Shifting superpowers? An update on global

geopoliticsBob Digby

Geographical Association ConferenceApril 2014

Sponsored by

Focus for this lectureFocus for this lecture

Provide some recent and relevant subject update for Edexcel A2 Unit 3

Understand some recent changes to the world’s ‘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

Powerful countries: Powerful countries: who’s who?who’s who?

HDI 0.69 0.94 0.79 0.55 0.63 0.73

GDP per capita US$ PPP

9,200 49,900 23,500 3,900 4,900 11,900

Internet users (% pop)

40 78 48 11 22 46

GDP from agriculture (%)

10 1 4 17 38 6

Population growth rate (%)

0.5 0.9 -0.1 1.3 1.0 0.8

(2012 data) China USA Russia India Indonesia Brazil

Use the data to

guess the country

Different ranking systemsDifferent ranking systems

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

Comprehensive National Power (CNP), Chinese GovernmentScore 2007 Score 2011

USA 91 USA 100UK 65 China 75Russia 63 Russia 60France 62 France 35

Germany 62 Germany 35

China 59 Japan 30Japan 58 UK 25Canada 57 India 25S Korea 53 Brazil 20India 50 Turkey 20

The BRICs: gaining traction?The BRICs: gaining traction?

‘BRICs’ coined in 2001, by Jim O’Neill 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)

Does ‘BRICS’ make sense?Does ‘BRICS’ make sense?

BRICS GDP totalled $16 trillion in 2012

Compares with $17 trillion for EU & $16 trillion for the USA

Between 2000-2012, China overtook the UK’s economy rising from 6th

to 2nd largest (UK dropped from 4th to 6th)

Data in US$ trillions

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

Next 11 (N11)Next 11 (N11)

‘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 Citigroup’s 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

• Open to global trade and investment • Economic stability• Broad education • Political maturity

Demographic dividend Demographic dividend

Many emerging powers face a future demographic dividend

They have youthful populations now – sometimes even troublesome ones (Egypt)

...but their fertility rates are falling Soon, they will have a window of

opportunity with a large workforce, but without either a large young or old population

By 2050, big winners will enjoy combined population growth + economic growth

Compare the former economic powers where demographic growth rate is slowing

2010Top 10

economies by GDP

2050Top 10

economies by GDP

USA ChinaChina IndiaJapan USA

Germany IndonesiaFrance Nigeria

UK BrazilItaly Russia

Brazil JapanIndia Philippines

Canada UKCitigroup 3G study, 2011

Philippines +1.9% India +1.3% Indonesia +1%Nigeria + 2.5%

(annual pop growth %)

Germany -0.2%Japan -0.01%Russia -0.01%

Germany -0.2%Japan -0.01%Russia -0.01%

• Citigroup expects 4 of the 10 biggest in 2050 to be Citigroup expects 4 of the 10 biggest in 2050 to be ‘new’ – i.e. not in the top 10 now; countries with ‘new’ – i.e. not in the top 10 now; countries with falling pop will do badly falling pop will do badly

• (Russia climbs to 4th or 5th in 2030, then falls to 6th (Russia climbs to 4th or 5th in 2030, then falls to 6th by 2050)by 2050)

• UK worth noting – the only one of the current major UK worth noting – the only one of the current major economies that is undergoing rapid population economies that is undergoing rapid population growth growth

A lesson from history?A lesson from history?

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 Post-95

BRICs – what kinds of future?BRICs – what kinds of future?

Russia Sluggish global recovery dents Russia’s 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.

The BRICS 1Brazil

Brazil: a regional powerhouse Brazil: a regional powerhouse

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’s resources Brazil’s resources

Brazil’s ‘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)

World’s 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

Brazil’s oil fields are only just being developed:

Images from ‘The Economist’ – www.economist.com

Brazil v IndiaBrazil v India

Brazil’s natural resource strength is seen by comparing net imports of Brazil and India (right)

India’s net imports are dominated by crude oil, minerals and even food and wood

Brazil is more self-sufficient in basic resources and imports more chemicals, plastics, electrical and transport materials.

