Global/Regional Systems And The New Global Reality

Please note: This archive page is related to a former project of the Stanley Foundation. Therefore, some of the material may be outdated and many of the links may no longer work. This page was last updated in late 2009. Information about current Stanley Foundation efforts can be found here.

 

Groups such as the United Nations, World Trade Organization (WTO), North Atlantic Treaty Organization (NATO), Association of South East Asian Nations (ASEAN), and more provide structure to international relations. Today these global and regional systems are being challenged by a variety of post-Cold War trends including globalization, nonstate actors, nontraditional threats, changing patterns of global trade and finance, environmental pressures, and more.

 

Even with the end of the Cold War and the passing of America’s “unipolar moment,” the US role in this evolution is still vitally important. How the United States views its global position, what values it maintains and projects, and how these ideas get translated into policy will have great impact on the ability of new global and regional systems to successfully emerge.

In the end, global and regional systems are the mechanisms that allow nations to participate in multilateral, cooperative action. Managing today’s transnational threats and challenges requires a cross-regional, principled, and multilateral “coalition for global governance” that incorporates as many of today’s middle and rising powers as possible.

The global system is now in the middle of a great transition from bipolar competition between two ideological, economic, and military blocs (the Cold War) to a multipolar system based on a more complex and nuanced network of middle powers, rising powers, least-developed nations, and failing states.

The global system is now characterized by several crucial trends that continue to evolve:

  • Economic and cultural globalization.
  • The rising prevalence of nonstate actors.
  • The rise of “nontraditional threats.”
  • The increasing importance of nationalism and nationalist movements throughout the developing world.
  • The increasing importance of regions to the global economy, and the rise of “regionalism” among states who may share geographic, political, economic, or security interests and goals—especially in Asia, Europe, and South America.
  • The increased strength of “rising and emerging powers” such as Turkey, South Africa, Japan, China, India, Brazil, South Korea, Russia, and the European Union (EU), as well as the continued durability of several Northern and Southern “middle powers” who play valuable economic, political, and military roles in the system.
  • The adoption by the latter powers of a foreign policy stance of “pragmatic” or “opportunistic” multilateralism in their dealings with each other, in their relations with the United States, and even in their stances toward avowed US enemies—often in a way that partially or wholly clashes with traditional US security practices
  • Increasing instabilities in the supply of oil and natural gas, which—alongside the effects of global warming—make the current “energy order” or “energy security” picture increasingly bleak and uncertain for all actors in the global system.
  • Negative “secular trends” in the basic foundations of global governance: regional environmental degradation and global warming, growing economic inequalities both between and within countries with stagnating and underdeveloped economies existing alongside fast-growing emerging economies, and finally, increasing questions about the durability and long-term sustainability of the global financial and trading system as originally set up and led by the United States.
  • Serious ongoing reforms of key Bretton Woods Institutions that the United States created after World War II to manage, finance, and fuel the global free market trading economy, notably the International Monetary Fund (IMF) and the World Bank.

The reality of today is that we live in a relatively fragile globalized system initiated by economic agreements after World War II—a system that has now evolved to capture most states and nonstate actors in a dense, complex, but largely ungoverned and unregulated web of interconnected economic and security transactions. Strong linkages between state and nonstate actors are growing, based in part upon instantaneous information flows, just-in-time transportation in global trade and manufactures, and the free flow of currencies and investment funds in a world dominated by “big capital” without any meaningful regulation or constraint by governmental bureaucracies.

Globalization has created:

  • An evolving foreign policy practice of “opportunistic multilateralism” among a diverse and eclectic array of middle, emerging, and rising powers who tend to agree with American goals only partially—whether friend, enemy, or something in between.
  • Increasing extremes in poverty and development, with some “emerging economies” rocketing forward with explosive domestic growth (often fueled by exports of manufactured goods) alongside a huge array of “least-developed countries” that continue to either stagnate or even decline in basic living standards and economic production.
  • Continued environmental deterioration and environmental inequalities, both in countries benefiting from globalization and those who remain underdeveloped.
  • A rise in “nontraditional threats,” often tied to nonstate actors, including black market weapons flows, transnational criminal activity, and nonnational ideologies that dispute the very basis of the globalized order such as Al Qaeda.

