Emerging multipolar world

Comments on Simon Tay “The US-Asia relationship in 2010: Progress and problems”,
30/12/2010, http://www.eastasiaforum.org/2010/12/30/the-us-asia-relationship-in-2010-progress-and-problems/

Tay's concluding remarks are particularly worth noting: "A new context for American-Asian relations is emerging. America now faces a spectrum of strategic choice running from potential isolationism grounded in the idea of American decline to the acceptance of a more multipolar world and a continued engagement on different terms. Leaders on both sides must work to smooth this new and difficult transition."

History could be a burden, but unrealistic and wrong expectations may also be unhelpful and counter productive and even harmful and destructive.

It is in that context and expectation that every country. including declining and rising powers, should conduct itself and behave in a cooperative way appropriate to that context. Missteps by any may not be in the interests of most countries.

Russia the wild card in Asia Pacific

Comments on John Lee “Watch out for Russian wild card in Asia-Pacific”, 29/12/2010, http://www.theaustralian.com.au/news/opinion/watch-out-for-russian-wild-card-in-asia-pacific/story-e6frg6zo-1225977417402

Russia will be a considerable power to be reckoned in Asia.

However, there is no guarantee that it will be closer to the US and its allies than to China.

For the foreseeable future, it is much more likely that it will be closer to China, given its interest in preserving its world power status and that the US is unlikely to be happy to see a stronger Russia with powerful nuclear arsenals.

China, on their hand, will realise that it is in its interest to see a multi-polar world where the US will no longer dominate the world at will. It will recognise the value of Russia to its world strategy.

The argument that China views the future of the world as bipolar is wrong and China has strongly resisted that view pushed by some. That is a trap for China and China understands that.

In the next 20 to 50 years, the world cannot be anything but a multi polar world, where cooperation will outweigh competition.

That is the best outcome for everyone.

G20 needs effective mechanisms in decision making

Comments on Thom Woodroofe “The G20: More development needed”, 9/09/2010, http://www.eastasiaforum.org/2010/09/09/the-g20-more-development-needed/#more-13997
While G20 should have its place on the world stage on important issues, it does not mean it will replace other important world/international institutions such as UN and UN Security Council.

G20 may, however, facilitate other world bodies.

Also, while G20 is much smaller in size compared to UN general assembly, it also needs a workable governing structure and mechanism to be effective and efficient.

For example, does G20 require complete unanimity or simple majority to make decisions?

Another issue is that while it should not adopt the veto mechanism by permanent members of UN Security Council, does it need some sort of representative mechanism as opposed to purely senate mechanism in parliament, by some measure of size like population or economy?

That issue reflects the differential impact of a decision on countries of different sizes.

That is also the core meaning of democracy, isn't it?

It may appear better to have some sort of combination of the representative and senate mechanisms in decision making.

Statics and dynamics of world affairs

Comments on Joseph Nye “China’s bad bet against America”, 28/03/2010, http://www.eastasiaforum.org/2010/03/28/chinas-bad-bet-against-america/

After reading the article I looked at the credentials of the author and noticed that "Joseph Nye is Chairman of the Pacific Forum CSIS Board of Governors and a former US Assistant Secretary of Defence. He is also currently University Distinguished Service Professor at the Harvard Kennedy School."

I would like to make a few comments as follows.

Firstly, a few variables in elementary physics in terms of speed, acceleration and different momentums. It is not enough to just discuss the speed of an object without considering its acceleration that is the rate at which its speed changes. I am not sure Nye had this in mind or not when he was talking about a number of things.

Secondly, many economists and commentators talk about the yuan versus $US as if the issue was just between China and the US and ignore or are ignorant about a wider international context. In fact, as some economists and commentators have pointed out, the matter is much more complex than the former group or people naively think. It involves, I would argue, mainly competitions between China and other countries than the US. Yes, if the yuan was appreciated that will have an effect on the relative competitiveness between China and the US, but it is unlikely to change the imbalances the US has been having, because others would simply take the vacuum vacated by China and increase their surplus with the US.

