Shifting superpowers? An update on global geopolitics

1. Shifting superpowers? An update on global geopolitics Bob Digby Geographical Association Conference April 2014 Sponsored by

2. Provide some recent and relevant subject update for Edexcel A2 Unit 3 • Understand some recent changes to the world’s ‘superpowers’ • Assess some of the BRICs in terms of their superpower status • Identify some concepts and complexities that students have to grasp in this topic Focus for this lecture

3. Use the data to guess the country Powerful countries: who’s who?

4. Two different ranking systems • Both attempt to quantify hard (military) & soft (economic, cultural) power • The CNP has changed hugely since 2007 • European countries have lost out; China, India and Brazil have moved up • 3 countries (USA, China, Russia) have pulled away from the rest Different ranking systems

5. ‘BRICs’ coined in 2001, by Jim O’Neill at Goldman Sachs bank • The argument: by 2050, the BRICs would exceed the economic power of the G7 • Post-global recession suggests the ‘crossing point’ will happen sooner rather than later (2030/35?) • What began as an economic idea, is now an official reality; the first BRIC summit held in 2009. • In 2010, South Africa joined the group i.e. ‘BRICSs’ not ‘BRICs’! The BRICs: gaining traction? (2010, Goldman Sachs)

6. BRICS GDP totalled $16 trillion in 2012 • Compares with $17 trillion for EU & $16 trillion for the USA However …… • China alone accounts for 55% of BRICS’ GDP and 49% of their military spending • Take China out of the ‘BRICS’, and the ‘BRIS’ look much less powerful Data in US$ trillions Between 2000-2012, China overtook the UK’s economy rising from 6th to 2nd largest (UK dropped from 4th to 6th) Does ‘BRICS’ make sense?

7. ‘N11’ also coined by Goldman Sachs, in 2005 • These 11 have all, or some of, the characteristics below • However, it is ‘mixed’, ranging from Nigeria & Bangladesh to Turkey & South Korea • Some N11 countries also appear on Citigroup’s 3G list from 2011 • This Global Growth Generators (3G) list includes Bangladesh, China, India, Indonesia and Egypt • Open to global • trade and • investment • Economic stability • Broad education • Political maturity Next 11 (N11)

8. Many emerging powers face a future demographic dividend • They have youthful populations now – sometimes even troublesome ones (Egypt) • ...but their fertility rates are falling • Soon, they will have a window of opportunity with a large workforce, but without either a large young or old population • By 2050, big winners will enjoy combined population growth + economic growth • Compare the former economic powers where demographic growth rate is slowing • Citigroup expects 4 of the 10 biggest in 2050 to be ‘new’ – i.e. not in the top 10 now; countries with falling pop will do badly • (Russia climbs to 4th or 5th in 2030, then falls to 6th by 2050) • UK worth noting – the only one of the current major economies that is undergoing rapid population growth Germany -0.2% Japan -0.01% Russia -0.01% Philippines +1.9% India +1.3% Indonesia +1% Nigeria + 2.5% (annual pop growth %) Citigroup 3G study, 2011 Demographic dividend

9. But projections can be wrong e.g. Japan • ‘The next superpower’ in 1985, by 1995 it was floundering • Japanese economic problems, the USSR collapse and the costs of German reunification alter the fortunes • The USA lost 10% of global GDP 1985-95, but won most of it back by 2002 • China is clearly rising, but are there problems ahead ....? Pre-95 Post-95 A lesson from history?

10. BRICs – what kinds of future?

11. The BRICS 1 Brazil

12. Important regional power, its economy dominates South America • At 198 million people, Brazil contains half the population of the continent (385 million) • Spends more on its military than the rest of South America combined 2012 GDP in $ billions Brazil: a regional powerhouse

13. Images from ‘The Economist’ – www.economist.com Brazil’s ‘trump card’ is its natural resources, making it more than self-sufficient in food and energy production: • More potential agricultural land (400 million hectares) than any other country on earth • An ‘agricultural superpower’ in terms of exports (graph) • World’s second largest biofuel producer, after the USA • 15th largest oil reserves (likely to rise as more deep water oil is discovered) • 3rd largest producer of iron ore • 3rd largest producer of HEP Brazil’s resources Brazil’s oil fields are only just being developed:

14. Brazil’s natural resource strength is seen by comparing net imports of Brazil and India (right) • India’s net imports are dominated by crude oil, minerals and even food and wood • Brazil is more self-sufficient in basic resources and imports more chemicals, plastics, electrical and transport materials. Source of images: http://atlas.media.mit.edu/explore/tree_map/net_import/ind/all/show/2010/ Brazil v India

15. Image from http://www.cbc.ca/news/world/brazil-protests-show-cost-of-hosting-major-sports-events-1.1358504 • Brazil has recently stalled, relying too much on raw material exports • Its middle class is growing, but less strongly than 5 years ago • Protests in 2013 against higher public transport prices did not help – rebellions against 2014 World Cup & 2016 Rio Olympics • These protests were really about a lack of decent public services for a growing middle class, compared to corruption and spending on global sport • Long term, Brazils’ natural resources are likely to prove very valuable • The Olympics and World Cup are being used to shine on the world stage – but can Rio deliver? FIFA World Cup 2014 Rio Olympic and Paralympic Games 2016 These two events give Brazil a chance to show what it can do. The last country to have both so close together was USA – Atlanta 1996 (a disaster!) & 1994 World Cup (dull!) Brazil: a future superpower?

