Global power tilts towards Asia
The outcome will be presented to the annual WEF meeting in Davos in January 2011 for consideration and action.
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* The Western donor aid paradigm is no longer valid as it responds to these countries' own taxpayers and political compulsions and not to the needs of citizens in recipient states.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.