By Alexander O'Riordan · 22 Apr 2015
While the ‘Rhodes Must Fall’ protestors have successfully toppled the Rhodes statue at the University of Cape Town, the latest signs are that the global economic order is only getting stronger albeit with a few changed faces. In much the same way that replacing statues of old white capitalists with that of new black capitalists does not change the rules of the economy, so too is there growing evidence that China and other emerging economies are tracking closer and closer to reinforcing rather than rewriting the current global system.
Many in South Africa have looked to China as a possible driver of a different global economic order. In 2013, for example, much was made of the establishment of the New Development Bank that is capitalised by Brazil, Russia, India, China and South Africa (BRICS). The New Development Bank was celebrated by the BRICS as a viable competitor to the World Bank and an avenue to greater global assertiveness of emerging economies. The BRICS claimed that the new bank would give all members equal say in how the funds are managed with no country being able to wield disproportionate influence like the US and its developed country allies do over the World Bank. Two years later, however, the New Development Bank has faded from the news and looks like not much more than a press release. More disheartening, the only web presence the bank has is more akin to a high school project than the combined work of “BRIC countries [comprising] more than 3 billion people or 41.4 percent of the world’s population, [covering] more than a quarter of the world’s land area over three continents, and account for more than 25 percent of global GDP.”
Unfortunately for South Africa and any other country holding out for a new golden age for emerging powers, there is a lot of evidence to suggest that China is not the ally it is presumed to be. Instead China’s posturing may be all about trying to get a cosier deal from the West before getting in bed with it rather than in trying to set up an alternative order. Last week the Los Angeles Times reported that the Chinese led Asian Infrastructure Investment Bank has now attracted substantial investments from Northern powers such as the United Kingdom, France and Australia. In fact, “more than forty five nations and territories reportedly applied to become founding members of the China-led bank, with Britain, Australia, France, Norway, Portugal, Iceland and Hong Kong all signing up last month.” With so many Northern powers investing, it is increasingly clear that China is not using the Asian Infrastructure Investment Bank to alienate the West but rather to partner with it in exploiting Asia’s many economic opportunities.
To be clear, the Asian Infrastructure Investment Bank is certainly an alternative global institution to the World Bank and International Monetary Fund. But with so many of the same actors involved it is likely to defer back to the same rules of engagement that the World Bank uses simply because these are the same rules supported by the same investors even when they invest in a different organisation. The only notable difference is that whereas the Republican held American congress has been able to stop emerging powers get a greater say in the World Bank and IMF, this new investment bank will not afford the United States disproportionate influence over staffing and management.
There is a common thread running through the ‘Rhodes Must Fall’ movement and governance of the global economy and it is that while there is space to change the face of power, there is really not much interest in changing the actual workings of the system. A statue of Cyril Ramaphosa rather than Cecil John Rhodes does nothing to improve social justice in South Africa in much the same way as a black American president rather than a white one does nothing on its own to change the workings of the United States. The global governance system is going through a similar change in optics and thus we should expect to see more Chinese or Indian or even African leaders of global institutions. However, there is no reason to believe such visual changes will lead to much difference. The reason these cosmetic changes will not upset the fundamental structuring of the global economy is simply because there's too much at stake in continuing business as usual. As Lloyd Blankfein, the Chief Executive Officer of global banking giant Goldman Sachs describes, “It is hard to imagine a situation or challenge in the world today that could not be handled better than if the US and China cooperate.”
The world is always changing and it is no different today. One thing always remains the same though: it is always more likely that the global order comes together when there are incentives to do so. The radical re-haul that activists yearn for is always just over the horizon and apparently will remain there for the foreseeable future. It is naïve to think that there are real incentives on the global stage to radically reform the global system for greater equality. Instead the incentives are to continue as is but to widen the global coalition by bringing the world’s newly powerful actors inside the tent rather than leaving them outside. This means bringing China, India and Brazil in, containing Russia without alienating it too much and moving forward as normal. These factors are coming together with the United States now recognising Cuba, the West brokering a deal with Iran and new partnerships that christen China the status it feels it deserves.
The only question we have to ask is whether South Africa is going to be part of this new global order or whether we are naively hoping that a new statue, a new face, and a new global superpower will come and save us.