Shifting superpowers? An update on global geopolitics Bob

Shifting superpowers? An update on global geopolitics Bob

Shifting superpowers? An update on global geopolitics Bob Digby Geographical Association Conference April 2014 Sponsored by Provide some recent and relevant subject update for Edexcel A2 Unit 3 Understand some recent changes to the worlds superpowers Assess some of the BRICs in terms of their superpower status Identify some concepts and complexities that students have to grasp in this topic Focus for this lecture HDI 0.69 0.94 0.79

0.55 0.63 0.73 GDP per capita US$ PPP Internet users (% pop) GDP from agriculture (%) Population growth rate (%) (2012 data) 9,200 49,900 23,500 3,900

4,900 11,900 40 78 48 11 22 46 10 1 4 17 38 6 0.5

0.9 -0.1 1.3 1.0 0.8 China USA Russia India Indonesia Brazil Powerful countries: whos who? Use the data to guess the

country Comprehensive National Power (CNP), Chinese Government Score 2007 Score 2011 USA UK Russia France 91 65 63 62 USA China Russia France

100 75 60 35 Germany 62 Germany 35 China Japan Canada S Korea India 59 58 57 53 50 Japan UK India Brazil

Turkey 30 25 25 20 20 Two different ranking systems Both attempt to quantify hard (military) & soft (economic, cultural) power The CNP has changed hugely since 2007 European countries have lost out; China, India and Brazil have moved up 3 countries (USA, China, Russia) have pulled away from the rest Different ranking systems BRICs coined in 2001, by Jim ONeill at Goldman Sachs bank The argument: by 2050, the BRICs would exceed the economic power of the G7 Post-global recession suggests the crossing point will happen sooner rather than later (2030/35?) What began as an economic idea, is now an official reality; the first BRIC summit held in 2009. In 2010, South Africa joined the

group i.e. BRICSs not BRICs! (2010, Goldman Sachs) The BRICs: gaining traction? BRICS GDP totalled $16 trillion in 2012 Compares with $17 trillion for EU & $16 trillion for the USA However China alone accounts for 55% of BRICS GDP and 49% of their military spending Take China out of the BRICS, and the BRIS look much less powerful Data in US$ trillions

Between 2000-2012, China overtook the UKs economy rising from 6th to 2nd largest (UK dropped from 4th to 6th) Does BRICS make sense? N11 also coined by Goldman Sachs, in 2005 These 11 have all, or some of, the characteristics below However, it is mixed, ranging from Nigeria & Bangladesh to Turkey & South Korea Some N11 countries also appear on Citigroups 3G list from 2011 This Global Growth Generators (3G) list includes Bangladesh, China, India, Indonesia and Egypt Open to global trade and investment Economic stability Broad education Political maturity

Next 11 (N11) 2010 2050 Many emerging powers face a future demographic dividend Top 10 Top 10 They have youthful populations now economies economies sometimes even troublesome ones (Egypt) by GDP by GDP ...but their fertility rates are falling USA China Soon, they will have a window of opportunity with a large workforce, but China India without either a large young or old Japan USA population Germany Indonesia By 2050, big winners will enjoy combined France Nigeria

population growth + economic growth Compare Citigroup expects 4 of powers the 10 biggest in be the former economic UK2050 to Brazil new i.e. notgrowth in therate top 10 now; countries with where demographic is slowing Italy Russia falling pop will do badly Brazil Japan (Russia climbs toPhilippines

4th or 5th in 2030, then to 6th +1.9% India falls Philippines by 2050) India +1.3% Canada UK Germany -0.2% Japan UK worth noting the only one of the current major -0.01% Citigroup 3G study, 2011 Indonesia +1% economies that is undergoing rapid population Russia -0.01% Nigeria + 2.5%

growth (annual pop growth %) Demographic dividend But projections can be wrong e.g. Japan The next superpower in 1985, by 1995 it was floundering Japanese economic problems, the USSR collapse and the costs of German reunification alter the fortunes The USA lost 10% of global GDP 1985-95, but won most of it back by 2002 China is clearly rising, but are there problems ahead ....? Pre-95 A lesson from history? Post-95

