Living in a world without the West

PIGS! No, I’m not swearing at anyone. PIGS is the acronym for Portugal, Ireland, Greece, Spain – the four European countries so deep in economic troubles that not even light can reach the bottom. Indeed, 2010 could be the last Christmas many Western countries will celebrate in the way they have done in the years past. For, a black hole of financial and social troubles is threatening to dislodge Europe and North America from the apex position they have occupied for barely 300 years.

By the time the current recession pans out, vast swathes of Europe will have living standards lower than Thailand’s. Many East European countries are already hopelessly poor, with joblessness and crime rampant. In many cities prostitution is the only ‘industry’ left.

Western Europe’s powerhouse, Germany, has been propping up the tottering economies of the European Union. Germany has paid out hundreds of billions of dollars to its poor cousins, mainly because it cannot let them sink – they are a ready market for German products. But how long can Germany support its bankrupt brothers?

Canada’s Globe & Mail newspaper wonders if Britain’s current condition is a harbinger of the West’s future. It says that intergenerational poverty, rare in most countries today, has become a factor in a notable British subculture. That tallies with a British government report, which shows that if you are born poor, you stay poor.

Worse, millions of middle class British youth are faced with the stark choice of either stepping down into the underclass or migrating.

However, it is the American implosion, when it comes, that will be the most spectacular. Earlier this year Tracy, a small town in California, declared that its residents will now have to pay every time they call 911 for a medical emergency. Residents can pay a US$48 fee for the year, which allows them to call 911 as many times as necessary. Or there’s the option of not signing up for the annual fee. Instead they will be charged US$300 if they make a call for help. Remember, California is America’s richest state. You get the picture.

As we move into the Christmas season, more than 35 million Americans are starving. Some of them will die but the American coroners will merely write “Died of natural causes” in their post-mortems. It is indeed a strange country where millions live on a meal (or soup) a day while the rich live in mansions as usual.

Contrary to what the media says, it’s not the Iraq and Afghanistan wars that are hollowing out the West. It’s just that the East is just becoming wealthier in comparison through better economic practices and systems.

Also, the West is not able to corner cheap supplies of oil and minerals like it could in the colonial days.

Chew on this figure – $123,000,000,000,000. For the numerically challenged that’s $123 trillion and China’s estimated economy in the year 2040. For perspective, the US economy is worth some $14 trillion today. What it means is China will soon become a colossus and the US will have to simply take a deep breath and retreat to shallow waters.

Yes, the titans of tomorrow will be China and India – not necessarily in that order. The second string will be a motley star cast comprising Russia, Brazil, Turkey, South Africa, Indonesia, Argentina, and of course the US.

That will be the shape of the world without the West.

For Western powers that’s a scary thought. For generations they have ruled the planet by colonising countries, and through rock solid alliances like NATO. Those that disagree like the Russians, Venezuelans, Serbians, North Koreans and Iranians are made targets of subversion.

But now the BRIC states (Brazil, Russia, India, China) are determined to break the dominance of the West.

These rising powers are increasingly “routing around” the West.

There are two ways this works. One, the rising powers are deepening their trade, defence and cultural ties. Two, in doing so these countries are loosening the ties that bind them to the international system centred in the West. So in effect, they are creating an alternative arrangement in which they neither enter into conflict situations with the West nor enter into subservient alliances (like those offered to South Korea and Japan).

This simply makes the West irrelevant.

For instance, India’s biggest trade partner is now the UAE. Its biggest weapons supplier is Russia and its largest supplier of crucial telecom equipment is China.

In effect, the West is getting squeezed out. China has become the world’s factory that produces virtually everything from iPods to rockets. Russia has brought its vast mineral resources onto the world’s market so that rising powers don’t have to buy them from Western middlemen. Moscow’s astute diplomacy has shut out the West from the huge gas and oil fields of Central Asia.

India, already the world’s software HQ (Intel and IBM have more employees in India than in the US) and is becoming a manufacturing powerhouse. Indeed, India’s growth story could easily despatch China to the back pages. Both India and China are racing each other to buy up the world’s minerals and commodities.

The routing around the West phenomenon is increasingly visible. Look at the Russia-India T-50 fifth generation fighter bomber. It is being designed and built in Russia with avionics and electronics from India, with potential buyers in China, Venezuela, Algeria, Malaysia and Indonesia.

Or picture this: a Venezuelan whiz kid conceptualises a computer tablet, the software for which is developed by India’s Infosys, mated to hardware manufactured in Taiwan, financed by a Malaysian multinational and marketed by an Abu Dhabi firm. Well, it’s the stuff that’s giving nightmares to Western companies.

It is a measure of the decline of the West that just as America cancelled a replacement for its aging Space Shuttle, India announced its Mars mission, with plans to land on the moon by 2020. India now launches more satellites than the US, with an Indian PSLV rocket creating a record last year by launching 10 satellites in one go.

But why is the West getting bypassed and is there hope for the agitated Western masses who are rioting across Europe as the recession bites?

One reason is that the Western economic model has failed spectacularly. Not only has it failed to lift most countries in the wider world, even in the West it has only benefitted the rich. Banks and financial institutions across the Western world have lied to their customers and stolen trillions of dollars. The politicians, who are supposed to have protected these unfortunate investors, have lied even more and shielded the bank robbers and then rewarded them with hundreds of billions in bailout cash. Clearly not a Kodak moment!

On the other hand, vast swathes of China and India are becoming gentrified – that is, the poor are becoming middle class and the middle class moves up one notch and so on. Try getting hold of a full time maid in India these days. You get the picture.

The West has had its heyday. Unfortunately its liberal democratic traditions have not benefitted 95% of the planet. In sharp contrast the model of authoritarian prosperity espoused by Russia and China has yielded spectacular results.

PIGS is a four letter word after all!

(About the author: Rakesh Krishnan Simha is an infidel. He is a features writer at New Zealand’s leading media house. He has previously worked with Businessworld, India Today and Hindustan Times, and was news editor with the Financial Express.)