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Thursday, July 15, 2010

Geopolitics of the 21st century: shares of global wealth in 2015

This map represents the share of the World Domestic Product (Purchase Power Parity) in 2015, according to the latest (2010) estimates by the IMF (direct source:
Wikipedia). Countries with less than 1% of WDP(PPP) not shown.

Click to enlarge
(In lighter blue: countries closely allied with the USA)

By 2015 the Chinese GDP(PPP) will be almost as large as that of the USA and China should overcome the USA in this measure before 2018. Another thing is the nominal GDP but this depends a lot of the artificially-set exchange rate of the renminbi (yuan).

By 2015 India will also be the third global power measured in these macroeconomic figures, having displaced Japan but still a long way to go to rank in the 1st tier. Otherwise the list of 19 countries concentrating more than 1% of global wealth is exactly the same as today but the order will have changed somewhat in favor of developing countries, with much higher growth rates and much better resistance so far to the global economic crisis.

In fact the crisis seems to be largely a crisis of the imperial World order: a clear sign of decline of the neo-European imperial system inaugurated some 500 years ago. It is also a sign of decline of the Anglosaxon-dominated industrial global economy of the last 2-3 centuries, a subset of the previous and its apogee.

A century ago...

Besides that, the situation also reminds me of the other great systemic crisis we know well: the one triggered by Germany surpassing Britain in GDP at the beginning of the 20th century, leading to the two World Wars and, eventually, the global hegemony of the USA.

There are many differences, of course, but there are also similitudes.

Some of the differences are that:
  • the main scenario now is not in Europe but in Asia,
  • that the USA (in the role of early 20th century Britain) is not deploying anything like splendid isolation, but rather has a huge imperial system and is the active self-designed paladin of the old world order, encompassing a large list of wealthy and powerful countries, notably Japan and Germany.
  • that nuclear weapons make a world war most unlikely to happen as such
  • that the rising stars have huge numbers of people to feed and keep content (one thing is GDP and another very different one GDP per capita)
  • that China is far from being the militarist power Germany was and favors instead soft power
In my opinion, the comparison is still valid anyhow and has the following "casting":

  • The USA in the role of Britain, the established but declining first global power
  • China in the role of Germany (including Austria-Hungary), the dynamic but somewhat isolated challenger
  • India in the schizophrenic role of both France and, specially, Italy: the third power in the geostrategic scenario: a more modest rising star with high dependence on who controls the seas
  • Russia as herself and the Ottoman Empire: the semi-colonies of Germany (China) which made up somewhat for its lack of overseas territories
It's very approximate but you get the idea, right? Not sure if Japan should play the role of France or what but India and Italy give me much of the same vibe indeed, including the parallel between the Hymalayas and the Alps, as well as the fact that, much like Italy became relevant in parallel to Germany, India has done the same in parallel to China.

Europe definitively seems to have no major role, specially as it's far away from the Asian scenario. The only chance it could have would be through a real political and military union but that is far from happening. That's probably one of the reasons why Europe is being hit so hard in this economic crisis: it has lost some of its strategic relevance and is therefore disposable.

So which are the new Balcans? Obviously the Greater Middle East, including Central Asia. SE Asia could also play such role to some extent but also that of Scandinavia if they are luckier.

The parallel is, admittedly, only valid to some extent but it is still valid.

What really made me think of this parallel is the fact that for the first time in many many decades, the established global power is going to be soon replaced in the macroeconomic realm by someone else, exactly what provoked WWI.

So what?

These macroeconomic figures are no trivial fact: they represent real power much better than any other data. You can have as many recruits as you wish (soldiers, spies, lobbyists, etc.) but in order for them to be effective you have to be able to pay them, train them and specially equip them. Nowadays GDP generally gives a much more real measure of military prowess than number of troops or any other such figure. The same is true in the plane of economic and political influence.

Then... should we expect a WW-III? I hope not and I do not think so (nuclear deterrence). But we should expect localized wars in the line of Afghanistan and Iraq, as well as political instability (coups, revolutions) associated to this global confrontation each day more apparent.

Then is it more like a Cold War II? Yes, I think so. However, the USSR was never in position to really challenge the USA as China is right now. On the other hand, the USSR had a much more solid and exportable ideology China has abandoned in favor of capitalist competition (but consider Nepal, the Indian Maoists and even the Thai Red Shirts). Finally China is being careful of not overspending in the military department, as the USSR did with catastrophic results, as well as not to challenge prematurely the US hegemony and allow the Empire to get stuck itself in its own new editions of the Vietnam War, knowing that it cannot win them and that they'll cost it dearly.

But China also has its own challenges: in order to succeed economically, it must exploit mainly its own population in a phenomenon I call "internal colonialism". This is obviously bound to produce growing discontent, whose unavoidable revolutionary results are by the moment being deferred by means of certain redistribution of the newly acquired national wealth. China also faces major ecological problems, which are partly its own and partly interconnected with the rest of the world, such as global warming. Another problem is their partial dependence of its main rival as market for its products. Additionally, China has some unsolved geostrategic issues, notably securing access to the oil resources, along with the chain of US military bases/allies offshore, specially Taiwan.

Well, interesting and intriguing scenario the one we are heading into, right?


Manju Edangam said...

Not sure I understood many points here. To begin with what does the following mean?

much like Italy became relevant in parallel to Germany, India has done the same in parallel to China.

Maju said...

Both Italy and Germany were born as the polities we know today with little time difference in the second half of the 19th century and in relation with similar overall processes (rise of romantic nationalism, Napoleon III). While these processes are intertwined from the overall perspective, they are fairly independent from each other anyhow.

Similarly I understand that the two overpopulated Asian powers share a lot of elements in their rise (decolonization, "socialism") in the overall perspective but, similarly, they are quite different from each other. Unlike Germany and Italy, they are more directly confronted (though Italy was indeed confronted with Germany's preferential ally: Austria-Hungary, what probably decided its alignment in WWI).

The parallels are limited but I think that they are valid anyhow. Overall, regardless on one-to-one comparisons, there are a lot of similitudes with the situation a century ago.

Maybe the main difference I have not mentioned is that, unlike Britain, who eventually could cushion its own decline by falling to the arms of its "rebelliuous daughter" the USA, the North American republic has no apparent heir to cushion its own predictable fall.

However things do not need to be an exact parallel, not at all. Actually in other articles I have compared the USA with Habsburg Spain, specially for its excessive militarist expenditure and trying to achieve global hegemony and face therefore too many "threats" in too many fronts at the same time, something Britain generally avoided.

Another comparison I have found is with the late USSR, for similar reasons: inability to reform itself ahead of the challenges, excessive waste in military adventures.