New Powers and the Status Quo

By 18.04.12 No Comments

INSOR Management Board Chairman Igor Yurgens penned an op-ed for Nezavisimaya Gazeta, commenting on the main items of the agenda of the Council of Councils, a new organization bringing together analytical centers from around the world to discuss issues of global importance.

In March of this year a notable event occurred in the international expert community. Twenty analytical centers based in G20 countries convened in Washington DC to create an organization called the Council of Councils. Its main objectives are to address the problems facing global governance systems, find common ground on shared threats and challenges, and prepare innovative remedies for government decision-makers, including responses to crisis situations. Russia is represented in the Council of Councils by the Institute of Contemporary Development.

At the inaugural Council of Councils conference, delegates addressed a number of topical and urgent issues, which were grouped under four themes:

– the overall state of global governance and multilateral cooperation
– the status of the nuclear nonproliferation regime (with a focus on Iran)
– the dollar’s future as the world’s reserve currency
– the criteria for humanitarian intervention, in the wake of regime change in Libya and the ongoing crisis in Syria

Global governance

Globalization and technological advances have substantially changed the substance of relations between nations. The system created after Allied victory in World War II is not sufficiently adapting to today’s realities and to the appearance of new centers of power. During the discussion the BRICS were often mentioned as such a power. Countries are being enticed to study cooperation opportunities across a broad range of issue outside the framework of the United Nations, an organization whose effectiveness should be evaluated and possibilities for its reform analyzed.

Following the collapse of the bi-polar world, the mono-polar approach proceeded to reveal its lack of viability. A serious reassessment of the activities of regional organizations is underway and temporary alliances are emerging to resolve specific issues. With increasing frequency Public-Private Partnerships are being used to carry out tasks that are exclusively in the realm of responsibility of countries or groups of nations. Previously existing state regulatory instruments are proving insufficient to solve such problems as cross-border crime, energy security or economic turmoil, provoked by uncontrolled financial flows.

At the same time, the world has entered a period of fierce competition as a result of the emergence of new poles of power. The United States remains the strongest nation and global leader, but the Americans are already recognizing that they cannot or do not want to retain this role in the long-term perspective. This means that in the foreseeable future we will have to reassess not only systems and instruments for global security and governance but also the systems of values and moral criteria which underpin these systems. Furthermore, the crisis of 2008 and emergence of new economies with alternative political systems has evidently put an end to the ideological superiority of the West, as immediately following the collapse of the USSR, it was assumed that Western values remained the only feasible model for the developing world.

It remains unclear which global responsibilities such countries as Russia, China, India or Brazil can or want to assume, either separately or as a group. All the more so, because on a number of issues they could find themselves engaged in competitive positioning vis-à-vis one another. For now the group’s positioning appears to be something like a strengthening of the Non-Alignment Movement. However, one of the main principles of this pre-existing movement is the non-nuclear status of member states, which is completely incompatible with the positions of Russia and China.   

A new interesting and very promising form of global cooperation is the G20. Its creation was sign of the developed world’s recognition of the need for strengthening global coordination with the participation of emerging economies. The agenda of the G20 is certain to be expanded to include political issues, including cooperation with the United Nations and other regional organizations. However, for now, we see here a lack of organizational structure and are witnessing something of an identity crisis, although there is reason to hope that this is simply growing pains.

Nuclear nonproliferation

At present the most acute problem in nonproliferation is the Iranian question. The position of Russia on Iran is simultaneously simple and complex: it is not acceptable for us to have a nuclear-armed Iran but we also believe that suffocating Iranians with sanctions is counterproductive. However, many of our partners believe that Iran is simple biding its time until it reaches the threshold at which nuclear weapons become technically possible and the only remaining step will be the political decision.

Israel has a more definite position: “Iran already has a sufficient quantity of enriched uranium to produce one bomb. One bomb is sufficient to wipe out Tel Aviv, where 25% of the Israeli population lives. We cannot accept such a risk.” The subtext here is: “we are counting on our strategic ally the US not to leave us facing such a threat alone.” 

The dollar as a reserve currency

The crisis of 2008 further strengthened arguments in favor of finding a new reserve currency. However, it is a widely accepted fact that despite the decline in trust of the dollar, there is not yet any real alternative to it.

