The New Rising Powers of the World and Its Significance to Global Politics in General and Global South in Particular
The New Rising Powers of the World and Its Significance to Global Politics in General and Global South in Particular
The world is heralding towards new dimensions of change - The New Rising Powers of the World and Its Significance to Global Politics in General and Global South in Particular introduction. Globalization has changed the status quo of most nations round the world. More than any part of the world, it has brought Asia on the forefront. India and China, in particular have remained phenomenal with their growth stats, giving the western world sleepless nights for their ever increasing dependence on the two Asian giants. The global economy has already disembarked for a momentous shift. According to forecasts, the first few decades of the twenty first century will be dominated by the consequences of a new Asian dynamism.
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Keeping in perspective, the current stats, China with a GDP of 11 percent will make it to the second spot amongst the biggest economies of the world followed by India to the third spot in 2016 and 2035 respectively. A number of other countries inclusive of Thailand, Vietnam, Brazil and South Africa have also been stipulated to join the bandwagon. The regional and global economic, social and political interactions are expected to go through a dramatic change with some major repercussions on the environment as a result of the economic processes these nations implement. Not only will it change the face of the world but completely obstruct the global political and economic order that has been in place for as many as 50 years now.
This paper will elaborate on the current and the expected future role of India, China, Brazil and South Africa in two lights-their effect on the developing world in terms of economic growth and their effect on the global politics. Before, I delve into further details; I will elaborate a little on the growth status of each of the four nations under scrutiny.
South Africa is undoubtedly the most advanced nation in the African continent. Their economy grows at an annual rate of 3 percent a year. Growth in Africa started shooting up since the 1994 and it enjoys a unique geographical position. The route through from South Africa leads one to the Sahara Desert.
Mining sector, manufacturing sector and agriculture have long held strong as the pillars of South Africa’s development. Gauteng is the center of economic activity where most mining also takes places. The industrial and financial sectors of the country have been developed over the year while holding immense potential for growth.
Moody’s in 2005 found it only justified increasing South Africa’s rating by a notch. It enjoys Baal now. They were basically improvement in South Africa’s foreign exchange reserves and rapid economic growth that sought it the higher grade.
Germany, United States, Japan, United Kingdom, China and Netherlands are nations South Africa frequently engages in trade with.
Amongst the major sectors of the industry, mining tops the chart followed by manufacturing, agriculture, tourism, and oil and gas etcetera. On the other hand, the less successful sectors include financial services, textiles and clothing and banking. However, their growth has not remained stagnant but has shown considerable improvement in the past few years.
On the global front, South Africa enjoys the unique honor of being the world’s leading supplier of minerals and mineral products. It satiates the needs of as many as 87 countries round the globe. Stats reveal that the country ends up producing approximately 55 different minerals each year. There are 700 mining facilities and minerals such PGES that is platinum group elements, gold, coal and diamonds not only dominate exports but also fetch significant revenue earnings.
The mining industry sector is all set for a change. This will follow post-implementation of South Africa’s new Mining Charter. The charter calls for empowerment for all developments related to mining in the country. Agriculture on the other hand continues apportioning four percent of the nation’s GDP every year. What is ironic is the land composition which is made up of cattle and sheep farming largely with only 13 percent of land utilized for crops. Amongst the crops, Maize tops the charts while wheat, sunflowers, oat and sugar cane are also grown. Government has realized the potential of agriculture to the growth of the economy and is investing in the development of small scale farming. Moreover, employment is also aimed for through agro-development. Exports are made up of citrus and deciduous fruit along with some locally produced flowers and wines.
The introduction of the Africa Growth and Opportunity Act brought in growth opportunities for the clothing and textiles sectors of the industry. Not only did the government bank on the opportunity but stats reveal that the industry earned as much as R791 million from its exports to the States only; a 51 percent increase from the preceeding years.
As far as the currency is concerned, rand was strengthened by as much as 16 percent against the basket of currencies in 2003. Another 9 percent increase came its way in 2007. The natives also enjoy low mortgage and interest rates, a measure that is supportive of growth. Other than this, high international prices for export commodities thanks to some good quality work by native labor as raised business prospects. Consumer confidence has taken a boost and is culminating today in the form of high productivity.
Brazil’s economy has seen significant growth for the past five years. It has been increasing from brick to brick and the recent stock increase in atleast four consecutive days firmly validates our argument. It demonstrates the country’s economic power and the edge it exercises over other nations in its ability to sustain the con-current instability of the world economy. According to some experts, Brazil stands out as one of the few nations who will be able to survive the global credit crunch without any impediments coming its way. According to certain industry experts for example Regis Abreu of Bloomberg, the global credit crunch will not affect Brazil at all. Not only is this but it also expected to enjoy economic growth irrespective of world wide decline in the international markets. Capital growth due to real estate investment in various parts of the nation especially the northern eastern part of Brazil has been growing at a steady rate of 25 percent. This in its own as a green call to prospect investors in property. This is because risk variables are less in Brazil when compared to other global markets. Why invest in a market whose status is unpredictable in the long run when you have more promising stable investment prospects around you? Brazil is regarded as an aggressive market with some fierce competition and growth potential. It provides not only excellent capital opportunities but a secure and stable investment for its investors. This is a direct result of its strong economy.
