Chapter 2 Contemporary Centres Of Power

European Union

After the devastating Second World War, European leaders faced the crucial ‘Question of Europe’: whether to repeat old rivalries or rebuild based on cooperation. WWII had shattered Europe's economies and its prior political structures. In 1945, European states confronted widespread ruin and the need for a new approach to international relations.

Formation And Evolution

Post-WWII European integration was significantly aided by the Cold War context. The United States provided massive financial assistance through the **‘Marshall Plan’** to help revive Europe's economy. The US also established **NATO** as a collective security structure. The Marshall Plan led to the creation of the **Organisation for European Economic Cooperation (OEEC)** in 1948, which facilitated economic cooperation among Western European states. The **Council of Europe (1949)** advanced political cooperation. Economic integration progressed step-by-step (see Timeline of European Integration), leading to the formation of the **European Economic Community (EEC)** in 1957.

The establishment of the **European Parliament** added a political dimension to this process. The collapse of the Soviet bloc accelerated integration, culminating in the formal establishment of the **European Union (EU)** in 1992. This laid the groundwork for common policies in foreign affairs, security, justice, and home affairs, and the introduction of a **single currency (Euro)**.

The EU has evolved from primarily an economic union into an increasingly political entity, sometimes acting like a nation-state. Although attempts for a formal EU Constitution failed, it possesses its own flag, anthem, founding date, and currency (Euro). It also strives for common foreign and security policies and has expanded its membership, especially to former Soviet bloc countries. This expansion has faced challenges, including reluctance among some member states to cede sovereignty and reservations about incorporating new members.

Influence In World Politics

The EU wields significant economic, political, diplomatic, and military influence. Its GDP is projected to be very large (approximately $19.35 trillion in 2024), making it a major global economic player. The euro currency has the potential to challenge the dominance of the US dollar. The EU's large share of world trade enables it to be assertive in trade negotiations with major partners like the US and China. Its economic power extends influence over neighbouring regions and further afield in Asia and Africa. It also acts as an important bloc in international economic bodies like the **World Trade Organisation (WTO)**.

Military Capabilities

The EU has considerable military strength. Its combined armed forces constitute the second largest in the world, and its total defence spending ranks second after the US. France, an EU member, holds a permanent seat on the UN Security Council and possesses a significant nuclear arsenal (approximately 335 warheads). The EU also has several non-permanent members on the UNSC, allowing it to influence international policies and diplomacy.

The EU has demonstrated effective use of diplomacy, economic tools, and negotiation over coercion or military force, as seen in its dialogue with China on human rights and environmental issues. It is also a major source of space and communications technology.

Challenges Within The Eu

Despite its collective strength, the EU faces internal challenges that can limit its ability to act as a unified entity in foreign policy and defence. Member states retain their own foreign relations and defence policies, which sometimes conflict (e.g., differences over the Iraq invasion). There is also **‘Euroskepticism’** within some parts of Europe, a resistance to further EU integration (e.g., Britain's exit, Denmark and Sweden's resistance to the euro and certain treaties). These internal divisions restrict the EU's ability to present a fully unified front on the global stage.

Timeline Of European Integration

• 1951 April: Six Western European countries (France, West Germany, Italy, Belgium, Netherlands, Luxembourg) sign the Treaty of Paris, establishing the **European Coal and Steel Community (ECSC)**.
• 1957 March 25: These six countries sign the Treaties of Rome, establishing the **European Economic Community (EEC)** and the European Atomic Energy Community (Euratom).
• 1973 January: Denmark, Ireland, and the United Kingdom join the EEC.
• 1979 June: First direct elections to the **European Parliament**.
• 1981 January: Greece joins the EEC.
• 1985 June: The **Schengen Agreement** abolishes border controls among EEC members.
• 1986 January: Spain and Portugal join the EEC.
• 1990 October: **Unification of Germany**.
• 1992 February 7: The **Treaty of Maastricht** is signed, establishing the **European Union (EU)**.
• 1993 January: EEC is renamed the **European Community (EC)**.
• 1995 January: Austria, Finland, and Sweden join the EU.
• 2002 January: **Euro** currency is introduced in 12 EU member states.
• 2004 May: Ten new members (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia) join the EU.
• 2007 January: Bulgaria and Romania join the EU. Slovenia adopts the Euro.
• 2009 December: The **Lisbon Treaty** comes into force.
• 2012: The EU is awarded the **Nobel Peace Prize**.
• 2013: Croatia becomes the 28th member of the EU.
• 2016: **Brexit** referendum in Britain results in a vote to leave the EU.

Association Of South East Asian Nations (Asean)

Southeast Asia (identify countries in this region on a map) faced significant challenges after WWII, recovering from colonialism (European and Japanese), grappling with poverty and economic backwardness, and facing pressure to align during the Cold War. This context created potential for conflict.

