New Regionalism in a Multi-Polar World

1. New Regionalism in a Multi-Polar World Core readings: Schmidt, Johannes Dragsbaek (2007) Social Compacts in Regional and Global Perspective, Canadian Journal of Development Studies, vol. 28, number 3-49 Deacon, Bob (2001) The Social Dimension of Regionalism. A Constructive Alternative to Neo-Liberal Globalization http://gaspp.stakes.fi/NR/rdonlyres/02A8960F-764F-4E8C-9477-B0CECCFC3478/0/gaspp82001.pdf Guerrero, Dorothy (2001) Regionalisms and Alternative Regionalisms in Asia and the Pacific Basin, Project Discussion Paper No. 5/2001, University of Duisburg, (Institute for East Asian Studies/East Asian Politics) http://www.wun.ac.uk/cks/teaching/horizons/documents/robertson/Guerrero.pdf Secondary readings: Dieter, Heribert and Richard Higgott (2002) Exploring alternative theories of economic regionalism: From trade to finance in Asian co-operation, Centre for the Study of Globalisation and Regionalisation, University of Warwick, http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/2002/wp8902.pdf Söderbaum, Fredrik and Timothy M. Shaw (2003) Theories of New Regionalism, A Palgrave Macmillan Reader, Chapter 1 and 2

2. Agenda - New Regionalism in a Multi-Polar World • Intro • End of Neoliberal Globalization • Core problems of Global Change • A Cacophony of Crises • Potential Outcomes of the Crises • Alternative (New) Regionalism vs Neoliberal Globalization • The Nationalism option • Other Alternatives

3. The main argument is that we have reached the end of globalization and will probably move into a period of renewed nationalism and protectionism. It seems that energy depletion and climate change are important factors converging with a global economic meltdown, exacerbating it and creating the grim post-neoliberal collapse of the world economy. There are specific and uncovered strengths for mobilizing an alternative in the informal sector. Finally these discussions are put into the greater picture concerning the current debate about rights, democracy and civil society based organizations in Asia and Europe under the cacophony of crises.

4. 1 The End of Globalization • Point of departure: Neoliberal globalization has reached its end-point! Why? • 1 - Never delivered what was promised • 2 – compromised as ideology and strategic policy device • 3 – lost legitimacy – its main pillars – the Brettonwoods inst. have failed (not even one economy can be used as success example) • 4- deregulation and privatization have led to informalization of grand-scale economies and labor markets • 5 - Even adherents of utopian “free-markets” seem to fear that it has reached its end-point • 6-Social crisis of inequality, poverty and increasing North-South gap

5. Furthermore the unequal distribution of health-damaging experiences “is not in any sense a ‘natural’ phenomenon but is the result of a toxic combination of poor social policies and programmes, unfair economic arrangements, and bad politics” “…. unequal distribution is not in any sense a ‘natural’ phenomenon but is the result of policies that prize the interests of some over those of others – all too often of a rich and powerful minority over the interests of a disempowered majority” “….. social injustice is killing people on a grand scale”

9. A cacophony of crises • Five simultanous crises – embedded in a systemic conjuncture of failure • A nexus between climate change, food and primary commodity crisis and the depletion of oil (speculative price hikes lead to environmental disaster) – has cast the EOI model into jeopardy • Financial crisis has reached the real economy – created recession/depression in the US economy –spreading to Europe and parts of Asia • It appears that 1929 is repeating itself with a world economy sliding towards recession or even a new Great Depression

10. The deep systemic causes of the social and environmental dramas unfolding around us are related to the growth of endless consumption, increasing levels of inequality, and the unwise institutional pathology which to a very large degree has been induced by US administrations. The neoliberal imperative has depleted the natural life support system of the planet, disrupted hydrology and climate systems, and is indeed threatening human survival • Climate change which before was interpreted as a transnational ethical problem has become a major political issue and might increasingly be identified as a security issue • This isespecially the case when it is linked to the systemic failure of the current mode of production – no matter the type of political and institutional layer in whichthe market economy is embedded in. There are also horizontal links and close connections between the failures of capitalism and the depletion of oil • Scarcity of water and oil is already a security issue which has led to wars

11. The contagion effects of the crisis of capitalism represents nothing less than what Paul Baran and Paul Sweezy aptly described as a "gigantic system of speculating, swindling, and cheating."  It has reached the global level and pose tremendous challenges to people’s organizations, solidarity movements and those who fight for increasing social, political and ecological rights of ordinary people. The dominant response on both left and right is the call for more regulation and government intervention. But this answer “fails to shed light on the convergence of interests of business and political elites as well as the ongoing class war that has eviscerated the ranks of unionized labor, stagnated wages, and casualized workers across all sectors of the economy”