Brazil has also given indications signaling low interest rates and low inflation in the near future. If juxtaposed with foreign mortgages that are slated to be available by the end of the year will inevitable take international real estate investment to newer highs in the nation. This is remarkable considering the speculations of economic recession in its neighboring areas. Moreover, the demand beats supply by miles and bounds in the country. This will help the nation sustain some wide spread development and expansion as far as its residential and commercial development is concerned. Brazil’s first rate exist strategies give it an edge over other nations as well in that it is solely not dependent on international market. It enjoys its own share of millionaires all ready and willing to invest in property and vacation at home. Thus, soaring rental income will stand inevitable as a result of this.
Home to a population of whooping 1.1 billion people, India’s development in terms of scale, pace and size has remained unparalleled ever since its existence. The country has been successful in innumerable sectors right from the word go on 15th August, 1947. the various fronts which it has successfully taken care of include a vibrant strong electoral democratic system, completely gotten rid of the threat of famines, has been able to confront issues relating to poverty reducing its absolute value by more than half, soaring literacy rate, advancement in technology giving way for improved health conditions and has become one of the strongest information technology hubs round the globe. Other areas where growth has remained phenomenal include business process out sourcing, pharmaceuticals and telecommunications sector. Today, it has become the fourth largest economy in the terms of the purchasing power parity, exercising a unique position internationally henceforth. India currently grows at a whooping eight percent. The national income which has been ever increasing for the past 3 years has a lot to explain for the growth story of India. On the saving and investment front, India has witnessed rapid development. According to current statistic, India saves approximately 32 percent of its total GDP while investment sector is soaring high at 34 percent. The tete-a-tale doesnot end here for both, the savings and the investments are slated to rise more rapidly in the near future.
In terms of population division, India’s population is appropriately in terms of its contribution to the country’ economy compared to world standards. A recent survey revealed that young population has contributed very conspicuously to the growth and development of the nation. In this bid to cashing in on the youth of its population, Indian government has also taken significant steps to educate them. Not only will this fetch employment for them but will also end up raising national incomes. Other than this, various policies have been implemented in the country. They have proven to be pretty fruitful in finding their way through to economic growth. One major blissful outcome of this has been the remarkable reduction in poverty across the board as mentioned earlier. The government remains committed towards continued unimpeded growth and development and looks forward for investment in the health, education and infrastructure related sectors.
That India command international respect is know alien concept and this was very recently taken to newer heights after an article by Canadian columnist Marcus Gee in Canada’s Globe and Mail. According to him, Indian business leader will cut through U.S and China in the twenty first century. Even though China is well ahead of India in various sectors as far as exports are concerned but India is no mouse hiding out in holes. The genius of its businessmen will do the trick and it is solely thanks to their expertise that India which was once upon a time an economic washout around 20 years ago is home to more billionaires compared to Japan. As many as four billionaires rank in the top 10 list of the world’s richest people. This is phenomenal and much higher than the total number of billionaires that any other country can boast about.
According to the newspaper, India today is amassing wealth at an accelerated pace which is more rapid than the Japanese in their 1980s and the Chinese in their 1990s. It leaves many a fold business leaders wide eyed when they read reports of how Mukesh Ambani gifted his wife an Airbus which cost him a humongous 60 million dollars and that too on her forty fourth birthday.
The leadership that Indian companies exercise is even more spectacular. Not only are they moving ahead as far as their companies are concerned but also opening new doors for their country as well. The Indian companies today are not huge, brawny and bold but instead they are smart and very nicely articulated; modern to be precise. Indian entrepreneurs are focused and are remarkable in that they don’t give in to hyperbole. Irrespective of his achievements coming in the form of world’s cheapest nano every and taking over Tetley Tea, India’s Anglo Dutch steel company Corus and the British Jaguar and Land Rover brands have remained rooted to their causes and have not given in to all the hype. This does not go unsaid however, that the government still faces innumerable challenges in a number of areas. However with the sort of commitment, Indian government and people share towards their nation, it will be only a matter of time before it becomes the superpower.
Since the late 1970s, China’s economy has been growing at a remarkable average rate of 9.3 percent annually. It goes unsaid that China’s growth has been unrelenting. According to forecasts, the minimum time period speculated as far as this continued growth and development is concerned is another two to three decades or so. China with a population of as many as 2 billion people is slated to be the next superpower and the biggest con-current threat to the United States. It owes to its credit, a huge manpower and working process in various sectors including manufactured. Moreover it utilizes purchasing-power-parity to put it in a stronger position; a strategy that was put into action economists to adjust for local purchase power. Today, China’s labor force show as many as 761 million people. This is approximately five times as large when compared to that of the United States. China used to produce around 200 room air conditioners in 1978; today it produces a whooping 48 million air conditioner. If we compare the stats then and the stats today of the amount of cloth produced in the two time periods, then we will be amazed to know that back then China produced 11 billion meters of cloth, while in 2007 it ended up producing 35.4 billion meters of cloth. With the constant growth, the living standards of the Chinese have also increased. More and more houses have become technologically more equipped with a lot of dependence on appliance and electronic products such as refrigerators, TVs, DVDs, cell phones, laptops etcetera. It does not come as a surprise that today China is home to as many as 28.3 million broad band users. The internet users sum up to a remarkable 98.8 million. 28.4 billion square feet of floor space is going through its construction phase in China. This is splendid when compared to that of United States which is home to only 5 billion square feet of space that is under construction. China holds the unique honor of being the owner of the world’s five largest shopping centers. As far as the manufacturing sector is concerned, China produced an astonishing number of goods worth 3.5 trillion dollars in 2004 compared to United States’ 1.5 trillion dollars. And the biggest stats of all, China’s gross domestic product is 7 trillion dollar, almost 60 percent of the size of United States.
