[DEBATE] : Newsweek, The Rise of the Rest

[Riaz K Tayob]

Newsweek
Sponsored By
The Rise of the Rest

It's true China is booming, Russia is growing more assertive, terrorism 
is a threat. But if America is losing the ability to dictate to this new 
world, it has not lost the ability to lead.
Fareed Zakaria
NEWSWEEK
Updated: 2:24 PM ET May 3, 2008

Americans are glum at the moment. No, I mean really glum. In April, a 
new poll revealed that 81 percent of the American people believe that 
the country is on the "wrong track." In the 25 years that pollsters have 
asked this question, last month's response was by far the most negative. 
Other polls, asking similar questions, found levels of gloom that were 
even more alarming, often at 30- and 40-year highs. There are reasons to 
be pessimistic—a financial panic and looming recession, a seemingly 
endless war in Iraq, and the ongoing threat of terrorism. But the facts 
on the ground—unemployment numbers, foreclosure rates, deaths from 
terror attacks—are simply not dire enough to explain the present 
atmosphere of malaise.

American anxiety springs from something much deeper, a sense that large 
and disruptive forces are coursing through the world. In almost every 
industry, in every aspect of life, it feels like the patterns of the 
past are being scrambled. "Whirl is king, having driven out Zeus," wrote 
Aristophanes 2,400 years ago. And—for the first time in living 
memory—the United States does not seem to be leading the charge. 
Americans see that a new world is coming into being, but fear it is one 
being shaped in distant lands and by foreign people.

Look around. The world's tallest building is in Taipei, and will soon be 
in Dubai. Its largest publicly traded company is in Beijing. Its biggest 
refinery is being constructed in India. Its largest passenger airplane 
is built in Europe. The largest investment fund on the planet is in Abu 
Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once 
quintessentially American icons have been usurped by the natives. The 
largest Ferris wheel is in Singapore. The largest casino is in Macao, 
which overtook Las Vegas in gambling revenues last year. America no 
longer dominates even its favorite sport, shopping. The Mall of America 
in Minnesota once boasted that it was the largest shopping mall in the 
world. Today it wouldn't make the top ten. In the most recent rankings, 
only two of the world's ten richest people are American. These lists are 
arbitrary and a bit silly, but consider that only ten years ago, the 
United States would have serenely topped almost every one of these 
categories.

These factoids reflect a seismic shift in power and attitudes. It is one 
that I sense when I travel around the world. In America, we are still 
debating the nature and extent of anti-Americanism. One side says that 
the problem is real and worrying and that we must woo the world back. 
The other says this is the inevitable price of power and that many of 
these countries are envious—and vaguely French—so we can safely ignore 
their griping. But while we argue over why they hate us, "they" have 
moved on, and are now far more interested in other, more dynamic parts 
of the globe. The world has shifted from anti-Americanism to 
post-Americanism.

I. The End of Pax Americana
During the 1980s, when I would visit India—where I grew up—most Indians 
were fascinated by the United States. Their interest, I have to confess, 
was not in the important power players in Washington or the great 
intellectuals in Cambridge.

People would often ask me about … Donald Trump. He was the very symbol 
of the United States—brassy, rich, and modern. He symbolized the feeling 
that if you wanted to find the biggest and largest anything, you had to 
look to America. Today, outside of entertainment figures, there is no 
comparable interest in American personalities. If you wonder why, read 
India's newspapers or watch its television. There are dozens of Indian 
businessmen who are now wealthier than the Donald. Indians are obsessed 
by their own vulgar real estate billionaires. And that newfound interest 
in their own story is being replicated across much of the world.

How much? Well, consider this fact. In 2006 and 2007, 124 countries grew 
their economies at over 4 percent a year. That includes more than 30 
countries in Africa. Over the last two decades, lands outside the 
industrialized West have been growing at rates that were once 
unthinkable. While there have been booms and busts, the overall trend 
has been unambiguously upward. Antoine van Agtmael, the fund manager who 
coined the term "emerging markets," has identified the 25 companies most 
likely to be the world's next great multinationals. His list includes 
four companies each from Brazil, Mexico, South Korea, and Taiwan; three 
from India, two from China, and one each from Argentina, Chile, 
Malaysia, and South Africa. This is something much broader than the 
much-ballyhooed rise of China or even Asia. It is the rise of the 
rest—the rest of the world.

