The succession of rapid international organizational meetings – ASEAN’s Shangri-La Dialogue, the Shanghai Cooperation Organization (SCO) summit and the G-7 summit – shed light on the rapidly changing international fortunes of the West and the East. Today, we can marvel that nearly 70 years after the rise of the newly decolonized Asian, African and Latin American countries in the midst of the Cold War, when the world was a plaything of Western powers and their rivals, fortunes have reversed.
Russia – the successor of the mighty Soviet Union – is now conceding China’s authority in all the territories that were earlier under the Soviet influence in Eurasia, while the North-Atlantic powers are wooing India to secure their strategic interests and economic opportunities.
Most recently, this reversal has been underlined by the abject failure of the G-7 summit and the success and unity displayed at the SCO summit. The trade conflicts leading up to the G-7 summit and the aftermath of the summit were marked by deep divisions and acrimony among the industrialized countries. The US President is determined to dismantle all the multilateral bodies that have formed the crux of the West’s dominance of the global order. The immediate casualties will be the NATO military alliance, any further free trade deals with Europe similar to the Trans Pacific Partnership (TPP), the WTO (which the US has said it will follow only when it suits them) and the already weakened IMF and World Bank. The list basically includes all the liberal mainstays of the ‘first world’ through which it has exercised its dominance for the last 60 years.
It is very likely that Trump’s immediate actions are further endearing him to the US electorate, irrespective of what the media says, since the US’s economic figures have rarely been better than now. While the US unemployment is at record low, the economic growth is at an all-time high and corporate tax savings are also high. Seeing these domestic results, Trump will be further emboldened to carry the trade war with the US’s western allies to its fullest extent. While Obama was obviously pursuing ideological interests, Trump’s policies are based solely on the US’s narrowly defined national interest and immediate gains and his own immediate domestic interests. That is why the fiasco at the G-7 summit, which started with Trump’s call to re-induct Russia into the group and ended with him calling Canada’s Trudeau ‘very weak and dishonest’ while refusing to sign the G-7 joint statement and leaving the summit early for Singapore, thereby skipping and dismissing the importance of the sessions on gender and climate change.
Besides pointing to the obvious divisions within the so-called ‘first world’, the fiasco also highlights the rapidly growing irrelevance of G-7, with Russia expressing no desire to join it. Moreover, the presence of weaker economies like Italy and ageing ones like Japan and Germany included in the grouping contrasts sharply with their actual role in global economic leadership, which is rapidly diminishing. Europe is heavily tilting towards trade with China after suffering rude shocks from the US, Japan is opening up its economy to immigrant labour, while UK badly wants to court India in the post-Brexit era. When the idea of G-7 was conceived during the heyday of the West in 1970s, these countries were the global economic leaders, while those like China and India were stuck in a socialist mire. But now China and India together constitute more than half the increase in global GDP, while G-7 languishes.
When G-7 was conceived the world had started moving towards globalization based on financialization. Today, we are at a stage where trade deals have been corrupted, financialization has resulted in complex markets full of self-destructive bubbles and globalization became the handmaiden for fulfilling the West’s imperialist extractions across Africa. One of the main contentions of the war between US, Canada and Mexico over NAFTA is the sunset clause – as witnessed during heated G-7 debates also – which Trump wants introduced, since he does not want to bestow any permanence on a trade deal conceived more than two decades ago. NAFTA – like many other bilateral disputes dragged to the WTO – is being misused by foreign companies, who have been given the power – under investor-state dispute settlement mechanisms – to drag sovereign countries to court in the name of protecting the rights of foreign investors, thereby spawning a whole new industry of clever, cheating lawyers whose actions have ended up binding the hands of the state and compounding their environmental problems.
Countries cannot take the initiative of banning environmentally harmful activities within their own territories, since reprisals result in them being dragged to court by vested interests of some investor or the other, resulting in them having to revoke their policies and pay millions of dollars in compensation. That Canada would want to bestow permanence on this system by denying the sunset clause or renegotiate any new makeovers but without the sunset clause explains one of the reasons of why Trump is enraged.
Such flashpoints – heightened during the G-7 – show the true selfishness and utilitarian spirit underlying the global governance system at present. It is now seen that this West-dominated system is falling apart under the burden of its own selfishness and greed, and is being replaced by an Asia-led world order. The SCO meeting at Qingdao, which occurred parallel to the G-7, provided a clear contrast to the acrimony at the latter summit. Its success is reflective of the consolidation of Asian superpowers. Led by China and jointly managed by China and Russia, the strategic grouping is focused on counter-terrorism and regional connectivity. Both issues are extremely important for India as well, which finally became a full member of SCO last year.
This year’s SCO summit further consolidated the spirit of cooperation between India, China and Russia. Most notably, it is clear that the recent informal Wuhan summit has now set a new tone for the Indo-China relationship which will be reflected in all future cooperative meetings and ventures, including Xi Jinping’s visit to India next year for another informal summit. Even though India kept out of signing an endorsement for the Belt and Road Initiative of China, this poise has come to be expected of India and did not generate any surprises.
SCO offers a good opportunity for India to further its connectivity interests in the region by bypassing Pakistan. The International North South Corridor, the Chabahar port etc. are all a part of India’s connectivity priorities. Counter-terrorism measures will also strengthen India’s hand. Through the SCO summit and the previous Shangri-La Dialogue, it is clear that India is maintaining a consistent position of developing its relationships with all countries, but especially with China.
Most recently, in terms of concrete actions, this was reflected in the decision by India and China to come together and bargain as one to challenge the power and prices fixed for oil by the OPEC (Organization for Petroleum Exporting Countries), since both the countries together accounted for over 25% of world’s oil imports last year. The increasingly united front being displayed by these countries has been strengthened by the SCO summit. The strategic objectives of the organization render the compulsion of geographical connectivity among its members to be of utmost importance. The position India used to adopt, till a few years ago, of always being at loggerheads with China is dissolving and will dissolve due to the irresistible logic of Xi’s vision of unity and of SCO’s own logic of regional connectivity for strategic and security purposes.
As it is, India is already looking at rebalancing ties with Pakistan, in yet another attempt, to open up its connectivity to Central Asia through Pakistan and Afghanistan, under the SCO framework. But the extent to which SCO can serve to smoothen India-Pakistan relationship remains a big question. With Iran also soon set to join the SCO, India’s Chabahar project – seeking to bypass Pakistan – to deliver goods to Afghanistan, will be influenced by the changing regional environment. Instead of viewing SCO as a product of Chinese domination, it should be viewed as a wider Asian grouping that will counter terrorism and challenging existing fiefdoms, lead to a shared future.