China dominates international markets for the cheap prices at which it produces its goods. Chinese textiles, footwear, clothing are amongst its top 10 exports and consumed across the globe as well as at home. The prices at which these goods are sold are much less when compared to the world standards, hence the monopoly it enjoys. Other than this there are the bears and the cigarettes as well with China making cigarettes 3 times and bear 60 times wine then what it used to in 1978. According to speculations and forecasts by the State Council Research Center Deputy Director Sun Xiayou Chinese economy will continue accelerating for the next 3 decades atleast. Predictions are rife that by the time it is 2020; Chinese economy would have quadrupled than what it is today, way ahead of its stipulated schedule.
Role of these nations in the developing world:
As argued over in the aforementioned paragraphs China and India are the key Asian Driver Economies. However the growth patterns of both these economies are relatively different. While China embodies a more outward oriented regional economy that incorporates innumerable divisions in its labor in various sectors, India has what many economists call it a stand alone economic system. However it can’t go unheeded that both the nations pose distinct challenges in their own rights for most developing and global economies. The first major challenge sparks off as a result of their relative growths. According to stats, China experienced the beginning of its growth in 1979 while India in 1992. If we look into it more closely. Asian economies like that of Japan and Korea have also experienced rapid growth patterns. However, this is where the hitch comes in; China is home to 20 percent of the world’s population while India is home to approximately 17 percent of the world’s population. If we compare the two with Japan and Korea, we will be surprised to find out that at no time in the history did the combined population of the two nations go beyond four percent. Thus, Korea and Japan could go on growing without daring to disrupt global economy. The small country assumption as far as Asian drivers are concerned cannot be ignored as blindly. The intensity of its trade, makes China’s growth huge and its affect on the world at large more conspicuous than ever. China’s exports have risen from a measly 50 billion dollars in 1985 to a humongous 772 billion dollars in 2005. This has pushed China up to the third position slot as the world’s biggest trading nation. Chinese enterprises are strongly rooted in state ownership, a feature that stems out of large regionally based firms. The ownership of every one of China’s large State owned enterprises has seeped into a number of public institutes as well.
“ The interests of most of these firm owners rest more on the performance of the firms than anything else. They have easy access to low priced and more often subsidized long term capital. These firms operate in their own unique time horizons and are less risky if compared to their western counterparts. Indian firms on the other hand are comparatively less distinct when compared to the western model. They are largely accompanies with elements of social commitment a phenomena which to date remains alien to most western nations. As a result of this intricately woven and complex form of ownership which has its links in various state bodies Chinese firms hold an advantage internationally. The Chinese advancement in the Sub-Saharan Africa in its bid to look out for energy resources, necessary to fuel and develop its industries at home.
Another reason that explains why these rising powers are a major challenge to most global and developing economies is because they come with 2 key elements which are a rare sight in other nations; these are low income and low wages juxtaposed with immense innovative potential. This gives them the necessary edge required to compete and mould market prices according to their terms and conditions. It has been oft stated that in the near future China will fall short of unskilled workforce. The belief stems from the size of its reserve army of unemployed people which are estimated to be around 150 million people. Formal manufacturing sector on the other hand is home to the employment of as many as 83 million people. According to leading economists, the big labor reserves of China accompanied by low pay scales makes it a country which is within a country. If we delve into it more deeply, we will be stunned to know that the average income in the rural areas (where more than half of the country’s population lives) is as little as a measly 25 dollars a month… India on the other hand will be host to an extremely large reserve army of underemployed by the time 2030 hits. However, China and India are far from content while working in this era of their cheap labor. As a result they have started investing heavily in developing their technological capabilities. For instance, China took over Japan and become the world’s second largest investor in research and development in 2006.
Another reason, why China and India come across as a major challenge to the developing world is because they are associated with very different forms of regional integration. China is a an integral element of an internalized distributed regional network of productive. It brings along with it a wider array of regional competition. Goods traded through China are not only manufactured and produced in China but also emanate from regional production systems. As a result trade deficit with Asia and other parts of the world continues to increase. It was a whooping 40 billion dollar in 2002 compared with a measly 4 billion dollar trade deficit in 1990. Today, China’s trade composition includes both the processing of raw materials as well as intermediaries. If we analyze official data, they show that this kind of trade involving raw materials shot up to 404.8 billion dollars in 2003. It was 2.5 billion dollars in 1981. Comparatively, Indian exports are a direct result of some sort of “national system of production”. Thus, the effects emanating from the spread out of both these Asian tigers are expected to be pretty different. Fifth, China and India continue to participate actively in most global institutions. India has been long a participant in most of these global institutes. China, on the other hand has started involving it self in such forums only in the last few years. The relative ways with which India and China interact politically differs remarkably; however it can’t go unheeded that both these nations in the process affect regional and global governance. India has played a major role in its support for the interests of the developing nations round the globe; for instance, its efforts as the leader of G22 within the premises of the World Trade Organization. China on the other hand has remained prominent in pushing through the Shanghai Co-operation Organization. The organization was formed by the likes of nations such as Russia, Kirgistan, Kazakhastan, Tadjikistan and Uzbekistan. China intends make this organization a key player in the area of policies pertaining to global energy. China and India also have a huge role to play as policy role-models in a lot of struggling economies. The rise and popularity of its Beijing Consensus against the Washington Consensus substantiates the aforementioned argument. The subsequent dynamics cite a major transition from the once dominant quasi unilateral world order over powered by the States to a fairer multi polar power distribution. Other than power shifts, major repercussions can follow as result of this. New conflicts and turbulences can crop up amongst the rising and declining powers in the concurrent global political system.