We are living through the third great power shift in modern history. The 
first was the rise of the Western world, around the 15th century. It 
produced the world as we know it now—science and technology, commerce 
and capitalism, the industrial and agricultural revolutions. It also led 
to the prolonged political dominance of the nations of the Western 
world. The second shift, which took place in the closing years of the 
19th century, was the rise of the United States. Once it industrialized, 
it soon became the most powerful nation in the world, stronger than any 
likely combination of other nations. For the last 20 years, America's 
superpower status in every realm has been largely unchallenged—something 
that's never happened before in history, at least since the Roman Empire 
dominated the known world 2,000 years ago. During this Pax Americana, 
the global economy has accelerated dramatically. And that expansion is 
the driver behind the third great power shift of the modern age—the rise 
of the rest.

At the military and political level, we still live in a unipolar world. 
But along every other dimension—industrial, financial, social, 
cultural—the distribution of power is shifting, moving away from 
American dominance. In terms of war and peace, economics and business, 
ideas and art, this will produce a landscape that is quite different 
from the one we have lived in until now—one defined and directed from 
many places and by many peoples.

The post-American world is naturally an unsettling prospect for 
Americans, but it should not be. This will not be a world defined by the 
decline of America but rather the rise of everyone else. It is the 
result of a series of positive trends that have been progressing over 
the last 20 years, trends that have created an international climate of 
unprecedented peace and prosperity.

I know. That's not the world that people perceive. We are told that we 
live in dark, dangerous times. Terrorism, rogue states, nuclear 
proliferation, financial panics, recession, outsourcing, and illegal 
immigrants all loom large in the national discourse. Al Qaeda, Iran, 
North Korea, China, Russia are all threats in some way or another. But 
just how violent is today's world, really?

A team of scholars at the University of Maryland has been tracking 
deaths caused by organized violence. Their data show that wars of all 
kinds have been declining since the mid-1980s and that we are now at the 
lowest levels of global violence since the 1950s. Deaths from terrorism 
are reported to have risen in recent years. But on closer examination, 
80 percent of those casualties come from Afghanistan and Iraq, which are 
really war zones with ongoing insurgencies—and the overall numbers 
remain small. Looking at the evidence, Harvard's polymath professor 
Steven Pinker has ventured to speculate that we are probably living "in 
the most peaceful time of our species' existence."

Why does it not feel that way? Why do we think we live in scary times? 
Part of the problem is that as violence has been ebbing, information has 
been exploding. The last 20 years have produced an information 
revolution that brings us news and, most crucially, images from around 
the world all the time. The immediacy of the images and the intensity of 
the 24-hour news cycle combine to produce constant hype. Every weather 
disturbance is the "storm of the decade." Every bomb that explodes is 
BREAKING NEWS. Because the information revolution is so new, 
we—reporters, writers, readers, viewers—are all just now figuring out 
how to put everything in context.

We didn't watch daily footage of the two million people who died in 
Indochina in the 1970s, or the million who perished in the sands of the 
Iran-Iraq war ten years later. We saw little of the civil war in the 
Congo in the 1990s, where millions died. But today any bomb that goes 
off, any rocket that is fired, any death that results, is documented by 
someone, somewhere and ricochets instantly across the world. Add to this 
terrorist attacks, which are random and brutal. "That could have been 
me," you think. Actually, your chances of being killed in a terrorist 
attack are tiny—for an American, smaller than drowning in your bathtub. 
But it doesn't feel like that.

The threats we face are real. Islamic jihadists are a nasty bunch—they 
do want to attack civilians everywhere. But it is increasingly clear 
that militants and suicide bombers make up a tiny portion of the world's 
1.3 billion Muslims. They can do real damage, especially if they get 
their hands on nuclear weapons. But the combined efforts of the world's 
governments have effectively put them on the run and continue to track 
them and their money. Jihad persists, but the jihadists have had to 
scatter, work in small local cells, and use simple and undetectable 
weapons. They have not been able to hit big, symbolic targets, 
especially ones involving Americans. So they blow up bombs in cafés, 
marketplaces, and subway stations. The problem is that in doing so, they 
kill locals and alienate ordinary Muslims. Look at the polls. Support 
for violence of any kind has dropped dramatically over the last five 
years in all Muslim countries.

