As the world enters the second decade of the millennium, signs of a precipitous decline in Western power and prosperity are clearly evident.
PIGS! No, I’m not swearing at anyone. PIGS is an acronym for Portugal, Ireland, Greece, Spain – the four European countries so deep in economic troubles that not even light can reach the bottom. Indeed, this could be the last Christmas many countries in the West will celebrate in the way they have done in the years past. For, a black hole of financial and social troubles is threatening to bring down Europe and North America from the apex position they have occupied for barely 300 years.
By the time the current recession pans out, vast swathes of Europe will have living standards lower than Thailand’s. Many East European countries are already hopelessly poor, with joblessness and crime rampant. In some regions prostitution is the only ‘industry’ left.
Western Europe’s powerhouse, Germany, is getting ruined propping up the PIGS and other equally insolvent countries.
Canada’s Globe & Mail newspaper wonders if Britain’s current condition is a harbinger of the West’s future. It says that intergenerational poverty, rare in most countries today, has become a factor in a notable British subculture. That tallies with a British government report, which shows that if you are born poor, you stay poor. Worse, millions of middle class British youth are faced with the stark choice of either stepping down into the underclass or migrating.
However, it is the American implosion that is the most notable. Earlier this year Tracy, a small town near San Francisco, California, declared that its residents will now be charged US$300 every time they call 911 for a medical emergency. Remember, California is America’s richest state. You get the picture.
It gets worse. Currently, more than 35 million Americans are starving. This is an official US government figure so the real picture is probably higher, and soup kitchen organisers say they now see formerly middleclass people coming in. Officially 30 million Americans are jobless but again the figure could be close to 45 million – that’s a whole country by itself with nothing to do.
Contrary to what the media says, it’s not the Iraq or Afghanistan wars that are hollowing out the West. It’s just that the East is becoming wealthier in comparison through better economic practices and systems.
Chew on this figure – $123,000,000,000,000. For the numerically challenged that’s $123 trillion and China’s estimated economy in the year 2040. For perspective, the US economy is worth some $14 trillion today. What it means is China will soon become a colossus and the US will have to simply take a deep breath and retreat. If India gets it act right, it could top China. These figures are giving nightmares to Western conservative think tanks.
Yes, the titans of tomorrow will be China and India – not necessarily in that order. The second string will be a motley cast comprising Russia, Brazil, Turkey, South Africa, Indonesia, Argentina, and of course the US. Western clubs like the G8 and NATO are either dead or on life support. And the IMF, that organ of American imperialism, will have to shut shop or be controlled by China and India.
That is tomorrow’s world without the West.
In this new world order, the rising powers led by the BRICs (Brazil, Russia, India, China) are keen to break the dominance of the current order by increasingly “routing around” the West.
This works in two ways. One, the rising powers deepen their trade, defence and cultural ties among themselves. This in turn loosens the ties that bind them to West. So in effect, by not playing by the rules set the West they are creating an alternative arrangement in which they neither enter into conflict situations with the West nor enter into subservient alliances (like those offered to South Korea and Japan).
This simply makes the West irrelevant.
For instance, India’s biggest trade partners are now the UAE and China. Its biggest weapons supplier is Russia. China has become the world’s factory. Russia has brought its vast mineral resources and high-tech weaponry onto the world’s market. Moscow’s astute diplomacy has shut out Western companies from the huge gas and oil fields of Central Asia.
In effect, the West is getting squeezed out.
As the West stumbles around in the recession, both India and China are racing each other to buy up the world’s minerals and commodities. India is buying farmland across Africa to grow crops for its burgeoning middle class. Australia is better known as China's mine.
This routing around the West is increasingly visible. Look at the Russia-India T-50 fifth generation fighter bomber. It is being designed and built in Russia with avionics and electronics from India, with potential buyers in China, Venezuela, Algeria, Malaysia and Indonesia.
Today Israel prefers Indian rockets for launching its ultra-powerful spy satellites. After the churlish and bumbling former Australian Prime Minister Kevin Rudd refused to sell uranium to India, New Delhi signed long-term agreements with Kazakhstan and Russia, shutting out the West for the next 30 years. India now won’t accept uranium from Australia if they offered it free.
But why is the West getting bypassed?
One reason is that the Western economic model has failed spectacularly. Not only has it failed to lift most countries in the wider world, even in the West it has only benefitted the rich. Banks and financial institutions across the Western world have violated nearly all the 10 Commandments – they have lied to their customers and stolen trillions of dollars. The politicians, who are supposed to have protected these unfortunate investors, have lied even more and shielded the bank robbers and then rewarded them with hundreds of billions in bailout cash. US billionaire philanthropist Pete Petersen calls it “carnivorous and animalistic capitalism”.
The second reason why the BRICS are determined to create a world without the West is America’s blatant misuse of the dollar. The US Federal Reserve ‘creates’ money by merely electronically ‘transferring’ trillions of dollars into the US banking system. Even printing bills has been given the go-by. In fact, defying the law of physics, wealth is being created literally out of thin air. Speaking to the media, financial expert Max Kaiser said: “Countries like Russia, China and Brazil are trying to divorce themselves from the US dollar because it’s a completely toxic currency that’s just right for the counting fraud. It supports an empire that’s just too lazy to compete.”
To restore a semblance of normalcy to international economics, the BRIC countries have gone into a huddle several times to find a replacement for the dollar and end America’s phoney economics. Even India, whose feckless leaders vie with Britain to cosy up to America, has spoken of the need for an alternate global currency.
Smaller players like Iran have their own axe to grind. In 1953, a US-UK coup ousted their democratically elected leader Mossadeq, causing decades of instability. Iran is now trying to create a massive petroleum exchange where payments will be accepted in any major currency bar the dollar. Can you blame the Iranians for carrying a grudge?
The West has had its heyday and made too many enemies along the way. Unfortunately its liberal democratic traditions have not benefitted 95 per cent of the planet. In sharp contrast the model of authoritarian prosperity espoused by Russia and China has yielded dramatic results.
The prelude to a world without the West was seen at the Copenhagen Summit, where the BRIC nations set the agenda and the US President got a finger-wagging from Chinese Premier Wen Jiabao. Europe was not invited into the room where the deal was struck.
Come to think of it, who’d want to be in a huddle with PIGS?
(About the author: Rakesh Krishnan Simha is a features writer at New Zealand’s leading media house. He has previously worked with Businessworld, India Today and Hindustan Times, and was news editor with the Financial Express.)