Super Economies

America, India, China and The Future of World

By Raghav Bahl

ISIN: 978-06-7008-812-6 ǁ Publishers: Random House ǁ Price: Rs. 699/-

Super economies 1Our times are characterized not by estranged superpowers building formidable arsenals, but by engaged societies building a robust global economy. Emerging countries are redefining the geo-economical (and geopolitical) dynamic in the new world order; a soaring GDP and a booming population are the new indicators of a nation’s strength.

The 21st century will be led by a handful Super Economies – large, prosperous counties with a fairly high growth rate, ranking among the world’s top trade partners, commanding 15 to 20 % of global GDP; having nuclear arms but using economic leadership to effect significant changes.

A New Century, A New Power Dynamics

The WWII rearranged geopolitical landscape to produce the Age of Superpowers. From ‘50s through end of ‘80s was the period of great Cold War conflict between the Soviet block and US and its allies. Even as the political conflict pivoted around ideological – communism vs. democracy or capitalism – eyeball-to-eyeball real ground realities were played through nuclear arms race. Only when Berlin Wall fell in 1989 did the Cold War end, and with it the bipolar Superpower era. For quite some time, USA ruled supreme.

Between 9/11 attack and subprime meltdown of 2008, America’s place as numero uno power of the old world was deeply shaken. BRIC(S) economies had started to emerge as alternative power centre in the beginning of 21st century. If the 20th century power rested mainly on in the hands of bureaucrats, country’s military was its main instrument of influence. This is now replaced by power of the marketplace in which economic prowess emerged more influential than the military strength in driving the global agenda. What Superpowers achieved with missiles and warships, The Super Economies seek to achieve with economic leadership, organising multilateral trade dialogues, setting the terms of inter-country engagement and using tough negotiations to establish everything from exchange rates to climate policy.

The Super Economy recognises the superior value of ‘soft power’ – what Joseph Nye defined as the ability to get what you want through attraction rather than coercion or payments[1] – and is adept at deploying its economic and cultural assets to win influence.

Even after the major disasters of 9/11 and 2008 financial meltdown, USA has recovered economical as emotional Super Economy leadership role. Even as large part of old economic activities or low-end activities of current times remaining off-shore, US has carved out its prowess in high-tech fields like nanotechnology and digital manufacturing, advanced software(s), composite materials or 3-D printing to name a few. Crumbling big-city infrastructure has spawned creative public-private partnerships to undertake the repairs and reconstruction. Otherwise erstwhile advanced economies of Europe or Japan are beset with varying degree of structural constraints.

Of all the emerging economies, China has earned the spurs of Super Economy. Its Purchasing Power Parity adjusted GDP has surpassed that of USA, for the first time in 40 years. The recent surfacing of some major issues and too rapid economic growth has given birth to a hot new debate on the US-China race outcome. Most of the Western economists firmly bet for American supremacy in the foreseeable future. However it should be noted that they do not manifest confidence, in equal measure, in pushing aside the long term Chinese dominance of world affairs.

While the Europe dominated the 20th century, the Indian Ocean is clearly accepted to occupy the centre of attention, in military and economic terms. For the first time in 500 years, the bulk of global resides in Asia.

That puts India in the right place at the right time. Raghav Behl bets strongly in India taking over as Super Economy in wake of decisive mandate in favour in wake of decisive mandate in favour of the present Narendra Modi led BJP/NDA government. This is in spite of India being critically hobbled by among other things political extremism, corruption and expanding rich-poor divide. [2] China’s rise an economic superpower has unintentionally helped India and USA into a closer strategic alignment.

Raghav Behl goes on to trace India’s potential journey to Super Economy status through several happenings and factors, each one being presented as a separate chapter, which we will take up on 2nd February, 2016,  in the next part of this article.

[1] Joseph Nye on Soft Power

[2] Will India become a Superpower? – Ramchandra Guha