Indian Defence Review

The emergence of a new world order has been under discussion for some time now.  The reasons are not difficult to discern. In the last few years, the USA appeared serious about its ‘America First’ slogan and seemed to be withdrawing from many of its foreign engagements and commitments. The US was also having major differences with its long-standing allies across the Atlantic and even questioned the utility of its defence arrangements with these strategic allies.

On the other side, China is becoming more assertive in its dealing with other countries. The assertiveness reinforces the view of China’s desire to revise the international order in its favour. It is pursuing scientific and technological domination, enhancing control over world trade through the ‘belt and road initiative’ and encouraging acquisition of business entities particularly those involved in cutting edge dual use technologies though purchase of stake in those companies or joint ventures or through other means.

All these aspects indicate an emerging vacuum in global leadership which China desires to occupy. Added to this is the recent disruption caused by the Corona pandemic which many consider as a sort of ‘tipping point’. It may therefore, be worthwhile to ascertain if these predictions of an emerging new world order carry any weight or is it just wishful thinking?

At the outset let’s understand what world order means and what does a change in world order imply? World order broadly implies the distribution of power among nations, the more powerful being able to influence the way countries work with each other, in terms of settling differences and building coalitions.

The more powerful or key players determine the norms and functioning of the institutions which govern dealings and relations in the international arena. They are not only instrumental in resolving military disputes between or within countries, but also influence world trade and economic issues. In most cases the leading or key powers ensure the well-being of their camp followers and display a benevolent attitude towards the needy.

The world witnessed a stable world order for the decades following the end of the second world war. This was quite a unique happening since strife, wars, conquests and colonization are generally a norm in world history. A stable world order involves a fair and more or less acceptable distribution of power among the key players, with each being able to protect and pursue its vital interests. 

The long period of stability had the beneficial effect of unprecedented economic growth and wellbeing, particularly among the leading powers. The demise of the Soviet Union, while causing an upheaval of sorts, did not disrupt international relations to any great extent since USSR just faded away without a whimper.

The only consequence was USA, the other pole, assuming the role of the sole superpower. Full of hubris at this elevation in status, the USA embarked on many ill-advised adventures as the world’s policeman, resulting in economic setbacks and loss of moral standing. These factors resulted in a rethink and the USA pitched for a gradual withdrawal from its international engagements and opted for economic rejuvenation.

A vacuum at the top of the world order cannot exist for long, leading to talk of a new world order with changesand redistribution of power among players; both old and new. A change in world order would lead to changes in the set of rules and norms governing relationships among nations. The key players tend to further their beliefs, values and methods of governance. For example, USA as a leading light promoted democracy and capitalism. If China assumes leadership, it will promote its model of authoritarianism and command economy.

A change in world order is thus accompanied by furthering new perspectives and ideologies.

Major changes in world order occur in a gradual manner rather than as a sudden transformation. Skilful management and proactive diplomacy can to a large extent avoid disruptions as the existing world order dissolves and a new one emerges.

A new world order emerges because the earlier balance of power is disrupted and global institutions do not represent the emerging power structures. Some countries become more aspirational as their economic and military power rises, while countries which were powerful earlier, falter or overstretch their resources.

However, one feature of change is that it requires a coalition of nations to tilt the balance in favour of a new world order. In the normal course, a single nation hardly ever has the accumulated power or heft to bring about such changes. Even a powerful nation requires a coalition of likeminded nations to support its bid for leadership, particularly in institutions which influence security, trade and commerce.We can observe some of these happenings today with China emerging as a rising power and global institutions like the UNO and others, unable and unwilling to be more representative of the new power structures.

The Corona pandemic has pushed the Western powers, including the US on the back-foot and this appears to have provided an opening to an assertive China to move up the totem pole.But will China be able to manipulate the levers of influence such as relationships, economic and military power to replace USA or slide into the vacant spot of erstwhile USSR? Let’s explore in greater detail.

While the Western nations are struggling to cope with the Corona pandemic in arresting the infections and death rates, China seems to be on the road to recovery. However, the opaque manner in which China handled the Corona outbreak and delayed alerting other countries, resulted in a tremendous loss of trust and credibility.

Not many countries would be currently willing to repose any trust in China’s actions or its proclamations of innocence. This trust deficit reinforcesthe earlier perception of a ‘predatory China’ attempting to ensnare countries into debt traps and seizing strategic assets, as it did in Sri Lanka. It will take a lot of effort on Beijing’s part to change these existing perceptions.

