‘All regions will be important at the same time’

The world is fixated with the rivalry between the two top Western and Eastern powers. America is still calling the shots in economics and politics, but we know how the story ends: the Chinese, or rather East wins, the West loses. Wrong. “The world we are moving into in 2011 is one not just with many more prominent nations, but one with numerous centres of power. It is, in short, a neo-medieval world,” says Parag Khanna of the New America Foundation

in his new book How to Run the World which turns on its head much of the assumed reality of 21st Century power.

A foreign policy advisor for Barack Obama’s presidential campaign, Khanna says life is now a retreat to medievalism. In the Middle Ages, corporations in Bruges and Venice competed for resources and wealth. Khanna extends the neo-medieval metaphor to suggest that today we see a blurring of boundaries: family businesses like India’s Reliance are asserting themselves as the backbone of the world economy and Persian Gulf royalty control global investments. Khanna talked to Uttara Choudhury about how globalisation is diffusing power from the West, from states, to companies, religious groups, to billionaire philanthropists like Bill Gates, George Soros and celebrity do-gooders like Bono and Angelina Jolie.

Your book is blunt about saying the ‘American century’ is over. What is our new reality?
Instead of a world of just great and lesser powers, the emerging landscape looks a lot like the Middle Ages a millennium ago. That was the last time in history when, like today, both East and West were powerful at the same time. The Song dynasty in China invented paper money (of which they have plenty today!), the Chola empire in south India ruled the seas from East Africa to Indonesia, the Arab-Islamic community was at its peak as the Abbasid caliphate stretched from Andalusia in Spain to Central Asia, while the Holy Roman Empire marked an unstable period in Europe. But rather than talk about the East replacing the West, the Pacific displacing the Atlantic, or China subverting America, I believe the world will be complex, multi-polar, and multicivilisational — all regions will be important at the same time.

You point out that Westerners have complacently forgotten one of the eternal axioms of world affairs: one who has the money makes the rules. China is challenging the role of the US dollar by calling for a neutral currency. Do you think this will come to pass?
We are clearly in an up-for-grabs era of economic management, one in which mixed models compete to pull their countries ahead. The response to the financial crisis looked more Chinese and European than American. Beijing controls its currency value to keep exports cheap, maintains strong oversight of the financial sector and selectively curbs imports to maintain high employment. Even George Soros has remarked that he is impressed by the the ‘Beijing Consensus’.

But the growing importance of China’s currency doesn’t need to lead to currency competition, but rather can be an impetus to create a neutral currency basket based on the Yuan, Dollar, Euro and Yen. I think this is an important cause to pursue global financial stability.

Your book argues that India needs to shift its approach to Kashmir the way China has won over Taiwan — by buying its loyalty.
The Manmohan Singh government came to power a half-decade ago promising over $5 billion in rehabilitation spending for Kashmir — at the time, it seemed as though the situation would turn a corner in terms of stability. But today the situation has again fallen into a fragile and dangerous state. Indian leaders need to fulfill decades-old pledges to win over Kashmir the way China has increasingly done with Taiwan. This would be more feasible if India and Pakistan declared the so-called Line of Control the official border before pursuing goodwill missions across it. Opening official borders in the long term means more than unofficial ones in the short term.

Do you think what the colour line was to the 20th century, the faith line might be to the 21st century?
It’s true that loyalties are strengthening beyond money, power and kinship, and toward faith. Islam is spreading today, its appeal equally political and social in Egypt and Lebanon, where the Muslim Brotherhood and Hezbollah are political parties and welfare providers. Christianity, too, is rerooting itself in Africa, Latin America, and even China, while millions of Americans are joining evangelical mega-churches. But I don’t believe there will be one fault line, either political or religious. Instead, there are many identities flourishing such as the cause-driven or generational. Faith will certainly be important, which is why I include it in the set of actors that needs to be part of future mega-diplomacy.

You have said there is little in Obama’s vision for the coming years, as reflected in the Afghanistan-Pakistan strategic review, to indicate anything beyond America muddling through. What should America do to stay relevant in the world?
America can lead again if it focuses on helping others help themselves. This is what America’s post-World War II strategies achieved in Europe and Japan, ultimately making them self-sufficient powers and to this day America’s only genuine allies in the world. The same can now happen in Africa, where the Africa Growth and Opportunity Act, begun under the Bush administration, slashed tariffs on African exports and boosted programs to counter AIDS. America is heavily invested in developing Africa’s energy infrastructure — the continent may soon provide more oil to the US than the Middle East.

The way to embed this grand strategy of self-reliance is to focus on regional institution building, encouraging countries to engage with their neighbours the way Europe has done through the EU. Obama has made relations with ASEAN a priority, but he needs to follow through to help Southeast Asian nations collectively negotiate better with China, manage their natural resources and maintain regional stability. America should deepen its relationships with India, Korea and Japan to keep itself indispensable for Asia’s future.

Can Generation Y change the world?
For Generation Y, impatience is a virtue. It intuitively supports greater trade, faster communication, multiple identities, and subscribes to postmaterial values such as equality and ecology. Generation Y consisting of people under 30, sees problems functionally, not nationally. They take for granted that working for corporations such as Google, or NGOs such as Oxfam and the Bill Gates Foundation, means participating in political agendas that operate without official approval, yet the work is as diplomatic as that of a foreign ministry. They will reshape governments and other pillars of the establishment. Generation Y will own mega-diplomacy.
Email: uttara.choudhury@gmail.com