ALTERNATIVE CENTRE'S OF POWER
European Union
As the Second World War came to an end, many of Europe’s leaders thought: should Europe be allowed to revert to its old rivalries or be reconstructed that would contribute to a positive conception of international relations.
European integration after 1945 was aided by the Cold War during which America extended financial help for reviving Europe’s economy under the ‘Marshall Plan’. Under the Marshall Plan, the Organization for European Economic Cooperation (OEEC) was established in 1948 to channel aid to the west European states.
The Council of Europe, established in 1949, was another step forward in political cooperation. European Economic Community was formed in 1957 and this process acquired a political dimension with the creation of the European Parliament.
The collapse of the Soviet bloc resulted in the fast track establishment of the European Union in 1992. It led to a common foreign and security policy, cooperation on justice and home affairs, and the creation of a single currency.
The EU has started to act more as a nation state as it has its own flag, anthem, founding date, and currency.
Power of EU:
The EU is the world’s second biggest economy with a GDP of more than $17 trillion in 2016.
Its currency, the euro, can pose a threat to the dominance of the US dollar.
Its share of world trade is much larger than that of the United States allowing it to be more assertive in trade disputes with the US and China.
Its economic power gives it influence over its closest neighbor's as well as in Asia and Africa.
It also functions as an important bloc in international bodies such as WTO.
Two members of EU : UK and France are permanent members of UNSC.
Its use of diplomacy, economic investments, and negotiations has been effective with China on issues of human rights and environmental degradation.
Militarily, the EU’s combined armed forces are the second largest in the world and its total spending on defense is second after the US.
It is also the world’s second most important source of space and communications technology
Limitations of EU:
In many areas its member states have their own foreign relations and defence policies that are often at odds with each other. For example: UK supported US invasion of Iraq, while Germany and France opposed it.
Euro skepticism: Denmark and Sweden have resisted the Maastricht Treaty and the adoption of the euro.
Brexit has brought to the fore the internal issues within the EU.
Association of South East Asian Nations(ASEAN)
ASEAN was established in 1967 by five countries of this region, Indonesia, Malaysia, the Philippines, Singapore and Thailand by signing the Bangkok Declaration.
Objectives of ASEAN:
(i). To accelerate economic growth and through that ‘social progress and cultural development’.
(ii). To promote regional peace and stability based on the rule of law and the principles of the United Nations Charter.
Over the years, Brunei Darussalam, Vietnam, Lao PDR, Myanmar (Burma) and Cambodia joined it taking its strength to ten.
ASEAN countries have celebrated the ‘ASEAN Way’, a form of interaction that is informal, non confrontational and cooperative and respect for national sovereignty.
In 2003, ASEAN moved along the path of the EU by agreeing to establish an ASEAN Community comprising three pillars, namely, the ASEAN Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community.
(i). The ASEAN security community was based on the conviction that outstanding territorial disputes should not escalate into armed confrontation.
(ii). The ASEAN Regional Forum (ARF), which was established in 1994, is the organization that carries out coordination of security and foreign policy.
While the ASEAN is a much smaller economy compared to the US, the EU, and Japan, its economy is growing much faster than all these.
ASEAN has created a Free Trade Area (FTA) for investment, labour, and services. The US and China have already moved fast to negotiate FTAs with ASEAN.
Its Vision 2020 has defined an outward-looking role for ASEAN in the international community which builds on the existing ASEAN policy to encourage negotiation over conflicts in the region.
During the Cold War years Indian foreign policy did not pay adequate attention to ASEAN. But in recent years, India has tried to make amends as the ASEAN-India FTA came into effect in 2010.
ASEAN is the only regional association in Asia that provides a political forum where Asian countries and the major powers can discuss political and security concerns.
The Rise of Chinese Economy
China’s economic success since 1978 has been linked to its rise as a great power.
China’s economy is projected to overtake the US as the world’s largest economy by 2040.
