3. New powers in International relations

IEP Rennes – AEP -CEP Program 2013- 2014 Introduction

• « power » : « the capacity for a Nation to act against another Nation» (MORGENTHAU, Policy Among the Nations, 1948)

• According to MORGENTHAU, Power is based on : – Geography – Natural ressources (oil, coal…) – Industrial capacity…

• This chapter will mainly -but not only- focus on « emerging economies » : nations with fast growth : BRIC-S

• Problem : Are emerging economies real political powers ? Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by a superpower III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

I. New economic powers A. Developing countries

• Emerging giants - BRIC Population in billions (rank) Brazil 198,7 (5th) - Brazil, Russia, India, China : Russia 143,5 (9th) supposed to be at a the same India 1,237 (2nd) stage of development ? China 1,351 (1st)

TOTAL BRIC 2,930 billion (40% of - Since 2010 : BRICS, because of world population) South-Africa (politically correct ?)

BRIC : numerous and low-cost workforce • Specialization of the world: – Globalization entails specialization of each country – Cf. Comparative advantages (David RICARDO). • BRIC specialization – Brazil: “World’s Farm” : food power. – India: “World’s back-office” service power. – China: “World’s factory” : industry power. BRIC : next superpowers ?

2012 GDP 2050 GDP

1. US (15,68 billions USD) 1. China (70 710 billions) 2. China (8,2 billions USD) 2. US (38 514 billions) 3. Japan 3. India (37 668 billions) 4. India (1,842) 4. Brazil (11 366 bilions) 5. Germany 5. Mexico 6. Russia 6. Russia 7. UK 7. Indonesia 8. France ……. 9. Brazil 10. Germany 10. Italy 12. France

BRIC and developping countries

“BRICS countries are the defenders and promoters of developing countries.” Hu Jintao, President of China, 2012.

=> Are they really representative of developing countries ? Others developing countries : LDCs

• Least developped countries (LDCs) : Country HDI (maximum is 1) – 49 countries with lowest HDI Niger 0,304 – HDI : Human Development Democratic 0,304 Index : combination of Republic of Congo socioeconomic development, health indicator, education Mozambique 0,327 indicator… (more complete than GDP) Chad 0,340 • Geographical localization Burkina-Faso 0,343 – 34 African countries Mali 0,344 – 14 Asian countries (Yemen, Eritrea 0,351 Nepal, Burma…) Central African 0,352 – 1 American countries : Haiti Republic

Source : UNDP, 2012 Human Development report

How to explain this gap between emerging and developing countries ?

• Neo-marxist theory – Samir AMIN – Immanuel WALLERSTEIN : Core-Periphery model. Ex. Triade. • Liberal theory – W.-W. ROSTOW : 5 stages of the economic growth, from traditional society to mass consumption. – Most important stage : take-off (3rd stage) Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by a superpower III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

I. New economic powers B. Development strategies • EOI policies – Export-Oriented Industrialization – developing exports (EPZ) & opening domestic markets to foreign competition – Ex. four Asian Tigers • ISI policies – Import-Substitution Industrialization – replacing import with domestic production. – Goal : reducing the foreign dependency. – Ex. South America.

EOI policies : Korean example

• Industry growth in South- Korea 1. Light industry (60s): textile. Seoul in Cheap labor. Less capital 1960 intensive 2. Heavy industry (70s): steel, shipbuilding… need a lot of capital and a workforce not too expensive. 3. Hi-tech industry (90s) : skilled workforce. Expensive R&D

• Similar strategy in Japan & South-East-Asia : “the flying- geese paradigm”?

South-Korea’s GDP (nominal) between 1960 and 2007 Interventionist policies

• National development plans: – 1978 : Deng Xiao Ping launched “Socialism with Chinese characteristics” (opening plans) – “Socialism market economy”

• National groups : – Korean chaebols (Daewoo, Samsung) – Brasilian multinationals (Petrobras, Embraer…) – Chinese multinationals : Huawei, Sinopec, Conoco, ZTE… – Indian conglomerate companies : Mittal, Tata, Reliance….

