The Rise of the Rest
The global factor. Certain nations today are continuing to enjoy prosperity today. Prosperity, however, does not mean having a shopping mall in every damn town, nor does it mean getting 10,000 television channels in your home 24 hours a day... China will remain the global economic superpower. India is the new silicone valley. And Russia is simply flooded in cash. However, Russia's real wealth is the fact that it essentially owes no money to anybody! Russia also controls the largest amounts of the globe's natural resources. Give Russia and China a couple of decades and they will most probably have a living standard better than ours in the West.
It's true China is booming, Russia is growing more assertive, terrorism is a threat. But if America is losing the ability to dictate to this new world, it has not lost the ability to lead.
Fareed Zakaria NEWSWEEK
Americans are glum at the moment. No, I mean really glum. In April, a new poll revealed that 81 percent of the American people believe that the country is on the "wrong track." In the 25 years that pollsters have asked this question, last month's response was by far the most negative. Other polls, asking similar questions, found levels of gloom that were even more alarming, often at 30- and 40-year highs. There are reasons to be pessimistic—a financial panic and looming recession, a seemingly endless war in Iraq, and the ongoing threat of terrorism. But the facts on the ground—unemployment numbers, foreclosure rates, deaths from terror attacks—are simply not dire enough to explain the present atmosphere of malaise.
American anxiety springs from something much deeper, a sense that large and disruptive forces are coursing through the world. In almost every industry, in every aspect of life, it feels like the patterns of the past are being scrambled. "Whirl is king, having driven out Zeus," wrote Aristophanes 2,400 years ago. And—for the first time in living memory—the United States does not seem to be leading the charge. Americans see that a new world is coming into being, but fear it is one being shaped in distant lands and by foreign people.
Look around. The world's tallest building is in Taipei, and will soon be in Dubai. Its largest publicly traded company is in Beijing. Its biggest refinery is being constructed in India. Its largest passenger airplane is built in Europe. The largest investment fund on the planet is in Abu Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once quintessentially American icons have been usurped by the natives. The largest Ferris wheel is in Singapore. The largest casino is in Macao, which overtook Las Vegas in gambling revenues last year. America no longer dominates even its favorite sport, shopping. The Mall of America in Minnesota once boasted that it was the largest shopping mall in the world. Today it wouldn't make the top ten. In the most recent rankings, only two of the world's ten richest people are American. These lists are arbitrary and a bit silly, but consider that only ten years ago, the United States would have serenely topped almost every one of these categories.
These factoids reflect a seismic shift in power and attitudes. It is one that I sense when I travel around the world. In America, we are still debating the nature and extent of anti-Americanism. One side says that the problem is real and worrying and that we must woo the world back. The other says this is the inevitable price of power and that many of these countries are envious—and vaguely French—so we can safely ignore their griping. But while we argue over why they hate us, "they" have moved on, and are now far more interested in other, more dynamic parts of the globe. The world has shifted from anti-Americanism to post-Americanism.
I. The End of Pax Americana
During the 1980s, when I would visit India—where I grew up—most Indians were fascinated by the United States. Their interest, I have to confess, was not in the important power players in Washington or the great intellectuals in Cambridge. People would often ask me about … Donald Trump. He was the very symbol of the United States—brassy, rich, and modern. He symbolized the feeling that if you wanted to find the biggest and largest anything, you had to look to America. Today, outside of entertainment figures, there is no comparable interest in American personalities. If you wonder why, read India's newspapers or watch its television. There are dozens of Indian businessmen who are now wealthier than the Donald. Indians are obsessed by their own vulgar real estate billionaires. And that newfound interest in their own story is being replicated across much of the world.
How much? Well, consider this fact. In 2006 and 2007, 124 countries grew their economies at over 4 percent a year. That includes more than 30 countries in Africa. Over the last two decades, lands outside the industrialized West have been growing at rates that were once unthinkable. While there have been booms and busts, the overall trend has been unambiguously upward. Antoine van Agtmael, the fund manager who coined the term "emerging markets," has identified the 25 companies most likely to be the world's next great multinationals. His list includes four companies each from Brazil, Mexico, South Korea, and Taiwan; three from India, two from China, and one each from Argentina, Chile, Malaysia, and South Africa. This is something much broader than the much-ballyhooed rise of China or even Asia. It is the rise of the rest—the rest of the world.