Nontraditional threats involve increasing global instabilities in areas where most Americans take stability for granted: basic political governance, international trade and finance, food creation and distribution, energy supply, the environment, and domestic development and employment.

Perhaps the greatest threat to the United States and global security alike comes not from strong sovereign governments challenging the American way of life, but from the potential unraveling of the relatively fragile globalized system in which emerging nonstate processes and trends challenge the management capabilities of the United States and others. The world is still largely unprepared to prevent, preempt, or manage many of the following trends:

  • The dissolution of weak governments and their replacement by unregulated and largely lawless forms of intrastate and transstate competition with heavy ideological, terrorist, criminal, and ethno-religious elements.
  • The spectacle of regional-turned-global financial and monetary crises, such as the Asian financial crisis of 1997 and the US mortgage crisis, which because of the globalized economy, can and do reverberate across the globe.
  • The spread of both current and future technologies of catastrophic destruction, not to state governments (who can be deterred, contained, coerced, and negotiated with), but to truly stateless actors with antiglobalization ideologies, who challenge the basic international system within which all states—even rogue states—exist.
  • The progressive deterioration of the environment to the point where starvation, intense resource conflicts (mainly over scarce and contested water supplies that cross borders), and unpredictable, catastrophic weather patterns become the norm.
  • Severe poverty and overpopulation, which threatens to feed into, and accelerate, all of the above processes through declines in basic human security at the individual level across the developing world.

There is an evolving, expanding normative system of multilateralism in Southeast and Northeast Asia that is partially due to China’s evolution within larger Asia. Consider the historical changes since President Richard Nixon’s visit to China in 1972. In the past thirty-three years, a complex set of international and transnational business, cultural, monetary, and even security ties have steadily enveloped a rising China in a dense regional network involving almost all nations in Southeast and Northeast Asia.

Although the multilateral and cooperative ASEAN is still fairly limited in addressing hard security issues, ASEAN is no longer a creature of just one Asian subregion. It has become more involved in Northeast Asia as its dialogue of common threats and security challenges has evolved. Under the rubric of “ASEAN + 3,” China, Japan, and South Korea are being incorporated in the expanding norms, rules, and common expectations constituting Asia’s experiment in cooperative development and security.

In addition to traditional “hard security” threats such as weapons proliferation, China and its Southeast Asian neighbors are now cooperating on inherently transnational challenges such as environmental degradation and pollution, quality education of citizens, drug and arms smuggling, terrorism, disease control and prevention, and of course the expansion and management of the ballooning Asian financial markets and high technology trade networks.

Meanwhile, in Northeast Asia, there are early indications that the crisis of an impoverished and nuclear-weapons-capable North Korea could provide a grand opportunity for creating something that has never existed: an institutionalized, formal framework or “architecture” for security in Northeast Asia that would attempt to prevent and minimize arms races and diplomatic or cultural frictions.

Northeast Asia already boasts a very integrated interstate economy of trade and finance between South Korea, China, Taiwan, Japan, Russia, and the United States—even as historical tensions remain between China, South Korea, and Japan. The trick, then, is how to prevent nuclear and conventional arms races, diplomatic slights, space weaponization, or naval incidents at sea, which could all be based on lingering mistrust between players who otherwise are enjoying unprecedented levels of economic interconnectedness.

In contrast with the traditional US security script, consider the practices of middle-to-rising powers such as India, South Korea, South Africa, Turkey, India, Russia, and China, as well as Northern “middle powers” such as Canada and Scandinavian countries:

  • Turkey has equally correct relations with all its neighbors, no matter what their cultural or ideological composition: Israel, Iran, the EU and Arab states all enjoy good relations with Ankara, even as Turkey is a formal member of NATO. The same can be said of India toward the Middle East.
  • India has been competing with China for the same oil contracts in least-developed nations of the world. Further, India has constructed a major Iranian port facility in the Southern Gulf and is helping Iran build transportation networks for more oil/gas on Iranian territory, even while India also has strong antiterrorism and conventional defense ties with Israel and the United States.
  • China, like India and Japan, is avidly courting all ASEAN nations in the East and all Gulf Cooperation Council Arab Monarchies in the West—the former for purposes of finance and trade, and the latter for purposes of energy security.
  • Meanwhile, South Korea has increasingly strained alliance ties with the United States, even as it has a burgeoning, impressive space launch program now going forward with Russia, and even as it trades in high-tech goods and finance with Japan and China and takes part in the six-party process with North Korea (which also involves the United States, Russia, China, and Japan).