12. In principle this crisis could be resolved by a major systemic shake-up, involving (for example) new economic doctrines and new forms of international relations. • But this time it is more unlikely because of two reasons: • First, non-renewable natural and human resources are being exhausted and no form of capitalism can resolve that • Second based on historical experience the decline of US hegemony – a declining superpower armed to the teeth - is unlikely to give up power voluntarily – combined with shift in world economic gravity to the East! A new situation

13. Potential outcomes of the crises • Outcomes: • Regionalism! • Positive or negative Nationalism!

14. Alternative Regionalism vs Neoliberal Globalization • We live in a complex and multi-hegemonic world where the emerging regional social compacts can be seen as one of the most important responses to the crisis of neoliberal globalization • This is in essence what some authors refer to as multilayered global governance and it is in this context that a comparative analysis of regional systems of social redistribution, regulation and empowerment becomes relevant as a new form of resistance. Regional governance is becoming a more entrenched feature of the global political economy, whilst inter-regional diplomacy, through which regional associations seek to build global alliances and preferential agreements, is a potential countervailing influence to the power of the United States, in dominating global agendas and setting global priorities • The political ambition of establishing regional coherence and regional identity is of primary importance. • Distinguish between three kinds of region building initiatives: • 1) integration through trade liberalisation; regional governance; • 2) and regionalism as citizenship or political identity. • 3) Along these variants of regionalism enter questions of redistribution, democracy, accountability, participation, transparency, security, labor market regulation, and social policy. This has brought with it a new set of social and political actors but also highlights the fact that regionalism in many cases is based on the idea of regional identities and the catalytic challenges posed by external challenge

15. In this respect, regional social compacts ought to be understood as constructed endeavours of resistance by social actors in response to the looming crisis of contemporary international capitalism. In this sense, the regional dimensions of structural change have been something of an inconvenience for the less reflexive globalizers who have used the hegemonic discourse of globalisation to dispense with any meaningful notion of a national state To claim that there are oppositional regional resistances and in some cases like the power structured WTO alliances to this may seem challenging. However it might be the only route out of the crisis of a dysfunctional global governance system and at the same time the only “rational choice” of policy makers, politicians, and other socieral actors. Thus I claim that it is possible to identify four regional social compacts all based on different institutional structures and cultural orientations - from government monetary, fiscal and industrial policies to labor legislation, work ethic, trust and even the creation of new identities. Regionalism itself constitutes an element of an increasingly complex system of governance operating at a variety of levels in which questions about public goods, welfare, economic organisation and political participation are addressed

16. 1) The Anglo-Saxon political and economic liberalist compact which still is the dominant global model claims that coping with globalization - maximizing gains and minimizing risks - requires flexible domestic economic structures so that economic agents can adapt speedily and effectively to external pressures. Small rule-bound government upholding property and contract, within which framework private actors interact freely on the basis of a decentralized world price-mechanism, best serves national flexibility. Here the deregulated labor market is prevalent. This model is furthermore characterized by weak labor unions and lack of bargaining power. • 2) The so-called Flexicurity model rests on negotiated social contracts between labor, employers and the state - social corporatism is a way to cushion and spread the costs of adjustment to global liberalisation. Extensive social security systems. Trust, long-term cooperation, and acceptance of collective objectives are based on the social, industrial and political citizenship rights. Together, these constitute a highly developed welfare state securing a high floor of provision for each citizen, as well as institutionalized rights of individuals and organized groups to participation and voice in the polity and at the workplace , making exit less necessary for expressing discontent. The model rests on politically negotiated social compacts in a bargained economy.

17. 3) The East and Southeast Asian Model, including China and Japan, has been characterized by a corporatist arrangement without labor, and a substantial state involvement in economic affairs. This compact relies on a specific type of highly cohesive and disciplined civil society, structured by strong developmentalist institutions and orientations, which is easy to mobilize for collective action and protects society from the dysfunctions of possessive individualism, excessive competition, and noncooperative, particularistic rationality. By putting ‘politics in command’ the developmental state in East Asia played an important role in the capitalist growth process. The developmental state restrains market rationality in order to pursue a policy of industrialization and growth per se. China plays a major role as catalyst and fascilitator in the creation of an East Asian alternative to US hegemony.

18. 4) There are other important attempts to redress existing or new defensive regional social compacts There are interesting similarities as well as important differences between the SARDC, African Union and MERCOSUR and ALBA regions. The most important being that Southern Africa has spend numerous efforts and energy on reconciliation and the creation of stability and security in the aftermath of apartheid and wars. The experience of resistance has been heroic regardless of the conditionalities of the IFIs in the region. Venezuela plays an important role together with Brazil in Latin America but it remains to be seen whether it is a viable counter-hegemonic project! The Latin American and African models today are characterized by a massive restructuring of capital-labor relations. The contraction of domestic markets, the dismantling of “uncompetitive” national industry, the growth of the informal economy, revised labor codes directed at making labor flexible and austerity programs have resulted in the informalization of the work force, mass under- and unemployment, a compression of real wages, and a transfer of income from labor to capital, but as mentioned new types of pro-active regionalisms are emerging

20. The Nationalism option • The vacuum the disappearence of aggressive neoliberalism creates will be filled by a massive return of nationalism. Whether it is positive or negative nationalism remains to be seen. There are clear signs today of an aggressive rivalry between the two as both gain strength

21. This is indeed the case in corporate driven EU where the central problem is its undemocratic nature which partly translates into more and more EU scepticism on the part of the European populations. We are witnessing a swing back to national agendas taking precedence over regional problem-solving; furthermore the general lack of democratic transparency – the socalled democratic deficit - in the commission and the European Council and the lack of real democracy has together with the stalemate surrounding the constitution turned the vulnerable segments of the populations against the EU.

