Tag Archives: Featured

An Alternative Alliance

It is hard to imagine a world where the United States is not the dominant global power. However, over the last decade the BRICS alliance (Brazil, Russia, India, China, and South Africa) has emerged as a potential alternative to the traditional, US-centric power structure. In order to maintain its position as a global leader, the United States must effectively respond to the challenges presented by BRICS.

British economist Jim O’Neill of Goldman Sachs Asset Management developed the idea of BRIC in 2001 (South Africa joined ten years later) as an investment vehicle that took advantage of their large territory, abundant natural resources, and dense population. The BRICS nations leveraged O’Neill’s ideas to create the BRICS alliance to effectively leverage their combined strength. BRICS also provided each nation a platform to position itself as a regional power or as an international competitor of the United States. As BRICS continued to increase its presence in the international system, it presented an alternative to the traditionally western-dominated international power structure. There is a hope in some BRICS capitals, the alliance will accelerate changes to the status quo at the expense of the United States.

BRICS Economics

Without a doubt, BRICS is an international actor of significant influence. The BRICS nations represent 43% of the world’s population, 40% of its economy, 21% of the global GDP, and are responsible for 20% of global investment. According to the United Nations Development Program, the economies of China, India and Brazil will surpass the cumulative production of the G-7 in 2020. In 2014, in an effort to compete with the World Bank and the International Monetary Fund (IMF), BRICS created its own bank (the New Development Bank) and a framework for providing protection against global liquidity pressures they called the Contingency Reserve Arrangement. By 2018 the New Development Bank had lent US $7.5 billion, and this year it has issued bonds with a total value of 3 million yuan (US $447 million). These tools allow BRICS to operationalize the collective power of their economies. 

The BRICS heads of state meet at the BRICS X Summit in July 2018.
Photo credit: http://www.granma.cu/mundo/2018-07-29/que-temas-se-abordaron-en-la-x-cumbre-del-brics-29-07-2018-20-07-13

BRICS is well-positioned to take advantage of the current state of international affairs and is expanding its political reach. The concept of “BRICS Plus” provides a political mechanism for non-member states to engage the bloc at its annual summit. In some ways, BRICS appears more stable than some European countries such as the United Kingdom that are in the midst of political or economic crises. Recognizing this and perhaps hedging their bets, Mexico, South Korea, Jamaica, Argentina, and Turkey have all taken advantage of BRICS plus and have attended BRICS events.

 

2017 BRICS economic data from the IMF and the World Bank
Photo credit: https://ewn.co.za/2018/07/25/brics-nations-by-the-numbers

Future of the Bloc

Despite success in its first decade of existence, BRICS must adapt to overcome today’s challenges. The trade war between China and the United States presents one such challenge. Additionally, controversial positions taken by the Bolsonaro government in Brazil — discrimination against racial miniorities, homosexuals, and women — complicate the aspirations of BRICS to present itself as a role model for developing nations. In order to continue serving as a key partner for developing nations, BRICS must provide tailored solutions that focus on commercial investment in those nations as well as the needs of the people and communities there.

BRICS member states have managed to overcome cultural and geographic differences to create a strong alliance. Together, they’ve laid the groundwork to achieve their collective goals of becoming a global economic force and reducing the effects of climate change. Jim O’Neill, the Goldman Sachs economist that conceived of BRICS, is certainly optimistic. He believes four of the five BRICS nations (China, Brazil, Russia, and India) will have the world’s dominant economies in 2050. In the last ten years, BRICS has already helped to redefine the international order. If the United States, and the western world more broadly, intend to maintain a dominant position in international politics and economics, they must begin responding to BRICS as a separate economic and political entity — an alternative alliance — not just a tiny piece of the foreign policy of its member states.


Ligia Lee Guandique

Ligia Lee Guandique is a political analyst living in Guatemala City, Guatemala. She holds a Bachelor’s degree in International Relations and a Master’s degree in Political Science from the Pontifical Catholic University of Chile. Ligia has worked with human rights-based NGOs and is a regular contributor to The Affiliate Network.

 

 

Chengdu: Canary in the Coal Mine

Feature Photo: Chengdu Global Center is the largest building in western China. It contains a mall, hotel, conference center, and water park.

Chengdu, the capital of Sichuan province in south-central China, is a lighthearted community. Famous as the home of the Giant Panda conservation program, Chengdu occupies an important place in the heritage of greater China. The attractive and prosperous city is also known for the beauty of its women, the spicy heat of its food, and the self-effacing sense of humor of its inhabitants. They will need it. In many ways, Chengdu is a microcosm of China’s rise and may also serve as a canary in the coal mine should the country’s experiment with capitalism begin to fall apart.

