Chapter Notes

Overview

After the bipolar structure of world politics ended in the early 1990s, the era of two superpowers (the US and the Soviet Union) was over. It soon became clear that other centres of political and economic power were emerging that could limit the dominance of the United States.

In Europe, the European Union (EU), and in Asia, the Association of South East Asian Nations (ASEAN), have become significant forces. These organisations have helped their member countries solve historical conflicts and weaknesses by creating new institutions for peaceful cooperation. This has led to the growth of prosperous economies in these regions. At the same time, the dramatic economic rise of China has also made a major impact on world politics. This chapter looks at these emerging alternative centres of power.

European Union

After the Second World War ended, Europe was devastated. Its economies were in ruins, and the old structures and assumptions that governed relations between European states had been shattered. Leaders across the continent faced a critical choice: should they allow Europe to fall back into its old rivalries, or should they rebuild it based on new principles of cooperation?

The Path to European Integration

The process of bringing European countries together was helped by the Cold War. The United States played a key role in this process.

1. The Marshall Plan: The US provided massive financial aid to help rebuild Europe's economy. To manage this aid, the Organisation for European Economic Cooperation (OEEC) was established in 1948. This organisation became a forum where western European countries started cooperating on trade and economic issues.
2. Political and Security Cooperation: The US also created a new collective security structure, NATO. In 1949, the Council of Europe was established, marking another step towards political cooperation.
3. Economic Integration: The process of economic integration continued with the formation of the European Economic Community (EEC) in 1957. This process gained a political dimension with the creation of the European Parliament.
4. Establishment of the EU: The collapse of the Soviet bloc in the early 1990s put European integration on a fast track. This led to the establishment of the European Union (EU) in 1992 with the signing of the Treaty of Maastricht. This treaty laid the foundation for a common foreign and security policy, cooperation on justice and home affairs, and the creation of a single currency.

The EU as a Supranational Organisation

The EU has many features of a state, such as its own flag, anthem, founding date, and currency (the euro). While attempts to create a single constitution for the EU failed, it does try to have a common foreign and security policy.

However, becoming a supranational organisation—an organisation where member states give up some of their power—has faced challenges.

• Expansion: The EU has tried to add new members, especially from the former Soviet bloc, but this process has not always been easy.
• Sovereignty Concerns: People in many member countries are hesitant to give the EU powers that were traditionally held by their own national governments.

The EU’s Influence

The EU is a highly influential organisation with economic, political, and military power.

Economic Influence

• Massive Economy: The EU's GDP was projected to be around $19.35 trillion in 2024.
• Powerful Currency: Its currency, the euro, can pose a threat to the dominance of the US dollar.
• Global Trade Leader: The EU's share of world trade is much larger than that of the United States, which allows it to be more assertive in trade disputes with the US and China. It is also an important bloc in the World Trade Organisation (WTO).

Political and Diplomatic Influence

• UN Security Council: An EU member, France, holds a permanent seat on the UN Security Council. The EU also includes several non-permanent members.
• Influencing US Policy: This representation has allowed the EU to influence US policies, such as the US position on Iran's nuclear programme.
• Soft Power: The EU often relies on diplomacy, economic investments, and negotiations rather than military force. This has been effective in its dialogues with China on human rights and the environment.

Military Influence

• Combined Forces: The EU's combined armed forces are the second largest in the world.
• Defence Spending: Its total spending on defence is second only to the US.
• Nuclear Power: France, an EU member, has a nuclear arsenal of approximately 335 warheads.
• Technology: The EU is the world's second most important source of space and communications technology.

Limitations of the EU

Despite its power, the EU faces significant limitations, especially in foreign relations and defence.

• Internal Disagreements: Member states often have their own foreign and defence policies that conflict with each other. [!example] When the US invaded Iraq, Britain's Prime Minister Tony Blair was America's partner. Many of the EU's newer members also joined the US-led "coalition of the willing." In contrast, Germany and France strongly opposed the American policy.

• Euroskepticism: There is a deep-seated skepticism in some parts of Europe about the EU's goal of greater integration. For example, former British Prime Minister Margaret Thatcher kept the UK out of the European Market. Denmark and Sweden have resisted adopting the euro.

• Brexit: In 2016, a referendum was held in Britain where 51.9% of voters decided that Britain should exit the EU (a process known as Brexit).

Association of South East Asian Nations (ASEAN)

Before and during the Second World War, the southeastern region of Asia suffered from repeated colonialism by both European powers and Japan. After the war, these newly independent countries faced immense challenges, including nation-building, poverty, and pressure to align with one of the superpowers during the Cold War.

To avoid conflict and promote cooperation, the countries of the region established the Association of South East Asian Nations (ASEAN).

Formation and Objectives

• ASEAN was established in 1967 by five founding members: Indonesia, Malaysia, the Philippines, Singapore, and Thailand, who signed the Bangkok Declaration.
• Over the years, Brunei Darussalam, Vietnam, Lao PDR, Myanmar, and Cambodia joined, bringing the total strength to ten members.
• Primary Objective: To accelerate economic growth, and through that, achieve social progress and cultural development.
• Secondary Objective: To promote regional peace and stability based on the rule of law and the principles of the United Nations Charter.

The 'ASEAN Way'

Unlike the EU, ASEAN has little desire for supranational structures. Instead, ASEAN countries follow what is known as the 'ASEAN Way'.

The Three Pillars of the ASEAN Community

In 2003, ASEAN decided to establish an ASEAN Community based on three pillars, moving along a path similar to the EU.

