Developing Countries and Regional Collaboration

We were recently interviewed by Ratio Magazine, an online journal which specialises in providing business analyses related to East Africa.

The subject was an interesting one - the use of branding consultants for the promotion of emerging countries to the West. The Editor was interested in our rather tough view that such activities, if they are to be taken seriously, required a certain level of administrative capability in order to be successful.

The article speaks for itself and, in fact, there was no intention to criticise those who take on such contracts in good faith - they do their best and it is generally not their fault if the client (the sovereign country) has not invested in the systems that would make external communications a success.

This raises for us another interesting question that is often overlooked - the strategic imbalance of bureaucratic resources between the G20 and the rest of the world.

Many years ago, we worked on the campaign for a major pitch by one country's candidate to become Director General of a UN organisation on an independent reform platform. Our experience then and since was that small countries were the playthings of their donors.

Progressives in the West have tried to help by offering administrative expertise but this often fails to take hold because the donations are clearly linked to the strategic and security interests of the donors (otherwise they would be not get approval from legislatures).

Take the anti-corruption expertise where policemen are brought in to bring Western standards to 'assist' local elites and then come head-to-head with political systems that rely on clientage and patronage to function and where 'corruption' is, in fact, not always what it seems.

The other route to assisting the emerging world is by giving them the first benefits of aid and assistance to the developing world through the United Nations but here we face three problems, apart from a general backlash against aid that is laundered through local elites.

The UN is already overstretched, the West has undertaken a programme of recapturing control of what it pays for so that it reproduces the same model as its national administrative aid programmes and, of course, 'fairness' means that 'corruption' and clientage is re-imported into the UN by the back door.

So, when it comes to major multilateral negotiations, the emerging countries as sovereign nations have less capable, less well trained, underpaid and confused administrators who have little independence from the political class and can be treated as cannon fodder in the disputes of the big players.

What can be done? Certainly the West has less free capital to play with now and so national aid is likely to have more rather than less strings tied to it and be more directed at aid to the subjects of the sovereign rather than support for the administrators of the subjects of the sovereign.

There is, of course, growing pressure to reform the United Nations. This must come eventually but any reform is likely to focus on a reshuffle within its economic elite to take account of global shifts of power since 1945 and this may well reduce emerging country bargaining power through 'liberal 'reforms'.

In the end, emerging country ability to negotiate from strength is likely to have to rely on one of three methods ...

• a country effectively sells itself into the orbit of a greater power and trades what it can provide to the big power for the big power's patronage when serious discussions start - this is, of course, tantamount to a form of international feudalism;
• a country diverts its scarce resources to introducing the sort of administrative reforms that underpinned the British Empire and the US Federal State and puts its brightest and its best into a position of power over and against its political class - possible but expensive and not easy;
• a country begins to pool sovereignty with similar size powers and deals (much as the EU is trying to do with minimal success at the moment) with the international community as a bloc.

We have been somewhat of a 'bear' on the European Union precisely because the levels of development between its members is so different. This is the Germany-Greece problem that might yet break the Euro this autumn.

The European Union has not been bound together, unlike the US as Federal State, on war. There has been no War of Independence, its last major Civil War (1914-1945) took place before it was formed and there have been none of the low-level social wars that have been endemic to the United States.

If emerging countries are to build administrative capability without being client-states or drawing in on themselves as administrative party dictatorships, then regional blocs work for them as much and probably far more than they work for the members of the G20.

Such blocs might have come to be bound together through the free play of war but the West refuses to countenance this option. The UN exists, in any case, as permanent block to petty imperial expansionism so the alternative is negotiation.

The most honourable (not that honour counts for much in international affairs) approach for the West to take would be to encourage blocs of continguous and similarly sized countries to come together and create the sort of administrative capability beyond tribe and locality that it is promoting for itself.

Take Ratio's own country base - Kenya, Uganda, Tanzania, Rwanda, Burundi and the de facto statelet emerging in Southern Sudan. This is a natural bloc that may compete within itself but which has interests in dealing with the West that might be better served through collaboration than competition.

Of course, collaboration does take place on issues of shared interest but the further formalisation of this process here and elsewhere as a positive policy aim might help focus dialogue over aid and security, assist in regional stabilisation and provide the basis for a consensus on reforms.

The United Kingdom should be a natural bloc of 'these islands' and is only stopped from being so by the idiotic legacy of its past imperialist approach to the Irish people. The Nordic countries adopt their own similar 'common interests' approach.

More of this in the developing world might be central to its continuing independence of action.

Be in no doubt that imperialism is back. Indeed, it has been back for some time but as a form of informal power struggle based on trade and aid with multiple players seeking to acquire spheres of influence without the costs of stationing troops - except where necessary to protect trade routes.

Small developing countries are like mice before cats and they may need to think increasingly collaboratively if they are not to find that they are simply out-stations for low cost transfer of natural resources to the industrial zones of the developed world.

