The rise of China challenged America's undisputed hegemony over the global economy (a status the US acquired after the collapse of the USSR). And although part of the American elite from the national security sector is trying to keep the US primacy, others have apparently come to terms with the prospect of a bipolar world. The more likely outcome, however, will be a multipolar structure in which the middle powers provide a significant counterbalance, preventing the US and China from imposing their interests on others.
Middle powers include India, Indonesia, Brazil, South Africa, Turkey and Nigeria. These are economically large countries that have significant participation in the global and regional economy. Although they are not rich (they are, in fact, home to a significant percentage of the world's poorest population), they have a large consumption-oriented middle class, as well as significant technological potential. The combined GDP of the six mentioned countries (at purchasing power parity) is already higher than the GDP of the USA and is expected to grow by 2029% by 50.
These countries have a peculiar foreign policy that refuses to enter into an explicit alliance with the United States or China. Contrary to what is widely believed in the US, the middle powers have little sympathy for China and are not prepared to sacrifice their relationship with the United States for the sake of rapprochement with it. In fact, the reason for the alleged rapprochement with China lies in American policy. The fact that the US uses its own economic and financial power as a weapon forces it to protect itself and look for backup options.
Middle power leaders do not want a world where they are forced to choose sides. "We refuse to be pawns in a new cold war," former Indonesian President Joko Widodo said. They want to build multi-dimensional trade and financial relationships, choosing from a menu of options without artificially limiting choices due to great power rivalry. Many believe, like Rana Foruhar from the Financial Times, that "the US is no longer a pillar of stability, but a source of risk that needs to be guarded against."
Since developed countries are increasingly focused on themselves, middle powers have naturally emerged in the role of guardians of global public goods. They are well placed to lead on issues such as climate change, health and debt relief. A good example is Brazil's initiative (presented at the G20 meeting) to introduce a global tax on the wealth of billionaires. The proposal is expected to raise hundreds of billions of dollars in this way and could play an important role in closing the climate finance gap in low-income countries.
The middle powers are unlikely to become a powerful bloc, mainly because their interests are too diverse to fit into a single economic or security agenda. Even when they join formal groups, their collective influence is limited. The BRICS group (originally Brazil, Russia, India, China, and then South Africa) was created in 2009 with much fanfare, but has so far achieved little more than organizing photo shoots for state leaders.
Recently, four more countries joined the BRICS: Egypt, Ethiopia, Iran and the UAE. Maybe others will join. But it is hard to imagine how such a diverse group of countries can consistently act together. At worst, that grouping will strengthen authoritarian tendencies even among democratically elected leaders of member states.
Among economists and political scientists, it is generally accepted that a hegemon is needed for a healthy and stable world economy. That role was played by the United States after 1945 or Britain at the time of the gold standard. According to the "hegemonic stability" theory, extraordinary power is required to bear the costs of maintaining an open world economy, including keeping the sea lanes open and enforcing trade rules and ensuring the free flow of money. Consequently, multipolarity becomes a recipe for chaos and economic ruin.
This, however, is an outdated view that does not tell us how the modern world works. The exact combination of openness and protectionism will naturally vary from country to country, as no country has an interest in turning its back on the global economy. Governments will have to weigh the benefits of free trade and balance them against the costs of supporting the domestic economy. Each country knows best under what conditions it is ready to participate in the global economy.
It would be nice to live in a world where the United States (perhaps along with China) actually provides global public goods, including concessional financing and access to technologies that developing countries need to combat climate change. But that's not the world we live in. The United States and other economically large countries are not fully disposed to provide the public goods that the world economy really requires; and if we look at the current mood in their capitals, the situation is unlikely to change in the foreseeable future.
Moreover, as many middle powers have learned the hard way, hegemonic power can be used not only for good, but also for coercion. It can be used to impose rules of the game that do not suit the interests of those countries (and which the hegemon easily violates every time they do not suit him), or to punish countries that ignore the foreign policy goals of the hegemon (which, for example, happens with the internationalization of American sanctions against Iran and Russia). .
This is probably the most important contribution that the middle powers can make: to show by their own example the reality of multipolarity and the diversity of development paths in the world order. They offer a vision of a global economy that does not depend on the strength and goodwill of America or China. However, in order to become a worthy role model for others, the middle powers must become responsible players. And this does not only concern their relations with smaller states, but also the increasing political responsibility in internal politics.
The author is a professor of international political economy at Harvard University
Copyright: Project Syndicate, 2024. (translation: NR)
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