The strength of its economy, together with other factors such as population, land mass, resources, regional location and political influence, adds to its power in significant ways.
Following the communist revolution in 1949 under the leadership of Mao, its economy was based on the Soviet model.
The model was to create a state-owned heavy industries sector from the capital accumulated from agriculture.
As it was short of foreign exchange that it needed in order to buy technology and goods on the world market, China decided to substitute imports by domestic goods.
Employment and social welfare was assured to all citizens, and China moved ahead of most developing countries in educating its citizens and ensuring better health for them.
Though the economy grew at 5-6 per cent, but an annual growth of 2-3 per cent in population meant that economic growth was insufficient to meet the needs of a growing population.
Its industrial production was not growing fast enough, international trade was minimal and per capita income was very low.
Due to this, the Chinese leadership took major policy decisions in the 1970s.
Change in Policy
China ended its political and economic isolation and established relations with the United States in 1972.
In 1978, Chinese leader Deng Xiaoping announced the ‘open door’ policy and economic reforms in China.
The policy was to generate higher productivity by investments of capital and technology from abroad.
The Chinese did not go for ‘shock therapy’ but opened their economy step by step. For example, the privatization of agriculture in 1982 and the privatization of industry in 1998.
Trade barriers were eliminated only in Special Economic Zones (SEZs) where foreign investors could set up enterprises.
In China, the state played and continues to play a central role in setting up a market economy.
Effect of reforms:
(i). Privatization of agriculture led to a remarkable rise in agricultural production, rural incomes and thus rural industry.
(ii). The Chinese economy, including both industry and agriculture, grew at a faster rate.
(iii). The creation of Special Economic Zones led to a phenomenal rise in foreign trade.
(iv). It has become the most important destination for FDI.
Now, it plans to deepen its integration into the world economy and shape the future world economic order.
Limitations of reforms:
(i). Unemployment has risen in China with nearly 100 million people looking for jobs.
(ii). Environmental degradation and corruption have increased
(iii). Rise in economic inequality between rural and urban residents and coastal and inland provinces.
Impact of reforms on China’s Power:
(i). The integration of China’s economy has enabled China to have considerable influence with its trade partners.
(ii). Fears of China’s rise have also been mitigated by its contributions to the stability of the ASEAN economies after the 1997 financial crisis.
(iii). Its more outward looking investment and aid policies in Latin America and Africa are increasingly projecting it as a global player on the side of developing economies.
India-China Relations
India and China were great powers in Asia before the advent of Western imperialism.
Both the countries extended their influence beyond their borders and this influence was political, economic and cultural.
However, the regions where India and China exercised influence rarely ever overlapped. Thus, there was limited political and cultural interaction between the two.
After India regained its independence from Britain, and China expelled the foreign powers, there was hope that both would come together to shape the future of the developing world.
For a brief while, the slogan of ‘Hindi-Chini bhai bhai’ was popular.
Soon after independence, China and India were involved in a border conflict in 1962 over competing territorial claims principally in Arunachal Pradesh and in the Aksai Chin region of Ladakh.
This had long-term implications for India–China relations and diplomatic relations between the two countries were downgraded until 1976.
A series of talks to resolve the border issue were initiated in 1981. Rajiv Gandhi’s visit to China in December 1988 provided the impetus for an improvement in India–China relations.
Since the end of the Cold War, their relations have a strategic as well as an economic dimension and both governments have taken measures to contain conflict and maintain ‘peace and tranquility’ on the border
Bilateral trade between India and China has increased from $338 million in 1992 to more than $84 billion in 2017.
At the global level, India and China have adopted similar policies in international economic institutions like the World Trade Organization.
India’s nuclear tests in 1998, did not stop greater interaction.
Indian and Chinese leaders and officials visit Beijing and New Delhi with greater frequency, and both sides are now becoming more familiar with each other.
Increasing transportation and communication links, common economic interests and global concerns should help establish a more positive relationship between the two most populous countries of the world.
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