Future Trouble Spots

We are all aware of the top trouble spots for diplomats today but what are they likely to be during the next thirty year economic cycle?

Current Problems

There is the never-ending Israel-Palestine confrontation. Perhaps it will be solved soon - few are hopeful. There is Afghanistan with its potential to destabilise Pakistan. The Caucasus and the Balkans are never quite settled - and, of course, there are the basket case aspects of Africa.

At the inter-state level, there are unresolved issues between the US and Russia (though these are in the process of resolution) and between India and China. And the old European empires have left behind a slew of poor judgements on borders and resource allocation that have yet to be resolved.

But all these conflicts relate to the world of the last two economic cycles which was characterised by the dissolution of formal 'bourgeois' Atlantic empires (in the first) and then that of the Soviets (in the second).

Borders shrank back to leave inexperienced new regional elites, some of which failed abysmally. Yet, for the bulk of the second cycle, from the 1970s to the 2000s, the West remained dominant within its new boundaries and could exert an economic leadership that acted as some restraint on chaos.

The Effects of the Economic Crisis

The last decade has seen the institutionalisation and then growing failure of an attempt by the West to restore its authority against the growth of anarchy - not just a matter of failed states and insurgency but of organised crime, mass migration and loss of control of capital movements.

The recent economic crisis ('credit crunch') is, in fact, far from over. Serious observers know that we have seen sticking plaster operations over the last two years, designed to hold together a failing system, rather than fundamental reforms.

The problem is an obvious one. The elites and special interests who dominated the last cycle are not going to give up power lightly. The West is 'stuck' - neither able to return to business as usual nor develop the zest to dispose of those special interests who are now surplus to requirements.

The 'balanced' liberal arrangements of both written and unwritten Anglo-Saxon constitutions have become drags on the sort of populist radical change that may be necessary to move forward - but 'revolution' is not how the West likes to do things.

New Types of Problem

Economic crisis has not gone away by any means. It has just changed character. It is not about the potential collapse of a system any more (in fact, the system is already in danger of sclerosis) but about the public (that is, political) response to diminished opportunities.

Two tendencies are in danger of colliding. In the West, resentment at more tax claims, poorer service provision and more assertion of authority could grow in the context of massive diversions of funds to special interests - Wall Street and the automotive sector in the US and financial services in the UK.

The economics of these massive transfers may be self-evident to those at the heart of the system but they are not so self-evident to hard-pressed small business interests, to the middle classes in general and to unemployed workers.

The much publicised fact that the latest bank bailout in the UK exceeded the entire year's defence budget at a time of a procurement crisis in Afghanistan played a role in the recent clash between Gordon Brown and the Sun.

The second tendency is that growing populations outside the West are not only not being supported now by globalisation but have decreasing hopes of being supported in the future. Faith in capitalism is a lot thinner than was hope that it would deliver the goods ... and hope is in short supply.

The 'victims' instincts, not so much for insurgency but towards self-help, political protest, organised crime and migration, are a new factor in global politics. The next cycle is thus going to add a completely fresh range of crises to those created by decolonisation and the fall of the Berlin Wall.

These fall into three broad categories:

• pressures within non-Western 'empires';
• the extension of crisis into the borderlands of the West (a process started in Eastern Europe with the collapse of communism); and,
• (if the crisis lasts more than a few years more) centrifugal pressures within the West itself.

The 'Not-so-old' Empires

We think of India and China as ancient cultures and so as being ancient polities. But this myth is no more valid for contemporary Congress India or Communist China than might be a myth for Egypt created by some post-Mubarak dictator that he was heir to the Pharoahs.

Both mega-states are reactive creations of the West - India as inheritor of the state formation project of the British Raj and China as the recent (1949) heir of Communist capture of the weakened and quasi-colonised former Chinese empire that had long since lost either authority or structure.

India has merely acquired the imperial franchise for South Asia from the West - and its foreign policy tends to support that notion - while China, more secure in its Han character, maintains the same sort of dominion over its subject peoples that the West had attempted over it in the past.

Whether a matter of Tibetan or Uighur aspirations or those of North Indian Muslim or other minority groups within India, China holds down dissent through extremely authoritarian methods while violent revolt has been endemic in India for many years.

Despite emergent Chinese and Hindu ultra-nationalism, the ability of these States to hold together and maintain their regional dominance is no more certain than was that of Soviet Russia's in 1988.

Borderland Pressures

Remittances have been a major political stabiliser in the emerging world. Although migrants may stay in their new home, the flow of funds back home have been major sources of micro-investment and have ensured that significant elements of the population have not had to make demands on weak states.

If the funds are not coming home (as is now increasingly the case), then more people in the West's cultural borderlands are going to be marginalisedm with the middle classes starting to feel the pain not long after.

People have to eat. While one lot with some accumulated capital returned home with their skills, another lot with no capital began to move towards the West as still the better bet than staying at home. It is no longer an economic partnership, it is the invasion of the desperate.

