Archive for Friday, February 10, 2006

Global evolution defies neat symbols

February 10, 2006

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The global balance of power is shifting decisively to Asia, which will dominate the 21st century as Europe and the United States did in their respective heydays. So say we all, or nearly all, in international seminars, gatherings of statesmen and big-picture essays.

Asia Rising has become the moment's geostrategic theme, even something of a sacred cow. The description is amended at times to make China, or India, the superpower of the future instead of the Asian continent as a whole. And there is plenty of evidence on the surface - statistical and anecdotal - to feed the cow.

Impressive growth rates registered by India and China, and the latter's emergence as the manufacturing hub of the world, seem to prove that a historic transfer of power and leadership is taking place. To see that Europe and America are simultaneously being displaced by the powers of the East, you only have to look at the $23 billion takeover bid launched last month by Lakshmi Mittal of India for Arcelor, Europe's most important steel company.

Or so I thought when the controversy - kicked up by European protectionists who oppose Mittal's hostile bid - first caught my eye. I gingerly began to consider writing this column to tell how, in this event, two major strands of the Asia Rising story were coming together.

One strand would be the continuing economic weakness of Europe, hit by sharply declining birthrates and market rigidities in many of its most important countries at a time of Asia's economic revival. The other strand concerns the emblematic displacement of U.S. corporate power abroad - in this case by Mittal's company, which has become the world's largest steel maker.

Last year, Pepsi-Cola was similarly pilloried for threatening European jobs and assets by supposedly trying to buy out the Danone group. (No deal happened.) This year an Indian-owned multinational firm has triggered the same fears and grandstanding by protectionists, who demand that Mittal not be allowed to take over Arcelor, which is headquartered in Luxembourg.

So, are greedy, job-destroying Indians really muscling aside greedy, job-destroying Americans in the power sweepstakes? It turns out not to be that simple. The Mittal company is actually headquartered in the Netherlands and already is a major player in Europe - a market it sees as continuing to be profitable.

Mittal buys up inefficient companies in Europe and elsewhere and modernizes them, at times in partnership with Germany 's ThyssenKrupp. The end result of a Mittal purchase of Arcelor is likely to be diffusion of power in a hybrid concern with roots deep in Europe and Asia, rather than greater concentration in solely Asian hands.

The same may turn out to be true of military power in the 21st century as well. It would be possible to hang another Asia Rising tale on the news that the United States will push NATO's European members at the Riga summit in November to invite Australia, Japan and South Korea to become "global partners" of the alliance. That same status could eventually be extended to India and other Asian nations.

You could spin out a Rumsfeldian "Old Europe" vision, with the U.S. gradually replacing demographically and politically weakening European mates with fresher and strengthening partners from the world's new power center. But once again there is more symbol than substance.

For one thing, Japan, the overlooked Asian great power, will exert its considerable talents and resources to diffusing power within the region and toward that end, slowing the erosion of U.S. influence there.

It is not in Japan's interests to have power concentrated in the hands of its regional neighbors, either collectively or individually.

Under Prime Minister Junichiro Koizumi, Japan has played a clever below-the-radar balancing game with China and India while committing forces and substantial aid to Iraq and Afghanistan in support of U.S. goals.

Tokyo's history of close security cooperation with Washington may suggest to the Japanese that only American power can stabilize the Middle East and Central Asia, which are major exporters of energy and importers of security. India, Asia's other great democracy, is coming to a similar conclusion.

This is a tale with two morals: One is to always distrust neat symbols that fit handily into preconceived and popularized geostrategic theories.

The other is that the continental transfer of superpower is no more certain than was the popular "end of history" notion of the last decade. There is no straight line to a new unipolar hegemony in a world in which the fragmentation of state power is common to all regions. It is always more complicated tomorrow than we believe today.

- Jim Hoagland is a columnist for Washington Post Writers Group.

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