We are living through the third great power shift in modern history. The first was the rise of the Western world, around the 15th century. It produced the world as we know it now—science and technology, commerce and capitalism, the industrial and agricultural revolutions. It also led to the prolonged political dominance of the nations of the Western world. The second shift, which took place in the closing years of the 19th century, was the rise of the United States. Once it industrialized, it soon became the most powerful nation in the world, stronger than any likely combination of other nations. For the last 20 years, America's superpower status in every realm has been largely unchallenged—something that's never happened before in history, at least since the Roman Empire dominated the known world 2,000 years ago. During this Pax Americana, the global economy has accelerated dramatically. And that expansion is the driver behind the third great power shift of the modern age—the rise of the rest.
At the military and political level, we still live in a unipolar world. But along every other dimension—industrial, financial, social, cultural—the distribution of power is shifting, moving away from American dominance. In terms of war and peace, economics and business, ideas and art, this will produce a landscape that is quite different from the one we have lived in until now—one defined and directed from many places and by many peoples. The post-American world is naturally an unsettling prospect for Americans, but it should not be. This will not be a world defined by the decline of America but rather the rise of everyone else. It is the result of a series of positive trends that have been progressing over the last 20 years, trends that have created an international climate of unprecedented peace and prosperity.
I know. That's not the world that people perceive. We are told that we live in dark, dangerous times. Terrorism, rogue states, nuclear proliferation, financial panics, recession, outsourcing, and illegal immigrants all loom large in the national discourse. Al Qaeda, Iran, North Korea, China, Russia are all threats in some way or another. But just how violent is today's world, really? A team of scholars at the University of Maryland has been tracking deaths caused by organized violence. Their data show that wars of all kinds have been declining since the mid-1980s and that we are now at the lowest levels of global violence since the 1950s. Deaths from terrorism are reported to have risen in recent years. But on closer examination, 80 percent of those casualties come from Afghanistan and Iraq, which are really war zones with ongoing insurgencies—and the overall numbers remain small. Looking at the evidence, Harvard's polymath professor Steven Pinker has ventured to speculate that we are probably living "in the most peaceful time of our species' existence."
Why does it not feel that way? Why do we think we live in scary times? Part of the problem is that as violence has been ebbing, information has been exploding. The last 20 years have produced an information revolution that brings us news and, most crucially, images from around the world all the time. The immediacy of the images and the intensity of the 24-hour news cycle combine to produce constant hype. Every weather disturbance is the "storm of the decade." Every bomb that explodes is BREAKING NEWS. Because the information revolution is so new, we—reporters, writers, readers, viewers—are all just now figuring out how to put everything in context.
We didn't watch daily footage of the two million people who died in Indochina in the 1970s, or the million who perished in the sands of the Iran-Iraq war ten years later. We saw little of the civil war in the Congo in the 1990s, where millions died. But today any bomb that goes off, any rocket that is fired, any death that results, is documented by someone, somewhere and ricochets instantly across the world. Add to this terrorist attacks, which are random and brutal. "That could have been me," you think. Actually, your chances of being killed in a terrorist attack are tiny—for an American, smaller than drowning in your bathtub. But it doesn't feel like that.
The threats we face are real. Islamic jihadists are a nasty bunch—they do want to attack civilians everywhere. But it is increasingly clear that militants and suicide bombers make up a tiny portion of the world's 1.3 billion Muslims. They can do real damage, especially if they get their hands on nuclear weapons. But the combined efforts of the world's governments have effectively put them on the run and continue to track them and their money. Jihad persists, but the jihadists have had to scatter, work in small local cells, and use simple and undetectable weapons. They have not been able to hit big, symbolic targets, especially ones involving Americans. So they blow up bombs in cafés, marketplaces, and subway stations. The problem is that in doing so, they kill locals and alienate ordinary Muslims. Look at the polls. Support for violence of any kind has dropped dramatically over the last five years in all Muslim countries.
Militant groups have reconstituted in certain areas where they exploit a particular local issue or have support from a local ethnic group or sect, most worryingly in Pakistan and Afghanistan where Islamic radicalism has become associated with Pashtun identity politics. But as a result, these groups are becoming more local and less global. Al Qaeda in Iraq, for example, has turned into a group that is more anti-Shiite than anti-American. The bottom line is this: since 9/11, Al Qaeda Central, the gang run by Osama bin Laden, has not been able to launch a single major terror attack in the West or any Arab country—its original targets. They used to do terrorism, now they make videotapes. Of course one day they will get lucky again, but that they have been stymied for almost seven years points out that in this battle between governments and terror groups, the former need not despair.