Finally, energy needs of both China and India stand unparalleled. What is more are the ever increasing needs. China is only second to the United States as the world’s biggest emitter of greenhouse gases such as carbon dioxide. The emission know no end and will continue to increase. It is stipulated that by the time 2015 hits, China’s energy demands would have doubled by then while India’s would increase by 50 percent of its current requirement. It is feared that the bio-capacity of the world will be badly stretched if India and China are to be constantly fed the required energy in their bid to sustain growth. Thus, India and China in particular come across as major threat to the norms and order of the world. Come to think of it, the world is home to 6 billion people and India and China‘s population combined total almost 3 billion people. This is apparently half the world to be precise. Accordingly, half the world’s resources should be directed to India and China. If this is implemented in near future, it is feared that total chaos may follow making unprecedented changes in the world order both politically and economically. Comparatively, South Africa and Brazil’s energy requirements are still less and though they are slated to increase as time grows, they will never be as huge as that of India and China combined.
Let us now speculate over Brazil’s economic growth and its implications in the developing world. The scenario on the Brazilian front is comparatively different. While India and China have left the world raising eyebrows over their never-ending energy demands Brazil has already found itself enough reserves. They have found energy in the form of bio fuels and are banking in on the deep water oil giving it enough energy independence than other nations in the same area. The government is acting pro-active in its bid to muster enough cash that would be used to irrigate the desert and construct highways all through the Amazon.
The country’s currency as argued in the aforementioned paragraphs is going strong and healthy. Exports are on the rise while foreign debt barely exists. Economy continues growing at a robust 5 percent a year. It is home to millions of people who can now easily afford buying homes and cars. The icing on the cake came in the form of this surprising news by an energy official who claimed that an oil field has been discovered which would be the world’s third largest oil field ever. Brazilians who have long yearned for a prominent role on the world stage have suddenly come in the lime light. According to Luiz Barboso who is a supervisor as Sau Paulo, the country’s capital of industry and Finance, Brazil has made its own niche in the world. Not only does this mean high living standard but it means more work, more money and hence more employment. In another prediction by Harolda Lima who is apparently the country’s top oil industry regulator, the fields situated off the shores of Rio de Janeiro would contain as much as 33 million barrels of oil. Not only would this be way bigger than any oil finds in the past twenty thirty years but would triple Brazil’s total oil reserves. In the world of today, which is going through a major energy crisis especially on the petroleum front, this could bring a long with it some major repercussions as far as the status of Brazil across the globe is concerned.
According to the U.S ambassador to Brazil Clifford Sobel, Brazil sees no end in near future. Luckily it has moved ahead of time and left its boom-and-bust economic cycles way behind. Brazil comes in with a strong and stable environment promising secure investment for the people. Its variables are thus directly related to its prospects of growth and prosperity. In the long run Brazil is stipulated to be a key player on the petroleum front. According to David Fleischer who teaches political science at the University Of Brasilia, Brazil can impact the developing world more profoundly than ever. Its importance in the region, South America in particular and the world in general could translate in the form of some substantial political authority. A bigger role on the global political stag could help remove the influence of Venezuela’s leftist president Higo Chavez. Not only this but this would leave Brazil in a better position to join key world bodies. These may include the group of Eight Industrialized nations and may even end up getting it self a permanent seat in the United Nations Security Council.
Thus Brazil, with its oil reserves already on a toll can enjoy major strategic thrust on the global stage politically and economically. It is lucky to have found its key strengths at a time when the world is going through a major oil crisis. Oil prices are soaring high in key players in America for example the Bush administrations are struggling in their bid to bring the prices down. It is at this critical juncture that Brazil hold the potential to dominate world powers according to its own terms and conditions. If it acts wisely, and puts through some role-model policies there will be no dearth as far as development is concerned for Brazil. It can help resolve the Venezuela crisis and come across as one of the key fighters when it comes to ridding the developing world of poverty. Investment in infectious diseases such as tuberculosis, aids and cholera is also on the cards and the government of Brazil intends to work with other nations to put its plans into action.
The rising nations as donors and their role in Africa:
Today China gives away as much as 2 billion dollars in aid a year, a figure that is comparatively higher against nations such as Belgium, Switzerland and Australia. India on the other hand gives away as much as 1 billion dollars a year trespassing nations such as Finland and Ireland in the process.