Source of images: http://atlas.media.mit.edu/explore/tree_map/net_import/ind/all/show/2010/

Brazil: a future superpower? Brazil: a future superpower?

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?

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!)

FIFA World Cup 2014 Rio Olympic

and Paralympic Games 2016

Image from http://www.cbc.ca/news/world/brazil-protests-show-cost-of-hosting-major-sports-events-1.1358504

Evaluating Brazil as a superpowerEvaluating Brazil as a superpower

Rondonia: recent development

Photo courtesy of Google Maps

The BRICS 2China

Superpowers: The China Question Superpowers: The China Question

Students struggle with exactly what type of country China is.

Where does it sit on the ladder of development?

There are no easy answersImportant that students at

least discuss this and come to a ‘view’ which can be justified.

Too many students calmly proclaim China is a:

SuperpowerLEDC MEDC

without evidence to support this …….

Is China a NIC?Is China a NIC?

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

pc 2010 (US$)Other NICs Nominal GDP pc

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

• By comparison, Singapore is a HIC; and the GDP of many other Asian Tigers exceeds most EU A8 countries.

• Hong Kong’s GDP is close to the EU average of $32,500.

Thailand 4,992

China 4,382

Indonesia 2,974

Philippines 2,123

China versus MalaysiaChina versus Malaysia

What makes China special? 1What makes China special? 1

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

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? 2What makes China special? 2

USA versus China USA versus China

China flexes its muscles but….China flexes its muscles but….

China’s ‘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

China’s long term military plans are to be able to defend out to the ‘Second Island Chain’. Meanwhile Obama’s ‘Pivot’ is shifting forces to the Pacific.

Carriers Operating Building

USA 11 3

Italy 2

UK 1 (helicopter)

2

India 1 2

China 1

France 1

Spain 1

Russia 1

Image - http://www.jeffhead.com/redseadragon/varyagtransform.htm

China goes global China goes global

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)

New View of Asia , Heritage Foundation, 2013

State led State led investmentinvestment

China’s FDI is different to that of many countries, as companies are often state-run 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

Huawei’s 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

Neo-colonialism?Neo-colonialism?

China’s 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 neo-colonialism; "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)

Images from ‘The Economist’ – www.economist.com

Colonialism?Colonialism?

Candidates get confused when considering China’s ‘colonial’ or ‘neo-colonial’ role - it’s complex. Consider:Is China trying to force Chinese culture and values on the countries in which it invests?Does it use colonial mechanisms of maintaining power?In reality its investments are economic – no more or less neo-colonial than those of USA or Europe (e.g. Shell Oil in Nigeria)The terms of trade are unfair, and there are examples of exploitation – but this is far from unique Some Africans view Chinese investment as healthier than EU investment – it comes with fewer conditions.

Colonialism:

A lack of any form of

democracy or democratic

accountability

Imposition of the rule of law by any means, almost at any

cost

Lack of local government capacity i.e.

little investment in

social or public services

‘Divide and rule policy’ to break up local opposition

China’s reality – a summaryChina’s reality – a summary

Students often lack a clear idea of China’s strengths and weaknesses

This includes economic, military, cultural and geopolitical

China’s 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

China’s ‘cheap labour’ is increasingly not cheap at all

The BRICS 3India

India – problems persistIndia – problems persist

Investing in India? Investing in India?

Since 2012, foreign TNCs can own 51% of a retail business in India

Pre-2012, majority stakes were illegal

Will this encourage Wal-Mart 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

Difficult to meet these conditions, e.g. in sectors such as consumer electricals where most goods are imported.

India’s energy crisis India’s energy crisis

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

Oil imports are rising rapidly – with costs

rising too as the Rupee remains weak

Images from ‘Wall Street Journal’ – http://online.wsj.com/news/articles/SB10001424052702304331204577352232515290226

BlackoutsBlackouts

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

Blackout gridlock in 2012

To conclude; evaluating IndiaTo conclude; evaluating India

AcknowledgmentsAcknowledgments

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.uk)