The international institutional structure has remained largely static since the mid-20th century rather than evolving with the changing power realities and challenges. Reforming and restructuring the international system poses the single biggest challenge to preserving global peace, stability and continued economic growth. A 21st-century world cannot remain indefinitely saddled with 20th-century institutions and rules.
Power shifts are an ongoing phenomenon in history. The global power structure continually evolves. Although the focus currently is on the post-Cold War power changes, the Cold War era itself witnessed important shifts.
For example, it was only after the Cold War began that the Soviet Union rose as a global military power, although it failed to become a true economic power. By the second half of the Cold War, Japan and Germany emerged from the ruins of World War II as formidable economic giants. And in keeping with the profound technological and geopolitical changes since the late 1980s, power shifts have become even more pronounced, as underscored by the gradual rise of the East since the 1990s.
The United States emerged as the sole superpower due to a quirk of history — the sudden, unexpected collapse of the Soviet Union. Indeed, when viewed against history, the existence of a single superpower is highly unusual. Even at its pinnacle, the British Empire did not parallel the American Empire in global ascendancy.
Britain was not the hegemon in Europe, so it could not be the global hegemon. In fact, Britain’s failure to gain preeminence in Europe, where it faced Russia, Germany and France, motivated it to concentrate on distant lands. That is how Pax Britannica was established.
The fact is that there has never been a global hegemon on the lines of America. The normal pattern in history is one of uneasy coexistence among several great powers. So, the emergence of a single superpower post-1991 was an anomalous development.
If the international institutional structure is to be recast, the U.S. must begin to adjust to the ongoing shift in its own status from being a global hegemon to turning into less than a global hegemon, yet remaining the world’s leading power. The world is gradually moving toward the normal condition in history — coexistence among quite a few great powers.
A liberal, rules-based international order for the 21st century can be developed if sincere efforts begin toward that goal. That task demands making the international institutional structure more relevant to the newly emerging challenges and power realities.
In essence, this will be possible if the U.S. is willing to take the lead to reform the international institutions before events overwhelm the present system. The choice is to either restructure the international order while international peace prevails or allow developments to take us back to the pattern of past history — namely, decisive change has come only after a major bloody war involving great powers, with the victors of that war shaping the new international system. That is what happened in 1945, 1919, 1815, and 1713. The choice today is to either break free from that historical pattern or remain a prisoner of history.
The world presently is in transition, although we still do not know what the new order would look like. Until recent years, a handful of powers made all the international decisions on global trade, economy, peace, and security. But the emergence of new players in the geopolitical marketplace is fundamentally changing the global power dynamics. With the “new kids on the block” extending their influence beyond their immediate region, the list of players shaping international relations is growing.
The new powers legitimately seek greater participation in international institutions and their decision-making. The power shifts and new global challenges actually symbolize the birth-pangs of a new world order, making far-reaching institutional reforms inescapable.
Changes indeed are already beginning to occur, but rather modestly. For example, the G-20, composed of both wealthy and emerging economies, has replaced the G-8 as the main forum for discussions concerning the global economy. The G-20’s formation, however, was an improvisation designed to defer genuine reforms in the Bretton Woods system. The slow pace of quota and governance reforms in the International Monetary Fund and the reluctance to restructure the World Bank to create a more dynamic institution that breaks free from its donor-recipient straitjacket only highlight the need for a reformed international financial architecture.
Meanwhile, the risks to global economic growth have grown due to several factors, including the large, capricious cross-border capital flows, the Eurozone crisis, and the excessive volatility in commodity prices.
More broadly, the challenge is to accommodate not only the new powers that have been emerging since the Cold War’s end but also the new powers that emerged before the Cold War ended. Indeed, the powers that emerged before the Cold War’s end do not pose any of the special challenges that China does, in the sense that they are liberal democracies promoting rules-based international governance and eschewing muscle-flexing.
Geoeconomics is not dictating geopolitics, as some pundits had romantically visualized when the Cold War came to an end. In fact, politics today drives economics, with political risk dominating the financial markets. But not to accommodate the powers that emerged by the 1980s would only signal that a country counts as a power only when it begins to flex its muscles.
Take Germany, the only booming economy in the eurozone today. Should it not be accommodated as a rule-maker, rather than remaining a rule-taker?
China’s dramatic rise parallels Japan’s phenomenal rise as a major power during the Meiji Era (1867-1912). The difference is that Japan, after having re-emerged as an economic powerhouse from the ashes of World War II, has run into economic stagnation since the 1990s. However, one of the least-noticed developments in Asia in this century has been Japan’s political resurgence. With its pride and assertiveness rising, the nationalist impulse has become conspicuous. Tokyo is intent on influencing Asia’s power balance.
China is beginning to exercise influence far beyond its shores. The larger discussion on accommodating China in the international system, however, misses one key fact: China is already heavily accommodated in the present international order, to an extent that no new power of the past half a century has been. Yet, this cosseted insider has turned into a key obstacle to accommodating other new powers.
China’s accommodation occurred not because of its rising power. China was still backward, poor and internally torn when it was made an integral member of the “hard core” of global geopolitics — the system that deals with international peace and security issues: the United Nations Security Council. In that sense, China is the luckiest of all the new powers.
In fact, Indian Prime Minister Jawaharlal Nehru rejected a U.S. suggestion in the 1950s that India take China’s place in the Security Council. The officially blessed selected works of Nehru quote him as stating on record: “Informally, suggestions have been made by the U.S. that China should be taken into the U.N. but not in the Security Council and that India should take her place in the Council. We cannot, of course, accept this as it means falling out with China and it would be very unfair for a great country like China not to be in the Council.” The selected works also cite Nehru as telling Soviet Premier Marshal Nikolai Bulganin in 1955 why India wasn’t interested in joining the Security Council in place of China: “I feel we should first concentrate on getting China admitted.”
It is thus no accident that China today is a status quo power with regard to the United Nations system, seeking to remain Asia’s sole permanent member in the Security Council and opposing its enlargement, but is a revisionist power on the global financial architecture, seeking an overhaul of the Bretton Woods system.
Today, the world is at a defining moment in its history. Some of the challenges it confronts are unique, ranging from accelerated global warming to cybercrime and the spreading international reach of terrorism.
Healthy, effective international institutions have become critical to building genuine cooperation and power stability. The most pressing challenges are global in nature and demand effective international intervention. Yet the “democratic deficit” of existing international institutions and their inadequacy to play a forward-looking approach has become glaring. This must be addressed for the sake of international security and stability.
The United States recently took the Iran-sanctions monkey off India’s back: it granted India an exemption from Iran-related financial sanctions in exchange for significant cuts in Indian purchases of Iranian oil. Nevertheless, Iran continues to cast a pall over an otherwise brightening U.S.-India relationship.
The Iran issue, in effect, has turned into a diplomatic litmus test: Will India stand up for its strategic and energy interests in the region, or will it be co-opted to serve the short-term interests of its friend, the U.S.? The U.S., for its part, must reconcile its Iran-related pressure on India, which is likely to continue despite the 180-day sanctions waiver, with the imperative to build deeper defense ties with India, thereby giving strategic heft to its declared “pivot” to Asia.
Stagecraft and Statecraft 