Why the West Still Rules

Oliver Stuenkel, Post-Western World, February 24, 2013

The West is in decline and the world is becoming more multipolar. As a consequence, emerging powers such as China, Brazil and India are claiming for more power within international institutions. The questions of how existing institutions can adapt to new realities, and whether we need new structures to respond to recent changes, are among the defining puzzles of our time.

Robert Wade, a professor of economics at the London School of Economics (LSE), has written a thoughtful article claiming that the West remains far more dominant in existing institutions than is generally thought, and there is little reason to believe that the South will be in charge anytime soon. "The common narrative about China and some other developing countries rising to challenge the United States and other major Western states turns out to be an exaggeration" he writes.

More provocatively, he asserts that "the United States and other Western states continue to set the agenda of global economic and financial governance for the most part, while the big developing countries have exercised negligible leadership so far." Southern leadership, that is, remains limited. Wade's essay describes a series of case studies of global politics to show how Western states have managed to retain their position of global leadership even after 2008 and the onset of the long slump in Western economies. The results are fascinating indeed.

The first one shows how, in 2009, Western states led by the UK and the United States marginalized the United Nations General Assembly from a role in debating the global financial crisis and its impacts, so as to leave the subject to interstate organizations dominated by the West - which, naturally, were careful not to propose any measures that could be harmful to Western interests. Wade shows how Susan Rice outmaneuvered those who sought to give the General Assembly (the "G192") a larger role. For example, General Secretary Ban Ki Moon denied any financial assistance to the Stiglitz Commission which had been tasked by the GA to provide an independent report. Despite the Commission's competence, the United States argued that it was their "strong view is that the United Nations does not have the expertise or the mandate to serve as a suitable forum or provide direction." The United Kingdom had ambassadors threaten the Commission's members to quit. As the West wanted, the G20 did the foreplay, and the IMF reassumed the role of sole legitimate forum for hard discussions and negotiations.

The second case study shows how, in 2012, the West almost succeeded in stopping the United Nations Conference on Trade and Development (UNCTAD) - dominated by developing countries - from further analyzing the global financial crisis. As a senior U.S. delegate declared in one of the last negotiating sessions in Doha, “We don’t want UNCTAD providing intellectual competition with the IMF and the World Bank.” In effect, the West said, “We do not want UNCTAD to discuss any of these issues, because UNCTAD is not competent to do so. They are for the G20 and IMF.”

The third case study shows how Western states managed, over 2008 to 2010, to craft a “voice reform” in the World Bank, which appeared to give developing countries a significant increase in their share of votes but in reality failed to do so.Including only low-income and middle-income countries—the Bank’s borrower members—the voting share of developing countries increased from 34.67 percent to only 38.38 percent, while the developed (high-income) countries retained more than 60 percent. Japan, Germany, the United Kingdom, France, and Canada have even increased their share of total votes by a combined total of 4.1 percentage points after 2010.

The fourth shows how, in 2012, the United States retained the presidency of the World Bank, despite years of member state chorusing that the heads of international organizations like the Bank and the International Monetary Fund (IMF) should be open to all nationalities. Yet as I have pointed out before, Kim's and Lagarde's appointment also symbolized the emerging powers' failure to fully unite around an alternative candidate. This was particularly clear when the BRICS could not agree on jointly and openly calling on the United States and Europe to support Ngozi Okonjo-Iweala, the Nigerian candidate to head the World Bank. As Wade rightly notes, "the story equally shows how the developing countries’ distrust of one another makes it easy for the US-Americans to split them with bilateral deals."

The article makes the reader wonder whether the West has succeeded in transforming today's emerging powers into 'useful idiots', who are so proud that they are part of the G20 that they no longer defend developing countries' interests. Seen from this perspective, the rise of the BRICS may have been a positive development for the West, now that the poor have lost powerful defendants in Brasília and Delhi, who are increasingly defending big-power interests. At the same time, emerging powers should not complain: It is natural that the West will do everything hold on to its power - after all, even China is not fully committed towards permanently including Brazil and India in the UN Security Council.

Wade rightly writes that Western states have been strikingly successful in their efforts to keep control of the commanding heights. Their success owes much to institutional rules they put in place decades ago, long before talk of the rise of the South - and still, the South is partly to be blamed for not being able to unite and present more powerful ideas about why reform is necessary.

Source: http://www.postwesternworld.com/2013/02/24/why-the-west-still-rules/