Founded during the warring states period by Lord Kaiming as a capital for his dominion, Chengdu means “Becoming a Capital.” With 15 million inhabitants and 3.87 million cars, the youth there sarcastically refer to it as “Becoming a Carpark.” The city’s traffic is indicative of the transformation that has affected China as a whole. Since the 1980s, an entire generation of rural Chinese has migrated to the cities looking for work in the new economy. Their flight has emptied the countryside, changed family dynamics across China, and forced a residential construction boom like the world has never seen. In Chengdu, the pace of change is so astonishing people joke they sometimes go to work in the morning and get lost on the way home because everything changes so quickly. The joke is not far from the truth.

Growth and Prosperity

The rapid transformation of China from a rural Communist backwater in the 1980s to the economic powerhouse of today is arguably the single greatest human endeavor since the Second World War. Since 1978, an estimated 800 million Chinese people have been lifted out of extreme poverty. China’s adult literacy rate in 2012 was 95.1% and climbing with youth literacy reaching 99.65%. Its infant mortality rate dropped from 4.2% in 1990 to 1.2% in 2012. Life expectancy in 2012 was 75.2 years, up from 69.5 years in 1990. Gross Domestic Product (GDP) per capita increased an average of 9.3% annually from 1990.[1] In the space of a single generation hundreds of millions of Chinese citizens stopped having to worry about survival and became concerned about enjoying life. A Chinese version of the American Dream took hold in which young couples marry for love, own their own homes, and expect to retire comfortably without dependence on their children. This “Chinese Dream” once ignited, cannot be extinguished without calamity, forcing Beijing to seek resources to satisfy its growing industry and appetite for consumption.

China’s political aspirations have risen with its economic power. There is a sense at every level of Chinese society that after centuries of shameful disunity and perceived exploitation by outsiders, it is finally time to reclaim China’s place at the “center of the universe.” An air of inevitability and a disregard for short-term consequences now permeates Beijing’s foreign policy, but China lacks the cool confidence exhibited by Japan or Thailand, the only two Asian nations that were never colonized. Instead, China bullies its neighbors with incomprehensible urgency. Shamelessly and without hesitation, Beijing attempts to divide and conquer in political and economic matters, raising the level of uncertainty in the region and leaving little doubt it will act militarily if required. East and Southeast Asia are regrettably vulnerable to this approach, leaving only the Association of Southeast Asian Nations (ASEAN) and the US system of alliances to thwart Chinese hegemony in the region. In this way, the US Navy’s 7th Fleet is the ultimate regulator of China’s military, economic, and political aspirations—and this makes Beijing restless.

In response, China’s military expansion is almost as astonishing as its economic growth. Since 1989, the budget of the People’s Liberation Army (PLA) has increased an average 9.56% per year though some estimates put the figure much higher.[2] China has the luxury of focusing its military efforts against a single paradigm: the United States Military. In pursuit of parity, the PLA has acquired nuclear weapons, carrier and stealth aviation, modern command and control systems, submarine-launched ballistic missiles, and special operations capabilities. Some believe the Chinese may actually lead the world in cyber, anti-ship ballistic missile technology, and even quantum computing—a capability that could obviate any attempt at communications security. Though the United States Military is a large and robust rival, China’s drive for parity requires only that it learn from the Pentagon’s successes and avoid its mistakes. Accordingly, Chinese officers miss no opportunities to study America’s weaknesses and develop countermeasures. For them, parity is only a matter of time and persistence, something the Chinese are more comfortable with than Americans are. It is not surprising then that the PLA is not just a military force, it also carries political and economic weight within the Chinese system.

chart
This chart illustrates the rapid but steady rise of China’s military budget.

China’s Future: Unite or Ignite?

Unfortunately, China simply cannot sustain the economic growth required to keep it all going. The problem is dire. Even a moderate reduction in the pace of growth will profoundly affect tens of millions of workers. If a contraction stratifies and unbalances China’s economy, the country’s fractures will begin to re-emerge. Income and quality of life will become a matter of struggle between ethnic groups and geographic regions. China’s coastal cities are extremely important to its economy; those in the interior are less so. Profound cultural differences exist between those from the north and those from the south as well as between east to west. Xinjiang and Tibet already dream of an independent future as do some in Hong Kong and of course Taiwan. Igniting rebellion in these places requires only a spark. More profoundly, if the Chinese economy stagnates, there is simply no way to keep 600 million military aged men busy, unified, and politically obedient without expansion and conquest. Economics may thus force China to decide between conflict at home and conflict abroad.

China’s Communist Party leadership is already preparing for this eventuality. Efforts to control information and stamp out dissent serve to inoculate the country against the centrifugal forces that threaten to spin it apart. The PLA appears to have three principal goals: develop a power projection capability, use that capability to solidify control of energy supply lines, and build positive relationships with the Chinese people through disaster response. China recognizes it will need all these things if it decides to embark on a policy of conflict overseas. Though at the moment Beijing pushes its territorial ambitions incrementally, it openly experiments with hard power solutions in the South China Sea, the East China Sea, and elsewhere. Any disruption in the quality of life in Chinese cities like Chengdu may provide an early warning as to whether Beijing will militarize its foreign policy. In the lengthening list of things that Chengdu is becoming, perhaps “canary in the coal mine” is the most significant.

