The US Needs to Change the Way it Deals With the Rest of the World–or it Risks Being Left Behind

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On March 17 the Asian Infrastructure Investment Bank (AIIB) received a significant boost in international credibility when European nations, France, Germany and Italy followed the United Kingdom in joining the AIIB, despite stern criticism from the United States. These four countries are not only leading players in the European Union, but they comprise the 4th, 5th & 6th largest economies in the world (Italy is ranked 8th) and are among the US’ closest allies. More European countries are likely to follow suit as Switzerland and Luxembourg are preparing to do. Asian countries such as New Zealand, Thailand and Singapore have already joined, and staunch US allies South Korea and Australia seem likely also. The AIIB is a China-led international infrastructure bank, part of China’s challenge to the global financial monopoly enjoyed by the US, since the dollar is its reserve currency.

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China’s reasons for creating it’s own version of the World Bank (WB) are straight forward. The BRICS (Brazil, Russia, India, China, South Africa) have long resented the financial monopoly that western countries, particularly the US have in the WB and International Monetary Fund (IMF). The status quo was birthed by Bretton Woods system established in 1944. Critics point out it is no longer the 1940s and the system needs to reflect the changing balance of power in the 21st century.

Before the creation of AIIB the BRICS tried to work within the system by demanding a greater say in the IMF. In 2010 a deal was introduced to give emerging economies more power. But the US is the largest IMF stakeholder and US lawmakers must approve any such deal. Republicans consistently block its approval. American reluctance to reform led China to attempt to create a financial system not dominated by the West.

American criticism against the AIIB are concerns that the institution will not meet western standards on transparency, the environment and other issues. However BRICS leaders fire back that the US and Europe no longer have credibility to dictate such standards given their mishandling of the 2008 global financial crisis which caused economic chaos throughout the entire world.

In hindsight this development could prove pivotal for the future of the global economic system not only because it evidences China’s commitment to dismantle the dollar as the reserve currency, but given United States Treasury Secretary Jacob Lew’s public criticism of European countries joining the AIIB, it is increasingly evident, that the world is changing. Non-western countries are increasingly vying for a share of the geopolitical pie. If the world’s lone superpower wishes to retain considerable influence, American leaders would do well to recognize this and act accordingly. The longer it takes for the US to wake up to this new reality, the harder the fall will be and the less influence the US will be able to retain as global power continues to shift Eastward.

china_papersover_us If the US continues to block necessary reforms to the IMF and WB while criticizing European allies who join (for their own financial self-preservation), the fallout could potentially be momentous. At worst, the US creates a new layer to the developing geopolitical rivalry between the US-China and forces even the closest American allies to choose sides against the US. At best, the US jeopardizes the strength of the Trans-Atlantic alliance and being left behind as a new international system emerges, trapped in its web of denial.

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Scotland’s bid for independence and what it means for international relations

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The results have just been announced, that Scotland will not become an independent country and end a 300 plus year union. Even so, this vote will have profound effects for the UK and the international community.

Scotland’s bid for independence was fought hard on both sides. British politicians like Prime Minister David Cameron emphasized Scotland’s increased economic and political strength as a part of the UK. First Minister Alex Salmon highlighted the differences between Scotland and the rest of the union. In short Scots in favor of independence felt and still feel different, separate from the rest of the UK.

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 If Scotland seceded, the UK would’ve lost one-third of it’s land mass and 8% of it’s population. A Scotland-less UK would also be more likely to leave the European Union, which has always had an ambivalent relationship with the supranational organization.  The Conservatives have vowed to have a referendum on EU membership if they win next year’s general election.  As Scots are more left leaning, the UK would be more likely to leave without Scotland’s votes.

Also, the UK’s underwater nuclear weapons are in Scotland. Some have raised the issue if the UK lost possession of its nukes, would it continue to be a world power? Would it still be deserving of veto power on the United Nations Security Council? Nations such as India, Japan and Germany have openly declared they want “permanent member” status, making the argument that it no longer makes sense for the concentration of power in the international organization to be confined to five countries. A UK without Scotland would’ve further illustrate this argument.