22. Another reason why democracy and human rights are in jeopardy in Europe is the migrant issue and the campaign against terror which has created a draconian climate of fear, extra-judicial detention and expulsion of socalled illegal immigrants leading to serious violation of human rights and a virtual and physical surveillance system of Orwellian scope. Combined anti-terror laws and European foreign policy support for the wars in Palestine, Iraq, Afghanistan and the hostility towards real democratization, secularism and human rights in the region show the hypocrisy involved and create the real paradox – more fear and more terror – thus paving the way for an authoritarian solution to the present financial crisis!

23. Increasing protectionism and nationalism in Europe and the US • Rise of xenophobia – also on the Left • China bashing – India bashing (to a lesser degree) • Anti-immigrant measures in the name of War on terror • Democracy in distress in Europe • Capitalim does not need democracy • This point is also illustrated in the contemporary world by the attractiveness of China and Vietnam to foreign capital – these countries are the real darlings of private capital and in this equation, democracy and human rights are regarded as obstacles to high-speed economic profit.

24. In the context of the mood against economic and political refugees, xenophobia fuels rightwing “identity politics” in Europe • progressive civil society organizations in Europe are facing rightwing social movements who appeal to widespread anxieties, prejudices, and resentments, in order to exploit them for political gain • The inherent contradiction between capitalism and democracy is likewise visible in Europe where negative nationalism in the form of new levels of islamaphobia against first and foremost immigrants and refugees with a Muslim background

25. We see the introduction of measures limiting civic rights in European and other Western societies. This solution potentially prepares the ground for a proto-type of fascism which can be used against progressives and labor movements in case the economic crisis becomes politically uncontrollable

26. In fact the question we may ask in Europe (and the US) today is whether the political and economic elites are looking to China for a model to solve the inherent contradictions between individual human rights in the political sense and economic efficiency and profit!

27. Alternatives - New Regionalism in a Multi-Polar World • Difficult to find a way of transgressing the capital–labor nexus, which is the fundament for the accumulation process, can be said to be the precondition for the most radical break with history • The current and emerging alternatives that are emerging can indeed be seen as examples of a break with the very holy grail of capitalism namely private property

28. What is at stake for anti-systemic forces is first and foremost to acknowledge that it is not the removal of market failure or governing the market that is important. In the last instance, such an approach re-legitimizes capitalism as a socio-economic system based on class differentiation and competition, thereby representing more of an alternance than an alternative to real existing capitalism

29. In the contemporary international system, two types of actors are seeking a return to a multipolar international order. One is China, whose dramatic ascendancy poses the most serious challenge to the post-Cold War balance of power. Another country seeking multipolarityis France, which asserted its independence from the US by refusing to endorse the Bush administration’s plans to invade Iraq. Both see American hegemony as a grave threat to world order, challenging the possibility of both peace and justice. But China is a rising power, while France by itself is not. China’s desire for multipolarity is hence motivated to a greater degree by its perception of American dominance as a threat to its own regional power ambitions. And while China’s is largely a national quest for multipolarityFrance’s is framed within a “Euro-nationalism”- calls the EU to become an actor in the world stage to counterbalance the United States.”

30. 1930’s Seven Great Powers Global Great Depression Democracies deeply fearful of war and fail to maintain balance of power No consensus on international system and No moral-intellectual consensus International law and League weak ‘ Universal pursuit of ‘national interests Germany, Italy and Japan reckless No monolithic Berlin-Rome-Tokyo Axis, but great threat to democracies, USSR and China Military developments not major barrier to war • 1970’s Two Superpowers, three Great Powers Western, Communist, Third World economic ills Democracies refuse to “think about the unthinkable” No consensus on international system and No moral-intellectual consensus International law and U.N. weak Universal pursuit of national interests Russia and China both cautious No monolithic Communist bloc, indeed deep and bitter Moscow-Peking rift Nuclear weapons major deterrent to total war, but may not maintain balance of power

31. 2010 • G2 – An emerging multi-polar world system (BRIC) • Global crisis – similarities to Great Depression • No consensus on international system • No moral-intellectual consensus • Weak and illegitimate global governance system • Multiple crisis in energy, climate, food, finance and real economy • Increasingpursuit of national interests • Unclearsecurity situation