Who will lead the new world?

The question posed in the title of this essay needs to explained before an answer – or answers – are attempted. The world in which we live in the third decade of the 21st century is new and changing rapidly. That is happening in part because of the enormous demographic transformation occurring all around the globe. Most developed countries as well as China have seen sharp declines in the rates of growth in their populations. Many have rapidly aging populations. This has resulted in the migration of people from the populous south to the demographically stressed north. This has reversed the demographic trend that in the 18th and 19th centuries peopled what came to be called the New World. However, demographic change is paid little attention in the literature on the changing world.

Also, unlike in the immediate post Second World War, there is no clear leader – a nation or a person – to which the world can look for guidance. Then the United States was the clear leader. Although it entered the war after some hesitation, once it was in the conflict it fought hard and spent enormous amounts of resources not only to send in a large force into first the European and then the Asian conflict. It also provided significant amounts of financial help to other nations who were fighting Germany, Italy and Japan. The first two were called the “Axis Powers”.

Once the war was over, the Americans could have established themselves as the clear leaders, laying down the rules pf governance that would be followed by the rest of the world. Instead of going that route, Washington chose to become the leading partner in a universal arrangement that included both the winners and losers of the great war. New organisations were founded that required their members to follow clearly spelled-out rules.

The United Nations Organization as well as the International Monetary Fund, or IMF, and what eventually became the World Bank Group opened their doors to all the nations that wished to join them. The IMF was designed to stabilise the financial system that had emerged after the war while the International Bank for Reconstruction , or the IBRD, was designed to provide the badly needed capital the war-torn European nations needed to rebuild their destroyed economies. The IBRD was to become the World Bank Group which raised funds in the capital markets to provide development finance needed by dozens of countries that gained independence with the withdrawal of colonial Europe from the colonies they had acquired in Asia and Africa. Once they were in, they committed themselves to follow the rules of governance that were based on consensus. The United States could have dominated these institutions, but it chose to be influential rather than dictatorial. Washington, along with the countries of Western Europe, played important roles in governing these institutions. At the very outset it was decided that the World Bank president would be an American while the person chosen to lead the IMF would be from Europe.

One area where consensus among nations took time to develop was the conduct of international trade. Those with large economies with large exportable surpluses wanted very few constraints placed on the movement of goods and commodities while those that were big importers were determined to protect their infant nascent industries. It took 40 years before the world could agree to establish an institution they called the World Trade Organization, or WTO .

This consensus- and rule-based institutional structure survived the Cold War that was fought right after the end of the Second World War. The contestants were the group of countries that were led by the United States on the one side and by what was then called the Union of Soviet Socialist Republics, or the USSR, on the other. This skirmish lasted for close to half a century, from 1945 to 1991; it ended with the collapse of the USSR which had suffered a humiliating defeat in Afghanistan, a country it had sought to dominate by invading it in 1979. After waging war for ten years, the Soviets pulled out of Afghanistan. The Americans went to Afghanistan in 2001 to punish the Taliban government that then ruled from Kabul for allowing Osama bin Laden to set up a base in the southern part of Afghanistan. It was from there that the people they trained launched devastating attacks on two targets in the United States – one that destroyed the twin trade towers in New York and the other that hit the Pentagon near Washington. These attacks were carried out on September 11, 2001. They killed about 3,000 people and the then President George W Bush promised that Afghanistan will pay a price for this terrorist activity. In December 2001, the Americans went into Afghanistan and removed the Taliban government from Kabul. What followed was a civil war that lasted for two decades and ended on August 15, 2022, when the Taliban returned to power.

The Afghan episode is one part of the story concerning the emergence of the new world. It had two immediate consequences: the demise of the USSR and the emergence as independent states of a host of countries that were once the southern and eastern flanks of the USSR. This change in the geography of the state once ruled over by Vladimir Lenin and Joseph Stalin was tolerated by Moscow until the emergence of Vladimir Putin as the new czar. The new Russian president made no secret of his extreme distress at the scaling down of the mighty Soviet Empire. He attacked Ukraine with the ambition to incorporate it in Russia. The attack on Ukraine created a new world order which saw America getting deeply involved in European affairs with the decision to support Ukraine in the war of resistance launched by the country after invasion by Russia.

It is now recognised in the growing literature on the changing trends in the makeup of the global economy and political structures that a good part is the consequence of developing demographic trends noted above. Autocratic governments in several areas of the world have replaced those that were based on democratic principles of governance. Religion is also playing a role in changing the principles of governance. Two good examples of this are Hungary in Europe and India in Asia. The former is led by the long-lasting Prime Minister Viktor Orban and the latter by also the long-lasting Prime Minister Narendra Modi.

Published in The Express Tribune, May 29^th, 2023.

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