The closest thing that has approached being a “possible replacement” is the yuan. But the financial system of the PRC is in need of a number of fundamental reforms before such a replacement could be contemplated. Such reforms include the protection of intellectual property rights, development of flexible capital markets, reform of political institutions in terms of stability and transparency in decision-making. China will have to build such networks for distributing information and monetary funds for transnational corporations and existing global systems, which could surpass the American system. This cannot all be done in a decade. Furthermore, China’s $3 trillion in currency reserves need to be preserved and not devalued via the undermining of the dollar. Thus, although Beijing is not giving up on its ambitious plans with regard to the yuan, it does intend to act slowly and cautiously.

The second contender is the euro. Prior to the 2008 crisis, global financial reserves denominated in euro had reached 26%. The crisis however cast doubt on the prospects for internationalization of this currency beyond the Eurozone, but a number of experts continue to believe that euro could potentially compete with the dollar in the future. Nonetheless, everyone understands how difficult the prerequisite institutional reforms will be to make this possible.

Realization of the idea of turning the IMF’s special drawing rights into a currency has not yet reached the stage of using SDRs as a transaction currency within the fund itself. There is some promise here but it must be tied to economic growth in developing countries and a reliable currency basket created in this basis.

Thus the status quo is like to hold for decades. If it does collapse, then this will likely be due to a lack of trust of major countries in the US, which would lead to enormous losses primarily for these very countries themselves. Nonetheless, it remains imperative to maintain international pressure on US authorities to decrease the country’s trade deficit, reduce its debt and implement a prudent and predictable economic policy. 

Criteria for humanitarian intervention

So-called humanitarian interventions, such as the Libyan intervention, have been justified under international law with reference to 2005 UN decision regarding the “Right to Protect” (RTP) of international forces in the case of the application of disproportional force by the state against it own citizens. From the outset it was clear that this norm implies the cynicism of powerful – no one would think of applying this right with regard to, for example, China. Furthermore, with the end of the mono-polar world, many believe that this norm should not be applied at all. Only three countries – the US, Great Britain and France – have used it in various situations. And even if we are to disregard the extremely selective application of this right, experts note one particular contradiction. This contradiction lies in the fact that using military force to halt cruelty against civilians is only one of three principles of the RTP, while the first is the responsibility of the state to rebuild what has been destroyed in the process of restoring order. In any case, the guarantee of justice for citizens via a foreign state violates the principles of sovereignty and noninterference in internal affairs upon which international relations have been based since the creation of the United Nations.

The positions of Russian and China, which abstained from voting on Security Council resolutions with regard to Libya and vetoed those concerning Syria, cannot be characterized as gaining more currency, but the logic of our approaches is nonetheless met with understanding. The growing cost of the results of the intervention in Libya along with the practical impossibility of nation building in Iraq and Afghanistan demonstrates the need for specific rules for exiting such operations and the corresponding responsibility of those who take it upon themselves to engaging in such efforts.  

The challenges of the modern world are such that national governments are not capable of responding to them alone. New emerging powers will change world politics, which will lead to corresponding changes in existing international organizations.

It is difficult to overestimate Russia’s contribution to these processes. In this light, the rhetoric of an anti-Western, nationalistic and isolationist type which was prevalent during the election campaign should not and, I am confident, will not become the main foreign policy course of our country. In just one month from now the new President of Russia Vladimir Putin will meet with his American colleague Barak Obama and other G8 colleagues at Camp David. The imperatives of domestic development and large-scale modernization objectives of the country demand that we continue work on a positive agenda despite all the difficulties in our relations with foreign partners. The heightened irritability of recent times should be overcome.

Founding Council of Councils Member Organizations:

Lowy Institute for International Policy (Australia), Center for European Policy Studies (CEPS – Belgium), Getulio Vargas Foundation (FGV – Brazil), Center for International Governance Innovation (CIGI – Canada), Shanghai Institutes for International Studies (SIIS – China), French Institute of International Relations (IFRI – France), German Institute for International and Security Affairs (SWP – Germany), Center for Strategic and International Studies (CSIS – Indonesia), Institute for National Security Studies (INSS – Israel), Institute of International Affairs (IAI – Italy). Genron NPO (Japan), Mexican Council on Foreign Relations (COMEXI – Mexico), Institute of Contemporary Development (INSOR – Russia), S. Rajaratnam School of International Studies (RSIS – Singapore), South African Institute of International Affairs (SAIIA – South Africa), East Asia Institute (EAI – South Korea), Global Relations Forum (GIF – Turkey), Chatham House (The Royal Institute of International Affairs – United Kingdom), International Institute for Strategic Studies (IISS – United Kingdom), Council on Foreign Relations (CFR – United States)

Nezavisimaya Gazeta
April 18, 2012