midterm

Question 1

Original answers of why rest is passing west

Answer 1

New infrastructure
BRICS PPP passing G7
Investment in trade, science and tech
BRICS changing dynamics of world politics

Question 2

What was the start of the Asian century?

Answer 2

AIIB
Chinese AIIB not liked by US and US told allies not to join, UK joined however which allowed for others to join as well. They joined because London is to be financial center of world and joining AIIB would reinforce this. “Start of Asian century” because following Asia takes precedence over Washington that shows reorder of hierarchy. China PPP (what you can buy with income you have) is the largest.

Question 3

LIO

Answer 3

Influential in US foreign policy, institutions created after WW2
NATO, Bretton Woods, UN
Western institutions created to confirm norms such as free-trade, democracy, freedom, human rights
Prof thinks LIO has served its purpose for past 70-80 years (no great war or great depression)

Question 4

Challenges to the LIO

Answer 4

LIO can only arise in unipolar system (not bipolar i.e. Cold War - flowered in post cw era) when the leading state is a liberal democracy
Trump elected president
Critical of NATO, led trans pacific partnership which was free trade agreement across the globe - previouly championed by Obama and Bush, left paris climate accord, left WHO during pandemic
Brexit referendum
Britain was a part of establishment of LIO in which EU was important
Finaland and Sweden were previously neutral till Russia attacked Ukraine when they joined NATO, if Trump elected again and abandons NATO this leaves Europe very vulnerable
Crisis of LIO not just driven by GS, its driven by how US and UK have given up on it after creating it in the first place. US does not seem to believe in free trade anymore after previously championing it, now they talk about “fair trade” - protectionism
TPP and more importantly WTO (brings countries together - further liberalizes trade to lower tariffs and arbitrate disputes) US not appointing judges to it which means WTO cannot do its purpose (Doha round)

Question 5

G20

Answer 5

In 97-98 there was Asian economic crisis, spread from Thailand, major challenge to world economy. G7 didn’t know what to do because Japan was only Asian member. G20 was created, financial ministers would cope with crisis - they invited countries from other continents
Paul Martin (canada PM) says he knows how important it is to bring GS to the table, however, we need G20 not for finance but for political leader
CIGI think tank created idea, G20 leadership group established with Bush
2 candidates vying from new global power elite; BRICS and G20
BRICS members are not actually very unitary; seen more as status symbol
G20 reshpaes global governance; 80% world’s population, 90% world’s GDP, 90% world’s finance, and 80% world’s trade.
“ credited with “implementing the largest coordinated macroeconomic stimulus in history, which has successfully arrested a potentially deep global recession.”
Credited for solving 2008 GFC
UN, IMF, and World Bank under G20

Question 6

Rise of Global South

Answer 6

New Development Bank, AIIB competing against IMF and WB
At most recent UN general assembly P5 meeting, only Biden was there signifying declining value
G20, however, attracted ⅗ signifying a shift in which organizations are gaining value
The G7 represents less than 10% of world pop while BRICS countries are 45%,
China has developed high speed railways throughout the country, Britain has been lagging behind in its infrastructure investment harming its productivity - meanwhile Indonesia has managed to do it
More trade takes place now in interactions in global south than north, same with investment, inflows in south have surpassed. Exports, imports, and foreign investment is high increase in South-South relations

Question 7

Why didnt tigers fall to dependency theory?

Answer 7

industrial policy
State stepped in and did the following: provided industries with low cost loans, trained labor force, carved out land,
Exports of these countries (radios, cars) went to the US market,
Export-oriented policy i.e. industrial policy, high savings rate, land reforms to make agriculture more efficient

Question 8

LA ISI

Answer 8

ISI = promoting domestic industries by substituting imports with domestic products. widely adopted by many developing countires in 1900s. Protectionist methods: tariffs, quotas, subsidies to reduce dependency
If you export, you prove whether you are good enough or not, if your local car is the only one available you buy it, but in other markets you have competition to prove
Ended up being protectionist policy in LA, did not export like East Asia which is partial reason for large distinction today

