SOUTHERN COMFORT
Middle powers like India, Brazil are filling the leadership void created by a world that is rapidly becoming multipolar. EPISODE #94
Dear Reader,
A very Happy Monday to you.
In a few weeks from now Egypt will be hosting the 27th United Nations Climate Change Conference. Referred more often as COP27, the meeting scheduled from 6-18 November will try and steer the world to take actions to contain “dangerous” human interference with the climate system.
And from 1 December India will inherit the Presidency of the G20, the new global high table. Among other things, India is looking to generate consensus on the future of climate, energy and work.
There is something striking about these two seemingly random events. Yes, both conferences have overlapping themes, which are of extreme importance for the future of our earth.
But there is an even more significant common denominator. It is the leadership of both conferences—both belong to the so-called global South. While Egypt is part of the African continent, India is part of Asia.
In a world that is slowly and steadily becoming multipolar, despite the best efforts of the United States and China, the two most powerful countries in the world, the leadership of the two important and still functioning global institutions by the nations of the South is of immense import.
This week I explore this phenomenon of ‘Southern Comfort’ and the attendant implications. Do read and share your feedback.
A big shoutout to Gautam, Rajit, Premasundaran, Aashish, Vandana and Lakshmipaty for your informed responses, kind appreciation and amplification of last week’s column. Gratitude also to all those who responded on Twitter and Linkedin. Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
DIALLING HOPE
As already pointed out in my introductory note, Egypt will be hosting the nearly fortnight long 27th United Nations Climate Change Conference beginning 6 November. And a few weeks later, India will inherit the Presidency of the G20, the new global high table, from Indonesia.
G20 includes the developed and developing countries and packs heft. Between them the members account for 85% of the global GDP, 75% of international trade and two-thirds of the global population.
On the face of it the leadership of the two summits is decided by rotation and hence nothing to write home about.
Though it is a coincidence, it is still very significant. Both countries, Egypt and India, belong to the global South and have a long history of working together (unsuccessfully) to forge an alternative to the hegemony imposed by the developed world on the global order since the conclusion of World War II.
In the case of G20, the leadership, past (Indonesia), present (India) and future (Brazil), will stay with the South for another two years—each Presidency is for the duration of a year. Since none of these three countries pose a threat to other nations and have recently displayed proactiveness to be part of the solution, leaves them ideally placed to avoid controversial face-offs. More importantly they can play the role of consensus maker better.
Especially given that the zero-sum game between two of the hegemons, United States and China, have rendered most multilateral institutions dysfunctional.
As a result, the leadership remaining vested in the South lends hope. Especially since the world desperately needs solutions to the challenges that threaten its future survival.
The Threats
The tragedy is that the biggest damage to the environment has arisen due to the dirty growth strategy adopted by the developed world. Of course the narrative peddled, particularly in the western media, conveniently glosses over this fact by focusing on suitable metrics.
The above graphic which measures pollution in per capita terms reveals this hypocrisy. Most narratives prefer to build the argument around total emissions, which as standard statistical techniques tell us is incorrect.
The fallout of climate change is worsening for the world in general, including India. One manifestation is the rising frequency of natural disasters. It is no coincidence that this uptick has come about in the last 20 years as wanton globalisation and urbanisation has given short shrift to nature.
Specifically in the case of India, the average of such occurences was about four natural disasters a year, including extreme weather, in the last century. This average spiked to a staggering 17 per year in the last two decades. Now if this is not a wake-up call, then nothing is.
And if this is not sufficient, the world has been hit by three back-to-back disasters—frankly all of them man made.
First was the covid-19 pandemic, which had dodgy origins in Wuhan, China. The devastating impact of the covid-19 pandemic led to fiscal largesse, particularly by developed countries.
Second, the Russia-Ukraine conflict roiled an already bad situation, triggering big disruptions in energy supplies. Not only did this stoke inflation, it has also nudged some countries closer to a recession.
Third, the fiscal overhang together with the recent surge in inflation, has forced the US Federal Reserve and other central banks to raise interest rates at a dramatic pace. This has caused an across the board depreciation in most international currencies as the dollar surged. In short, the world is picking up the bill for the fiscal abandon of the developed world.
