Global power tilts to­wards Asia

The out­come will be pre­sented to the an­nual WEF meet­ing in Davos in Jan­uary 2011 for con­sid­er­a­tion and ac­tion.

The Pak Banker - - Editorial5 - Dr Maleeha Lodhi

Par­tic­i­pat­ing in a con­fer­ence or­gan­ised by the World Eco­nomic Fo­rum ( WEF) is al­ways in­tel­lec­tu­ally chal­leng­ing. It helps to fo­cus at­ten­tion be­yond the im­me­di­ate and parochial to long-term trends in think­ing on global is­sues.

In last week's gath­er­ing in Dubai or­gan­ised by WEF in part­ner­ship with the UAE and Dubai gov­ern­ments, ex­perts from academia, busi­ness, govern­ment and so­ci­ety were in­vited from around the world to dis­cuss key is­sues and pro­pose so­lu­tions to to­day's chal­lenges. The out­come will be pre­sented to the an­nual WEF meet­ing in Davos in Jan­uary 2011 for con­sid­er­a­tion and ac­tion.

Dis­cus­sion of is­sues on a broad global agenda of­fered in­sights into both risks and op­por­tu­ni­ties. Speak­ers of­fered di­verse per­spec­tives but agreed on a num­ber of trends or points:

* Eco­nomic crises are be­com­ing geopo­lit­i­cal time bombs - sov­er­eign de­faults and fi­nan­cial melt­downs pose se­ri­ous threats to long-term po­lit­i­cal sta­bil­ity.

* There has been resur­gence in state power fol­low­ing the eco­nomic cri­sis. States are in­ter­ven­ing more to di­rect eco­nomic ac­tiv­i­ties to­wards par­tic­u­lar goals - a model that may even­tu­ally re­place the shat­tered "Washington con­sen­sus".

* The 2008 fi­nan­cial cri­sis has ac­cel­er­ated the emer­gence of a new world or­der mark­ing as it did the end of the era of Western dom­i­nance.

* As eco­nomic power shifts from the West to the East Western states no longer call the shots while China and other de­vel­op­ing coun­tries now pos­sess un­prece­dented lever­age over the global econ­omy.

* De­clin­ing Western economies are be­com­ing more pro­tec­tion­ist in a role re­ver­sal from the past when de­vel­oped states use to lec­ture de­vel­op­ing na­tions about pro­tec­tion­ism.

* New forms and struc­tures of in­ter­na­tional co­op­er­a­tion are emerg­ing in­di­cated by the shift to the Group of Twenty from the G7.

* Gaps in in­ter­na­tional co­op­er­a­tion will need to be ad­dressed by evolv­ing new or re­formed in­sti­tu­tions of global gov­er­nance.

* There are a num­ber of 'slow­burn­ing' risks of which the most im­por­tant is per­haps the de­mo­graphic chal­lenge. Left un­ad­dressed the pop­u­la­tion spikes can have very desta­bil­is­ing con­se­quences.

* Struc­tural un­em­ploy­ment looms as a grow­ing threat.

* The Western donor aid par­a­digm is no longer valid as it re­sponds to these coun­tries' own tax­pay­ers and po­lit­i­cal com­pul­sions and not to the needs of cit­i­zens in re­cip­i­ent states. Mo­ti­vated by in­puts that are un­able to de­liver the model needs to be reeval­u­ated and re­placed.

* On ter­ror­ism, the costs of such vi­o­lence are well known though hard to quan­tify, but the costs of counter-ter­ror­ism ac­tions re­main un­der-recog­nised and un­der-an­a­lysed. These can be highly desta­bil­is­ing and com­pound the vul­ner­a­bil­ity of frag­ile states by weak­en­ing govern­ment author­ity and cre­at­ing dis­rup­tions at the sys­temic level.

* Re­sponses to ter­ror­ist threats should avoid the ex­tremes of over­re­ac­tion and com­pla­cency.

The topic of the shift in global power at­tracted the most at­ten­tion at the Dubai Sum­mit. A WEF sur­vey prior to the con­fer­ence found China to be the most pop­u­lar among its net­work of 72 coun­cils ex­am­in­ing spe­cific is­sue ar­eas. Not sur­pris­ingly the ple­nary ses­sion on the chang­ing bal­ance of power was very well at­tended and pro­duced an­i­mated de­bate. Much of the dis­cus­sion cap­tured the anx­i­ety in the West about China's rise and raised a num­ber of in­ter­est­ing ques­tions about the present tran­si­tional phase that the in­ter­na­tional sys­tem is nav­i­gat­ing from US dom­i­nance to one based on a new, un­cer­tain equi­lib­rium.

China's emer­gence as an eco­nomic pow­er­house has con­fronted in­ter­na­tional pol­i­tics with a dra­matic trans­for­ma­tion and re­dis­tri­bu­tion in power that the West finds dis­com­fort­ing. Sev­eral speak­ers em­pha­sised that the US and Europe have no 'tran­si­tion nar­ra­tive' or strat­egy to ef­fec­tively ap­proach their rel­a­tive de­cline of power and China's as­cent. The fi­nan­cial cri­sis of 2008 saw a psy­cho­log­i­cal shift and a ques­tion­ing of the in­sti­tu­tions and con­sen­sus that un­der­pinned eco­nomic mod­els and eco­nomic man­age­ment strate­gies.

An­other Western anx­i­ety that was iden­ti­fied was over the scram­ble for nat­u­ral re­sources es­pe­cially how African coun­tries and other de­vel­op­ing na­tions were turn­ing to China. But there was also recog­ni­tion that the trade and devel­op­ment as­sis­tance strate­gies Bei­jing had har­nessed in pur­suit of its le­git­i­mate and grow­ing re­source re­quire­ments of­fered in­struc­tive lessons to oth­ers.

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