28 June 2009

The West in decline, the rise of the East

The West in decline, the rise of the East


There are 2 recent political events that hint to a major shift in the global geo-political structure:


·         The victory of the Sri Lankan government over the Tamil Tigers after 20 years of civil war in a overtly aggressive final push;


·         The victory of President Ahmadinejad in the elections in Iran recently which are almost certainly a result of a biased election process.


In both cases, the so-called first world or developed world moaned, complained and whined but both the Iranian and Sri Lankan governments simply ignored the views of their supposed betters.


This is simply because neither country needs to pay any heed to the views of the Western world, nor does the USA or the UK have any leverage.  The question is how did this happen?


In the case of Sri Lanka, they have sold a plot of land at Hanbantota to China to build a base for China’s Navy.  China has the money, China has the manpower, China has the military might.  It now is moving away from its traditionally internal looking political attitude to looking outwards for the first time in over 500 years. 


It wants first and foremost to protect is new found economic might.  So, like the British with its global empire, it is beginning by a desire:


1.       to protect its ability to trade through protecting its merchant fleet and keeping the shipping lanes open;


2.       it is looking to protect its access to base commodities like oil from the Gulf and also look at its (currently unsuccessful) deal with Rio Tinto and new discussions with Anglo American;


3.       it is looking to invest strategically by buying key technologies.


In the case of its low level military expansion it has acquired sites in relatively weak countries – Bangladesh, Burma Pakistan and Sri Lanka.  Sri Lanka then got military hardware in the form of guns, ordnance and six F7 jet fighters which allowed it to move on the Tamil Tigers.  So when China is providing over $1 billion and the UK £1.25 million and the USA $7.4 million, who cares what the so-called Developed world thinks.  Britain and America are simply impotent.


Iran has oil.  The price of oil is now relatively high, so the Iranian state has its own cash resource.  It does not need tax monies to finance itself as the governments do in Europe and America.  As a result, it does not need to listen to its people when it makes a political decision, which in this case seems to be to “elect” its incumbent President at all costs and who cares about auditable legitimacy.


The oil states have so far confined themselves to economic imperialism for the simple reason that the Gulf States do not have genuine depth of population, but Iran does.  So in the same way that Nigeria can happily tear itself apart with internal fighting financed through oil, Iran can ride roughshod over the democratic system it has put into place to give itself legitimacy.


With the global financial and economic crisis crippling the Western world in the short term and hobbling it in the long term, power has shifted eastwards.  China is in the ascendant and Europe is perhaps in permanent decline.  The USA will survive because of its size and its capacity to innovate and reinvent, but its sphere of interest will shift to the Pacific.  Perhaps it should even move its capital to the West Coast?


I don’t know where this change will take us.  However, I do know that the future politics of the world will be very different from the last 300 – 500 years; China and India are regaining their rightful places as the most powerful nations in the world.  Furthermore, countries like Britain must be very careful:


(a)     It must get its national accounts positive rather than constantly running in deficit as the cash-rich nations will not bankroll us forever, particularly as they become more powerful and more interested in themselves and West Coast of America; and


(b)     It must not become over-reliant on the East to do its manufacturing because they have now become the price-setters for much of our manufactured goods which will not be benign for much longer.