Murari Sharma: The Asian Century

The 21st century will be Asian century, just as the 20th was the American century and the 19th was the European century. The signposts that Asia will dominate this century are becoming increasingly apparent and unmistakably clear. Western sanctions against Russia and Narendra Modi’s election in India will help accelerate Asia’s rise further.

The rise and fall of the great powers, says Paul Kennedy in his eponymous book, correlates to military overstretch and decline in economic resources and other areas. World War I and II decimated European powers militarily and economically and paved the way for the United States to emerge as the world’s hegemon.

Having the luxury of being located across the sea, America was largely immune from those wars and participated in them at the time of its choosing sustaining limited damage and maximizing its strategic advantage. Subsequent technological revolution, financial innovation and military expenditures sustained America in the top position for nearly a century.

However, now America’s global dominance is eroding steadily. Partly the decreasing investment in nation building at home and overextended military commitments abroad and partly the rise of other nations have caused this erosion.

As the pro-tax-cut and anti-government forces in Washington block investment in nation building and weaken safety net, growth has been slowing, poverty rising, infrastructure crumbling and inequality growing in America. The limitations of American power have already been witnessed in the wars in Vietnam, Iraq and Afghanistan and in the failure of economic sanctions against Cuba, Iran, North Korea and Russia.

As America stalls, Asia is rising. Although the United States still spends more on defense than the next 10 countries combined, the gap is narrowing as military expenditures spike in Asia. If countries like China and India do not engage in mutual annihilation, they will increasingly challenge American military dominance in the world in the days ahead, particularly in Asia and the Pacific.

China has already surpassed the United States in GDP in terms of purchasing power parity and will do so in nominal GDP in 8 years, given its 7-10 percent growth rate. The nominal GDP of America and China was 16 trillion and 9 trillion dollars respectively in 2013. China, India and Japan have a combined GDP of 23 trillion dollars (in 2013), 6 trillion more than that of the 28 EU members.

What is more, Asian countries are investing in the future, mainly by improving education and developing technology. For instance, out of the top five countries in global educational ranking in math, science and literacy, four were from Asia, according to the data from 2006-10 published by Pearson. Only Finland was among the top five. While declining population in the West will limit economic expansion, Asian countries will see their population increase for the next several decades.

Of course, there are doubts and uncertainties about political stability in leading Asian countries, particularly multicultural societies like China and India, which may stall or impede their progress. But their instability will remain manageable as long as their economic growth continues, for people would not want to kill the hen that lays golden eggs as long as it does. So it is likely that these countries will continue growing without any debilitating political setback.

The United States and Europe will try to arrest their own decline and prevent Asia from breaking or replacing the international order they have created, as their sanctions against Russia or Iran demonstrate. But their unity is shaky at best and their capacity limited in building and bribing a loyal elite base in other countries and in dividing these nations, and in controlling their own internationally mobile plutocrats from starving government and generating a popular backlash at home.

So Asian countries will continue to rise, and western sanctions against Russia, including its expulsion from G8, over the Ukraine crisis will reinvigorate their demand. The western support to remove the elected government of Victor Yanukovych and Russian annexation of Crimea were clearly wrong. If Russia is fomenting trouble in eastern Ukraine, that is also wrong.  But the sanctions will prove a blessing in disguise for Asia.

It will pan out in at least two ways. One, the sanctions have frightened non-western powers that they may face similar embargos if they defied the West. This will motivate non-western countries to unite against the existing order and strengthen Asia’s hand. If western countries fail to heed their demands, non-western countries will try to undermine the current order and find some alternatives.

The impact will be felt in the IMF, World Bank, and United Nations, in global trade negotiations, and in the status of the US dollar and euro, among other things. BRICs are already talking about an alternative to the US dollar and euro. Russia is promoting the Eurasian Union to counter the European Union. China and Brazil have their own forums as well.

Two, Russia, the second largest nuclear power and a medium sized economy with immense growth prospects, will forge closer economic and political ties with Asia to sell its gas, bring in investment, and counter the western sanctions. China and India will welcome Russia’s reorientation. For instance, they did not support the West-sponsored UNGA resolution criticizing Russia over Crimea’s annexation. Moscow is negotiating a major energy treaty with Beijing. India-Russia strategic and economic cooperation is slated to grow under the new administration in New Delhi.

That brings me to Narendra Modi, a Hindu nationalist, who will lead India for the next five years. If he can boost India’s growth as prime minister, as he did Gujarat’s as chief minister, he will be India’s Mahathir Mohamad. Like Mohamad, Modi comes from a humble background, has a nationalist political base, is not educated in the West and is not loyal to the West. Like Mohamad, he has suffered endless vilification from the West. So like Mohamad, he is likely to welcome western investment and reject western hegemony, which will contribute to Asia’s rise further.

All these developments will strengthen Asia’s economic and political importance in the days ahead. Short of a series of catastrophic wars between China and Japan or between China and India, the major countries with territorial disputes, the current century is destined to be the Asian century.