Interventionist policies : Korean example

• National groups : Chaebol Turnover (won) Business - “Chaebols” conglomerate Electronics, insurance, - Promoted” by President Park (since Samsung Group 221 trillion card, construction & 1960s) shipbuilding - “too big to fail” : impossible to Electronics, insurance, collapse ? LG Group 115 trillion chemicals, telecom & trade

Hyundai Kia 107 trillion Motors, steel & stock • A criticized model Automotive Group – Connection with politics : ex. Energy, telecom, trade, former Hyundai CEO was member SK Group 105 trillion construction & of National Assembly. semiconductors Energy, shopping & – Connection with banking sector : GS Group 49.8 trillion ex. Asian Crisis (1997) because construction chaebol were linked through debt Construction, food, guarantees => chain reaction… Lotte 41.4 trillion energy, Hospitality & Shopping – Oligarchy families still control Hyundai Heavy South-Korean family… 31.3 trillion Heavy industry Industries

Source : Wikipedia. Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by a superpower III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

II. New political powers A. New actors in International relations • Historical actors in International relations – « Third World » or third block : • 1955 : Bandung conference • 1961 : Belgrade conference - Non Aligned Movement (NAM)

New ambitions in IR – China in IR • China in Africa (« Chinafrique »?) – 2000 : first summit between China and 44 African states. – Main African partners : Angola, Nigeria, Sudan (what do they have in common ? => oil ) • Trade between China and Africa – 2000 : 10 billions USD – 2010 : 100 billions USD. China in Africa (« Chinafrique » for French)

?

=> Political and economic support Indiafric also… China worlwide

• China in South-East Asia – « Bamboo network » : overseas Chinese – control banking and trade sector the Tiger Club Economies • China in Middle-East – 60% of Chinese oil come from Middle East. – SINOPEC : first oil company in Irak • China in Arctic – Mining sector in Greenland (iron mine)

China in Siberia also Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by former power III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

II. New political powers B. International relations still dominated by Triade • « Triade Power» – Kenichi OHMAE (1986) – North-America + Europe + Japan

• Economic power of Triade – 67,76% of the World GDP % % % % Triade in world GDP – 80% of R&D 2005 2006 2007 2008

• Political power of Triade Triade 74,26 72,11 70,00 67,76 – Security Council… BRICS 10,30 11,66 12,99 13,80 – International Organization Others 15,44 16,23 17,01 20,11 100,0 100,0 100,0 100,0 (IMF, WTO). Total 0 0 0 0

Source : World Bank

II. New political powers B. International relations still dominated by Triade • Transfer of Technology (TOT) – Product life-cycle management (cf. VERNON theories) – Innovation from developed countries to developing countries (ex. TV production). – Developed countries : must innovate to be more competitive

• High speed rail in Asia – KTX in Korea (TGV technologies) – CRH 2 in China (Siemens technologies).

=> Is it not just an economic catch-up ?

Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by a superpower III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

I. New international relations A. International relations based on cooperation

• ODA – Official development assistance – « official loan for promoting economic development of developing countries » – UN goal : 0,7% of developed countries GDP for ODA – Bilateral and multilateral ODA

• ODA Projects – Transport infrastructures: metro, high-speed rail, airport… – Energy infrastructures : nuclear powers (ex. Russia in Vietnam)…. – Water treatment infrastructures

=> infrastructures because need intensive capital and allow mainlylong-term benefit (consequentlyf: few private investments)

Japan ODA in Lao PDR an influence competition with Korea in South-East Asia (slide before)? ODA Organizations

• Bilateral ODA organizations – Japan: JBIC + JICA – South-Korea : KOICA – France : AFD (Agence française de développement) + Ministry of Economy.