These states tactically seek out whatever financial, military, trade, and cultural relationships that will help them rise higher in the global system and provide a better living for their own. A Cold War legacy strategy does not work well in this system because it does not reflect the actual foreign policy practices of those nations who are receiving increasing benefits from the evolving but fragile global order.

The “Northern Middle Powers” of Canada, Australia, Norway, Sweden, and Finland have both overlapping and competing memberships in institutions such as NATO and the EU. These nations are clearly part of the “North” or “First World,” yet they do not constitute the core major powers that make up the G-8 (Group of 8) or the P-5 (permanent five members of the UN). These Northern countries tend to see security in broader, more comprehensive terms than the United States, focusing on the need to cooperatively solve common global problems rather than countering the agendas of avowed US enemies such as Iran or Syria.

Various southern countries also arguably fall into this category: Malaysia and Indonesia in Southeast Asia do not have the wherewithal to be deemed “major” or “rising” powers by most analysts, but they have a strong say in regional governance and often take principled stances at global forums as well, including issues of nuclear disarmament and religion (being home to a large share of the world’s Muslim population). Malaysia provides a home for US forces via a bilateral defense pact, but it also has been assertive on nuclear disarmament issues in the UN context. Indonesia is a leading member of the Organization of the Islamic Conference and is attempting to manage a Muslim-majority populace that harbors both similarities and significant differences with Middle Eastern Islamic counterparts.

More broadly, all of the six growing states that form the ASEAN look equally to China, Japan, and the United States for help in security and development without starkly picking sides, and are productive members and leaders of this expanding regional organization that is integrating slowly the interests and concerns of more wealthy Northeast Asian states such as Japan, China, and South Korea.

In Latin America, Mexico, Chile, and Argentina arguably have a strong, enduring role in regional and global governance, especially in economic matters of trade and finance, again despite their lack of “great power” or “major power” status.

As with rising powers, middle powers tend to pursue a strategy of opportunistic or pragmatic multilateralism that challenges the traditional US approach to national and global security.

Environmental destruction and decay is increasing alongside socioeconomic inequalities. Even within states benefiting from globalization—those identified as “emerging economies” or “rising powers”—the social and economic benefits of globalization often come at a growing local environmental cost. For instance, 17 of the 20 worst-polluted cities in the world reside in China.

This is in part due to the fact that norms of truly sustainable development, based on preservation of the global commons, are currently entirely voluntary in the global financial and trading system. In northern or First World countries, lack of enforceable standards for multinational corporations at the global level is made up for by very strong standards and enforcement mechanisms at the domestic level, via democratic and relatively transparent decision-making processes.

Within southern or developing countries, in stark contrast, domestic governmental entities either are uninterested in articulating and enforcing such standards (because they get in the way of fast national development and national strength), or developing world governments are simply unable to create, enforce, and monitor such standards against both parent companies and their diffuse subsidiaries because of extreme lack of monetary resources and technical expertise in pressing legal claims.

There is thus a two-tier, highly unequal system of environmental health and well-being within the current global order, something that is only now being slowly addressed via voluntary initiatives such as the UN Global Compact.

Rather than being enshrined formally in global institutional committees, executive governing boards, and bargaining and negotiating frameworks of the IMF or the WTO, sustainable development practices are codified in the purely voluntary “Global Compact”—an initiative conceptualized by academic John Ruggie and politically created by former UN Secretary-General Kofi Anan in 2000.

The Global Compact incorporates labor, environmental, and human rights standards in a highly principled, 10-point code of conduct, based squarely on four major, global conventions: the Universal Declaration of Human Rights; the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work; the Rio Declaration on Environment and Development; and the UN Convention against Corruption. And the compact has an equally diverse board of governors from many areas of the corporate world and developing world.

However, it has no enforcement powers, no implementation mechanism, and no “institutional articulation” in the form of day-to-day standard operating procedures. While multinational corporations are being encouraged to take on the 10-point principles of the compact and some are making strides in this area, the transnational workings of the global system itself remain largely unconstrained by this initiative.

