Transcript Shifting superpowers? Global geopolitics update

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
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

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:
who’s who?
Use the data
to guess the
country
Comprehensive National Power (CNP),
Chinese Government
Score 2007
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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
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120,000
100,000
80,000
60,000
40,000
20,000
(2010, Goldman Sachs)
The BRICs: gaining traction?
2050
2045
2040
2035
2030
2025
0
2020

G7
140,000
2015

BRIC
2010

‘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’!
Combined GDP $ billions

BRICS GDP totalled
$16 trillion in 2012
 Compares with $17
trillion for EU & $16
trillion for the USA

However ……
 China alone
accounts for 55%
of BRICS’ GDP and
49% of their
military spending
 Take China out of
the ‘BRICS’, and the
‘BRIS’ look much
less powerful
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
China
South
Africa
India
Russia
Brazil
Data in US$ trillions
Between 2000-2012,
China overtook the UK’s
economy rising from 6th
to 2nd largest (UK
dropped from 4th to 6th)
Does ‘BRICS’ make sense?
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‘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
Next 11 (N11)
Many emerging powers face a future
2010
2050
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
• Citigroup expects 4 of the 10 biggest in
be
 Compare the former economic powers
UK2050 toBrazil
‘new’
– i.e. notgrowth
in therate
top
now; countries
with
where
demographic
is 10
slowing
Italy
Russia

falling pop will do badly
Brazil
Japan
• (Russia climbs to 4th or 5th in 2030, then
falls
to 6th
India
Philippines
Philippines +1.9%
by 2050)
Canada
UK
Germany -0.2%
India
+1.3%
• 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
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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 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.
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

South American military
spending, 2012
6%
Colombia 6%
Brazil
4%
Argentina
Venezuela
Peru
22%
61%
Uruguay
Bolivia
Brazil: a regional powerhouse
2012 GDP
in $
billions
Images from ‘The Economist’ – www.economist.com
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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:
Brazil’s resources
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 selfsufficient in basic
resources and imports
more chemicals,
plastics, electrical and
transport materials.

Source of images:
http://atlas.media.mit.edu/ex
plore/tree_map/net_import/in
d/all/show/2010/
Brazil v India
Image from http://www.cbc.ca/news/world/brazil-protests-show-cost-of-hosting-major-sports-events-1.1358504
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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?
Strengths
•
•
•
•
Weaknesses
Agricultural power
Energy secure
• Economic history
Large middle class (boom/bust)
• Crime / corruption
World-class
companies e.g.
Embraer
Opportunities
• Regional power
• Developing the
interior
The most
‘developed’ of
the BRICs in
terms of its
economic
structure.
Threats
Rondonia:
• Populism / political
recent development
instability
• Inflation
Photo courtesy of Google Maps
Evaluating Brazil as a superpower
The BRICS 2
China
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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 Kong’s GDP is close to the EU
average of $32,500.
Is China a NIC?
Malaysia
China
14,744
7,544
HDI, 2010
0.74
0.66
% population living on less than
US$2 per day (2009)
Income share:
• of poorest 10%
8%
36 %
1.7
1.6
• of richest 10%
38.4
34.9
58.8%
36.3 %
GDP pc 2010 at PPP (US$)
Internet access (% of population,
2011)
China versus Malaysia
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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
Population
2011, million
1340
% global
GDP
9
India
1210
2.5
USA
312
23
Indonesia
237
1
Brazil
190
3
Pakistan
177
Less than 1
Nigeria
158
Less than 1
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
Economic
 Per capita GDP in China is still only 1/10th of that in the USA
 The US attracts a constant stream of high skill migrants from all
over the world; China still relatively isolated
 Universities with global reputations e.g. MIT, Stanford, Harvard.
 China tends to copy, rather than innovate.
Cultural
 China has few (if any, Lenovo? China Mobile?) global brands
 The USA dominates the global entertainment industry
Military
 China is a long way off in terms of global military reach
International
 The USA is still the nation the world turns to in a crisis, such as a
major natural disaster
 China does seem to shun international involvement and has yet
to ‘get people behind it’.
 China lacks gravitas in terms of international negotiations
because of its perceived double-standards and lack of moral
authority
USA versus China
Image - http://www.jeffhead.com/redseadragon/varyagtransform.htm
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
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….
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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 $1.3
trillion of US government
debt (as does Japan)
China goes global
New View of Asia , Heritage Foundation, 2013
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China’s FDI is different to that
of many countries, as
companies are often staterun enterprises
40% of all profits in China are
made by state run companies
State involvement makes some
governments nervous – e.g.
some private companies like
telecom company Huawei
Huawei’s apparent closeness to
the Chinese government has
been dubbed a ‘national
security threat’ by US
Congress (2012).
Many Chinese companies are
publicly traded (table) but still
influenced by government
Fortune 500
China global rank
Rank
Sales (US$
billion)
2012
1
17
Sinopec (oil)
131
24
China National
Petroleum
110
3
29
State Grid
Corporation
107
4
Industrial &
170 Commercial Bank
5
180 China Mobile Limited 35
6
192 China Life Insurance 33
7
215 Bank of China
30
8
China Construction
230 Bank
28
9
China Southern
237 Power Grid
27
10
275 China Telecom
24
2
State owned companies in red
State led investment
36
Images from ‘The Economist’ – www.economist.com
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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 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 China’s ‘colonial’ or ‘neocolonial’ role - it’s complex. Consider:
Colonialism:
 Is China trying to force Chinese
A lack of any
Imposition of
culture and values on the
form of
the rule of law
countries 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?
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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
China’s reality – a summary
The BRICS 3
India
3% of GDP is spent on
subsidies for the poor –
fertilizers, fuel, food – which is
hugely expensive when the
costs of importing these rises.
Red tape and
corruption are
major problems,
as are lack of
power, water and
transport
infrastructure
India?
Inflation, the
falling value of
the Rupee, large
government
budget deficits –
all make financial
markets nervous
20% live in poverty, & few jobs for the
poor – manufacturing peaked at 17%
of the economy in 1995, now only
14% ; middle class IT / outsourcing
jobs do not benefit the worst off.
India – problems persist
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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
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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
India’s 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
World
South Africa
Russia
India
EU
China
Brazil
0
500
Electricity consumption watts pp
Strengths
• Education
• English language
• Youthful
population
• IT and Software
Opportunities
• Huge domestic
market
• Vast growth
potential
• Urbanisation
Weaknesses
•
•
•
•
Infrastructure
Energy and water supply
Poverty
Weak inward investment
Threats
The least
developed
overall of the
BRICs, with
huge rural
poverty, but
also huge
potential
• Tensions within southern
Asian region e.g. Pakistan
• Resource / food crises
• Red tape/ bureaucracy
To conclude; evaluating India
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
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)
Acknowledgments