Power shifts pose problems for U.S.

Adhvith Dhuddu, CT Regular Columnist

Wednesday, January 23; 12:00 AM

The rise of BRIC countries (Brazil, Russia, India, and China) in the last decade has transformed the world in many ways. Significant changes in political, economic and social battlegrounds will result in a power struggle and the future will see a shift in the balance of power. Prosperity and economic muscle will dictate in large part the new power centers of the world.

The United States largely derives its superpower status from its resilient economy, powerful military and terrific political and legal structures. The U.S. will continue to remain a superpower but will lose a significant amount of its market share in the global power equation over the next few decades.

A slow migration of power to the East is a phenomenon that is already underway. Although many Asian countries are not necessarily beacons of economic and political freedom, the potential muscle they will obtain cannot be ignored. India and China, commonly referred to as "Chindia," are poised to be leaders in Asia, offering remarkable opportunities in many arenas.

China's story is an awe-inspiring one. For more than two decades it has experienced positive GDP growth at close to 5 or 6 percent compounded. It has become a country with the highest number of mobile phone users, highest number of engineering graduates, largest producers and consumers of steel and other metals, largest textile market and second largest energy market, and it still has a long way to go. One can only comprehend the advancement of China by visiting and exploring the country.

India is not far behind at all. It, too, boasts similar accomplishments and is on track for long-term financial stability and sustainable economic growth. With the advantage of a democratic process, free press and dominant English-speaking population, the future clearly looks sanguine.

Thomas Friedman eloquently described the rising economies of India and China in an interview a few years ago. "India and China," he said, "are two six-lane super highways. In China, the super highway looks excellent with perfectly paved roads, clean sidewalks and bright streetlights. Here there are one billion people traveling at a very fast pace. Often there is a speedbump called political reform and at such a high speed, some people get thrown out and left behind when they land back on the road with a thud. So what matters here is not the pace of reform but how well the economy and politicians can drag along over a billion people to avoid an internal uprising by the ones left behind."

"In India on the other hand, the superhighway is not very well done with many ditches and holes, broken streetlights, wrecked sidewalks, etc. Here one billion people are traveling at a normal pace but off in the distance, it smoothens out into a perfect six-lane superhighway with shining bright lights, no potholes, no bumps and a buoyant future. But the only question here is whether this image is a mirage or an oasis. So what matters here is India has the potential to become prosperous if they can overcome many economic and political barriers."

Two other important geopolitical regions in the coming decades are the Middle East and South America. Often our perception of the Middle East is clouded by the war in Iraq and tensions with Iran. This region is flush with cash and young people are more capitalist than ever before. Economic and financial hubs such as Dubai and Abu Dhabi are ever expanding, offering some remarkable opportunities. Other countries such as Bahrain, Egypt and Oman are quickly moving up the economic ladder, welcoming new businesses and investments. Many of these countries fared extremely well in a recently released report discussing the ease of doing business in different nations.

South American economic powerhouses such as Brazil and Mexico cannot be ignored. Brazil is a BRIC country and economists predict Brazil to be one of the top five countries (in terms of GDP) in a decade or two. Brazil has come a long way from a gloomy and murky economy to a vibrant, transparent and thriving one. It has reformed many policies by opening up its markets, established credible regulatory bodies to help sustain economic growth and become an energy-efficient nation. It fared extremely well in the ease of doing business report.

We can only hope that this rebalancing of power unfolds peacefully and does not trigger a cold war between U.S. and China.

Online link to this column:

http://www.collegiatetimes.com/stories/2008/01/23/power_shifts_pose_problems_for_u_s_