Introduction to Superpowers
- A Superpower is a Country that has the capacity to project dominating power and influence anywhere in the world and sometimes in more than one region of the globe at one time.
- Key Criteria:
- Military; large number of troops, nuclear weapons and involvement.
- Cultural; religion, global brands.
- Geographical; TNCs, Aid.
- Economic; Imports/exports, Trade, Aid, TNCs, Trade Blocs.
- The Contenders:
- BRICS; demographic power, some have economic power and individual strength.
- EU; lots of countries, slight uncomfortable position due to the lack of integration.
- Gulf States; increasingly important from an energy and 'cash' perspective.
- Japan; power on the slide since 1990s.
- USA; power on the slide.
USA as a Superpower
- A lot of Superpowers have nuclear weapons, USA are not expecting to use their nuclear power unlike Countries Iran and Israel.
- China is at the top with 2 million soldiers, USA have 1.5 soldiers.
- USA counts for half the worlds military spending at $450 billion = weapons, ships, etc.
- USA have access to all technology and are about to top the spectrum, with full control of everything including land, sea, space and cyberspace.
- China only spends 20% of what USA does.
- Russia declined, could not match USA spending.
- China rises due to Capitalism and market forces; still communist background.
- USAs GDP $15 trillion, compared to China's $2.5 trillion.
- China is chasing the gap each year with its annual rise by 10% in GDP per annum.
- USA has the worlds trading currency = POWER, however under threat by the euro.
- Spread of USA brands, subtly spread the American ideals; SOFT POWER.
- Starbucks in 42 Countries, Marriot Hotel in 63 Countries and Subway in 86 Countries.
- American films = Foreigners always the bad guys.
- English is the most common language.
- World Population 6.6, China is 1.3 billion and India is 1.1 billion.
- USA uses power and communication with other Countries.
- Old imperial rules still sometimes apply, use of power in organisations.
Changing Patterns of Power
- Rise and Fall of the British Empire:
- Colonial power.
- Founded on exploration and sea power.
- Three periods of history; Merchantilist (1600-1850), Imperial (1850-1945) and Decolonialisation (1945-today)
- Legacy still exists e.g. 53 states in Commonwealth.
- Given size, Commonwealth could be regarded as a Superpower.
International influence has to be maintained. Superpowers do this using different mechanisms, some of which are hard and some of which are soft and more subtle.
Superpowers use hard power mechanisms because these are the most obvious and threatening. The USA has an enormous military reach around the world giving it more military power than any other nation. Its military are present on every continent except Antarctica. But the USA has kept a permanently manned scientific base at the south pole since 1957. In 2003 it opened a new US$150 million base, reinforcing its superpower credentials. The NATO (North Atlantic Treaty Organisation) nilitary alliance provides the USA with allies in North America (Canada) and Europe (UK).
Collapse of USSR and appearance of BRICS
The USSR is now Russia and parts of Eastern Europe such as Eastonia and Lithuania.
- Collapse of Communism:
- Pivoted around the fall of the Berlin Wall in 1989.
- Caused by changes in policies which began in 1985 by president Mikhail Gorbachev. He put in reforms called Glasnost (Openess) and Perestroika (Private ownership of businesses). This led to a revolt against the Communist party.
- USSR collapsed in Feb, 1990 and became a Capitalist Country.
- New Emerging Superpowers:
- BRICS (Brazil, Russia, India and China)
- Brazil's middle class has grown and the number of the poorer population has declined. It has a relatively mature and balanced economy.
- Russia's growth is mainly based in fossil fuel exports, Russia uses its vast reserves as an economic and political lever.
- India skipped the manufacturing phase and has gone straight into services.
- China's growth is mainly due to its removal of tariffs and quotas = Free Trade.
- Oil Rich Middle East.
Geographical Theory and Superpowers
The take-off model (Rostow, 1960) - economic development is a linear, 5-stage process. Countries 'take-off' & develop when pre-conditions are met, such as transport infrastructure. Industrialisation follows, creating jobs, trade & consumers. The UK and USA were the first to do this, shows the steps that Superpowers have gone through. Criticisms: many countries borrowed money & invested into projects to meet Rostow's pre-conditions yet failed to develop & instead ended in debt.
