The emerging geopolitics and the world economy
Saturday, 24 April 2010
THE annual spring meetings of the World Bank and the International Monetary Fund (IMF) are scheduled to be held in Washington on April 24-25. These meetings customarily review the progress of the Bretton Woods institutions. This time the meetings will possibly pay more attention to the need of reforming the Bank-IMF than taking stock of their performance. The tone of the meetings has apparently been set by the President of the World Bank Group, Robert B. Zoellick in a speech at Washington's Woodrow Wilson Centre for International Scholars on April 14. The title of the prepared speech, "The End of the Third World?/Modernising Multilateralism for a Multipolar World", is provocative as well as suggestive. Proclaiming the end of the Third World is actually an acknowledgement, rather a belated one, of the fact that the geopolitical configuration of the world has totally changed from what it was in 1944, when the Bretton Woods system was born. And the advocacy of 'Modernising Multilateralism for a Multipolar World' has focused on the urgent need of reforming the Bank-IMF before the Bretton Woods System becomes a total anachronism. Zoellick has pointedly said: "If the tectonic plates are shifting, multilateral institutions must shift too."
The World Bank President has highlighted in his speech 'the end of the "Second World" with Communism's demise' in 1989 and the end of the Third World with the global economic crisis of 2009. He has also observed, in passing, how much the First World has declined: "The old world of fireside chats among G-7 leaders is gone." But he is rather reticent about the fundamental development which has caused the shifting of the 'tectonic plates' of geo-politics. The origin of the Bretton Woods System lies in the geopolitical matrix of 1940s. Princeton University professor, G. John Ikenberry, who has been Senior Research Adviser of the Commission on the Future of IMF and World Bank, says: "In its broadest outline, the postwar settlement does reflect American interests and its overwhelming position after the war... The distribution of power and interests within and among the United States, Britain, and continental Europe set the broad limits on the shape of the postwar international economic order." Bretton Woods System is, thus, the economic order of the American Century. The emergence of the multipolar world, which Zoellick celebrates in his speech, is the geopolitics of the post-American Century world. Restructuring the architecture of the world economy to make it compatible with the new geopolitics, is now called for.
The World Bank President in his speech has noted the "rebalancing" of the world economy. He has spoken about the "danger of the political gravity dragging countries back to the pursuit of narrow interests". And he has warned: "We cannot afford geopolitics as usual." "The new world," he says, "requires identifying mutual interests, negotiating common actions, and managing differences across a much wider spectrum of countries than ever before." He strongly advocates modernisation and reforms of the World Bank Group to "represent the international economic realities of the 21st century."
Whether the performance of the World Bank, under Zoellick's presidentship, will match his rhetoric, is a different matter. But it goes to the credit of Zoellick that he has forcefully drawn world attention to the prevailing mismatch between the world economy and the emerging geopolitics. Zoellick has in his speech recalled that Woodrow Wilson's "words on paper did not realise their lofty ideals" in the League of Nations as it was practically formed and run. He has pointed out "Arranging a new sharing of responsibilities among mutual stakeholders in international systems will not be easy". "But happen it must", he insists. Otherwise, the world will be in danger: "The failure of 1919 [the founding of the League of Nations] led to countries that could not cooperate in 1929 [the Great Depression] and the start of a new war in Europe in 1939." These are sobering words -- and dark thoughts.
The World Bank President has highlighted in his speech 'the end of the "Second World" with Communism's demise' in 1989 and the end of the Third World with the global economic crisis of 2009. He has also observed, in passing, how much the First World has declined: "The old world of fireside chats among G-7 leaders is gone." But he is rather reticent about the fundamental development which has caused the shifting of the 'tectonic plates' of geo-politics. The origin of the Bretton Woods System lies in the geopolitical matrix of 1940s. Princeton University professor, G. John Ikenberry, who has been Senior Research Adviser of the Commission on the Future of IMF and World Bank, says: "In its broadest outline, the postwar settlement does reflect American interests and its overwhelming position after the war... The distribution of power and interests within and among the United States, Britain, and continental Europe set the broad limits on the shape of the postwar international economic order." Bretton Woods System is, thus, the economic order of the American Century. The emergence of the multipolar world, which Zoellick celebrates in his speech, is the geopolitics of the post-American Century world. Restructuring the architecture of the world economy to make it compatible with the new geopolitics, is now called for.
The World Bank President in his speech has noted the "rebalancing" of the world economy. He has spoken about the "danger of the political gravity dragging countries back to the pursuit of narrow interests". And he has warned: "We cannot afford geopolitics as usual." "The new world," he says, "requires identifying mutual interests, negotiating common actions, and managing differences across a much wider spectrum of countries than ever before." He strongly advocates modernisation and reforms of the World Bank Group to "represent the international economic realities of the 21st century."
Whether the performance of the World Bank, under Zoellick's presidentship, will match his rhetoric, is a different matter. But it goes to the credit of Zoellick that he has forcefully drawn world attention to the prevailing mismatch between the world economy and the emerging geopolitics. Zoellick has in his speech recalled that Woodrow Wilson's "words on paper did not realise their lofty ideals" in the League of Nations as it was practically formed and run. He has pointed out "Arranging a new sharing of responsibilities among mutual stakeholders in international systems will not be easy". "But happen it must", he insists. Otherwise, the world will be in danger: "The failure of 1919 [the founding of the League of Nations] led to countries that could not cooperate in 1929 [the Great Depression] and the start of a new war in Europe in 1939." These are sobering words -- and dark thoughts.