[1] Statistics from the United Nations Children’s Fund (UNICEF).

[2] Figures in constant 2015 US Dollars. Raw data analyzed from the SIPRI database. SIPRI’s data typically exceeds official Chinese government statistics that are believed to be underreported.


Lino Miani

Lino Miani is a retired US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.

 

The Spark to Redefine “Europe”

The results of today’s referendum in the United Kingdom present an unprecedented situation for a strained European Union. For the first time in its history, a member state voted to leave the Union. In an organization that grew exponentially, the exit of a powerful contributor will force remaining nations to make some tough choices. The UK will also need to make some hard decisions about how to move forward outside of “Europe”. Needless to say, the Brexit will not be an easy process for anyone.

The UK has historically played balancing role on the continent, but this referendum represents a decisive departure from Britain’s neighbors and a vote of no-confidence in the European Union. Eurosceptic voters of the UK have many reasons to want to sever ties with Brussels: the aftermath of the economic dysfunction made manifest by the near-miss of the Grexit, the inconsistent and frantic response to the refugee crisis, and the resurgence of a bold and unpredictable Russia. British voters, however narrowly, ultimately lost faith with the European Project.

In choosing to leave the union, the UK has lost its privileged position as one of the leaders of a modern, unified Europe. Great Britain had a unique position in the Union as one of the only states with a balance of political, economic, and military might – a position it built over the decades through active diplomatic and economic engagement in continental affairs. It was arguably the most independent of EU members, enjoying many of the benefits of Union membership without the risks of the Euro, or the borderless society of the Schengen Agreement. Britain’s options for influencing the continent are now weakened, and the benefits of Union membership lost –a unilateral disarmament of what was once a formidable diplomatic and economic arsenal.

Centrifugal Force

Europe had a lot to lose from a British exit. Strong and independent Britain played a stabilizing role: ensuring no single country –namely France or Germany– could push a unilateral direction upon the EU. It was a role only the UK could play. Italy and Spain are prone to economic and political instability; the Low Countries and Scandinavia, though economically formidable, do not have the clout or muscle needed to balance their larger neighbors; and the Višegrad economies of Eastern Europe are too new, many with elected governments more interested in moving away from Europe than towards it. Germany is the de facto leader of the EU, which is a source of great discord among the smaller, more economically-vulnerable nations that do not appreciate Chancellor Merkel’s heavy-handed style or the historical aftertaste of German leadership.

Though division within the EU is not new, the departure of its great offshore stabilizer starts the political centrifuge spinning. Right-wing leaders in France, and the Netherlands are already demanding independence referendums of their own. Spain’s call for dual-sovereignty of Gibraltar is a sign that some disputes between the UK and other EU member states may reemerge after being held dormant by a spirit of intra-Union cooperation. In the immediate aftermath of the vote, prominent leaders in many of the EU’s major nations called for their nations to follow Britain’s lead.

Not surprisingly, independent-minded regions within European nation-states will also ride the winds of change to clamor more loudly for their independence. In a bizarre twist, Scotland may have voted to remain in the EU, but may not want to stay in a non-EU Britain. No doubt Basques and Catalans in Spain will watch closely if a second independence referendum takes place in Scotland, and aspiring EU members in the Balkans are unlikely to tolerate a long and painful application process while the more developed countries are voting to leave.

The Brexit may well be the spark that brings about the dissolution of the European Union. Its erosion and potential breakup would deprive its member states of a useful venue for cooperation to solve common problems; an international political situation closer to 1914 than 2016. At a time when transnational issues are more relevant than national ones, it is not at all clear why European leaders are divesting themselves of international tools to deal with them. Europe should take a moment to reflect on its fractured past.

Opportunity in Discord

As noted European diplomat, Victor Angelo recently predicted: Europe will survive Brexit. What is not clear is whether the EU or the UK will survive their divorce intact. Perhaps the Union grew too quickly, haphazardly attempting to unify the continent in the wake of the collapse of the Soviet Union, pushing “Europe’s” borders ever outward. In this manner, Brussels hardwired weaknesses into the future unity of the European Union.

But, as I’ve said before, there is opportunity in crisis. Challenges can break a weak union or strengthen a strong one. Perhaps this is the kind of shock Europe needs to wake up and implement further democratization and a unified fiscal policy towards a federal union. Any other course could doom the entire project to failure, and erase all the good Europeans have built, together.

Nick Avila Associate Blogmaster, Navisio Global. Brexit.LT Nick Avila is a U.S. Naval Officer and Olmsted Scholar in Belgrade, Serbia. He received his B.A. in History with a focus on American Diplomacy from Amherst College in 2008. He is an MH-60S helicopter pilot by trade and has military experience from two deployments in the western Pacific to include operations in Guam, Japan, and Australia. The views expressed here are his own and not those of the US Navy or the George and Carol Olmsted Foundation.