World Systems Theory - the world is divided into core, semi-periphery & periphery. Semi-periphery nations are broadly equivalent to the NICs that developed in the 1970s. Wallerstein recognised that some countries could develop & gain power, showing that wealth & power were fluid not static. Criticisms: World Systems theory is more a description of the world than an explanation of it.
Dependency Theory - the world is divided into North v South. The developed world keeps the rest of the world in a state of underdevelopment, so it can exploit cheap resources. Aid, debt & trade patterns continually reinforce the dependency. Criticisms: since the 1960s NICs & RICs have broken out of the North-South divide mould.
Take-Off Model 1960, Rostow, Liberal.
- Economic development is a linear five stage process.
- Countries can only 'take-off' and develop once the pre-conditions have been met: rise in rate of productive investment to over 10% of national income, development of 1 or more substantial manufacturing centres and the emergence of adminstrative systems which encourage development.
- The model itself looks upon the rate of development over a period of time.
- Many countries borrowed money and invested into various projects in order to meet the pre-conditions made by Rostow however they failed to develop and ended up in debt.
- It is only a simplification of reality.
- Doesn't take individual nation circumstances into account.
Frank, 1967 - Marxist
- The world is divided into the developed, the core, and underdeveloped, the periphery.
- The developed world keeps rest of the world in a state of underdevelopment in order to be able to exploit it for cheap resources and labour, taking its most skilled workers and selling it manufactured goods.
- Through this, the developing world helps the developed world to remain rich, (the development of underdevelopment).
- The developing world is then dependant upon the developed (rich dependant upon poor).
- Aid, debt and trade patterns continually reinforce this dependency Based upon Marx's ideas of the 'rich versus the poor', which is more static.
- Rise of NICs - Asian Tigers are examples of countries which have now developed since the 60s+70s, which show that development is possible from the periphery
World Systems Theory
Wallerstein, 1974 - Marxist
- The world is divided into core, semi-periphery and periphery.
- The semi-periphery nations resemble those of NICs and are competing to varying degrees for core status; therefore this theory suggests and allows for some countries being able to move out of underdevelopment
- suggestion of a middle ground
- It is the system that causes the divide and not the individual nations
- Wallerstein recognised that some countries could develop and gain power, demonstrating that wealth + power were more fluid and not static
- The theory is considered to be more of a description of the world than an explanation.
- Colonialisation usually had distinct phases:
- Exploration; resulting in the 'discovery' of new lands.
- Initial Settlement usually on coasts in defended forts.
- Beginning of trade in raw materials.
- Gradual extention of rule over larger territories.
- Development of political systems and institutions.
- New colonialism
- Countries remain under control from overseas, yet suppose to be independant; indirect control over developing Countries.
- Methods of Neo-Colonialism:
- Aid with strings attached
- TNCS locate and profits leak to HICS
- Balance of trade where LICs export low value goods
- Debt means that interest goes back to HICS
- Structual Adjustment Programmes cut to public spending in return for loans.
CASE STUDY: Ghana, Neo-Colonialism
- In 1957, Ghana gained Independance fron British Colonial rule, the first colony in Sub-Sharan Africa to do so.
- 50 years later English is Ghana's official language and Colonial rule from Britain did bring schools and hospitals to Ghana.
- However, the best paid jobs were held by the british and Ghana's crops were exported to Britain in a raw state and so it was Britain who added value to the crops.
- Ghana still depends of decisions made by the world's wealthy nations - a situation known as Neo-Colonialism.
- The British Colonial Government still dictates the price that the Ghanaian Cocoa farmers receive today. Other countries produce cocoa besides Ghana; Ivory Coast is now the world's largest producer. It means that if prices from Ghana are too high, dealers will purchase cocoa from other, lower-priced countries. Therefore there is downward pressure on prices.
- Most processing and packaging of cocoa is done in Europe, EU import tariffs are much more expensive for processed cocoa than raw cocoa beans which is known as cocoa escalation. In 2007, the EU charged no tariff charge for raw cocoa beans but 7.7% import tariff of cocoa powder so Ghana is forced it export raw cocoa beans and lose out on the value that is added by processing them.
- Ghana joined the WTO in 1995 in an attempt to increase its trade.