Russia Sluggish global recovery dents Russias oil and gas exports (fossil fuels are 45% of all exports). Dependent upon Ukraine for gas exports India Economic reforms, that once encouraged investment, has slowed to a crawl. Still socially on a tightrope. China Not as cheap as it was for foreign TNCs; fears of a massive property credit bubble (Robert Peston 2014) Brazil Lack of investment, high cost of World Cup and Olympics, populist government handouts e.g. pensions. Protest movement

growing. BRICs what kinds of future? The BRICS 1 Brazil Important regional power, its economy dominates South America At 198 million people, Brazil contains half the population of the continent (385 million) Spends more on its military than the rest of South America combined 2012 GDP in $ billions Brazil: a regional powerhouse

Images from The Economist www.economist.com Brazils trump card is its natural resources, making it more than self-sufficient in food and energy production: More potential agricultural land (400 million hectares) than any other country on earth An agricultural superpower in terms of exports (graph) Worlds second largest biofuel producer, after the USA 15th largest oil reserves (likely to rise as more deep water oil is discovered) 3rd largest producer of iron ore 3rd largest producer of HEP Brazils oil fields are only just being developed: Brazils resources Brazils natural resource strength is seen by comparing net imports of Brazil and India (right) Indias net imports are dominated by crude oil,

minerals and even food and wood Brazil is more selfsufficient in basic resources and imports more chemicals, plastics, electrical and transport materials. Source of images: http://atlas.media.mit.edu/expl ore/tree_map/net_import/ind/al l/show/2010/ Brazil v India Image from http://www.cbc.ca/news/world/brazil-protests-show-cost-of-hosting-major-sports-events-1.1358504 Brazil has recently stalled, relying

too much on raw material exports Its middle class is growing, but less strongly than 5 years ago Protests in 2013 against higher public transport prices did not help rebellions against 2014 World Cup & 2016 Rio Olympics These protests were really about a lack of decent public services for a growing middle class, compared to corruption and spending on global sport Long term, Brazils natural resources are likely to prove very valuable The Olympics and World Cup are being used to shine on the world stage but can Rio deliver? FIFA World Cup 2014 Rio Olympic and Paralympic Games 2016 These two events give Brazil a chance to show what it can do. The last country to have both so close together was USA Atlanta 1996 (a disaster!) & 1994 World Cup (dull!)

Brazil: a future superpower? Rondonia: recent development Photo courtesy of Google Maps Evaluating Brazil as a superpower The BRICS 2 China Students struggle with exactly what type of country China is. Where does it sit on the ladder of development? There are no easy answers Important that students at least discuss this and come to a view which can be justified. Too many students calmly proclaim China is a: Superpower LEDC MEDC without evidence to support

this . Superpowers: The China Question Important that students are aware where China sits in terms of its economic level of development. Look at GDP per capita and compare it to some other countries The 4 Asian Tigers Nominal GDP Other NICs Nominal GDP pc pc 2010 (US$) 2010 (US$) Singapore 43,117 Chile 11,827 Hong Kong 31,514 Brazil 10,816

South Korea 20,756 Turkey 10,309 Taiwan 18,558 Malaysia 8,423 Thailand 4,992 China 4,382 Indonesia 2,974 Philippines

2,123 By comparison, Singapore is a HIC; and the GDP of many other Asian Tigers exceeds most EU A8 countries. Hong Kongs GDP is close to the EU average of $32,500. Is China a NIC? China versus Malaysia China is an NIC . but no ordinary NIC. Its sheer size combined with its level of development gives China global significance. There are other demographically large countries, but they are poorer than China and much less economically significant

What makes China special? 1 China became globally significant when its GDP passed 5% of global total in 2005; now heading for 10% That level of global GDP gives it huge economic influence What makes China special? 2 USA versus China Image - http://www.jeffhead.com/redseadragon/varyagtransform.htm Chinas new aircraft carrier its only carrier entered service in Sept 2012 The Liaoning is actually the ex-Soviet Varyag launched in 1988. The USA has 11, with 3 more under construction Chinas long term military plans are to be able to defend out to the Second Island Chain. Meanwhile Obamas Pivot is shifting forces to the Pacific.

