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March 14, 2003
Portents of a New World Order
The unprecedented, worldwide anti-war protest rallies in the middle of last February, the cleavage in the Western bloc, the firm determination of the Bush administration to pursue its plans of a war on Iraq, the tedium of having to live with the constant threat of terrorism - these combined with the continuing debate over the efficacy of existing international organizations - portend the possibility of a major change in the world order.
Leaders of opinion on both sides of the Atlantic foresee a new world economic and political system sprouting as a synthesis from the on-going dialectics.
The existing system of a unipolar world has been in operation since the collapse of the Soviet Union in early 1990s. Based on capitalism and the precepts of Adam Smith, it was led by the profit motive and came to be dominated by multinational corporations whose ruthless pursuit of economic greed could hardly be checked by what Adam Smith has called “the invisible hand”. It spawned globalism whose tide, it was piously predicted, would lift all boats. Instead, it sank many a boat. The currency crashes of 1997 of the South-East Asian economic tigers provided a glaring example of this. Some have pursued vigorous austerities to overcome the mess and have managed to restart floating - some barely.
Dr. Henry Kissinger pointed out the grave weakness of the system, in a syndicated article as far back as October 1998. Free market capitalism, he said, remained the most effective instrument for economic growth and for raising the standard of living of most people. “But just as the reckless laissez faire capitalism of the 19th century spawned Marxism, so the indiscriminate globalism of the 1990s may generate a worldwide assault on the very concept of free financial markets…. The extreme version of globalism neglects the inevitable mismatch between the world’s political and economic organization. Unlike economics, politics divides the world into national units.”
The world is divided into some 200 nation states. Each one has to manage its territory politically and economically in a manner that its people feel an improvement in the amenities of life. Since globalism and free trade have deprived the nation states of crucial economic levers and initiatives, exercise of political powers creates the impression of coercion to suppress legitimate expectations and therefore invites the wrath of the common man who cannot appreciate the limitations of his rulers. Many countries in the Third World experience the consequent political turmoil.
Another syndicated columnist, Robert Samuelson, pointed out, as late as February 19 this year, that the war in Iraq might trigger ‘momentous side effects’ including the very future of globalism. After World War II, he maintains, nation states had self-contained economies, with trade concentrated in raw materials and some advanced industrial products.
The advent of WTO (World Trade Organization) in mid-1990s, turned the world into a vast market with the lowering of national customs barriers. This provided an ideal playing ground to the multinational corporations to move unhindered to any part of the world in pursuit of profit, eliminating in the process the weak and inefficient and aligning with the willing, cooperative and efficient.
With the exception of China, to some extent India, South Korea and a few other countries who have benefited from globalism, bulk of the developing nations found themselves deprived of the levers to protect and promote their indigenous enterprises. Many industries withered away as they could not compete with the gigantic external corporations.
Samuelson contends that the war on Iraq might buttress the concept of globalism or prove that the world is yet unready and unfit for it.
It is generally believed that the political and financial institutions set up after WWII - the UN, the IMF, World Bank and the WTO - are no longer able to deliver on their manifestoes. The US, the sole super power, is now treating the UN Security Council merely as an irritant in the pursuit of its agenda on Iraq. The monetary institutions have, more often than not, failed to provide the requisite succor to the poor countries to enable them to stand on their own feet. Critics argue that these institutions have mainly served the interests of the rich countries causing the cleavage to widen and bitterness to grow further between the rich and the poor.
Industrialization and capitalism had led, in the 18th and 19th centuries to the emergence of colonialism. The two World Wars were fought for colonial markets by those industrial states - Germany, Italy and Japan - who had been left behind in the scramble for colonies. They raised the slogan of “a place under the son” meaning a share in world markets.
It is now commonly believed that the Iraqi crisis has its roots in that country’s oil reserves, second largest in the world. The CEO of a Russian company involved in Iraqi oil since 1967 has pointed out bluntly, “The only reason for the crisis over Iraq is the US desire to establish full control over the oil-gas complex of Iraq.”
Needless to mention that the modern industrial complexes are almost all oil-dependent. Oil, the much sought-after commodity, is therefore the principal reason for the rift in the trans-Atlantic relations which had appeared to be so good till recently when the US declared its stance on Iraq. But, several other factors had also been causing hair fractures in the apparently monolithic Western world.
Europe has been trying to expand its domain by inviting ten East European states to join the European Union. Cultural differences with the US are being pointed out by European thinkers.
Religion now tends to divide rather than unite the West, according to some Western analysts. Europe has become more secular in recent years.
In a bitterly sarcastic article in the Times of London in January this year, the novelist John Le Carr declared that fundamentalist Christianity has pushed America into a period of “historical madness.”
A prominent French political thinker, Jean-Francois Revel, in his book published only a year back sees the cleavage emanating from the defeat of the European left in the cold war and the bankruptcy of its ideology.
The emergence of the European currency, the Euro, as holding an edge in terms of exchange over the dollar may also be an unacceptable development for the US. By dominating the oil resources of the world, the US dollar may maintain its status as the world currency. The US will thus have a direct or indirect supremacy over the world fiscal system. If it has to print substantial amounts to meet some emergency, the vast circulation abroad of US dollars would absorb, to some extent at least, the pressure of inflation.
If the war in Iraq ends quickly like the war in Afghanistan, there might not be developments leading to a change in the world order. But, if the war drags on, with or without European involvement, the current system will cave in making room for a new world order.
The uncertainty of the shape of things to come makes one wish that Mr. Saddam Hussein would see the advisability, in the interest of his people as well of the world, to seek exile in a country of his choice. (Arifhussaini@hotmail.com )
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