Establishment And Objectives

Efforts towards Asian unity, such as the Bandung Conference and Non-Aligned Movement, were insufficient for establishing regional cooperation. As a response, the **Association of South East Asian Nations (ASEAN)** was established in **1967** by five countries: **Indonesia, Malaysia, the Philippines, Singapore, and Thailand**. They signed the **Bangkok Declaration**. The primary objectives were to accelerate **economic growth, social progress, and cultural development**. A secondary objective was to promote regional **peace and stability** based on the rule of law and UN Charter principles. Brunei Darussalam, Vietnam, Lao PDR, Myanmar, and Cambodia later joined, bringing the total membership to ten.

The ASEAN flag symbolises unity (circle) and solidarity (ten paddy stalks representing member states).

The Asean Way

Unlike the EU's move towards supranational structures, ASEAN has little desire for such institutions. ASEAN countries have cultivated the **‘ASEAN Way’**, characterised by **informal, non-confrontationist, and cooperative** interactions. Respect for national sovereignty is fundamental to ASEAN's functioning.

The Asean Community Pillars

With some of the world's fastest-growing economies, ASEAN expanded its goals beyond economic and social spheres. In **2003**, it agreed to establish an **ASEAN Community** based on three pillars:

1. **ASEAN Security Community:** Aims to ensure that territorial disputes and conflicts do not escalate into armed confrontation.
2. **ASEAN Economic Community:** Focuses on creating a common market and production base to promote social and economic development and improve dispute resolution mechanisms.
3. **ASEAN Socio-Cultural Community:** Works on socio-cultural cooperation.

Economic Importance And Influence

ASEAN remains primarily an **economic association**. Although its economy is smaller than the US, EU, or Japan, it is growing much faster, increasing its regional and global influence. The ASEAN Economic Community aims to create a free trade area (FTA) for investment, labour, and services. Major economic powers like the US and China have actively pursued FTAs with ASEAN.

Regional Role And Vision 2020

ASEAN is becoming a very important regional organisation. Its **Vision 2020** outlines an outward-looking role in the international community, building on its policy of promoting negotiation over conflict. ASEAN has mediated in regional conflicts (Cambodian conflict, East Timor crisis) and hosts annual meetings for East Asian cooperation.

ASEAN's current economic strength and relevance as a trading and investment partner, particularly for growing Asian economies like India and China, make it an attractive entity. India's foreign policy, which previously did not focus much on ASEAN, has shifted with its **‘Look East’ Policy** (early 1990s) and **‘Act East’ Policy** (since 2014), leading to increased economic interaction. India has signed trade agreements and an FTA with ASEAN (came into effect in 2010).

ASEAN's strength lies in its focus on **consultation and dialogue** with members, partners, and other organisations. It is a unique regional forum in Asia where Asian countries and major global powers can discuss political and security concerns.

The Rise Of The Chinese Economy

China is the third major alternative centre of power, an immediate neighbour to India, whose economic rise has been a defining feature of recent world politics (Cartoon on China's rise). China's economic success since 1978 is closely linked to its emergence as a great power.

Economy Under Mao

After the communist revolution and the establishment of the People's Republic of China in 1949 under Mao Zedong, the economy was based on the **Soviet model**. China severed links with the capitalist world and relied on its own resources and limited Soviet aid. The strategy was to build a state-owned heavy industries sector using capital generated from agriculture. Facing a shortage of foreign exchange needed for technology imports, China adopted a policy of **import substitution**, producing goods domestically.

This model established a significant industrial base, provided employment and social welfare, improved education and health, and achieved a respectable economic growth rate (5-6%). However, a high population growth rate meant this growth was insufficient to meet needs, and agricultural production struggled to generate enough surplus for industry. Similar to the USSR, China's state-controlled economy faced a crisis in the 1970s, with slow industrial growth, minimal international trade, and low per capita income.

Reforms And The Open Door Policy

In the 1970s, China's leadership made major policy shifts. Political and economic isolation ended with relations established with the **United States in 1972**. Premier Zhou Enlai proposed the **‘four modernisations’** (agriculture, industry, science/technology, military) in 1973. By 1978, Deng Xiaoping announced the **‘open door’ policy** and economic reforms, aiming to boost productivity through foreign investment and technology imports.

China's transition to a market economy was gradual, unlike the 'shock therapy' model. **Privatisation began with agriculture in 1982**, followed by **industry in 1998**. Trade barriers were selectively removed in **Special Economic Zones (SEZs)** to attract foreign investors. The state maintained a central role in guiding the market economy.

Impact Of Reforms

The new economic policies broke China's economic stagnation. Agricultural privatisation significantly increased production and rural incomes, leading to growth in rural industry. The overall economy grew rapidly. Trade laws and SEZs caused a dramatic rise in foreign trade. China became a leading destination for Foreign Direct Investment (FDI) and accumulated large foreign exchange reserves, enabling it to invest abroad. Accession to the **WTO in 2001** further integrated China into the global economy.