Militant groups have reconstituted in certain areas where they exploit a 
particular local issue or have support from a local ethnic group or 
sect, most worryingly in Pakistan and Afghanistan where Islamic 
radicalism has become associated with Pashtun identity politics. But as 
a result, these groups are becoming more local and less global. Al Qaeda 
in Iraq, for example, has turned into a group that is more anti-Shiite 
than anti-American. The bottom line is this: since 9/11, Al Qaeda 
Central, the gang run by Osama bin Laden, has not been able to launch a 
single major terror attack in the West or any Arab country—its original 
targets. They used to do terrorism, now they make videotapes. Of course 
one day they will get lucky again, but that they have been stymied for 
almost seven years points out that in this battle between governments 
and terror groups, the former need not despair.

Some point to the dangers posed by countries like Iran. These rogue 
states present real problems, but look at them in context. The American 
economy is 68 times the size of Iran's. Its military budget is 110 times 
that of the mullahs. Were Iran to attain a nuclear capacity, it would 
complicate the geopolitics of the Middle East. But none of the problems 
we face compare with the dangers posed by a rising Germany in the first 
half of the 20th century or an expansionist Soviet Union in the second 
half. Those were great global powers bent on world domination. If this 
is 1938, as some neoconservatives tell us, then Iran is Romania, not 
Germany.

Others paint a dark picture of a world in which dictators are on the 
march. China and Russia and assorted other oil potentates are surging. 
We must draw the battle lines now, they warn, and engage in a great 
Manichean struggle that will define the next century. Some of John 
McCain's rhetoric has suggested that he adheres to this dire, dyspeptic 
view. But before we all sign on for a new Cold War, let's take a deep 
breath and gain some perspective. Today's rising great powers are 
relatively benign by historical measure. In the past, when countries 
grew rich they've wanted to become great military powers, overturn the 
existing order, and create their own empires or spheres of influence. 
But since the rise of Japan and Germany in the 1960s and 1970s, none 
have done this, choosing instead to get rich within the existing 
international order. China and India are clearly moving in this 
direction. Even Russia, the most aggressive and revanchist great power 
today, has done little that compares with past aggressors. The fact that 
for the first time in history, the United States can contest Russian 
influence in Ukraine—a country 4,800 miles away from Washington that 
Russia has dominated or ruled for 350 years—tells us something about the 
balance of power between the West and Russia.

Compare Russia and China with where they were 35 years ago. At the time 
both (particularly Russia) were great power threats, actively conspiring 
against the United States, arming guerrilla movement across the globe, 
funding insurgencies and civil wars, blocking every American plan in the 
United Nations. Now they are more integrated into the global economy and 
society than at any point in at least 100 years. They occupy an 
uncomfortable gray zone, neither friends nor foes, cooperating with the 
United States and the West on some issues, obstructing others. But how 
large is their potential for trouble? Russia's military spending is $35 
billion, or 1/20th of the Pentagon's. China has about 20 nuclear 
missiles that can reach the United States. We have 830 missiles, most 
with multiple warheads, that can reach China. Who should be worried 
about whom? Other rising autocracies like Saudi Arabia and the Gulf 
states are close U.S. allies that shelter under America's military 
protection, buy its weapons, invest in its companies, and follow many of 
its diktats. With Iran's ambitions growing in the region, these 
countries are likely to become even closer allies, unless America 
gratuitously alienates them.

II. The Good News
In July 2006, I spoke with a senior member of the Israeli government, a 
few days after Israel's war with Hezbollah had ended. He was genuinely 
worried about his country's physical security. Hezbollah's rockets had 
reached farther into Israel than people had believed possible. The 
military response had clearly been ineffectual: Hezbollah launched as 
many rockets on the last day of the war as on the first. Then I asked 
him about the economy—the area in which he worked. His response was 
striking. "That's puzzled all of us," he said. "The stock market was 
higher on the last day of the war than on the first! The same with the 
shekel." The government was spooked, but the market wasn't.

