Non-Western Modernization Challenges Davos Man

DAVOS - As the global elite gathers here in Davos to ponder how "collaborative initiatives" might bring the world closer together, there are a set of deep and broad challenges that suggest the trend is moving in a very different, if not opposite, direction.

First, we are witnessing the end of "the end of history" as a distinct pattern of "non-Western modernization" is beginning to take shape. Second, two decades after the defrosting of the Cold War order, the world is once again dividing into democratic and non-democratic camps. Third, it is increasingly clear that export-oriented emerging markets such as China or Brazil are achieving a sufficient level of domestic consumption that they can "decouple" from the rich economies, continuing to grow even as the US teeters toward recession. Reinforced by sovereign funds investment from China and Gulf in flailing US financial companies, securing capital flows from West to East ...

The most prominent chronicler of non-Western modernization is Kishore Mahbubani, the irascible former envoy of Singapore to the UN and now dean of the Lee Kuan Yew School of Public Policy. In his just-published book The New Asian Hemisphere: The Irresistible Shift of Global Power to the East, Mahbubani writes that "many in the West want to believe that this current bout of anti-Americanism is just a passing phase caused by the harsh and insensitive policies of one administration. When Bush leaves, all will change and the world will go back to loving America. The West will be revered again. All will be well. This is a mirage." Where once the Chinese, the Muslims and the Indians "happily borrowed Western lenses and Western cultural perspectives" to see the world, now "with growing cultural self-confidence their perceptions are growing further and further apart."

As evidence of this shift, Mahbubani not only marshals the well-known economic statistics about growth in India and China, but also cites the increasing quality and number of world class Asian universities, the credible rise of the "Chinese dream" as a model for the developing world as well as the eclipse of the once ubiquitous American I Love Lucy or Dallas- type entertainment by Qing dynasty dramas, wildly popular modern-day Korean soaps or Bollywood epics that are attractive in the Muslim world because of "the spirit of inclusiveness and tolerance" that pervades the Indian mindset. While the West sees the world in black and white, "evil empire and axis of evil" terms, writes Mahbubani, "the Indian mind is able to see the world in many different colors," making Easterners more properly "the custodians of human civilization" than Westerners.

The road to this new East may well have been through the West, but now that the East has arrived at its destination the future will be built on its own terms. In one of his most insightful passages Mahbubani writes that "the great paradox about failed Western attempts to export democracy to other societies is that, in the broadest sense of the term, the West has actually succeeded in democratizing the world." For this Singaporean diplomat, even "undemocratic China" has empowered its citizens and made them "masters of their own destiny" thanks to new economic liberties. Yet, instead of celebrating this "democratization of the human spirit," the West berates them "for imperfect voting practices" because it fears the inevitable: real democracy on a global scale would topple the West from its reigning perch.

Obviously much turns here on the differences between liberal and illiberal democracy, but Mahbubani is certainly right on the broader historical shift taking place.

Closely related to the new cultural self-assertion of the East is what former US secretary of state Madeleine Albright sees as "the hardening of the cement between democratic and non-democratic worlds."

"The phony democracies or autocracies of Putin and Chavez," she lamented in a recent conversation, "may point to the future rather than the likes of Walesa, Havel or Mandela who were harbingers of democracy in their time." For now oil is the ingredient which is hardening the cement, but one wonders, as the futurist Alvin Toffler did a few weeks ago on a visit to Moscow, how Russia can advance through centralizing the state and restoring the nomenklatura in an information age where distributed power and decentralization are the keys to success.

In any case, Albright's answer to stemming this new global rift is to reinvigorate US-European alliances in promoting democracy "because we have the most in common." For Russia and China, the whole point of the Shanghai Cooperation Council, which now ties them together, is to stand firm against such initiatives by the fading hegemon and its formerly colonialist allies trying to hold on as power moves East.