Thirdly, some of the historical events that Nye has mentioned were obviously true, but has he noticed and considered the differences now and the past, that is, between China and the USSR, as well as Japan? Don’t the huge differences in sizes of population and potential economic power and its implications ring a warning to Nye’s analysis and his simply and mechanically using historical examples? Will history always simply repeat itself like natural mechanics, or new history can be made? Had the US always been asa powperful as it is now before, say the last century? Are humans still as primitive as many tens of thousand years ago? Don’t those people also need to catch up with reality?

I do not wish to comment on the decline of the US. It is still the sole superpower in the world now. But it has had problems with the Iraq and Afghanistan wars. Its military capabilities can be very powerful in destruction, but not necessarily very constructive. If taking into account the sizes and powers of those two countries, the US, as that powerful as it has been, is not that invincible as some people might think it is. That is an irony and should be respected perhaps. Maybe the first point that I have just made has some relevance here. Einstein’s relativity will work in static and dynamic senses.

Fourthly, the role of the $US internationally should never be underestimated, but at the same time many people have realised the limitations of the current or the past arrangement or state of play. In economics, people take expectations very seriously. In that context, what expectations will people have, if a model of the world economy is taking into account? What implications will that have for international currencies?

However, I don’t want to leave people with an impression that I have nothing in common with Nye. I do want to reach an agreement with Nye, that is, the cooperation between China and the US will be win-win and beneficial to both countries and the world as a whole. That is human spirit. We have come a long way in terms of globalisation and human beings should not move backwards toward barbarous state where power rather than rationality prevailed.

G grouping of world economic affairs

Comment on Nina Hachigian “Deciding who decides at the G20 summit”, 26/09/2009, http://www.eastasiaforum.org/2009/09/26/deciding-who-decides-at-the-g-20-summit/

This is an important issue that is evolving and should be decided by a core of the current G20 members, the sooner the better.

While there are merits in each of the proposals mentioned in the article, it seems that economic weight should be the key criterion.

Even using the size of the economy as the key criterion, then there is still a tough question: how to determine or calculate the size of a economy?

There is obvious a calculation based on market exchange rate. But it is well understood that the market exchange rate has some significant shortcomings. For example, it may vary substantially within a short period. Also it generally underestimates the real size of most developing economies due to their lack of international trade and especially export power.

So whether you use a market based or a purchasing-power-parity (PPP) based exchange rate to calculate a country’s economic size? Alternatively is it better to use a combination of the two with an equal weight to reflect both the real economy and its trade impact?

In order to enhance its regional representation, then the top economy in a continent could be included.

So I would propose that the group should comprise the top one economy in each continent, and then the next 15 world largest economy, with the size of the economy based on a combination of both PPP and current exchange rate to be calculated by the United Nations. This group should be updated every 5 years to reflect the new world economic reality to be representative.

There should also be a governing structure of the G grouping. The top 5 of the G group should be the standing members during the off meeting period. Again, they should be decided using the same criteria.

This G economic group should be a new branch of the United Nations, to enhance the multilateral nature of the group and the legitimacy of the United Nations.

Four corners - an interesting view of teh world current affairs

An interesting view on the "latest jamborees at the United Nations and the Group of 20". See: "Four corners of the new world", 25/09/2009, http://www.businessspectator.com.au/bs.nsf/Article/Four-corners-of-the-new-world-pd20090925-W7UUA?OpenDocument&src=sph

Original source: Financial Times: ft.com

G-8 and more Gs

Comments on Nina Hachigian “The three-ring G8 summit”, 13/07/2009, http://www.eastasiaforum.org/2009/07/13/the-three-ring-g8-summit/

This raises an important issue, are the world most powerful leaders showing real leaderships among themselves, if they can't get their priority right and instead they waste their most valuable assets - their time?

Why don't they or their assistants decide how their time should be spent and what is the most appropriate forum for that?

Old powers' club is not willing to give up its privilege. Is that the case that it may diminish their status if they stand together with new ones?