Question 9

77+China

Answer 9

Non alligned movement + China (supported it but weren’t in it)
NIEO New International Economic Order was set of requests from post-colonial states demanding reparations and break from dependency - the battle cry of the non-alligned movement

Question 10

g77

Question 11

Cardoso

Answer 11

Brazillian president
wrote dependency and development in LA was due to economic ties that had developed between North and South with US and Europe and as a result, economies were stuck in producing raw materials/agricultural products without moving on to next stage because IR trade system run by north and designed to keep these countries in that place
Tariffs in northern countries for raw materials are quite low whereas industrialized products have much higher tariffs making it harder for GS to access them

Question 12

NIC

Answer 12

Newly industrialized countries
Asian Tigers, Turkey, Brazil
Stark division between 1st and 3rd world shrinking, rise of economies is when the term NICs came about
Notion that developing nations are stuck, didnt have a choice is wrong, SK for example made it

Question 13

Brics expansion

Answer 13

2010 with SAfr, then in Johannesburg they added 6 (Egypt, Ethiopia, Iran, UAE, and Saudi Arabia), but inbetween there was election in Argentina with Javier Milei who opted out of BRICS membership,
Argument its just a talk show and it doesn’t mean much until in 2015 they created their own bank, argued its just a political bank, however 5 years into its existence, the bank was approved by credit agencies etc based in Shanghai and its flourishing

Question 14

Collective financial statecraft

Answer 14

AIIB
counties in GS can now access different banking windows from international financial institutions that are not exclusive from IMF and WB, it’s good to have more than fewer

Question 15

BRI

Answer 15

New collective statecraft forges their own wealth and dont need Western reparations, they are rising themselves with these institutions and BRI as well. Spending more than West. SIngle biggest infrastructure project in LA is port in Peru called Chancay built by China, China actually fulfilling deadlines, setting goals and fulfilling them in time, $3.6 billion invested in Peru, planned to be ready in time for APEC conference Xi will attend

Question 16

SK v LA

Answer 16

Two differing approaches:
Tigers stand for liberal prescription of market-oriented policies, increased export-led growth into development orthodoxy
external economic ties are including an extremely high dependence on trade and, with the exception of Singapore, a comparatively low level of foreign direct investment
Brazil and Mexico on other hand show cost of inward-looking, import-substituting industrialization (ISI).
difficulties with the balance of payments, large inflows of foreign direct investment, extensive commercial borrowing, and economic and social distortions frequently attributed to “dependency.”

Question 17

G7 to 20

Answer 17

In ‘76 German Chancellor and French President met, formed G7 using global economic governance for economic purposes
G20 emerged in ‘99 after Asian financial crisis, started in Thailand, secretary of treasury in Washington and London saw that G7 did not fit new emerging economies and created G20
Idea that G20 met at different levels, some for presidents, some for finance ministers, etc
Summits; first one at leaders level of G20 took place in DC in 2008, called by Bush to deal with another financial crisis
Was made to be a conversation, not reading speeches
Has become an important group meetin regularly since 2008, role it preforms since crisis is ‘steering committee’ of world economy, economic and financial questions also covers environment and development. Consensus that it did a good job of handling GFC
Mechanisms to contain crisis, additional funding to IMF, various measures undertaken to monitor and indicators for future
What is interesting is that in past 3 years, chairs of G20 have been allocated to countries in South, in 2022 the chair of G20 was in Indonesia and meeting was held there
West usually tries to exclude countries so when Ukraine invasion was happening, there was pressure on Indonesia to not invite Putin but strong non-alligned history in Indonesia,
Next is India and Brazil, development issues front and center

Question 18

China FP

Answer 18

In contest between China and US, non-alligned powers seem to be slightly more aligned with CHina but this is not the case - China is the one aligning with the GS taking up their positions. Many longstanding demands from GS; to reform Bretton Woods, food insecurity, mass migration, climate change, environmental efficiency
While West didn’t focus on it, China is offering investment and assitance in this
For a long time West has said to stand for human rights, democracy while China stands for development, main concern for a lot of GS countries is a surviving economy more than anything else which gives China upper hand
“When we get the visit of Chinese minister we get a hospital, when a US minister comes we get a lecture”

Question 19

What lies behind Chinese miracle?