However the international media has a different story to tell about the aid programmes of India. According to reports, Indian aid comes in with a lot of conditions, which the world community refuses to give in to. As per Financial times, a lot of donors were stunned when the Indian government came out and publicly announced its intention to accept aid from the Group of Eight countries and some other European donors. According to the measures taken by previous governments, bilateral aid to Indian remained limited to six donors. These included United States, the United Kingdom, Russia, Germany, Japan and the European Union. This was in effect to present itself more as a donor than as a recipient in the last few years. The new government on the contrary puts across a very different story. It has also reinstated key donors such as Italy, France and Canada. Aid to India totals to 5 billion dollars a year most of which comes in through the World Bank, the Asian Development bank and Japan. However, the Indian government claims that it will not deviate away from its initial intention that aimed at giving aid instead of taking it. This announcement is a direct contradiction to the number of donors India has increased under its current government. However it has so far, remained unsuccessful in putting across a transparent aid policy. This could be disastrous in India’s efforts that are underway to give it a permanent seat in the United Nations security Council. India’s policy rest around its desire to cut down on foreign aid and give away soft loans to poorer under developed nations, such as Africa in particular. The way it seeks to do so has been severely criticized for quiet some time now. In a feature by the London based Royal Institute of International Affairs, India’s policy has been termed as muddled in the least, if you would want to ignore away terms such as hypocritical. Indian aid policy is blurred and does not distinguish its new economic and political objectives. It lacks transparency and fails to explain what is actually molded and implemented. A lot of countries have foreign aid policies and schemes that contradict altruism and benevolence with self-interests. Advocates for aid, hence, look down on such schemes which ties assistance and to the purchase of goods and services. RIIA has already warned about India’s ulterior motives. While it has totally prohibited restricted aid from donors, its own development assistance is in effect directly related to the purchase of Indian commodities and goods. India promises a lot of expertise in various fields including infrastructure, health care, information technology, and automobiles. Thus, it can come across as a key player in the development of Africa. Its work force cites potential benefits to these nations for which work has already sparked off. Wide spread integration of the activities of these Indian companies triggered arguments and suspecting India of its ulterior motives yet again. It was said, that Indian government has hypocritically associated diplomacy with its economic needs and requirements. Irrespective of these charges, New Delhi continues extending soft loans to African countries to help them finance exports coming in from India. Indian loan to Africa which was sent through the Exim Bank was as much as 110 million dollars last year. Investment was no less than aid to Africa. In what experts claim as the biggest Indian Investment ever in Africa, ONGC Videsh who is the Indian state owned oil producer, brough crude oil assets in Sudan. These assets were worth a whooping 750 million dollars. This shows the role of oil in the world at large today. It has become instrumental in chalking out international relations. Indian occupation of the Sudan oil field remains a key effort in the process as said by Abday Mahmood Abdalheem Mohammad who is Sudan’s ambassador to India. India’s investment and aid to Africa does not end here. According to reports, India proposed lines of credit approximating 200 million dollars to the twenty nation New Partnership for Africa’s development and around 500 million dollars to other West African nations. Indian measures in Africa have served the nation well. In the year 2003-2004 itself, Indian exports to Africa shot up by 16 percent. The exports were inclusive of a 19 million dollar World Bank contract which came in the hands of Tata Motors. It is aimed at supplying around 500 buses to Senegal. The finance export schemes undergone by India had been a result of a policy titled India Development Institute. This policy was formulated during the tenure of former prime minister Mr Atal Bihari Vajpayee. However uncertainty has been rife regarding the motives behind the introduction of such initiatives. Speculations continue over arguments deciding if these measures were taken to bring about investment in India or actually channel Indian aid to the needy nations round the globe. According to Yashwant Sinha who has been a former foreign minister of India, the Indian Development Institute was created to promote India’s image as a donor internationally. The Indian government carefully analyzed the concurrent crisis in Africa before finalizing the aid package. It was chalked out keeping in perspective, their strengths and weaknesses.
Indian investment in Africa brought to light the strengths of India to the Africans. It promoted its image as a donor, and of its people as hardworking, caring and sincere. According to Mr Sinha the only terms and conditions that were put forth before the agreement was the notion that all procurement to be made through India suppliers. The whole idea in effect was to help Africa develop and promote regional co-operation through trade or south-south trade as He put it.
However irrespective of all the clarifications, India’s foreign policy continues to raise eyebrows. Most foreign donors say that Indian aid policy is a result of the belief held by Delhi’s political that increasing dependence on international aid does not thing but curtails growth and development.
China and Africa have had a long standing association that dates back as far as its independence in the 1960s. Their involvement has with each other has seen many faces and the current level of Chinese interaction with Africa is pretty different compared to its earlier stance over the continent. In its early days, China aimed at establishing good relations with Africa solely for diplomatic reasons. It needed help in its attempt to muster up votes against the recognition of Taiwan at the United Nations Security Council. China desperately wanted Taiwan’s China credentials be vehemently rejected by the Security Council. China had enemies on a two-tier scale back then. It had to not only get rid of Western influence but to take care of Russia as well. In this bid to restore confidence and cordial relations with its African counterparts China ended up backing the liberation movement led by Robert Mugabe. The Russians on the other hand, sided with Joshua Nkomo ZAPU. After some intense internal conflicts, Mugabe ended up winning and the ZAPUS were completely vanquished. This laid down the founding stone of the long standing relations between Zimbabwe which remains as cordial and as close as ever even to date. Chinese presence in Africa in those days could be made out through the lavish pompous infrastructure projects. These projects more often than not had little to do in terms of the growth and development of the region. As a result spreading across the coastal areas throughout West Africa, one could see those humongous Olympic style stadiums. All this was a result of Africa’s association with China and came in the form of donations. Competition was even more intense as far as Eastern Africa was concerned. Chinese efforts in constructing roads that were at par with Western standards has earned them some well deserved accolades. For the next several decades, China continued serving Africa. It helped the continent in providing it with help in the form of doctors, technical expertise, scholarships to fund education in the region and a myriad of other forms of aid. At present, as many as 900 Chinese doctors serve African countries. However, Chinese investment in the development region could not be sustained for long and as a result waned away during the 1980s. China found it difficult to cope up with western aid programs that came in the region and moreover Taiwan was no longer a threat. However, ensuring that Taiwan is not recognized