Challenges And Consequences Of Growth

Despite dramatic economic improvement, the benefits of reforms were not universal. Unemployment rose (affecting nearly 100 million). Female employment conditions remained poor. **Environmental degradation** and **corruption** increased. Economic inequality between rural and urban areas, and coastal and inland provinces, grew.

Regional And Global Influence

Regionally and globally, China became a major economic power. Its economic integration and interdependencies provide significant influence with trade partners, tempering outstanding issues with countries like Japan, US, ASEAN, and Russia. China hopes to resolve differences with Taiwan through closer economic integration. Concerns about China's rise have been somewhat allayed by its contributions to regional stability (e.g., after the 1997 Asian financial crisis). Its increasing investment and aid in Latin America and Africa project it as a global player supporting developing economies. (Cartoon on China then and now depicts the shift and duality).

India – China Relations

Both India and China were significant powers in Asia before Western imperialism, each exercising political, economic, and cultural influence in distinct regions, with minimal overlap. Consequently, historical familiarity between the two was limited, creating challenges for evolving foreign policy towards each other in the 20th century.

Historical Context

China historically had a tributary system influencing its periphery (Mongolia, Korea, Indo-China, Tibet). India also had regional influence. But their spheres rarely overlapped, limiting deep political/cultural interaction.

Border Conflict And Its Aftermath

After gaining independence (India) and expelling foreign powers (China), hopes for collaboration between the two developing nations emerged, symbolised by the slogan ‘Hindi-Chini bhai-bhai’. However, these hopes were marred by border disputes. Differences arose from China's takeover of Tibet (1950) and the unresolved border issue. A border conflict in **1962** over competing territorial claims in Arunachal Pradesh and Aksai Chin (Ladakh) led to Indian military reverses and long-term implications for relations. Diplomatic ties were downgraded until 1976.

Improvement After The Cold War

Relations slowly improved after 1976, accelerating significantly after the end of the Cold War. Following China's shift to more pragmatic policies in the late 1970s, a series of talks to resolve the border issue began in 1981. **Rajiv Gandhi's visit to China in 1988** provided a major boost to relations. Both countries now view themselves as rising global powers and aspire to play major roles in the Asian economy and politics.

Economic And Strategic Ties

India-China relations now have significant strategic and economic dimensions. Both governments have worked to contain conflict and maintain 'peace and tranquility' on the border, signing agreements on cultural exchange, science/technology cooperation, and opening border trade posts. Economic ties have grown dramatically, with bilateral trade increasing from $338 million in 1992 to over $84 billion in 2017. Both countries cooperate on global economic issues (WTO) and even in areas of potential competition like bidding for overseas energy deals.

Recent Contentious Issues

Despite improvements, recent relations have faced setbacks due to unresolved border disputes, concerns over the China-Pakistan economic corridor, and China's support for Pakistan at the UN on India's counter-terrorism initiatives. While these issues exist, ongoing talks on the boundary question and increasing military-to-military cooperation suggest a mutual desire to manage differences. Increasing travel, communication links, shared economic interests, and global concerns are expected to foster a more positive relationship between the world's two most populous nations.

Japan

Japan is another significant contemporary centre of power, known globally for brands like Sony, Panasonic, and Toyota, associated with high-technology products. Despite limited natural resources requiring raw material imports, Japan achieved rapid post-WWII progress.

Economic Power And Global Role

Japan joined the OECD in 1964. In 2017, it was the third largest economy globally and the only Asian member of the G-7. It is the eleventh most populous nation. Japan is the only nation to have experienced nuclear bombing.

Security And Defense Policy

Under Article 9 of its Constitution, Japan renounces war and the threat or use of force. It has a security alliance with the US since 1951. Despite its pacifist constitutional stance and relatively low military spending (1% of GDP), its military expenditure ranks seventh globally, reflecting its significant defence capabilities within the constraints of its Constitution. Japan's economic and technological strength allows it to function as a potential alternative center of power.

South Korea

The Korean peninsula was divided after WWII into North and South Korea (along the 38th Parallel), with the Korean War (1950-53) and Cold War dynamics intensifying rivalry. Despite this division, South Korea emerged as a significant power in Asia.

Economic Development And The Miracle On The Han River

Between the 1960s and 1980s, South Korea underwent rapid economic development, known as the **“Miracle on the Han River”**, transforming it into a major economic power. It joined the OECD in 1996. In 2017, its economy was the eleventh largest globally, with its military expenditure ranking tenth.

International Standing And Factors For Success

South Korea ranks high on the Human Development Index (HDI). Factors contributing to its success include land reforms, rural development, extensive human resource development, and rapid, equitable economic growth. Other factors are export orientation, strong redistribution policies, public infrastructure development, and effective institutions/governance. South Korean brands like Samsung, LG, and Hyundai are well-known globally and in India, reflecting strong commercial and cultural ties (Numerous agreements signify growing ties).