Easternisation of the world

Daily: Pakistan Today
Date: 19.03.17

The term easternisation can be understood as a phenomenon embodying the economic
rise of the countries in the east. A few centuries ago, especially in the wake of Vasco da
Gama’s effort to discover a sea route from Europe to India in 1498, the economic potential
of Asia beckoned Europeans who vied with one another for gaining a foothold on Asian
lands to monopolise raw material to feed European industrial complexes.

After the Second World War, Asia took over the reins of destiny. Japan was the first to
express its economic prosperity, followed by the second wave of opulence launched by
South East Asian countries named Asian Tigers. Both these waves espoused capitalist
policies under the auspices of the US military hegemony in the region. Nevertheless, in the
1990s, China initiated the third wave of economic sufficiency, which India joined quickly.
Generally, not only did the expansion-cum-diversification of local industry based mostly on
raw material, but also the shifting of multi-national companies to Asia in search of cheap
labour contributed significantly to the economic surge of Asia. The growth of the software
industry offered an additional benefit to all to utilise human potential contributing to Asia’s
economy.

The implied idea in easternisation begrudged by many is that it is happening at the
expense of the west or westernisation. In this regard, Gideon Rachman’s book,
Easternisation: War and Peace in the Asian Century,” published by Penguin Random
House in 2016, says that easternisation not only reflects the dwindling significance of
European countries but it also reflects their burgeoning troubles ravaging various spheres
of life. To put this point across, Rachman writes on page 167: “The process of
Easternisation means not just that Europe no longer controls large swathes of the globe.
That has been the case for decades. It also means that Europe is increasingly vulnerable
to political, social and economic trends in the rest of the world that it cannot control – but
which pose direct and indirect threats to European stability, prosperity and even peace.”
That is, today’s Europe is beset with a two-pronged challenge: first, the loss of political clout
to reframe its calling in resource-rich areas of the world; and second, to devise a way to
stop the inflow of troubles affecting various spheres of European life. Unfortunately, when
extant, both these challenges reinforce each other.

In 1956, when the US ended the hegemony of two European powers, the UK and France,
on the issue of the Suez Canal, Europe started shrinking into its fold. In this way, the
primary challenge to the west or westernisation came from the west itself. Years afterwards,
the economic crisis that visited Europe in 2009 debunked the reality that European
authority over the world was moribund. In this regard, Rachman writes on page 167: “By
2009, when an economic crisis erupted in Europe, the age of European imperialism in Asia
and elsewhere had been over for roughly half a century…[M]ore and more economists are
giving voice to the idea that competition with low-cost producers in Asia, in particular in
China, has contributed to the European economic malaise.” In fact, Chinese cheap
industrial products undermined the residual monopoly of European manufacturing
industries and funnelled European money into the Chinese economy.

Whereas the year of 2009 can be considered the time when the existence of easternisation
became noticeable, the realisation got itself reified into more palpable results in 2014, when
China spearheading the phenomenon of easternisation surpassed the US. In this regard,
Rachman writes on page 6: “A symbolic moment was reached in 2014 when the IMF
[International Monetary Fund] announced that, measured in terms of purchasing power,
China was the world’s largest economy”. Similarly, Rachman writes on page 8: “By 2014,
China was already the world’s leading manufacturer and its largest exporter. China was
also the biggest export market for forty-three countries in the world; whereas the US was
the biggest market for just thirty-two countries. (Twenty year earlier, China had been the
largest market for just two countries in the world, and the US was number one for forty-four
nations).” In this way, in 2014, the world finally recognised the presence of easternisation.
In the post-2014 era, the world is supposed to be stretched between retiring westernisation
and mounting easternisation, whether the two phenomena are coterminous or not.

The economic challenge posed by easternisation is just one dimension of the issue. There
are two other dimensions. First, economic sufficiency cannot be seen in isolation from
political adequacy. In this regard, Rachman writes on page 6: “It is economic might that
allows nations to generate the military, diplomatic and technological resources that
translate into international political power.” Second, like westernisation, easternisation is
non-sparing in asserting its history, values and practices. In this regard, Rachman writes on
page 29: “Yet while attitudes to the West vary across Asia – between countries and
individuals – there is little doubt that a widespread process of Easternisation is underway,
as Asian nations reassert their own histories and heritages, and scrape away some of the
accumulations of Westernisation.” In fact, losing grip over economic and political affairs of
the world and getting vulnerable to crises of various types express the worst fear of Europe.

Whereas China is heading the post-2009 wave of easternisation, the US has been trying to
challenge China in the Pacific by developing a pivot to Asia since 2011 with the help of
Japan and India. The cases of Japan and India are different. Japan experienced the
humiliation of defeat at the hands of the US and later developed its economy on capitalist
lines under the supervision of US military. This relationship is more a patron-client one than
a partnership of equality and respect. On the other hand, the bonhomie that thrived
between the US and India is a post-1998 phenomenon, which expressed itself in October
2008 by signing the 123 Nuclear Energy Agreement. It is still difficult to say if India – which
is also part of easternisation – is ready for being an active frontline partner of the US in the
pivot to Asia plunge.

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What General Bajwa says

Daily: Pakistan Today
Date: 18.10.17

One thing is now obvious: the balance of Pakistan’s system is out. The civil-military
scrimmage, which began from behind closed-door meetings, popped up on twitter, and
attained the form of delivering speeches, has now surfaced in seminars. Civil and military
are together like oil and water. The sound of dissonance is shrieking and squawking.