goes on as one of the prime motives of the Chinese government. China thus disappeared from the picture for a while. Changes in the world’s economic order and Chinese need for energy resources brought it back in the game. With China’s population ever increasing and economy going through dramatic changes, it doesnot come as a surprise that the Chinese government has turned back towards Africa to cater to the needs of its own economic development. China henceforth made its way back into Africa in the 21st century in search of not only for economic resources but also with significant cash juxtaposed with acute political acumen to emerge victorious in the game. It would not come as a surprise if I cite that today; China is one of the key investors in Sudan’s oil industry, its transport and its infrastructure products. It basically banked on the changes in the region during the civil war on Sudan. Most American and Canadian firms were shut down and a lot of investors backed out. It was at this critical juncture that China came to the rescue of Sudan as a complete package. Not only did it bring along enough capital but also the required expertise that is necessary. Moreover, Chinese political influence in major forums across the globe such as the United Nations Security Council ensured that no sanctions were imposed on Sudan. China collaborated with Malaysia and helped Sudan over come its crisis. It thus became a net exporter of crude oil. Today, China enjoys the unique honor of being its biggest customer. Other than this China has helped the nation draw away from sanctions that would have been imposed on Sudan had it not been for its alliance with China. It has also helped the nation to confront genocides and crimes against humanity effectively. Most of these crimes were triggered off in the Darfur region of country. China has currently increased its role in West Africa as well. West Africa is apparently the largest oil producing region of the continent. It provides the States with as much as 15 percent of oil imports; a figure which is stipulated to shoot up to 20-25 percent in the next ten years or so. Nigeria and Angolo are currently the key producers in this bid and Chinese have been proactive in both the regions. Angola is a living example of the way Chinese dominate by putting together their assets and cashing in on them. China wanted to win the rights of exploration to a bloc in Angola. In its attempt to achieve those rights, China proposed a soft loan amounting to 2 billion dollars to Angolo as only a portion of its long term aid package. As a result, China ended up winning the bid. Chinese investments in the region come in with a lot of incentives. Conditions pertaining to governances and other fiscal probity are not put down, something which is a common phenomenon as far as western donors are concerned. As was the case with Sudan, Chinese presence in Angolo has dramatically changed the international role. The argument can be easily substantiated by the apparent indifferent attitude of Angola to calls from IMF and various other western nations demanding Angola to work on the transparency of its oil second. Basically, Angola was asked to chalk out various reforms as a pre-condition before some planned donor conference. Angola failed to develop on the reforms and it is said that Angola was indifferent towards international call. Reason being, the Chinese loan that made a major difference. Angola’s ambassador stated that that keeping transparency a condition before the conference was baseless and totally uncalled for. He plead for the normalization of the political world order as a pre-condition before it gives ear to any issues regarding fiscal transparency. China enjoys its role in the region completely. According to the Chinese deputy foreign minister Zhou Wenzhong politics and business are two separate entities. China voices its disapproval of Western attempts that forcefully impose a market based economy in these countries especially when they are not prepared to adopt it.
China has found grounds in the Nigerian market as well. China has been remarkable in its bid to exploit African oil reserves to full potential and capitalize on them as much as is possible. An 800 million dollar agreement between China and Nigeria was recently signed. The agreement was signed to put into action a yearly purchase by China of approximately 30000 barrels a day for the next 5 years. Even more conspicuous development is the fact that China succeeding in winning a license to Nigeria’s four oil blocks. This came in after a promise on the Chinese side that a hydro power station would be constructed. The story does not end here as China has expressed its desire to take over a privatized Nigerian oil refinery. Apparently the refinery is incurring losses and it is expected that it will go ignored by western companies. To put long story in short, China doesnot endeavor to stop and is speculating the pros and cons of 7 billion dollar investments in Nigeria.
The graph in other areas of Africa is no different. Chinese investment in Zambia shot up to million dollars. The investment was directed largely towards the mining sector. Today, China is the largest consumer of copper with United States coming only second. On the political front China has been found to be actively involved in the Democratic Republic of Congo. It is a nation that is under intense civil war and instability. Like other regions, Chinese investments continued in Congo as well irrespective of all the fears that come in with civil wars. As a result cobalt and copper mines were constructed. Moreover, to help facilitate the transport of these minerals to and fro from the nation, roads were also developed. Chinese officials are also looking at the prospects of power projects in the region as well. The situation in Sierra Leone is no different from that of Congo. Civil wars are rife but there is no end to Chinese innovations. Currently, they are constructing a luxury hotel in the region and looking out for other prospects. Basically, making it where others and the west in particular would never have even thought of. Continuing its expansion across Africa, China has also invested in a pharmaceutical firm, in Uganda. The firm aims to introduce some anti-malaria drugs to help the region fight any malarial epidemics.
China’s role in global politics can be easily understood through its two-tier relationship with the Mugabe of Zimbabwe. The two nations have had a close relationship for quiet sometime, thanks to China’s vehement support to the Mugabe government protecting it from the international community in the process. Mugabe’s government is looked down at internationally for his abhorrent treatment of his people. Recently, he threw the opposition away and removed as many as hundreds of thousands of city residents to the rural areas. There was a lot of blood shed but Mugabe exercised no respect for the lives and property of the people. China continues investing in minerals, farming and road in Zimbabwe today. Moreover Mugabe is also supplied with jets, and various other armaments by the Chinese government. According to experts, China has taken over Zimbabwe completely. The only price, the Chinese have had to pay in this bid, is a hand of friendship extended at a time when the whole world stands opposed to Mugabe.
Competition between the rising nations, India and China in particular:
This portion of the paper will throw light on the growing competition between the rising, India and China in particular in our case. China and India often connoted as the two indisputable Asian giants have not had a very cordial relations throughout. A number of factors have contributed to the strained relations between the two nations, the most notable one being the dispute over a piece of land that India claimed to be its part of the country while Chinese government claimed that only they had the right to take over the land. Moreover, constant Chinese support to the Pakistanis, a long standing enemy of India has not gone down well with India. It was only recently that the relations between the two nations improved a little culminating in the form of exchange visits by officials from both sides. This was a result of the realization on the part of these nations that to sustain growth and development its high time, that the two giants shook hands. Various trade agreements were signed and if all goes well, relations are expected to evolve in the interests of both the nations. 