CASE STUDY: Russia and its energy imports
- Russia's economy relies heavily on crude oil and natural gas exports.
- In the last 20 years it has uncovered significant reserves of both oil and gas in its Siberian provinces. These could add significantly to Russia's global power. Russia has developed important export partnerships to the east (China) and to the West (Europe).
- Russia depends of the European market to buy 80% of its oil exports, but USA is keen to become a buyer and China's demand for oil is ever-increasing.
- In a world where energy resources are increasingly significant, the potentially vast fields of gas and oil that underline Russia's Siberian provinces are a key card in international affairs; giving Russia increased global significance and confidence.
- Russia cut its gas supplies to Ukraine in 2006 for 3 days over a payment dispute, and in 2008 it reduced supplies to its neigbour by 25%.
- Russia has repeatedly warned the USA not to expand NATO into eastern Europe or to site missiles there.
- Russian gas supplies to Ukraine and the EU were cut off in 2008-09.
- All of these actions have raised international tensions and led some people to speak of a new 'cold war'.
Control of Trade and Superpowers
- Ways that trade can result in power:
- Trade Blocs.
- TNCs exploit countries: Special economic zones and export processing zones.
- Trade Surplus.
- Secondary exports are dominated by Western Europe.
Culture and Power
- Key characteristics of Global Culture:
- English = Language of business.
- Cultural Imperialism (a little bit like Neo-Colonialism)
- Enforced spread of its culture by large powers e.g. British Empire: Cricket, Tea, English, Shared head of State and Railway.
- Voluntary adoption of a foreign culture by other people e.g. Americanisation.
- Backlash amongst groups:
- Assumption that one culture is better than others e.g. American
- Reduces cultural diversity.
- Companies are hegemonies; they decide who and what we watch, eat, drink, etc.
- Not a totally Americanised world:
- Curry is the national dish of Britain.
- Chinese food is increasingly popular.
- Some Bollywood inspired films.
- Sushi from Japan.
International Organisations and Superpowers PART 1
- IMF: Formed in 1944
- Stablised currency after WW2
- Countries contribute to fund: loans given out to help countries.
- Designed to prevent communism.
- Members are not equal, depends on money contributed: USA, EU, WESTERN DEVELOPED COUNTRIES and BRICS.
- UN Security Council: Permanent members are China, France, Russia, UK and USA.
- 10 other members who rotate.
- Trys to ensure that all continents are represented.
- Permanent members are allowed to veto any vote.
- Allows permanent members to have nuclear weapons.
- Tends to protect resource rich Countries e.g. Kuwat, not Rwanda.
- World Trade Organisation: Supervises and liberalises Trade.
- 153 members representing 95% of trade. Decision making usually by consensus.
- In reality informal meetings are made, called 'mini ministeralls'
- Many Countries are excluded and they usually involved the 'quad countries' = USA, Canada, EU and Japan.
International Organisations and Superpowers PART 2
- NATO: Military alliance originally designed to keep communism away.
- 70% of the world's spending of defence.
- 28 members.
- Decisions are made by consensus.
- Expansion into Eastern Europe seen by Russia as a way of weakening its position.
- G8: Informal forum to discuss issues e.g. trading policies, debt, poverty and AIDS.
- Includes Canada, France, Germany, Italy, Japan, Russia, UK and USA.
- Too interested in own issues.
- Too keen for globalisation as to their advantage.
- Trading Bloc EU: Ensures free moving or people, services, goods and capital; 27 members.
- Protection of key markets; Agriculture.
- Allows intro-regional trade and therefore economies of scale
- World Economic Forum: Swiss based non-profit making foundation.
- Meeting of business CEOs, Academics, Leaders, Intergovernmental organisations.
- Are very pro globalisation, and they are known as the 'fat cats in the snow'.
BRICS: Development and Consequences
China and raw materials prices
Increased Prices of Oil, Copper, Zinc and Gold: The effects of China on Prices
- High demand for commodities such as oil.
- China's demand for raw materials is on the rise.
- In its drive to secure reliable supplies of raw materials, it is said, China is coddling dictators, despoiling poor Countries and undermining western affairs to spread democracy and prosperity.