1. The ASEAN Security Community: Based on the idea that territorial disputes should not escalate into armed conflict. Member states promise to uphold peace, cooperation, and non-interference. The ASEAN Regional Forum (ARF), established in 1994, is the organisation that coordinates security and foreign policy.
2. The ASEAN Economic Community: Aims to create a common market and production base within ASEAN and to aid social and economic development. It focuses on creating a Free Trade Area (FTA) for investment, labour, and services.
3. The ASEAN Socio-Cultural Community.

ASEAN's Growing Importance

ASEAN's economy is growing much faster than that of the US, the EU, or Japan, which has increased its influence.

• Vision 2020: This policy defines an outward-looking role for ASEAN in the international community, encouraging negotiation over conflicts. For example, ASEAN has mediated the end of the Cambodian conflict and the East Timor crisis.
• India and ASEAN: During the Cold War, India did not pay adequate attention to ASEAN. However, in recent years, this has changed. India's 'Look East' Policy (since the early 1990s) and 'Act East' Policy (since 2014) have led to greater economic interaction. The ASEAN-India FTA came into effect in 2010.

The Rise of the Chinese Economy

China's economic success since 1978 is linked to its rise as a great power. It has been the fastest-growing economy since its reforms began and is projected to overtake the US as the world's largest economy by 2040.

China's Economy Before the Reforms

After the communist revolution in 1949 under the leadership of Mao, China's economy was based on the Soviet model.

• State-Controlled Economy: The government created a state-owned heavy industries sector, using capital accumulated from agriculture.
• Isolation: China cut its links with the capitalist world and relied on its own resources, with some brief aid from the Soviet Union.
• Successes and Failures: This model established an industrial economy and provided social welfare, education, and health to its citizens. However, economic growth was not enough to meet the needs of a growing population, industrial production was not growing fast enough, and per capita income was very low.

The Shift to a Market Economy

In the 1970s, the Chinese leadership made major policy changes to end its economic isolation.

1. In 1972, China established relations with the United States.
2. In 1973, Premier Zhou Enlai proposed the ‘four modernisations’ in agriculture, industry, science and technology, and the military.
3. In 1978, the leader Deng Xiaoping announced the 'open door' policy and economic reforms to generate higher productivity by attracting capital and technology from abroad.

China did not adopt 'shock therapy' like the Soviet Union but opened its economy step-by-step.

• Privatisation: Agriculture was privatised in 1982, followed by industry in 1998.
• Special Economic Zones (SEZs): Trade barriers were eliminated in these specific zones to allow foreign investors to set up enterprises.
• State's Role: The state continues to play a central role in setting up a market economy.

Consequences of the New Economic Policies

The new policies helped China’s economy break from stagnation and grow rapidly.

• Positive Outcomes: Agricultural production and rural incomes rose remarkably. The creation of SEZs led to a phenomenal rise in foreign trade, making China a top destination for Foreign Direct Investment (FDI). China joined the World Trade Organisation (WTO) in 2001.
• Negative Outcomes: Not everyone has benefited. Unemployment has risen, and working conditions for women are poor. Environmental degradation and corruption have increased, along with economic inequality between rural and urban areas.

India - China Relations

Historically, India and China were great powers in Asia but had limited political and cultural interaction. When they confronted each other in the twentieth century, they found it difficult to develop a stable foreign policy.

Conflict and Cooperation

• Early Hopes and Conflict: After independence, there was hope for cooperation, summed up by the slogan 'Hindi-Chini bhai-bhai'. However, this hope was shattered by conflicts over China's takeover of Tibet in 1950 and a border conflict in 1962 over territorial claims in Arunachal Pradesh and the Aksai Chin region of Ladakh.
• Improving Relations: Diplomatic relations were downgraded until 1976. In the late 1970s, China's policy became more pragmatic, and talks to resolve the border issue began in 1981. A visit by India's Prime Minister Rajiv Gandhi to China in December 1988 provided a major push for improvement.
• Economic Ties: Since the end of the Cold War, relations have gained a strong economic dimension. Bilateral trade grew from $338 million** in **1992** to more than **$84 billion in 2017.

Contentious Issues Today

Despite growing economic ties, several issues remain contentious.

• Border Disputes: The border issue from 1962 is still not fully resolved.
• Pakistan Factor: China is seen as contributing to Pakistan's nuclear programme. The China-Pakistan Economic Corridor and China's support for Pakistan in the UN against India's moves to counter terrorism are also sources of friction.
• Regional Influence: China’s military relations with countries like Bangladesh and Myanmar are sometimes viewed as hostile to Indian interests.

Despite these issues, both countries are becoming more familiar with each other through increasing transportation links and frequent official visits, and military-to-military cooperation is increasing.

Japan

Japan is another major centre of power, known for its high-technology products from brands like Sony, Panasonic, and Toyota.

• Economic Strength: Despite having few natural resources, Japan progressed rapidly after the Second World War. It is the third-largest economy in the world (as of 2017) and the only Asian member of the G-7.
• Global Role: Japan is the second-largest contributor to the regular budget of the UN. It has had a security alliance with the US since 1951.
• Military: Article 9 of the Japanese Constitution states that the people "forever renounce war." Although its military expenditure is only one percent of its GDP, it is the seventh largest in the world.

South Korea

South Korea has emerged as another significant power in Asia.

• History: The Korean peninsula was divided into South and North Korea after the Second World War along the 38th Parallel. The Korean War (1950-53) intensified the rivalry.
• Economic Development: Between the 1960s and 1980s, South Korea developed into an economic power in a period known as the "Miracle on the Han River." In 2017, its economy was the eleventh largest in the world.
• Key Factors for Success: Its development is attributed to successful land reforms, human resources development, rapid economic growth, and effective governance.
• Global Brands: South Korean brands like Samsung, LG, and Hyundai are well-known globally.