Some point to the dangers posed by countries like Iran. These rogue states present real problems, but look at them in context. The American economy is 68 times the size of Iran's. Its military budget is 110 times that of the mullahs. Were Iran to attain a nuclear capacity, it would complicate the geopolitics of the Middle East. But none of the problems we face compare with the dangers posed by a rising Germany in the first half of the 20th century or an expansionist Soviet Union in the second half. Those were great global powers bent on world domination. If this is 1938, as some neoconservatives tell us, then Iran is Romania, not Germany.
Others paint a dark picture of a world in which dictators are on the march. China and Russia and assorted other oil potentates are surging. We must draw the battle lines now, they warn, and engage in a great Manichean struggle that will define the next century. Some of John McCain's rhetoric has suggested that he adheres to this dire, dyspeptic view. But before we all sign on for a new Cold War, let's take a deep breath and gain some perspective. Today's rising great powers are relatively benign by historical measure. In the past, when countries grew rich they've wanted to become great military powers, overturn the existing order, and create their own empires or spheres of influence. But since the rise of Japan and Germany in the 1960s and 1970s, none have done this, choosing instead to get rich within the existing international order. China and India are clearly moving in this direction. Even Russia, the most aggressive and revanchist great power today, has done little that compares with past aggressors. The fact that for the first time in history, the United States can contest Russian influence in Ukraine—a country 4,800 miles away from Washington that Russia has dominated or ruled for 350 years—tells us something about the balance of power between the West and Russia.
Compare Russia and China with where they were 35 years ago. At the time both (particularly Russia) were great power threats, actively conspiring against the United States, arming guerrilla movement across the globe, funding insurgencies and civil wars, blocking every American plan in the United Nations. Now they are more integrated into the global economy and society than at any point in at least 100 years. They occupy an uncomfortable gray zone, neither friends nor foes, cooperating with the United States and the West on some issues, obstructing others. But how large is their potential for trouble? Russia's military spending is $35 billion, or 1/20th of the Pentagon's. China has about 20 nuclear missiles that can reach the United States. We have 830 missiles, most with multiple warheads, that can reach China. Who should be worried about whom? Other rising autocracies like Saudi Arabia and the Gulf states are close U.S. allies that shelter under America's military protection, buy its weapons, invest in its companies, and follow many of its diktats. With Iran's ambitions growing in the region, these countries are likely to become even closer allies, unless America gratuitously alienates them.
June 26, 2007
The largest threats to the American economic power have overtaken the domination of the USA in the global energy industry. Brazil, Russia, India and China – have taken over the domination of the USA in the global energy industry, shows the newest study by the investment bank, Goldman Sachs. The strengthening of the economic power of those four countries – new economic giants united under the name BRIC – is already obvious in the metal and mining sector, and it is slowly starting to be felt in the insurance and consumer industries, says Anthony Ling, the director of that investment bank.
“For all companies that operate globally, the world is changing at an ever faster rate, bringing larger challenges than ever before – that is true globalization”, he said. One of the most important changes is the growth of the BRIC economies, he added. According to a Goldman Sachs study, at the end of the first Gulf War in 1991, of the 20 largest companies in the energy sector by market capitalization, 55 percent were American, and 45 percent European. However, in 2007, 35 percent of the largest energy companies come from BRIC countries, 35 percent European, and around 30 percent American, it says in the study. “The USA is now trailing behind, with the smallest percentage of energy companies in the world”, says Ling.
“If we assume the global resources industry is a traditional leader as far as global trends are concerned, we will start to notice the same trend in the mining industry, where 20 percent of the top 20 companies are from BRIC countries”, he said. “We are convinced that the same form will happen in all other industries”.
This form is already present in the insurance sector, in which the BRIC countries hold 10 percent of the top 20 companies. In the world industry of refreshing drinks, in which the new economic powers are just starting to be represented with a 5 percent share. Ling is predicting that BRIC will soon start to penetrate the food and pharmaceutical sectors. If investors and corporations do not take into account the growing strength of BRIC in the global economy, they will start to fall behind in the growth of investments, and lose their competitive advantage of their companies, warned Ling, talking at a press conference before the summit in Geneva on July 5-6, about the United Nations Global Compact initiative.
An initiative that was stated in 2000 is in question. The aim of the initiative is connecting the business sectors with UN agencies, governments, and the civilian population, in supporting basic social values, which reflect the ten principles on which the initiative is based, which includes respecting human rights and fair work, responsible behaviour towards the environment, and anti-corruption measures. The Goldman Sachs study, which analyses the effect of those factors in a number of industry sectors, will be released on the 3rd of July.