However even though Scotland remains part of the UK, there will be consequences for Britain.  David Cameron has promised increased powers for Scotland, Wales and Northern Ireland if Scotland voted “NO” on independence but it remains to be seen what he or any of the other party leaders can feasibly do.

The ethnic nationalism that pushed the UK to the brink of national divorce is not confined to the island nation. Separatist and regional movements in Spain, Germany, Italy and Belgium watched the results of this vote very carefully. Whether Scotland became independent or not, Europe is at a critical moment in its history.  Groups all over the continent are challenging the modern definition of the nation-state.  Beyond Europe, in China, Canada and the Middle East, Scotland’s bid for independence motivated other ethnic groups to examine what ties them to the nation-state.

Just like the Global Recession has forced nations to turn inward, as seen in the recent elections in the European Parliament, so now too are groups within nations.  In a post-modern international system, the concept of the nation-state is slowly eroding as individuals groups, ethnic, religious and linguistic groups challenge globalization and centralization in the nation-state.

The World Failing to Rally With the United States Against Russia is Proof That America is Losing it’s Global Dominance

On it’s face, Russia annexing Crimea seems like an issue the world would be completely united on, with the United States leading the way.  But in fact the voices opposing Russia and insisting something be done have been few.  For starters, although Europe was outraged and horrified by Vladimir Putin’s actions, western European leaders such as Prime Minister David Cameron of the United Kingdom and Chancellor Angela Merkel of Germany offered very little other than strong condemnation and concern.  The European Union also approached the situation tentatively.

The answer to this was not difficult to figure out.  Germany, as well as much of central-eastern Europe receives at least 40% of it’s gas from Russia.  All three Baltic states and most of Scandinavia are completely dependent on Russia for their gas.  The EU itself receives a third of its gas from Russia.  Under Conservative David Cameron’s premiership, the UK and Russia have expanded their business and commercial ties.  So at the outset the America was the lone voice against Russia frankly because Europe had too much to lose, either by disrupting their gas supply or jeopardizing their already fragile economic recovery.  When Crimea was formally annexed to Russia, that became the jolt that made European leaders realize 1) Putin is not playing and 2) this sets a dangerous precedent for international relations in the 21st century.  Europe is now working with the US to impose sanctions on Russia, if nothing else to send a message that the West at least strongly opposes their actions.

But what about nations outside America and Europe, particularly the BRICs?  China keeping silent is not much of a surprise as their foreign policy is largely based on nonintervention.  One could argue there are parallels between Russia-Crimea and China situation with Taiwan, or even Tibet.  China’s foreign policy is principled on nonintervention because it does not want another country intervening in it’s own affairs.  Also, both China and Russia see themselves as a counter-balance to the US.  This situation is the perfect opportunity for them to draw closer together while exerting their influence.   But India, the world’s largest democracy has kept silent to the surprise of some.  Russia and India are historical geopolitical allies.  Understandably India is hesitant to disrupt them.

On his CNN program the Global Public Square Fareed Zakaria mentioned that there’s a growing tension in the international system between established norms and national interests, and how this tension resolves itself may determine whether the 21st century is one of peace or war.  I do not disagree with him but I think this tension is part of a greater reality that the world is no longer going to go with what the US wants simply because the US wants it, either because American objectives contradict their own national interests, or they simply do not want to be bound to us.  Perhaps both.  As other nations such as the BRICs rise and seek global influence, the political dominance the US had after 1945 through the collapse of the Soviet Union will inevitably lessen.  It is happening now.

Which brings me to my larger argument that we are in a global system similar to that just before the outbreak of World War I.  Globalization is already at levels on par with Europe in 1914, but the hesitancy of the world powers to rally behind the US evidences that we are living in a more multi-polar world, also like early 20th century Europe.