Or consider the Iraq War, which has produced deep, lasting chaos and 
dysfunction in that country. Over two million refugees have crowded into 
neighboring lands. That would seem to be the kind of political crisis 
guaranteed to spill over. But as I've traveled in the Middle East over 
the last few years, I've been struck by how little Iraq's troubles have 
destabilized the region. Everywhere you go, people angrily denounce 
American foreign policy. But most Middle Eastern countries are booming. 
Iraq's neighbors—Turkey, Jordan, and Saudi Arabia—are enjoying 
unprecedented prosperity. The Gulf states are busy modernizing their 
economies and societies, asking the Louvre, New York University, and 
Cornell Medical School to set up remote branches in the desert. There's 
little evidence of chaos, instability, and rampant Islamic fundamentalism.

The underlying reality across the globe is of enormous vitality. For the 
first time ever, most countries around the world are practicing sensible 
economics. Consider inflation. Over the past 20 years hyperinflation, a 
problem that used to bedevil large swaths of the world from Turkey to 
Brazil to Indonesia, has largely vanished, tamed by successful fiscal 
and monetary policies. The results are clear and stunning. The share of 
people living on $1 a day has plummeted from 40 percent in 1981 to 18 
percent in 2004 and is estimated to drop to 12 percent by 2015. Poverty 
is falling in countries that house 80 percent of the world's population. 
There remains real poverty in the world—most worryingly in 50 
basket-case countries that contain 1 billion people—but the overall 
trend has never been more encouraging. The global economy has more than 
doubled in size over the last 15 years and is now approaching $54 
trillion! Global trade has grown by 133 percent in the same period. The 
expansion of the global economic pie has been so large, with so many 
countries participating, that it has become the dominating force of the 
current era. Wars, terrorism, and civil strife cause disruptions 
temporarily but eventually they are overwhelmed by the waves of 
globalization. These circumstances may not last, but it is worth 
understanding what the world has looked like for the past few decades.

III. A New Nationalism
Of course, global growth is also responsible for some of the biggest 
problems in the world right now. It has produced tons of money—what 
businesspeople call liquidity—that moves around the world. The 
combination of low inflation and lots of cash has meant low interest 
rates, which in turn have made people act greedily and/or stupidly. So 
we have witnessed over the last two decades a series of bubbles—in East 
Asian countries, technology stocks, housing, subprime mortgages, and 
emerging market equities. Growth also explains one of the signature 
events of our times—soaring commodity prices. $100 oil is just the tip 
of the barrel. Almost all commodities are at 200-year highs. Food, only 
a few decades ago in danger of price collapse, is now in the midst of a 
scary rise. None of this is due to dramatic fall-offs in supply. It is 
demand, growing global demand, that is fueling these prices. The effect 
of more and more people eating, drinking, washing, driving, and 
consuming will have seismic effects on the global system. These may be 
high-quality problems, but they are deep problems nonetheless.

The most immediate effect of global growth is the appearance of new 
economic powerhouses on the scene. It is an accident of history that for 
the last several centuries, the richest countries in the world have all 
been very small in terms of population. Denmark has 5.5 million people, 
the Netherlands has 16.6 million. The United States is the biggest of 
the bunch and has dominated the advanced industrial world. But the real 
giants—China, India, Brazil—have been sleeping, unable or unwilling to 
join the world of functioning economies. Now they are on the move and 
naturally, given their size, they will have a large footprint on the map 
of the future. Even if people in these countries remain relatively poor, 
as nations their total wealth will be massive. Or to put it another way, 
any number, no matter how small, when multiplied by 2.5 billion becomes 
a very big number. (2.5 billion is the population of China plus India.)

The rise of China and India is really just the most obvious 
manifestation of a rising world. In dozens of big countries, one can see 
the same set of forces at work—a growing economy, a resurgent society, a 
vibrant culture, and a rising sense of national pride. That pride can 
morph into something uglier. For me, this was vividly illustrated a few 
years ago when I was chatting with a young Chinese executive in an 
Internet café in Shanghai. He wore Western clothes, spoke fluent 
English, and was immersed in global pop culture. He was a product of 
globalization and spoke its language of bridge building and cosmopolitan 
values. At least, he did so until we began talking about Taiwan, Japan, 
and even the United States. (We did not discuss Tibet, but I'm sure had 
we done so, I could have added it to this list.) His responses were 
filled with passion, bellicosity, and intolerance. I felt as if I were 
in Germany in 1910, speaking to a young German professional, who would 
have been equally modern and yet also a staunch nationalist.