16. Rondonia: recent development Evaluating Brazil as a superpower Photo courtesy of Google Maps

17. The BRICS 2 China

18. Students struggle with exactly what type of country China is. • Where does it sit on the ladder of development? • There are no easy answers • Important that students at least discuss this and come to a ‘view’ which can be justified. • Too many students calmly proclaim China is a: Superpower LEDC MEDC without evidence to support this ……. Superpowers: The China Question

19. Important that students are aware where China sits in terms of its economic level of development. • Look at GDP per capita and compare it to some other countries Is China a NIC?

20. China versus Malaysia

21. China is an NIC …. but no ordinary NIC. • Its sheer sizecombinedwith its level of development gives China global significance. • There are other demographically large countries, but they are poorer than China and much less economically significant What makes China special? 1

22. China became globally significant when its GDP passed 5% of global total in 2005; now heading for 10% • That level of global GDP gives it huge economic influence What makes China special? 2

23. USA versus China

24. Image - http://www.jeffhead.com/redseadragon/varyagtransform.htm • China’s ‘new’ aircraft carrier – its only carrier – entered service in Sept 2012 • The “Liaoning” is actually the ex-Soviet “Varyag” launched in 1988. • The USA has 11, with 3 more under construction • China’s long term military plans are to be able to defend out to the ‘Second Island Chain’. Meanwhile Obama’s ‘Pivot’ is shifting forces to the Pacific. China flexes its muscles but….

25. There is no doubt that China is expanding • Its state-run companies and banks, as well as its Sovereign Wealth Funds (worth about $1.2 trillion in 2012) are all investing overseas • As the diagram shows, this is global - it is not confined to 1 or 2 regions • Its 2005-13 overseas investment was about the same size as the entire Swiss economy. • China also owns $1.3 trillion of US government debt (as does Japan) China goes global New View of Asia , Heritage Foundation, 2013

26. China’s FDI is different to that of many countries, as companies are often state-run enterprises • 40% of all profits in China are made by state run companies • State involvement makes some governments nervous – e.g. some private companies like telecom company Huawei • Huawei’s apparent closeness to the Chinese government has been dubbed a ‘national security threat’ by US Congress (2012). • Many Chinese companies are publicly traded (table) but still influenced by government State led investment

27. Images from ‘The Economist’ – www.economist.com • China’s investment in Africa is rising • About 1 million Chinese now live there • Chinese trade with Africa now worth US$200 billion per year • 80% of Chinese imports from Africa are minerals (incl. oil) (see chart • Other BRICs increasing their trade with Africa (see lower graph) – usually focused on natural resources • China is sensitive to charges of neo-colonialism; "China has built over 100 schools, 30 hospitals, 30 anti-malaria centres & 20 agricultural technology demonstration centres in Africa. China has trained .. 40,000 African personnel ... and provided over 20,000 government scholarships" (Hu Jintao 2012) Neo-colonialism?

28. Candidates get confused when considering China’s ‘colonial’ or ‘neo-colonial’ role - it’s complex. Consider: • Is China trying to force Chinese culture and values on the countries in which it invests? • Does it use colonial mechanisms of maintaining power? In reality its investments are economic – no more or less neo-colonial than those of USA or Europe (e.g. Shell Oil in Nigeria) • The terms of trade are unfair, and there are examples of exploitation – but this is far from unique • Some Africans view Chinese investment as healthier than EU investment – it comes with fewer conditions. Colonialism?

29. Students often lack a clear idea of China’s strengths and weaknesses • This includes economic, military, cultural and geopolitical • China’s economic strengths are often discussed freely, but rarely its problems (especially environmental and social issues) • They need to have a realistic view of China compared to the USA, other BRICs, and the EU. China’s reality – a summary

30. The BRICS 3 India

31. India – problems persist

32. Since 2012, foreign TNCs can own 51% of a retail business in India • Pre-2012, majority stakes were illegal • Will this encourage Wal-Mart and Tesco to invest in a retail market worth $800 billion? • Many TNCs do not see India as ‘open for business’ • On the other hand, local retailers are protected Difficult to meet these conditions, e.g. in sectors such as consumer electricals where most goods are imported. Investing in India?

33. Images from ‘Wall Street Journal’ – http://online.wsj.com/news/articles/SB10001424052702304331204577352232515290226 • India has increased generating capacity recently but is a long way behind China. • Imports of fossil fuels are rising rapidly as the rupee weakens. • Most analysts think India is several decades away from having a sufficient and reliable electricity supply India’s energy crisis

34. July 2012 blackout: • The largest power outage in history • Affected over 620 million people, half of India's population in 22 states; 9% of world population • 32 GW of power taken offline. • Causes: very hot weather conditions increased power demand for irrigation pumps and cooling, while a late monsoon reduced HEP reservoir levels. Worth noting: • 25% of people have no supply even when everything works. • India has very low per capita electricity consumption compared with other BRICS, or the world Blackout gridlock in 2012 Blackouts

35. To conclude; evaluating India

36. Every attempt has been made to cite the source of each image where appropriate • Development data are from the ‘CIA Factbook’, which is continually updated. Some data may therefore now vary from those cited at the time of this lecture. • If you note any images which are wrongly cited, please contact the Geographical Association (www.geography.org.uk) Acknowledgments