Carriers Operating USA 11 Italy 2 UK Building 3 1 (helicopter) 2 India 1 2 China

1 France 1 Spain 1 Russia 1 China flexes its muscles but. There is no doubt that China is expanding Its state-run companies

and banks, as well as its Sovereign Wealth Funds (worth about $1.2 trillion in 2012) are all investing overseas As the diagram shows, this is global - it is not confined to 1 or 2 regions Its 2005-13 overseas investment was about the same size as the entire Swiss economy. China also owns $1.3 trillion of US government debt (as does Japan) China goes global New View of Asia , Heritage Foundation, 2013

Chinas FDI is different to that of many countries, as companies are often staterun enterprises 40% of all profits in China are made by state run companies State involvement makes some governments nervous e.g. some private companies like telecom company Huawei Huaweis apparent closeness to the Chinese government has been dubbed a national security threat by US Congress (2012). Many Chinese companies are publicly traded (table) but still influenced by government State led investment Images from The Economist www.economist.com

Chinas investment in Africa is rising About 1 million Chinese now live there Chinese trade with Africa now worth US$200 billion per year 80% of Chinese imports from Africa are minerals (incl. oil) (see chart Other BRICs increasing their trade with Africa (see lower graph) usually focused on natural resources China is sensitive to charges of neocolonialism; "China has built over 100 schools, 30 hospitals, 30 anti-malaria centres & 20 agricultural technology demonstration centres in Africa. China has trained .. 40,000 African personnel ... and provided over 20,000 government scholarships" (Hu Jintao 2012) Neo-colonialism? Candidates get confused when considering Chinas colonial or neocolonial role - its complex. Consider: Colonialism: Is China trying to force Chinese A lack of any Imposition of

culture and values on the countries form of the rule of law in which it invests? democracy or by any means, Does it use colonial mechanisms of democratic almost at any maintaining power? cost In reality its investments are economic accountability no more or less neo-colonial than Lack of local Divide and those of USA or Europe (e.g. Shell Oil government rule policy to in Nigeria) capacity i.e. break up local The terms of trade are unfair, and little opposition there are examples of exploitation investment in but this is far from unique social or public Some Africans view Chinese

services investment as healthier than EU investment it comes with fewer conditions. Colonialism? Students often lack a clear idea of Chinas strengths and weaknesses This includes economic, military, cultural and geopolitical Chinas economic strengths are often discussed freely, but rarely its problems (especially environmental and social issues) They need to have a realistic view of China compared to the USA, other BRICs, and the EU. China is not an MEDC or LEDC, it is an NIC Per capita

incomes in China are around 1/7th of those in the USA 10% of GDP comes from agriculture and 35% of people work in that sector China is reluctant to lead on the world stage it often tries to abstain It lacks capacity to project its military power around the globe Chinas cheap labour is increasingly not cheap at all

Chinas reality a summary The BRICS 3 India India problems persist Since 2012, foreign TNCs can own 51% of a retail business in India Pre-2012, majority stakes were illegal Will this encourage WalMart and Tesco to invest in a retail market worth $800 billion? Many TNCs do not see India as open for business On the other hand, local retailers are protected Investing in India? Difficult to meet these conditions, e.g. in sectors such as consumer electricals where most goods are imported.

Images from Wall Street Journal http://online.wsj.com/news/articles/SB10001424052702304331204577352232515290226 India has increased generating capacity recently but is a long way behind China. Imports of fossil fuels are rising rapidly as the rupee weakens. Most analysts think India is several decades away from having a sufficient and reliable electricity supply Although growing, electricity generation capacity is tiny compared to China, growing more slowly India has large coal reserves, but cannot supply demand from domestic supply Indias energy crisis Oil imports are rising rapidly with costs rising too as the Rupee remains weak

July 2012 blackout: The largest power outage in history Affected over 620 million people, half of India's population in 22 states; 9% of world population 32 GW of power taken offline. Causes: very hot weather conditions increased power demand for irrigation pumps and cooling, while a late monsoon reduced HEP reservoir levels. Worth noting: 25% of people have no supply even when everything works. India has very low per capita electricity consumption compared with other BRICS, or the world Blackouts Blackout gridlock in 2012 To conclude; evaluating India Every attempt has been made to cite the

source of each image where appropriate Development data are from the CIA Factbook, which is continually updated. Some data may therefore now vary from those cited at the time of this lecture. If you note any images which are wrongly cited, please contact the Geographical Association ( www.geography.org.u k ) Acknowledgments

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