As economic fortunes rise, so inevitably does nationalism. Imagine that 
your country has been poor and marginal for centuries. Finally, things 
turn around and it becomes a symbol of economic progress and success. 
You would be proud, and anxious that your people win recognition and 
respect throughout the world.

In many countries such nationalism arises from a pent-up frustration 
over having to accept an entirely Western, or American, narrative of 
world history—one in which they are miscast or remain bit players. 
Russians have long chafed over the manner in which Western countries 
remember World War II. The American narrative is one in which the United 
States and Britain heroically defeat the forces of fascism. The Normandy 
landings are the climactic highpoint of the war—the beginning of the 
end. The Russians point out, however, that in fact the entire Western 
front was a sideshow. Three quarters of all German forces were engaged 
on the Eastern front fighting Russian troops, and Germany suffered 70 
percent of its casualties there. The Eastern front involved more land 
combat than all other theaters of World War II put together.

Such divergent national perspectives always existed. But today, thanks 
to the information revolution, they are amplified, echoed, and 
disseminated. Where once there were only the narratives laid out by The 
New York Times, Time, Newsweek, the BBC, and CNN, there are now dozens 
of indigenous networks and channels—from Al Jazeera to New Delhi's NDTV 
to Latin America's Telesur. The result is that the "rest" are now 
dissecting the assumptions and narratives of the West and providing 
alternative views. A young Chinese diplomat told me in 2006, "When you 
tell us that we support a dictatorship in Sudan to have access to its 
oil, what I want to say is, 'And how is that different from your support 
of a medieval monarchy in Saudi Arabia?' We see the hypocrisy, we just 
don't say anything—yet."

The fact that newly rising nations are more strongly asserting their 
ideas and interests is inevitable in a post-American world. This raises 
a conundrum—how to get a world of many actors to work together. The 
traditional mechanisms of international cooperation are fraying. The 
U.N. Security Council has as its permanent members the victors of a war 
that ended more than 60 years ago. The G8 does not include China, India 
or Brazil—the three fastest-growing large economies in the world—and yet 
claims to represent the movers and shakers of the world economy. By 
tradition, the IMF is always headed by a European and the World Bank by 
an American. This "tradition," like the segregated customs of an old 
country club, might be charming to an insider. But to the majority who 
live outside the West, it seems bigoted. Our challenge is this: Whether 
the problem is a trade dispute or a human rights tragedy like Darfur or 
climate change, the only solutions that will work are those involving 
many nations. But arriving at solutions when more countries and more 
non-governmental players are feeling empowered will be harder than ever.

IV. The Next American Century
Many look at the vitality of this emerging world and conclude that the 
United States has had its day. "Globalization is striking back," Gabor 
Steingart, an editor at Germany's leading news magazine, Der Spiegel, 
writes in a best-selling book. As others prosper, he argues, the United 
States has lost key industries, its people have stopped saving money, 
and its government has become increasingly indebted to Asian central 
banks. The current financial crisis has only given greater force to such 
fears.

But take a step back. Over the last 20 years, globalization has been 
gaining depth and breadth. America has benefited massively from these 
trends. It has enjoyed unusually robust growth, low unemployment and 
inflation, and received hundreds of billions of dollars in investment. 
These are not signs of economic collapse. Its companies have entered new 
countries and industries with great success, using global supply chains 
and technology to stay in the vanguard of efficiency. U.S. exports and 
manufacturing have actually held their ground and services have boomed.

The United States is currently ranked as the globe's most competitive 
economy by the World Economic Forum. It remains dominant in many 
industries of the future like nanotechnology, biotechnology, and dozens 
of smaller high-tech fields. Its universities are the finest in the 
world, making up 8 of the top ten and 37 of the top fifty, according to 
a prominent ranking produced by Shanghai Jiao Tong University. A few 
years ago the National Science Foundation put out a scary and 
much-discussed statistic. In 2004, the group said, 950,000 engineers 
graduated from China and India, while only 70,000 graduated from the 
United States. But those numbers are wildly off the mark. If you exclude 
the car mechanics and repairmen—who are all counted as engineers in 
Chinese and Indian statistics—the numbers look quite different. Per 
capita, it turns out, the United States trains more engineers than 
either of the Asian giants.

