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Saturday 19 Aug 2017 | 06:03 | SYDNEY
Saturday 19 Aug 2017 | 06:03 | SYDNEY

Reader riposte: Questioning the rise of the east



3 October 2012 10:42

Harry Gelber, an Honorary Research Associate at the University of Tasmania, writes:

I am increasingly uncomfortable with the sweeping assumption by almost all segments of the foreign relations and defence community that the global centre of economic gravity has shifted 'from West to East' and will stay there for the foreseeable future.

Of course it might come to be true. China's record of 10% annual growth for three decades and India's ascent to technological and industrial eminence are as true as the current travails of Western Europe and the US. But there are questions to be asked.

There are people at the highest levels of the Chinese Communist Party who have raised the question whether the commanding position of the Party is sustainable in its present form in the face of popular pressures and technological change. In India there are local political, popular and even ethnic tensions that suggest possibilities of fragmentation, in effect if not in constitutional form. In neither of these major states is it clear whether – and if so how – the status quo is sustainable over the next decade or two. And in neither is it yet clear how these questions might be resolved, especially if resolution is to come without major social and political disruption.

There are questions of almost equal weight on the other side of any East-West assessment. It is true that the US recovery from recession is painfully slow and has been hamstrung by the gridlock between a left-wing and deeply statist president and a public (and Senate) increasingly alarmed by rapidly growing health care costs, not to mention the increasing US public debt. These issues will have to be seriously tackled by whomever the public elects, next November, to the presidency or the Senate.

But it is also true that the US economy and especially the financial system are deeply linked to Europe, whose finances are in even worse shape. Yet the trouble there has been a political much more than an economic issue at the very heart of the 'European Community' project ever since the creation of the Franco-German Coal and Steel Pool in 1950. And even more decisively since the creation of the (then) European Common Market in 1957/58. It was, and remains, a choice between Europe as, in effect, a single state-like entity or else as a grouping of cooperative but essentially independent members.

The current EU travails have come close to binging that issue to the brink of actual choice. The German Chancellor, Mrs Merkel, is trying hard not to reassert too obviously the German economic, industrial and technological ascendancy which has been evident, in one form or another, since the 1890s. But it seems likely that sooner rather than later reality will prevail and that the French President, Francois Hollande, will have to concede to the Germans the political leadership of the EU that most of his predecessors enjoyed (with German consent).

If or when that central issue is resolved, the European economy – perhaps shorn of some of its weaker members — may recover rather quickly on the basis of skills, knowledge, industrial experience and global trading links that have not disappeared. (Think, for example, of the importance of German high-precision machinery for Chinese growth). If or when that happens, much of the US economy may also find it easier to bounce back, encouraged as it will be by such developments as a new level of energy independence.

There will also be technical developments of an unpredictable kind. If Moore's Law (which says that the number and power of the components of our digital electronics will double every year) holds good for the nearer future as it has done for recent decades, computing power should increase a billion-fold over the next 25 years. If so, any predictions now for 2035 are merely risible.

In other words, the current balances, and the current assumptions about China's impending political and economic dominance, might turn out to be correct. But it is equally likely that they won't. It might be wiser not to think in terms of regions (like the 'Indo-Pacific') operating in relative independence from one another. It might be somewhat more realistic, instead, to contemplate ad hoc networks among major and medium states in any part of the world, cooperating but also competing at all levels of finance, economics, trade, travel and cultural exchanges.

It could be wise for Australia to keep that in mind and to think of the Middle East not as a barrier but as a bridge, among other things, to the ancestral cultural and ethnic homes of so many current Australians. And to ensure that the economic links with Europe, not to mention the cultural commonalities that make Australia what it is, remain in good and well-functioning order.

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