $115 today, with forecasts of continued tight supply and prices in the $120-$140 range for at least the next five years. That would boost the holdings of the sovereign wealth funds of oil-producing nations, chief among them Russia and those of the Gulf, from $3 trillion now to $15 trillion by 2015.
Chinese and Indian growth is likely to keep up. Inflation, driven in large part by their own food and energy requirements, will slow the double-digit growth that has already lifted hundreds of millions in each country out of poverty. But their export-led economies, boosted in China’s case by exchange-rate controls, will continue to transform their societies. One projection forecasts sevenfold growth in the size of the Chinese middle class by 2020, creating a new demographic 700 million-strong and hungry for cars, petrol and building supplies.
By the same year the Indian middle class could number more than 500 million, and all its adults will have a vote. The successful fusion of democracy and growth on the sub-continent has helped to underpin the argument that increasing prosperity elsewhere would lead inevitably to a clamour for democracy. That argument has seldom looked so thin.
The single most spectacular recipient of new wealth, the UAE, has ploughed it into diversification to thrill any capitalist. Dubai is a city of superlatives, its tallest building still a year from completion and already the tallest in the world. Abu Dhabi is joining the fray with a $200 billion spending blitz on tourist and conference facilities alone. The Gulf states’ combined GDP will soon surpass China’s, and Western multinationals are duly scrambling for market share in the new Middle East. But the Emirates’ intentions as global investors remain opaque; their appetite for democracy minimal.
In Russia, Mr Putin used his seven-year oil bonanza to pay off Soviet-era foreign debts and build up $480 billion of gold and foreign currency reserves. They will easily fund his showcase for the new Russia, the 2014 Winter Olympics in Sochi. But his “managed democracy” is a travesty of the real thing, and the rule of law that he and his successor promised is nonexistent.
China’s Olympics may have cost $40 billion, but that is less than 1 per cent of the sum Beijing is currently investing in infrastructure nation-wide. The Olympic budget is also dwarfed by the nearly $500 billion that China holds in US government bonds. Nineteen years on from Tiananmen Square many in Washington hoped they would be fostering a new Chinese democratic wave that this time would sweep all before it. Instead, their financial system is being propped up by China’s one-party capitalist miracle.
If only the autocrats were always so benign. David Miliband, the Foreign Secretary, has been struggling since taking up his post to persuade Beijing, and now Moscow, to see the benefits of joining the West’s “rules-based system”. He has failed. China’s refusal to withdraw its support for presidents al-Bashir of Sudan or Mugabe of Zimbabwe were two early examples. Russia’s refusal to respect Georgia’s international boundary or observe the letter of its recent ceasefires is merely the latest.
T he response in each case to Mr Miliband’s entreaties has been to ignore his rules – essentially those enshrined by US-dominated global institutions set up in the 1940s – in favour of national interests, narrowly defined. Sergei Lavrov, the Russian Foreign Minister, has spoken more loftily of a “real competitive environment in ideas” on foreign policy, but the result is the same: paralysis in the UN Security Council, where Russian and Chinese vetoes have derailed multilateral initiatives on Georgia and Zimbabwe in the past month alone.
As the autocracies gain confidence, the omens are bad for young democracies in their spheres of influence, from Georgia and Ukraine to Indonesia. Nor are they good for longstanding peace initiatives in Kashmir and the Middle East, or for the next international crisis in need of a consensual solution, be it keeping the Arctic peaceful, Antarctica neutral or space nuclear-free.
But neither US presidential candidate should despair, and nor should Europe’s leaders. The combination of liberal democracy and a commitment to free markets remains the most humane but also the strongest system of governance yet devised by man or statesman. China, Russia and the Gulf all owe their new muscle to it, even as their ruling elites share a fundamental lack of legitimacy that makes them more vulnerable than they look.
It is not too late to bind the new autocracies into rules-based systems, but those systems need updating, and not by Western governments alone.
China, Russia and the Gulf have been enriched by low-cost production and the high price of oil. They have been emboldened by what they see as social dysfunction, economic instability and foreign policy hubris in the West. The march of history towards global democracy – and with it the idea of a “world community” working on the common threats – is in danger of stalling. Regardless of whether Barack Obama or John McCain win the US presidential election, the next generation of Western leaders faces a new new world order.
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