As it is, most Western nations are blaming China for their current state and a major blow-back from the EU, USA, Australia and Japan has already commenced. With such a blow-back and loss of credibility, China may find it difficult to get support or backing for any initiatives in international fora that may favour it.

In addition, China is not viewed as particularly benevolent, an attribute generally associated with world leadership. Chinese attempts to seek greater influence in international institutions may suffer a setback, at least for now.

China is a rising military power and is expanding its capabilities and inducting cutting edge technology systems. It is acquiring basing facilities in the Indian Ocean and East Africa and gaining experience to operate globally while conducting anti-piracy operations in the Gulf region. Its power projection capabilities, however, are still restricted to its near abroad and Chinese military has limited experience in the conduct of large-scale combined arms operations far from the mainland.

It would take some time before China can be expected develop the capabilities and experience to match those of the US and Western navies in terms of policing regions such as the Atlantic or the entire Pacific oceans, It already has its hands full coping with challenges in its area of influence delineated by the nine-dot line. It will need a lot of effort and time before one can expect China to be able to breakout of the near abroad and in any way intervene to stabilise regions or places of unrest or conflict.

In the economic sphere, redistributing power would need much more of China than a large GDP, huge trade volumes, high growth rate and a humungous foreign exchange reserve. The World Bank, IMF, WTO and other such institutions are currently dominated by the West because of the funds that they inducted into these institutions  and it would not be easy for China to dislodge the current power elite handling these institutions.

Any move would be resisted and without support from likeminded nations, it may prove very difficult. More importantly, the current world trading currency is the US Dollar and till it retains this supremacy, China will have limited elbow room. While the Yuan was designated as the official reserve currency by IMF, China’s attempts to make Yuan the world trading currency appears a distant dream as of now. It will require China to loosen its iron grip on internal financial institutions, bring in capital market liberalization, monetary policy stability and free trading in Yuan.

More importantly, for Yuan to become a global trading currency would need central banks of other countries to trust China adequately to choose Yuan as part of their foreign currency reserves. Countries may not trust China with its opaque financial dealings such as currency or exchange rate manipulation. It is going to be a long haul for China and the change if any, would be very gradual rather than anything major in the immediate future.

Last but not the least, there are intangibles; those difficult to quantify aspects such as innovation and soft power which underpin world leadership. Currently, USA maintains a discernible lead in technological innovation, centred around the Silicon Valley in California. China is fast trying to catch up and has made considerable progress.

One needs to understand that innovation is not a one-time achievement created through financial inducement. It is fuelled by attracting and nurturing talent of diverse origins over a period of time. In this regard, USA continues to attract the best talent from across the world. This abundance of talent and the diversity of perspectives it brings along, is what makes the USA a leader in innovation.

China will thus have to compete with the USA in attracting talent from across the world, before it can take a decisive lead in innovation. Then there is the issue of soft power. To assume a consensual lead role among a diverse community of nations requires soft power in addition to hard power. Soft power is about the ability to attract and co-opt rather than coerce people to fall in line. This comes through cultural leadership and ideological affinity or attraction.

A tightly controlled and authoritarian regime in unlikely to prove attractive, particularly to the younger generation. Relations with such states are generally transactional in nature, remaining at the official level and do not filter down to people to people closeness.  Such relationships without the support of the people do not prove long lasting. In contrast, USA and the West attracts foreigners by their open markets, freedoms and a non-discriminatory approach.

Developing soft power, needs time to cultivate friends and supporters among the comity of nations by building common interests, cultural ties and supporting people to people contact. 

Based on the above discussions it becomes apparent that a major disruption in world order is unlikely. China may find it difficult to garner support from likeminded nations seeking changes in the existing world order. Besides this, it will take time before China or any other nation develops capabilities to replace USA as a power of consequence in world affairs.

In the meantime, gradual changes to accommodate the interests of rising powers and making global institutions more representative may be expected. The current norms and rules governing international relations may be expected to continue with minor adjustments to overcome challenges as they arise. One aspect that merits attention is that most nations, including China and others such as India, Germany and Japan, are the main beneficiaries of the current world order and its institutions, norms and rules.

A major upheaval in the world order would therefore, not suit any of the main aspirants of change. If anything, a more representative share of power may suffice. What is also obvious is that USA continues to hold a very strong hand in this game of cards. Its current phase of isolationism and fractured relations with allies are eminently reversible with a change in leadership, which in any case occurs every four years. What emerges is that the current world order can fairly easily adapt to accommodate interests of emerging powers, which sets at rest worries about major upheavals in the existing world order.