- China has descided not to interfere with the rest of the world's affairs; doesn't want to disturb its own foreign policy.
- China is "hoovering" up the world's commodities also because its growth is concentrated in industries that use lots of resources; in the past there has been a shift from light to heavy industry.
- China's pollution has increased.
- Steelmaking uses 16% of China's power, the most common fuel for power generation is coal and so this is an added cause to global warming.
Shifting Power to Asia and the Implications
- Older Core views: EU and USA
- Shift has produced cheap food, clothing and electronics for West.
- Loss of dirty industries.
- Kept quarternary industry.
- Increased Prosperity could lead to increased demand of Western Goods which would benefit both the UK and USA.
- For example, the Rolls Royce is a British car bought in China which shows a demand for luxury goods: this is an opportunity, not a threat.
- However, increased outsourcing of research and technology jobs, expecially to India.
- Credit Crunch has hit older Core countries hard.
- Older Core are now worried about BRICS TNCs: Chinese/Indian Multinationals are common as learnt from FDI.
- Car industry is facing huge competition from 4 companies.
Shifting Power: Opportunities for other Countries
China and Africa: Need for resources mainly oil and mineral exploitation.
- Shifting power might cause cultural tension:
- American corporate capitalism.
- European liberalism
- Chinese culture
- Islamic World.
- US report - Global trend 2025 suggests 5 scenarios for World politics:
- Multipolar World
- Increased risk of arms race
- Increased resource nationalism
- Decline of Europe and Japan due to ageing population.
- Resource Rich powers.
CASE STUDY: China and Africa
Development or Colonisation?
- China's search for oil and mineral resources has focused on Africa.
- Primarily in Oil exploration projects and infrastructure to help exploit and export raw materials.
- Around 30% of all oil used in China comes from Africa.
- In 2007, Chinese investment in Africa totalled US$30 billion
- China has invested US$8 billion building oil pipelines in Sudan.
- Estimated to be 750,000 Chinese working is Africa in 2008 and over 900 Chinese companies.
- Most investment goes to African governments, TNCs and Chinese governments, not to ordinary Africans.
- Providing a huge increase in oil revenues to the government of Sudan, which has helped fund war in Darfur.
- Propping up the government of Robert Mugabe in Zimbabwe with arms shipments.
- Chinese-funded infrastructure projects are built by Chinese workers, not local labour.
- In general, Mining, quarrying and forestry bring few skilled jobs and pay low wages.
Russia: The re-emerging Superpower?
- By the end of December 1991, the USSR had completely collapsed. Most of its 15 constituent states had, like Uzbekistan, alreay declared themselves independent during the course of 1990-1991.
- Russia has the world's largest known reserves of natural gas, and is the second largest oil producer after Saudi Arabia. These two commodities accounted for 60% of Russian exports in 2007, and have helped to fund Russia's economic recovery since 1999.
- Massive loans from the IMF, which helped to prevent total economic collapse during 1990s.
- The rapid growth of the Chinese and Indian economies: led to a huge demand for energy and increased global energy prices. Russia's massive energy reserves are now incredibly valuable.
- Gazprom (Russia's largest energy company) controls a third of the world's natural gas reserves and its profits have increased Government revenure and enabled Russia to repay its debts to the IMF.
CASE STUDY: Tata - Rise of BRICS
Tata group is an Indian multinational conglomerate company, headquartered in Mumbai, India. It was founded in 1868.
It encompasses seven business sectors: communications and information technology, engineering, meterials, services, energy, consumer products and chemicals.
Tata has operations in more than 80 Countries across six continents. Tata has over 100 operating companies each of them operates independently out of them 32 are publicly listed.
The major Tata companies are: Tata Steel, Tata motors, Tata power, Tata chemicals, Tata Global beverages, Tata Teleservices and Tata Communications.
The Tata Group is perceived to be India's best-known global brand within and outside the country
Tata Steel is among the top ten steelmakers, and Tata Motors is among the top five commercial vehicle manufacturers, in the world.Tata Global Beverages is the second-largest player in tea in the world.
Going forward, Tata is focusing on new technologies and innovation to drive its business in India and internationally. The Nano car is one example, as is the Eka supercomputer (developed by another Tata company), which in 2008 was ranked the world’s fourth fastest.