In short, the threat menu facing the world is scary, whether it is in the short run or the medium term. Solutions will have to be discovered immediately if the earth has to be saved from destruction. It is not a choice, but an imperative.
Leadership
The plain truth about multilateral institutions has been that they have been captured by the developed world, eroding their value.
To cite the oldest example, the leadership of the Bretton Woods Twins, the International Monetary Fund and the World Bank, has been divided between Europe and the United States. And most recently the institutional capture of the World Health Organisation by China caused immense harm to the world when it dragged its feet on the investigation of the origins of the pandemic and its spread.
Similarly, the developed world backed the World Trade Organisation (WTO) as long as the global trade rules suited their interests. Over the last decade and more they had started souring off as the trade gains were turning into losses. Worse, the rapid rise of China meant that the unipolar world led by the United States had started to lose its sheen.
Actually it was not so much the rise of China as it was about the erosion of the global standing of the United States, weakened by the wars in Iraq and Afghanistan. Which is when the first signs of a multipolar world have begun to surface.
Middle powers like India, Brazil and South Africa, have always had greater skin in the game in multilateral negotiations. The decline in the influence of multilateral institutions has been partly offset by the rise in their clout in a multipolar world. Especially one in which the emphasis is on issue-based coalitions.
Harsh Pant, the scholar from Kings College, wrote a very insightful piece in Mint capturing this phenomenon and describing it as “variable geometries”.
“The world is changing rapidly and the US as well as China have little or no interest in shaping the multilateral order.
As a consequence, plurilaterals are fast emerging as one of the more important instruments available to middle powers to fill the void. This way, the US can be cajoled while China can be pushed back.
The calculus of variable geometries is now being shaped by middle powers (like Brazil, India).”
So we have an interesting circumstance.
On the one hand multilateral institutions have lost their influence. Instead, they are being replaced by newer bodies like COP and G20, in which middle powers wield considerable clout. The fact that the hegemons don’t pack the usual veto they enjoy in other bodies and the fact that middle powers are more invested in generating solutions augurs well for the world.
Exactly why I argue that the leadership of these two institutions hold out the best chance for the world to rebound from the devastating consequences of the zero sum game pursued for most of the last 100 years.
Recommended Viewing
Sharing the latest post of Capital Calculus on StratNews Global.
This time I explore the jobs conundrum with Rituparna Chakraborty of TeamLease, one of India’s largest human resource companies. The big question we explored is whether it is about generating sufficient jobs—which India has failed to do consistently for the last two decades—or is it one about the quality of jobs?
As Rituparna explains: 88% of the workforce is in the informal sector.
Most of it is by design: to elude the staggering regulatory cholesterol facing organised business; a throwback to the days of the Licence Raj.
The universe of regulatory cholesterol, as Rituparna chose to so aptly described: It is about 1,536 laws, 69,233 compliances and 6,618 filings that businesses face as an aggregate.
Sharing the episode below in case you missed the premiere last Thursday at 7 pm.
Till we meet again next week. Stay safe.
A topical development for the near future and the immediate focus on perhaps the most important issue facing the globe today- climate change ! Yes you are absolutely correct Anil, Egypt and India have collaborated previously in leading non alingned movements; it first happened during the Busan conference in 1955, when Guam Abdel Nasser, the Egyptian PM (later President), Josef Broz Tito of Yugoslavia and Shri JL Nehru, Indian PM, spearheaded the first non alingned group of nations, for the welfare of the rest of the world community. You are absolutely right in identifying the acutely polarized world today and the suspect nature of UN bodies. Hence the G20 under the leadership of India from 1st December and COP27 for climate change issues from November, have a critical role to play in shaping the policies and regulations for the immediate future and yes, the South or non alingned nations will have more credibility than the West(USA and allies) and East(China and allies). Thank you Anil. A wonderful article.
Dear Anil,
Very interesting article and with a wealth of information!! Presence of India in International arena is becoming prominent with each passing year !!