Answer 19

High population that works for cheap labor, produce and export industrialized goods, however, there are many countries with large populations that don’t do as well
Wages may have been low at one point but are not right now
True architect of modern China is Deng Xiaoping
Reform + opening up starts with Deng, says isolation (closed economy) are hurting them while SK, Japan, Thailand had done well from opening up from foreign trade and investment, tech transfers, creating jobs and wanted to do it for China
Guangdong province near Hong Kong to attract capital and engineering allows China to kickstart development and growth, one town acted as catalyst was Shenzhen - previously small fishing village - now has 15 million people with massive tech companies and BYD
In Shenzhen they established economic experiment with low taxes, productive labor, etc to attract investors, if it worked they would spread it to Guangdong province, and if it worked in the province they would spread it further
Special economic zones (SEZs) were then used, its like not using legislation like in US, it’s instead an experiment
With Chinese diaspora, a lot of investment that took place was from entrepreneurs, banks, around region facilitated networking and operations
By reform they meant giving space to market of supply and demand and by opening up they get imports and exports
For 30 years China did what no economy in the world had done before, for 30 years they grew for 10 percent a year
While China is authoritarian and others are democratic, economically speaking they are quite similar, infact, China took inspiration from land reform, industrial policy, funding exports
Exports keep you honest because you must compete with rest of world

Question 20

Deng FP

Answer 20

China should not go around world like bull in china shop, its too big and new after years of isolationism to be leading the world - specifically recommended to keep a low profile and buy your time
Successors of his were Jiang Zemin, Hu Jintao
In 2001, China joined WTO so they could access markets around world and have treaties which was great for trade and investment
When Xi Jinping was elected, low profile China had developed went away and China erupted to international scene
In first 4 years in office, Xi visited 50 countries - far more than any previous Chinese president, BRI, South China Sea disputes, AIIB all show greater assertiveness

Question 21

Asian Giants

Answer 21

China and India (sometimes Japan)

Question 22

India

Answer 22

Old India replaced, one of the largest growing, growing faster than any other. What has made India take new pace?
Hindu rate of growth” used to be no more than 3% which is quite low, especially with such high poverty and population
Now, however, they have turned around to fastest fastest-growing economy
Parralels between two Asian giants;
In 1978, two years after death of Mao starts process of reform and opening up growing quickly
In India, turning point comes in 1991, Soviet Union implodes, India and Soviet Union worked very closely together, after its collapse India was left on its own and things got very bad; had no foreign currency reserves and had to ship their gold to British Banks instead
Removed protectionist approach, previously followed import substitution industrialization which means outside goods face high tariffs to promote domestic ones,
Started to open up and reform Indian economy, along China lines, they did the same 13 years later but were slightly more timid, less far-reaching than Chinese reforms
5% Indian growth in 90s, 7% in 2000s and 2010s
IT, software sector, remotely delivered services via the internet, providing services at a distance from India,
“The world is flat” by Thomas Freidman, people in India can connect with people across the world so that distance doesn’t matter
2 things happened:
In 90s, explosion of internet and submarine cables that connect internet all around the world, India now connected to Europe, etc
Submarine cables similar to railway system in US, global crossing going bankrupt allowed India to buy all the cables for cheap and benefitted greatly from internet connectivity
System in India to develop US income tax returns in Mumbai
Bangalore is like Silicon Valley, India has made great advance in software development
IIT, Institutes of technology
Indovation - how innovation takes place in India, vast majority of Indians don’t have high incomes
In US, the middle class is often targetted whereas in India vast numbers are below income, personal hygiene is important for ex, so they made smaller, cheap items. “Fortune at the bottom of the pyramid” how to make money in an environment where people are poor.
India has pool of human talent in engineering, tech, etc, but doesn’t have natural resources like oil for ex. Large population has been innovative.
Green revolution where Indian scientists developed new strains of wheat and grains, India turned to US previously for grains but came with conditionality that they support Johnson in Vietnam war, India was part of non-alignment move though
Projection that by 2050, India will be top 3 global economy