As far as the status quo of Sino-Indo relations is concerned, it comes as a huge surprise that the two nations have decided to bury the hatchet. This realization as dawned after around forty years of hostility. Companies from both nations have banked on the opportunity that came their way upon realizing that the benefits as far as gaining the necessary competitive advantage is concerned are mutual. Incase their western counterparts fail to do the same, they will end up in oblivion having lost their competitive edge both domestically and globally. However, this is where disaster strikes. Most companies do not wish to believe that the planet’s most densely populated nations can bridge gaps. Both are lobbying for complete dominance all over Asia and are archrivals for anything you name it, be it raw material, capital, foreign investment, market shares, energy resources or even technical expertise. Irrespective of this, China and India have decided to come on the table for three basic reasons. Firstly, both these nations have been at loggerheads since 1962. However, if we delve deep down into history we will be surprised to know that 2000 years ago, both India and China exercised close ties in various sectors—be it economic, religious or cultural. Secondly, to cash in on the trade opportunities that will come their way following their collaboration because it is commonly known that neighbors engage in trade more intensely than non-neighbors for that matter. Thirdly China and India have followed their own distinct ways to trigger off growth ever since their economies sparked off. This has helped eliminate competitiveness in the game and opened doors of complementarities. Ironically, there exist some companies in the region who have been cashing in on the development strategies of both the countries. For instance, India’s Mahindra and Mahindra. They build tractors at home but manufacture them in China. On the other hand China’s Huawei has employed atleast fifteen hundred engineers from India. This is so to make software for Chinese Telecommunication products. Other than this, the two giants have also decided to make full use of their resources to sustain their growth and development. As a result, state owned oil companies such as Sinopec and ONGC have joint hands to exploit oil resources in the region.
Various arguments have been cited as far as the competition between the two nations is concerned. India’ s development pace has not been impeded since far. It has been able to sustain its stance close to China for the past twenty five years if not beyond that of China. The factors contributing to the development rates of both these nations differ substantially. Before, we draw down on some major conclusions, it is mandatory that we speculate over the experiences on the Chinese part of the world. The much hyped “peasant question” is the first to come on the forefront. India has long gloated about its information technology sector but at the same time it should also be noted that China’s economic development hit off from its countryside. In the period, late 1970s to the mid nineteen eighties, the growth stats of rural areas and cities were very different. They were basically rural areas that were showing growth. It was after the land was reallocated that major reforms on the urban side were put into action. This measure helped unravel energy in atleast seventy percent of the population, laying the foundations of an impending urban reform. Thereafter, post mid 1990s, Chinese farmers were continued struggling to keep up and this resulted in a hollow in the form of income gaps. Apparently the income gap between the two sectors ended up widening. Other obstacles to the growth of China has come in the form of the famous sannong crisis in the agrarian sector. India has been seen going through similar obstacles. In the face of growing challenges, India must first confront the fundamental problems it experiences in the vast rural lands that India spans across.
In order to trespass China and grow at an even higher GDP, India needs to do so at the expense of even distribution of its resources. China has been successful in implementing this strategy and hence its edge over India. The idea is to get only a small part of the population to get through to the riches. When China, used to be poor, it would be poor across the table. However, today, the situation is pretty different. It has a very unbalanced population and the society that looms at large is far more unequal compared to that in India. To actually enact this idea rests in the hands of India only and we are yet to see if India aims to develop an even more disproportioned society in its struggle to make it where China is heading for. Today, China is home to millions and thousands of farmers while India is home to approximately 160 million oppressed people. For a split second, to trigger rapid development means leaving them unattended. India also lags behind China in terms of the efforts it has undertaken to attract direct foreign investment. Though robust, they are still not at par with those in China. India needs to do more to stimulate trade partnerships and joint ventures in the region. India needs to be liberal in its policies and implement an open-door policy calling for social stability in the region. China has been remarkably successful in this bid of its leaving behind Japan and South Korea let alone India in its game. Even today, the incentives China offer to foreign capital are more intriguing compared to those offered by India. It will be next to impossible for India to even come close to China if it does not build on this weakness. However it should be noted that is China has a very strong government at its center. It would have never made it where it is today had it not been for its strong establishment which remains firmly rooted to the growth of the nation. Thus the moral of the story is that India needs to realize that it has to tap on its resources more affectively and most notably by pushing through liberal trade policies.
As far as Brazil and China are concerned, trade between the two nations has shown remarkable increase ever since 2000. Previously, 2 percent of Brazil’s total exports would disembark at China but today this figure has risen up to 6 percent. Imports from the China to Brazil were 2 percent at one point of time in 2000 but today they have risen up to 4.5 percent. If the Chinese angle, is put into perspective, Brazil’s export share of the Chinese market moved up from 0.48 percent in 2000 to 1.1 percent in 2003. The table below shows the shares in trade flows between the two nations from 2000 to 2003.
Brazil and China: shares in trade flows, 2000-2003, %
Brazilian Trade Shares
Chinese Trade Shares.