On October 11, while delivering a keynote address, Chief of Army Staff General Qamar
Javed Bajwa addressed to a seminar, “Interplay of Economy and Security,” in Karachi and
exposed his understanding of economy and its link with security. The seminar was jointly
organised by the Inter-Services Public Relations (ISPR) and the Federation of Pakistan
Chambers of Commerce and Industry. What is apparent is that General Bajwa took refuge
in a simple bivariate relationship between economy and security, and then walloped in that
relationship, instead of valuing the significance of a multivariate relationship dipped in
complexity. If things were so simple!

Even if it were assumed that there would a link between economy and security, this link is
not final and cannot be explained through adjectives such as strong or weak. There are
other links available such as between politics and economy; between politics and security;
between politics, economy and security; and so on. For instance, the economic
performance of the incumbent political government is better than the economic
performance of the previous political government. The same is true regarding the law and
order and security situation. In this example, politics takes precedent over economy and
security. Unfortunately, the hypothetical link between economy and security cannot be of
cause and effect; instead, the link is of correlation, in which several other independent
variables play their due roles, to meet the need of multivariate relationship. Nevertheless, in
the recent history, it is the first time a COAS has spoken on economy, though in the pretext
of inter-relationship between economy and security.

On October 12, 1999, when former COAS General Pervez Musharraf took over the reins of
the civilian government, he offered the same excuse of economic problems of the country,
besides accountability. Military dictators have carved out a history of duping people into
believing in the veracity of their intent and the excellence of their expertise. The accessory
privilege is that they survive beyond accountability, though General Musharraf still revels in
counting his facebook followers. The tutelage of General Musharraf put Shaukat Aziz in the
picture. General Musharraf gave Aziz a free hand to play with the economy. Aziz did two
main things. First, he transformed economy from conserved market economy (protected by
various import laws) to liberal market economy (out of the bounds of import laws). Aziz
envisioned consumer economy likened to the one in the West where he used to run a
private bank. Secondly, Aziz met the aim of expanding the tax base of economy by making it
rely mostly on indirect taxes such as the sales tax and not on direct taxes such as the
income tax. Aziz envisaged the growth of the sales tax a solution for the narrow tax base of
the economy.

In the seminar, the COAS said, “development projects alone won’t save Pakistan’s
economy. The issue of national debt needs to be given priority.” The point is simple:
Development projects are not meant for saving any economy. Instead, they are meant for
running the economy. Development projects stimulate economy and ensure circulation of
wealth, as investors prefer investment to stacking money because of high rate of return.
This idea is an anti-thesis to the stagnation of economy when investors avoid investment,
transfer their money overseas or await a better opportunity to capitalise. Nevertheless, the
privilege enjoyed by economic experts such as Aziz is that, like military dictators, they also
remain answerable to none. It was Aziz under the command of General Musharraf that
constructed the contours of the present state of economy and its sectors to count on. Sales
tax is now the mainstay of the health of economy. The reliance on sales tax domestically
also allows the government to countenance a high import bill and hence the budget deficit.
The incumbent government is in no position to reverse the system. If the COAS were
dissatisfied with the present state of economy enjoying high growth but encumbered with
high debt, he would have invited General Musharraf and Aziz to the seminar and listened to
them. Political governments establish their own goals to fulfill. Unlike military regimes and
their cronies, political governments are accountable to people through vote. The incumbent
government seems in no mood to let the debt overrun the gains and knock it out of next
elections.

To support the argument of linking economy with security, the COAS cited the example of
the former USSR by saying, “erstwhile USSR had no dearth of armoured divisions but it
broke up due to weak economic base.” Interestingly, the real situation is a bit different. The
breakup of the former USSR was not simply because of the cause-and-effect relationship
between economy and security, there were several other factors. To begin with, the Soviet
political system was intolerant to political dissent, especially against war and expansion. If
political dissent were present and revered in the former USSR, it would not have entered
Afghanistan or it would have withdrawn earlier. It was incorrect political decision that
encumbered Soviet economy with war expenditures. Secondly, compared to the capitalist
system, which incentivised risk taking by individuals to innovate and recirculate wealth, the
socialist system afforded monopoly to state ownership on the means of producing and
circulating wealth. Before delivering his keynote to the seminar, the COAS might have not
thought, for instance, why could the Vietnam War not disintegrate the US and why could the
Afghanistan war crumble the former USSR?

The tyranny is that it was known to the COAS that the political situation was volatile and his
comments on the economy and financial distribution of resources would provoke the
opposition into criticising and agitating against the sitting government. Nevertheless,
assuming that the COAS might be concerned about economy, the following four inferences
can be drawn from his keynote address. First, the army is fed up of the US-led war on
terror. Second, the army is averse to the US dictations and veiled threats. Third, the army
thinks that owing to high debt the political government would compromise financially with the
US for aid or with US sponsored agencies such as the IMF for loans. Fourth, the army
thinks that the government should take the help of neither the US nor the IMF, as the
money given by them would compel the army to be compliant with the US. In short, despite
all flaws in argument presentation and despite violating all norms of constitutionalism,
General Bajwa has tried to say that financial independence of the government will make the
army independent of the influence of the US. General Bajwa is right in saying so. The
incumbent government should listen to him sympathetically.

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