The increased demand from the West that immigration be controlled merely increases the economic pressure at home and this turns more people into participants in organised crime - whether as willing victims (people trafficking) or as mules (drugs, guns or whatever).

New capital accumulations increase corruption and make local people into either insiders or outsiders of the new economic system. The West finances or drives one section of the elite into the war on crime and the other goes into political opposition. Economic civil war ensues.

The trouble spots no longer become matters for diplomacy but for 'security'. The militarisation of conflict against organised crime is soon in danger of creating new opportunities for inter-state conflict (as in the Venezuela-Colombia case) or ambiguities in dealing with insurgency (as in Afghanistan).

These are the zones to watch ...

• The Mexican-American borderlands where the US and Mexico City are in collaborative war against a criminal conspiracy that extends deep into the South Western US states and eventually America's cities;
• The corrupted and pauperised Central American and Caribbean zone where we are already seeing serious instabilities in which the US and (in the Turks & Caicos) the UK no longer have the automatic whip hand;
• The Euro-Med zone where authoritarian North African governments are buttressed by the European Union as the first line of defence against mass migration from Africa;
• The former Communist bloc either within the EU or aspirant to EU status (whether ex-Yugoslav or ex-Soviet) where, as in Bosnia, Western pressure to deal with corruption is coming up against the harsh reality of special interests who can finance clientage and clan systems.

Tensions Within the Heartlands

The rise of the BNP is of particular concern to liberal elites in the West but it is merely the tip of an iceberg of frustration at the competence and self-interest of the political class.

Only a minority of the angry are racist. Even the liberally-minded UK Prime Minister has now accepted that opposition to migration is not necessarily a racist opinion - a major breakthrough for common sense against radical ideology.

This is not just a British phenomenon - many ordinary Americans are equally angry at the 'corporate socialism' that sees funds doled out to people they consider responsible for the worsening in their living conditions. Europe has moved significantly towards support for a critique of capitalism.

Our concern is here is not with any democratic political change that is likely to drift towards populism in the US or the new critique of Anglo-Saxon capitalism and the liberal State on the centre-right of Europe but with any propensity to non-democratic revolt.

We see signs of this in two areas (given the weakness of the organised working class):

• In the US (over a thirty year cycle), if there are not major improvements in the economic condition of the mass of the population, we see potential for the sort of neo-secessionist movements that have periodically troubled Canada
• In Europe, we see the potential for an equivalent right-wing or neo-nationalist response to the European Union's inability to please everyone with its limited funds - perhaps a rise of both directly secessionist or radical regionalist movements within member states.

For every Iceland that wants to enter into the European Project as a result of economic failure, we may see a Flanders, possibly an England, Bavaria or Lombardy, ready to demand sub-sovereign status inside or outside the Union if the sense grows that it is being sucked dry to pay for failures.

Resource Wars

Most of the resource wars of the next cycle are likely to be found within the same territories of the last two cycles (from the 1940s to the 2000s) - natural resources tend not to move and Hitler's drive to Baku was symptomatic of the general dependency of the global system on fossil fuels.

One of the few successes of international diplomacy has been to agree, in most cases, spheres of influence where sovereignty is recognised. And most major nations and many small ones are moving towards energy diversity and towards nuclear and alternative energies that are not territorial.

The likelihood of a direct attempt by a rising power to break up or to make claims on an older empire for its assets - as the Germans and Japanese attempted in the 1930s - is small. The proven costs of military solutions to resource weaknesses are far too great for any invader. Trade is still preferred.

Most natural resources territories are also fully 'owned' (the Russian Far East may be in the direct line of fire of Han migration but the chances of a direct Russo-Chinese confrontation seem low). The difficult problem of the Gulf is an old one, going back to the shift from coal to oil on British battleships.

There are also no major new territories to conquer and settle. Space imperialism is a matter of science fiction. Two zones remain open to imperial adventure - Africa (as usual) and the Arctic - but both of these are likely to involve tense negotiation and the occasional arrival of a gunboat but not war.

The new factor may be trading routes where energy and food security for the developed world mean not only exploitation and production but also distribution.

Two sets of trade route - from the Gulf to the rest of the world and across Eurasia raise the stakes on failed states in Asia and Africa (and piracy and crime) but this is conflict of an ancient kind.

Prognosis

The grim news is that wars will not disappear in our time. The good news is that large-scale inter-state war is unlikely and exceptional and that world war can be averted because all empires are less concerned with stealing from each other and more concerned with being undermined from within.

The next cycle will mean more of the same - unresolved or only slowly and expensively resolved post-imperial conflicts - but Western budgets are going to be increasingly strained by new and greater challenges to their integrity.

When unrestrained migration and organised crime are a threat and significant minorities of your own population are growing angry and demanding increasingly radical solutions to their problems, the availability of funds for overseas nation-building is going to decrease.

If you add to this the fear that you would be worse off if your main emerging country competitors slipped backwards into political crisis or even anarchy, then the instinct of the West must not be to compete but to collaborate with other states against growing disorder.