• Multilareal ODA – World Bank – Europe : European Investment Bank (EIB) in Luxembourg – Asia Development Bank -ADB (headquarters : Manila) – African Development Bank - AfDB(headquarters : Tunis)

ODA relations

• Recipient of ODA Donator % of GNI (2010) development aid : Luxembourg 1 % – Africa : 28 billion USD Sweden 0,99 % ODA Norway 0,93 % – Asia : 24 billion USD. Denmark 0,84 % • Main national ODA UN Goal : 0,7% UK 0,56 % receipters (2010) France 0,45 % – Irak Germany 0,39 % – Nigeria – Morocco US 0,21 % Japan 0,17 % Main ODA donators

Source : DAC – Development Assistance Committee - OECD Cooperation also from developing countries to developed countries… • Katrina Hurricane (september 2005) – New Orleans destroyed (more than 1800 deaths) – Help from (not exhaustive) • Afghanistan (100 ,000 USD) • Albania (308,000 USD) • Bangladesh (1 million USD) • India (5 million) • Kosovo (500, 000 USD) And « cooperation » from BRIC to developed countries Chinamerica… China and US public debt • US bonds : 1277 billion USD in China. • China lends and US borrow… Until collapse ? Or Chimerica ? Course Plan

I. New economic powers A. Developing countries B. Development strategies II. New political powers ? A. New actors in International relations. B. International relations still dominated by a superpower III. New International relations A. International relations based on cooperation B. International relations based on conflitcs Conclusion

III. New international relations B. International relations based on conflicts • BRIC are not unified

• China vs India

– China vs India : Arunachal Pradesh and Aksai Chin (Himalaya

border)

– India defeated in 1962 Chinese seaport in Pakistan (Gwadar) – Chinese strategy « String of pearls »

« String of pearls » strategy Cultural conflicts?

• « The clash of civilizations » ? – Samuel. P. Huntington, 1996 – End of Cold War : end of political wars. – Cultural wars : ex. terrorism against western civilization. • A theory criticized – Not civilizations but one global civilization (Edward SAID, Orientalism) – Muslim divided : sunni, shia… – Sub-Saharan ?

Conclusion Conclusion

• Initial problem : are emerging economies real political powers ?

• BRIC are different and divided: – On the economic aspect : Russia growth is very different from Chinese growth… – On the political aspect : conflicts between emerging countries...

• Does the rise of new powers announce «the decline of the West» (Oscar SPENGLER, 1918) ? – European suicide through two World Wars – Economical crisis…

The collapse of a civilization ?

« Civilization died not by murder, but by suicide » Arnold Joseph TOYNBEE. Realism in International relations

• Hans Morgenthau (1904-1980) – Politics Among Nations, 1948 : influence an entire generation of scholars. – Encouraged the nuclear race during Cold War.

Flying-geese paradigm

• view of Japanese scholars – Japan as a leading power in South-East Asia development. – Catch-up with the West : production of commodities move from the more advanced countries to the less advanced ones. – developed in the 1930s, but gained wider popularity in the 1960s. Cf. Kaname AKAMATSU Third World

• Invented by French demographer Alfred SAUVY (1952) – Reference to the “Third Estate” during the French Revolution (commoners : 98% of population VS noble and ecclesiastic power) – “We are all, we represent nothing and we want to be all” • Used for non aligned movement in the Cold War – Non-aligned with NATO or the Communist Bloc. – International summit of Bandung (1955) – NAM founded in Belgrade Conference (1961). – Main actors : Nasser, Nehru, Tito

Free-trade Zone (FTZ) or Export processing zone (EPZ) Definition • Free trade zone (FTZ) or Export processing zone (EPZ). Formerly: free- port. • Zone where it’s possible to import, to produce/assembly and to export without any tax/customer taxes…

Example : Maquiladoras • A FTZ (free trade zone) located in Mexico, near the US border. • 3000 maquiladoras and 1,3 million of Mexican are employed for assembly, processing or producing products for exporting in the US market. • 1960s : border Industrialization Program (BIP) to solve the inunmploymet along the border. • 1994 : NAFTA - North American Free Trade Agreement (1994)