Because there is little regulation and effective monitoring of international and transnational capital flows, large amounts of currency reserves are absolutely required by all developing country governments to avoid unpredictable and unstable currency revaluations and flows, as well as to insure against unforeseen trade imbalances and balance-of-payments troubles. Such reserves, usually held by central banks, serve as a “cushion” for unforeseen shocks caused by currency speculators or unforeseen downturns in terms of trade for basic commodities.

In providing this cushion against monetary or trade crises, the US dollar is still unquestionably the primary form of these reserves, rather than gold, silver, or some other powers’ currencies (though the euro is making headway in global markets). But because of large US spending at home and abroad via military operations, the dollar is very overvalued and unstable, essentially subsidized in its value by large accumulations of Treasury notes by China, Japan, and the EU.

What this essentially boils down to is a current reality in which nations who are integrating into the global laissez-faire trading and financial system, according to the rules of the system itself, must stockpile incredible reserves of a currency that may or may not be that valuable, depending on domestic US economic policies and decisions as well as US military actions overseas. As a result, various studies have shown that developing countries (even those who are relatively successful in leveraging the global system to their advantage, such as Malaysia or Chile) are indirectly buying up American debt, in essence sending some of their wealth back to US consumers and the US government instead of using it on pressing domestic health, education, or infrastructure needs.

There are increasing questions about the overarching, systemic issue of global high finance that are connected to patterns of environmental and trade governance. The global financial system is not leading to increased prosperity and stability in most regions of the globe, despite the oft-heard success stories in Greater Asia and in some Latin American cases such as Chile or Brazil.

First, it has not always been the case that economic growth is connected to true human development, which includes factors such as health, education, information, and transportation infrastructure and knowledge. In part, this is because past IMF loans to developing states treated all government spending and subsidies of loan recipients as potentially inefficient and deleterious to the presumed universal goals of a balanced budget, free capital flows, and more efficient integration of the domestic economy into the global financial system. Thus developing countries had to obey a summons to reduce government expenditures on things that development economists argue are essential to long-term, holistic health of a society and nation: income inequality, education, health and other social services, and the overall steady buildup of communications and transportation infrastructure.

However, this is now slowly but surely being rectified as the IMF has received increasing pressure from middle, emerging, and rising powers to exempt development-oriented domestic social spending from calls for financial austerity.

The global reserve system is still inherently structured so that foreign countries—even quite poor or mid-level countries in the international system—are subsidizing massive levels of US debt, including a high consumerist standard of living based on low US savings rates.

To manage today’s transnational threats and challenges, what is truly needed is a cross-regional, principled, and multilateral “coalition for global governance” that incorporates as many of today’s middle and rising powers as possible to advance the overarching goal of sustainable development. Such an approach would add principle and purpose to what have thus far been largely ad hoc, pragmatic interstate coalitions on areas of common national interests.

Ideally, a wide, cross-geographical and cross-cultural coalition would work to create regional and global institutions for adaptive conflict management that would provide the following global public goods:

  • Provision of traditional security goods such as deterrence of aggressors and shoring up the balance of power between wary states in unstable regions.
  • A stable, well-regulated, and sustainable trading/financial system that entails a broadly fair distribution of wealth and economic growth, through the progressive inclusion of universal human rights, labor, and environmental norms into the functioning of institutions such as the WTO and IMF and their growing regional counterparts such as the Asian Development Bank.
  • Prevention of the unchecked spread and adverse development of technologies with mass destruction potential, including an effective system for tracking and containing outbreaks of either natural or man-made contagions.
  • A new understanding on the proper uses of outer space for economic, scientific, and security purposes.
  • The construction of new institutional security orders within all major regions.
  • Consistent stabilization of failed states, or if this proves impossible, consistent containment of the ill effects of expanding civil conflicts, including the prevention of mass refugee flows, genocide, ethnic cleansing, and rampant criminality.
  • A new, positive-sum global understanding on energy security, involving a consistent set of expectations about how rising powers, middle powers, and least-developed countries will cooperatively share scarce energy resources.
  • The prevention, management, and mitigation of ecological threats so that security and prosperity increase environmental health rather than degrade it.
  • The prevention and mitigation of terror threats and terrorist acts at the global, regional, and national levels, including not only military means but also development of better law enforcement capabilities in the developing world.
  • Closely related to counterterrorism, new understandings on universal human rights and precepts of "human security" that attend to the needs of individuals as well as sovereign states.

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