If the G-8 wish to continue its ineffectiveness, why do the others join them at G-8?

The US has other moral obligations beyond the elimination of nuclear arms

Comments on Tomohiko Satake “Obama, and Japan’s going nuclear”, 2/06/2009, http://www.eastasiaforum.org/2009/06/02/obama-and-japans-going-nuclear/

A world free of any nuclear weapons will be good for everyone, except some handful. Nuclear disarmament of the two nuclear superpowers should be welcomed by all countries.

Just as Japan's nuclear dilemma, if the Americans are serious of world including Asia peace and stability, they should cease to continue their cold war thinking and strategies and put an end to NATO's expansion, and begin to dismantle all cold war military structure, treaties and organisations.

The world needs a new security structure that is based on UN Security Council. For that to be effective and reliable, the Security Council needs to be reformed. Broader permanent representation of the world current reality is required. The veto power by each of the 5 permanent members should change to make it less extreme.

Americans not only have the moral obligation for eliminating all nuclear arms, they, as the sole superpower and the leader of the only cold war era legacy of NATO, also have the moral obligation to bury all cold war legacies and to establish a new collective world security.

Eventually, the world should be a place of humanity of permanent peace and every country, every nation, irrespective large or small, no matter of rich or poor will live with dignity, peace and harmony. They will compete (just like the market economy) as well as cooperate with each other for prosperity and better living standard.

In this light, the title of Tomohiko Satake' article does not appear to be well conceived. At least it does not sit well with Japanese foreign minister's 11 benchmarks for global nuclear disarmament, as mentioned in the article.

History is not necessarily always rational but full of surprises

Comments on Jonas Parello-Plesner “The G-2: no good for China and for world governance”, 23/05/2009, http://www.eastasiaforum.org/2009/05/23/the-g-2-no-good-for-china-and-for-world-governance/

I personally don't like power politics much, as a personal preference for world governance, to start with. In this sense, I have some sympathy to Jonas Parello-Plesner's arguments in this article.

But one has to be reminded, even though counter to my personal preference, that during the cold war era that stretching a few decades in the not so long past, it was the two world superpowers that dominated so many world affairs. The whole world had lived in the shadow of the display of the two superpowers.

However, there were two good things that came out of that long agony. One was that there were two superpowers, not just one, so they sort or balanced each other out and did not lead the world into another world war. Another was that the collapse of the former USSR proved an important point to all nations and human beings that any system has to produce good both economically and politically, otherwise it will not last in the long term.

The two cold war world superpowers gave way to the sole superpower of the US. What we got from that? Certainly the world had collectively sighed a great relief that the constant threat of a global nuclear destruction had gone. But what else have we got? We got heightened terrorist attacks, culminating by the 9/11 attack on the US and the subsequent invasions of Afghanistan and Iraq by the US and some of its allies and friends. The invasion of the former was internationally justified that Al Qaeda was harboured there.

The invasion of the latter was not necessarily so, and in fact many have argued that was the act of the sole remaining world superpower and that there was little international justification for its so called pre-empty actions. The matter of fact is that the main excuse for the war in Iraq, that it had weapons of mass destruction, has been irrefutably proven to be false. But that war has had huge costs, in terms of both human and economically. Even the US has paid dearly for that adventure with rising military tolls and military and other spending related to that war. Yet, no one has been responsible for those huge costs!

That was a legacy of an unconstrained or unrestricted sole world superpower. It can do what it wants and sometimes what it does can be very bad to others and to itself in the long run.

Even now the UN Security Council is still governed by the vested veto power to each of the five largest victors of World War II. That is an uncomfortable reality. Although there have been calls for reforms to the UN governing structure, there have been also difficulties to change that outdated structure, one has to admit.

Why and how the two superpowers did came into existence? It was probably not anyone’s wishful thinking or doing. It was the natural evolution in the aftermath of World War Two. The US, a traditional power, emerged as the leader of the west, while the USSR, a new and emerging power with a different system became the leader of a number of aspirant but relatively poor nations that were struggling to seek to change their countries’ destiny.

