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Pranjal Sharma

Pranjal Sharma has been analysing, commenting and writing on economic and development policy in India for 25 years. He has worked in print, TV and digital media in leadership positions and guided teams to interpret economic change and India’s engagement with the world

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Who Is In Charge Of The World?

As the US falters in global leadership, China and Russia scramble to take charge. Between the three, none is in control right now. For the moment the world seems to be on auto-pilot

Photo Credit : Shutterstock,

At the East Side Gallery in Berlin is a one kilometer section of the original wall that separated not just the city and Germany, but also the world. This section of the wall is painted by a collection of artists who express anger of division and joy of freedom. The wall was the most potent symbol of the iron curtain that divided the world into two halves led by the US and the erstwhile USSR. From the bipolar world that collapsed in the 1989 to the unipolar world led by the US, the global economy has come a long way.

Market economics swept almost all communist bastions including China, under the influence of global market leader US. The leadership of US is in open question now. China and emerging markets outdid the US in globalization and market oriented trade & investment policies. The consequence of this has been a protectionist backlash what were once leading economies of the world.

US and EU are in retreat. China and Asia are charging ahead arguing for higher market access and lower trade barriers.

Geo-economic and geo-political conflicts are rising. The leadership crisis in UK and its impending exit from EU will leave the region weaker. The Saudi Arabia led isolation of Qatar has deepened the divide in the Arab world.

As a consequence, there is not country or economic bloc in the world that has the clout and influence global growth at a time when inequality is rising and distrust of politics is eroding faith in democratic values.

Who can restore order in the world that is appearing increasingly fragmented? At the Horasis Global Meeting in Cascais, Portugal, this was the key question. Can togetherness be built again or will the world devolve into a cacophony of disputes. "We have seen counter-pressures against cooperation since the time of Adam Smith (1723-1790," says Frank-Jurgen Richter, Chairman Horasis. "There has been a surge in populism and isolationist tendencies."

The US could not create its economic bloc with the trans-pacific partnership (TPP). But a few countries are trying to take leadership of change. Russia is pushing ahead with its Eurasian Economic Union (EEU) to negotiate trade pacts with other regions. EEU is a collection of former USSR countries with a population of more than a billion.

China's effort to bind the world in a new economic belt is laudable from this perspective. Its belt and road initiative (BRI), also known as one belt one road initiative wants to connect 64 countries in an economic arrangement of trade and investment. So far 40 of these countries including India have not agreed to join. While the idea has the potential to rejuvenate the global economy, the BRI has to be paved with trust between the partners.
 
The details of the project are not immediately clear, but China wants partner countries to invest in a string of infrastructure project that will ease trade along the old silk route. However many countries see this as China effort to improve its influence at their cost. Apparently, each partner country of BRI will have to invest in projects that China agrees to. Instead of a collaborative effort, BRI is being seen as an imposition.

While China and Russia try to lead the world, other regions are making local efforts. East Africa and South Asia are trying to build on their collective strengths. Though, this still makes the world look fragmented.

To build togetherness, much more needs to be done. Leadership of the world requires the destruction of the virtual Berlin walls that divide countries and regions.

A walk along the East Side Gallery may help global leaders rise above narrow interests.


Tags assigned to this article:
global leadership china ussr Eurasian Economic Union

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