Exports to China in Total
Imports from China in Total
Exports to Brazil in Total
Imports from Brazil in total
Sources: data from site of Brasil, Ministério do Desenvolvimento, Indústria e Comércio;
World Trade Organization, International Trade Statistics 2002; People’s Daily, January
Exports to China from Brazil has remain restricted to commodities such as iron ore, iron ore pellets, soybeans, soybean oil, iron ore and wood pulp. In the near future, it is predicted that China will continue expanding its presence in the Brazilian market. It’s market shares will increase and foreign direct investment is expected in various areas including household electronic stuff and tele-communication software products. Not only this but it is slated that China will act as a binding force between FDI and markets and going beyond Brazil in Latin America. The task will not be an easy front for China will have to face intense competition from various other multi-nationals present in the region. As far as Brazil’s investments in China is concerned, they are largely directed towards activities such as that of coal extraction and coke production. Coal exports is not an abnormal phenomenon in this regard for it makes sense if viewed from a logistical perspective. It would help return freight when the trade between the two nations has been pretty disproportioned. Bilateral co-operation between Brazil and China can be seen in good light and mutually symbiotic for both ends. While Brazil will continue supplying commodities to China, it also plans to make use of Chinese expertise to build on its performance scales; innovation in particular is what it hopes to seek through strong two-tier relations. Surveys conducted by international companies have lauded Chinese efforts in improving its performance in sectors such as education, research and development in science and engineering and for increasing the total body of researches involved in research and development in general. This is an area where losses are often seen to play a key part in the flow of knowledge, in curtailing private risk and in getting rid of all the hurdles when it comes to apportioning economic achievements obtained from research results.
Brazil today does not intend to be mal-functional or completely dormant in China for that matter. It hopes to put to use its resources efficiently and ensure the development of economic ties between the two nations, trade promotion and continued participation of government-controlled banks in its bid to strengthen relations with China even in hard times. Previously, Brazil had a pretty insignificant role in China. The government has realized the cons of this and hopes to rectify it by making efforts to strengthen ties on both ends.
Regional Integration of the rising powers and Global politics:
The last decade has brought to light the importance of regionalism across the globe. The total number of regional trade agreements have taken a toll and their overall potential and geo-political reach has also widened. According to the data, put forth by World Trade Organization, the total number of such RTAs had shot up to 250 in 2002 only. Of these 250, as many as 168 are being currently implemented. This part of the paper will elaborate on the regional integration of rising powers and its significance to global politics in general.
China which was a dormant nation when it came to regionalism has started taking vivid interest in this. Regionalism has become a new alternative for the nation and the way it responds to it will help place its position and stance in both global politics and global economy more firmly rooted. The first major indicator of the argument can be seen when put into perspective, the Chinese inclination for free trade agreement with Japan and Korea under the ASEAN. In one of the ASEAN plus conferences of 2000, China put forth a proposal calling for the creation of an group of economic experts. The economic experts would be allocated the task of analyzing Chinese accession to WTO and to further develop Chinese-ASEAN economic co-operation. Such efforts, China speculates will help ease out the idea for the establishment of FTA between ASEAN and China. Today, China remains committed to regionalism and has been pushing Japan and Korea in the process. Not only does it seek to end its dependence on EU and US markets through increased multi-lateral co-operation across East Asia but hopes to make East Asia a stronger hold and not a puppet of the west.
India being the numero-uno giant in South Asia holds a lot of responsibilities on its shoulder especially the task of directing south Asia towards economic modernization, political stability, and social development. One of the most important developments in India in this regard came in 1991. India seriously thought about effective regionalism in the sub-continents and the advantages it brought, hence a major change in its relations with its neighbors. Central to this change of Indian policy in favor of its neighbors culminated in the form of the famous Gujral doctrine. The Gujral doctrine was named after Inder Kumar Gujral, a former external affairs minister and Prime-minister. Mr Gujral hoped to take an extra step necessary to resolve the issues of the subcontinent and the policy was continued by his successors as well. India not only hoped to extend bi-lateral co-operation through this policy but to put an end to the crisis that had struck the region and was acting as a major obstacle in the way of its development. On another note, India also realized, that for a bigger and broader image internationally, it is mandatory that it addresses its issues with the neighbors first, hence the regionalism policies in question. But there is no notion that comes without its share of problems. One of the major obstacles towards complete internalization or regionalism in the region has come as a result of strained ties between India and Pakistan. It is necessary that both the South Asians realize that it is symbiotic if they extend their hands in security and economic realms. However, the good news is that, relations today are less severed and significant steps have been taken to embark South Asia on a fresh journey of complete development. In this bid, the twelfth SAARC summit brought about positive results and put an end to all the pessimism associated with the effectiveness of the prospect. India signed a number of agreements with its neighbor including that of free trade, also called SAFTA. This is indeed a major development and it helped put on grounds a new era of co-operation. The twelfth SAARC summit triggered new dimensions of thinking as far as trans border regional economic integration is concerned. Even more heartening is the idea of a common currency that has been put forward.
However, this is no end and there is a lot that needs to be done including putting to halt the nuclear arms race between India and Pakistan and even more notably the Jammu and Kashmir.
South Africa is one of the most developed regions of the Africa. Of lately it has realized the importance of regional economic co-operation and integration. Thus it has increased its role in the OAU that is the Organization of African Unity. This is slated to produce positive results for the people of Africa in general. South Africa has completely reformed its image and re-modeled its relationship with Africa. Some of the efforts on the part of South Africa includes border liaison and surveillance, training missions, joint peace keeping operations, disaster relief’s and arms surveillance.
Thus, the rising powers of today purportedly, China, India, Brazil and South Africa have seen a major transformation in their roles and significance on the global front.
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