The two different systems competed and fighted with each other. They hated each with. They each wanted to destroy the other. So they built up their camps militarily with each having nuclear arsenals to destroy the whole world a few times over. On that point, the leaders of each camp had some sanity with them over that period, so they resorted to the principle of mutual deterrence that worked and saved the world from destruction. But eventually, one collapsed and disintegrated suddenly perhaps to the surprises of many including the very sophisticated intelligence of the other opposing camp. That was not the outcome of anyone’s well thought design. History has been full of surprises in that regard.

What about the G-2 concept? I don’t have an opinion at this stage, meaning I personally don’t have any idea. It may or may not work. Again history may present its surprises to us, irrespective whether we like it or not.

Nevertheless, I hope that any development along that line will not follow the competing and opposing two superpowers of the cold war ear, even though they do represent two different systems and also one traditional power and the other emerging power. I hope if they do emerge as G-2, they will work cooperatively rather than competitively with each other, for humanity's sake. We have come a long way, havn't we?

The experience of the superpower politics in the cold war era, as well as the recent history including the wars and the current great recession, should serve as a useful reminder to any superpowers in the years/decades/centuries to come, perhaps for all sides, both positively and negatively. Any superpowers should not assume they will be superpowers forever. They have their historical roles to play, but each of them will also have their sunset time. That is for sure, so don’t over play your role as a superpower.

Changed and changing realities call for new international order

Comments on Robert Gottliebsen “Turning on a Chinese axis”, 19/05/2009, http://www.businessspectator.com.au/bs.nsf/Article/future-pd20090519-S6T4N?OpenDocument&src=sph&alerts&loc=center.

Dear Robert, what you said in this article is important issue that will have significant implications for many in the world, whether one is currently aware of it and is concerned with it or not.

If the trends of the international economies of the past two decades are any guide to the future, it seems that the continual shift in the economic powers among world big economies will see the rise of China as the world largest economy in the not long distant future.

I call this international geoeconomics of our time. This, coupled with the high saving rates of the Chinese, does imply that the Chinese will be a very large international banker, to underwrite many things, not to mention the huge US government debts.

It is quite likely that the international geoeconomics will also shape international geopolitics. The world has to accommodate the changing and changed reality. But that is not our focus here in this forum, so let’s focus on business and economics.

The rise of China economically and the relative decline of the US economy internationally as seen in its falling share of the world economy, will mean there is a need to reform or restructure some of the international institutions that have been built on the post-war economic reality, with the strong focus on the dominance of the US and the west Europeans in the governance of those institutions.

Reforming IMF, the world bank and WTO will not only reflect the need to accommodate the rise of the Chinese economy and its shares in international trade and capital flows, but more importantly the collective transformation of some of the big developing economies, the BRIC for example, and Russia.

Economically and politically, Japan has been underweighted internationally, due to its role in World War II. This also needs to change to be more just and more appropriate in the current world reality more than 60 years after that war. But there have been difficulties in allowing Japan to play a bigger role, because of strong reactions from some of the Asian countries that suffered in the hands of Japanese imperial army during the Second World War. Japan will need to reconcile with its near neighbors on those issues.

Elsewhere when I commented on an article, I made a proposal to introduce a new governing or final voting system (see http://mrlincolns.blogspot.com/2009/05/new-voting-mechanism.html, or http://www.eastasiaforum.org/2009/05/11/the-chiang-mai-initiative-china-japan-and-financial-regionalism/). That proposal attempts to inject new thinking in terms of the governance of international institutions.

That proposal combines the current UN senate-style voting and IMF (economically) representative voting, to give a larger role for every country irrespective its size, but at the same time recognize economic accountability. That reflects the world trends of globalization and integration, and the human nature of our current time of becoming more humanitarianism.

The international community needs to persuade big powers, old, new and emerging, to accept a new and more humanitarian approach to the governing of we human beings at this age.