Finally, anyone crying over their sorry portfolio returns from US versus international markets can't but note the growing differential between slow down and take off. The World Bank forecasts that growth in the high-income countries in 2008 will be 2.2 per cent. Developing countries will grow by 7.1 per cent, south Asia by 7.9 per cent, east Asia by 9.7 per cent and China by 10.8 per cent.

Based on this data, several Hong Kong investment analysts argue that China has passed a critical threshold where it can "decouple" its economic fate from the West's financial tribulations, sustaining its pace of growth and investment despite a looming recession in the United States. Some go further, believing the emerging economies, China in particular, can become the "locomotive" of the global economy the United States once was.

Indeed, emerging markets are supplying liquidity as well as demand, injecting $60 billion in the past few weeks through sovereign funds into banks hits by the US subprime crisis. "Emerging markets have lived up to their name, and are now a greater economic bloc than the United States. These are countries that are giving emergency aid to the world's rich countries," said Filip Weintraub, portfolio manager at Norway's Skagen Global.This new reality describes yet another tectonic plate shift as the 21st century unfolds.

None of this means globalization is coming apart at the seams, though the seams are becoming ever more apparent culturally and politically as well as economically. Certainly common action on global warming, which affects everyone, would not be precluded. But the world order we see emerging is a lot different than the one Davos Man, as Harvard's Sam Huntington famously labeled the globalizing elite which attends the annual World Economic Forum in Switzerland, has been used to envisioning.

Comments

[dchavern]

Very interesting post -- but I am not sure how you feel about the trend you describe. I would have to assume that left-leaning and progressive folks would be very concerned about countries that don't feel the need to democratize in order to progress. Little things like individual liberty, minority rights, women's rights, etc. tend to get squashed in the absence of vibrant democracy. Having a "democracy" in name only certainly doesn't guarantee any of these things, but not having a democracy REALLY doesn't help. (This harkens back to the oft-stated progressive desire to "preserve" underlying cultures from globalization -- except where those cultures do things we don't like (such as treat women badly).)

You can hate the Bush Administration, but I wouldn't mix that up with hating the underlying political values that the West has developed. Our system has its flaws, but it still works better than any other.

[Henry]

So they're building real estate in Russia, buying bmw's in Beijing, and exporting ethanol from Brazil. The economic nucleus that finances economic activity is the bank. No western banks in Communist countries. No western banks in muslim countries. And for most third world countries, it was western banks making loans to western corporations to loot the native mineral estate or plunder other resource. Once a country starts financing home construction, agricultural production, and then on to industrial production it's all history after that point. Its country currency is a function of its ability to export to the rest of the world and its standard of living depends of its own prudence of management and education.
A lot of this money business (and especially the bitter ugliness shown to Iran) is a function of western monopolization of international banking e.g. Bank for Intl Settlements, IMF, and the World Bank. (play ball with the cartel or you are black listed) Once the money lanes (international settlement) are not monopolized by the west, then it is a brand new ball game. Ask yourself this question, who is it that creates the wealth in this world?

[anfractuous]

A capitalist will sell you the rope to hang him with. -- Lenin
Of course, now the rope itself is made in China.

[jackpinesavage]

Well said, Mr. Gardels, well said indeed...

[23000Days]

A very perceptive and insightful viewpoint, Mr. Gardels. It's interesting that none have commented on it.
What I fear most is that American leaders will react badly to the change, and do something really stupid. Though little is said of it, we are antagonizing many of these financial giants.
Will we discover militarily "biting the hand that feeds" financially is not a good idea?

[sparkandy]

Why should we be surprised that other cultures and other countries want to do things their own way and not just be clones of the US? We supposedly support democratically run countries, but that includes the rogue State of Israel, which is basically a terrorist state. No wonder our brand of democracy is suspect. We talk out of both sides of our mouth. We are the big dog right now, but unless we can work with other countries on terms suitable to both parties, instead of throwing a fit every time the other party fails to do things our way, then we're going to become the runt of the litter.