But America's hidden secret is that most of these engineers are 
immigrants. Foreign students and immigrants account for almost 50 
percent of all science researchers in the country. In 2006 they received 
40 percent of all PhDs. By 2010, 75 percent of all science PhDs in this 
country will be awarded to foreign students. When these graduates settle 
in the country, they create economic opportunity. Half of all Silicon 
Valley start-ups have one founder who is an immigrant or first 
generation American. The potential for a new burst of American 
productivity depends not on our education system or R&D spending, but on 
our immigration policies. If these people are allowed and encouraged to 
stay, then innovation will happen here. If they leave, they'll take it 
with them.

More broadly, this is America's great—and potentially 
insurmountable—strength. It remains the most open, flexible society in 
the world, able to absorb other people, cultures, ideas, goods, and 
services. The country thrives on the hunger and energy of poor 
immigrants. Faced with the new technologies of foreign companies, or 
growing markets overseas, it adapts and adjusts. When you compare this 
dynamism with the closed and hierarchical nations that were once 
superpowers, you sense that the United States is different and may not 
fall into the trap of becoming rich, and fat, and lazy.

American society can adapt to this new world. But can the American 
government? Washington has gotten used to a world in which all roads led 
to its doorstep. America has rarely had to worry about benchmarking to 
the rest of the world—it was always so far ahead. But the natives have 
gotten good at capitalism and the gap is narrowing. Look at the rise of 
London. It's now the world's leading financial center—less because of 
things that the United States did badly than those London did well, like 
improving regulation and becoming friendlier to foreign capital. Or take 
the U.S. health care system, which has become a huge liability for 
American companies. U.S. carmakers now employ more people in Ontario, 
Canada, than Michigan because in Canada their health care costs are 
lower. Twenty years ago, the United States had the lowest corporate 
taxes in the world. Today they are the second-highest. It's not that 
ours went up. Those of others went down.

American parochialism is particularly evident in foreign policy. 
Economically, as other countries grow, for the most part the pie expands 
and everyone wins. But geopolitics is a struggle for influence: as other 
nations become more active internationally, they will seek greater 
freedom of action. This necessarily means that America's unimpeded 
influence will decline. But if the world that's being created has more 
power centers, nearly all are invested in order, stability and progress. 
Rather than narrowly obsessing about our own short-term interests and 
interest groups, our chief priority should be to bring these rising 
forces into the global system, to integrate them so that they in turn 
broaden and deepen global economic, political, and cultural ties. If 
China, India, Russia, Brazil all feel that they have a stake in the 
existing global order, there will be less danger of war, depression, 
panics, and breakdowns. There will be lots of problems, crisis, and 
tensions, but they will occur against a backdrop of systemic stability. 
This benefits them but also us. It's the ultimate win-win.

To bring others into this world, the United States needs to make its own 
commitment to the system clear. So far, America has been able to have it 
both ways. It is the global rule-maker but doesn't always play by the 
rules. And forget about standards created by others. Only three 
countries in the world don't use the metric system—Liberia, Myanmar, and 
the United States. For America to continue to lead the world, we will 
have to first join it.

Americans—particularly the American government—have not really 
understood the rise of the rest. This is one of the most thrilling 
stories in history. Billions of people are escaping from abject poverty. 
The world will be enriched and ennobled as they become consumers, 
producers, inventors, thinkers, dreamers, and doers. This is all 
happening because of American ideas and actions. For 60 years, the 
United States has pushed countries to open their markets, free up their 
politics, and embrace trade and technology. American diplomats, 
businessmen, and intellectuals have urged people in distant lands to be 
unafraid of change, to join the advanced world, to learn the secrets of 
our success. Yet just as they are beginning to do so, we are losing 
faith in such ideas. We have become suspicious of trade, openness, 
immigration, and investment because now it's not Americans going abroad 
but foreigners coming to America. Just as the world is opening up, we 
are closing down.

Generations from now, when historians write about these times, they 
might note that by the turn of the 21st century, the United States had 
succeeded in its great, historical mission—globalizing the world. We 
don't want them to write that along the way, we forgot to globalize 
ourselves.
URL: http://www.newsweek.com/id/135380
© 2008