Recasting the Power Politics of Debt: structural power,hegemonic stabilisers and change

The 2007–08 financial crisis exposed and exacerbated the debt pathologies of the West. This paper examines whether the new global debt relations that have been generated by this crisis have transformed global power politics, changing the way in which the global South and the global North interrelate and interact. To do so the paper analyses the G20 advanced and emerging economies, examining a number of key indicators related to debt, indebtedness and financial leverage. This research leads to two main findings. First, the crisis has indeed given rise to new global debt relations. As a result, any reforms in the post-crisis global political economy will take place in an environment that favours the rising powers. Second, the USA maintains its capacity to control the parameters of this new global debt politics and economics, but cannot directly impose the terms of a solution to the existing ‘global/hegemonic imbalances’ on the rising powers.     

Watching from the sidelines? The decline of the IMF's crisis management role

This article compares the International Monetary Fund (IMF)'s crisis management role during the Asian financial crisis in 1997–98 with the role it has played during the ‘credit crunch’ which emerged in the wake of the subprime crisis in the United States. With prominent calls for the construction of new forms of global financial governance to prevent a recurrence of the subprime crisis in the future, we explore how the designated guardian of the international financial system has responded to the credit crunch in order to evaluate the strengths and weaknesses of the existing system. Our comparison of the US subprime crisis and the Asian financial crisis of the late 1990s indicates that the IMF has lost credibility with its members, and particularly with its principal sponsor, the United States, which has curbed its capacity to develop multilateral solutions to major financial crises.     

Internationalisation,global capitalism and the integration of Iran

Abstract

There is a common tendency to observe a process of homogenisation when the current international structure is analysed. However, the globalisation process embraces heterogeneities and contradictions stemming from the integration of different states into a single global structure. This article explores the role and motivations of domestic social classes in creating variations in the form of integration of their states into the global whole. It takes one of the odd cases at the centre of inquiry and particularly concentrates on the emergence of alternative forms to the neoliberal globalisation in the process of Iran’s integration into the global capitalism. The accumulation strategies adopted by the dominant class factions in Iran are investigated in order to reveal their dialectical relationship with the international capitalist structure. Their role in the international political economy of Iran demonstrates how social agents through their strategic activities create variations in the forms of integration into the global capitalism. The article compares the Iranian case to the varieties of integration of lately capitalised but not peripherised BRICS (Brazil, Russia, India, China and South Africa) states. This aims to reveal that whilst these countries have truly integrated into the global capitalist system, the internationalisation of their states contradicts the accumulation strategies of their dominant classes.     

Neoliberal globalisation,the nation-state and financial crises in the semi-periphery: A comparative analysis

The process of neoliberal globalisation has been associated with successive financial crises in the context of the 1990s, raising serious doubts concerning the sustainability of rapid growth in an environment of uncontrolled movements of short-term capital. The article probes into the origins of the financial crises in the semi-periphery through a structured comparison of three key recent crises in the world economy, namely the Mexican and Turkish crises of 1994 and the Asian crises of 1997. Whilst the magnitude of the capital flows and the dimensions of the subsequent crises are strikingly different, there are nonetheless important elements common to all three cases studied. One such common element involves the overdependence of the countries concerned on the short-term financial flows, in a setting characterised by premature capital account liberalisation in the absence of adequate regulation. It is striking that, contrary to the conventional IMF wisdom, financial crises have occurred in spite of 'sound fundamental', namely fiscal equilibrium and low inflation. The recent financial crises highlights a paradoxical situation: the need for effective regulation at a time when the capacity of the nation state to undertake the type of regulation needed severely circumscribed. Hence, the establishment of an effective regulatory framework at the global level emerges as a major requirement if successive financial crises, with significant economic and social cost, are to be avoided in the future.     

The logic of interdisciplinary studies

In this article, I argue that emerging economies are systematically becoming more susceptible to both currency and banking crises after financial liberalisation (FL). Using data for 27 emerging economies from 1973 to 1998, univariate and multivariate analyses indicate that the likelihood of currency crises and banking crises increase after FL. In particular, liberalisation allows more liquidity to enter an emerging economy, which finds its way into productive and speculative projects. What is common to both types of crises is a significant increase in speculative financing, thereby increasing the chance for borrower default. Thus, the outflow of international capital becomes more likely. The chance of a crisis occurring in response to changes in short-term loans is greater after FL than before. Similarly, the chance of a currency crisis occurring following a currency overvaluation is larger after FL than before. In comparison, the likelihood of a banking crisis occurring in response to an overvalued currency remains the same. Finally, the results show that the chance of a currency crisis declines over time, while the chance of a banking crisis increases after FL.     

Chinese capitalism: Cultures,the Southeast Asian region and economic globalisation

Globalisation is often presumed to be an economically, socially and culturally homogenising force. The deterioration of capitalism's major rival in the early 1990s has paved the way for a truly global economy in which all participants increasingly operate under the general logic of capitalism-that is, a market-orientated system of production and exchange, private ownership and a flexible labour market predicated upon self-interest. Yet, while the pressures of globalisation are obviously formidable and increasingly felt by all, economic societies remain diverse and have responded to these pressures in unique ways. This article makes its case for the continued diversity of capitalism by emphasising the unique mode of economic organisation that has emerged in Southeast Asia; one rooted in the demands of globalisation as well as in the cultural foundations of the Overseas Chinese. The evolution of ethnic-Chinese business networks, which define Southeast Asia's political economy, constitutes a unique reaction to the pressures of globalisation and has laid the basis for a distinct articulation of capitalism in the region.     

Going South: capitalist crisis,systemic crisis,civilisational crisis

This article argues that the current protracted and severe financial and economic crisis is only one aspect of a larger multidimensional set of simultaneous and interacting crises on a global scale. The article constructs an overarching framework of analysis of this unique conjecture of global crises. The three principal crisis aspects are: an economic crisis of (over) accumulation of capital; a world systemic crisis (which includes a global centre-shift in the locus of production, growth and capital accumulation), and a hegemonic transition (which implies long term changes in global governance structures and institutions); and a worldwide civilisational crisis, situated in the sociohistorical structure itself, encompassing a comprehensive environmental crisis and the consequences of a lack of correspondence and coherence in the material and ideational structures of world order. In these ways, the global system is now `going south'. All three main aspects of the global crisis provoke and require commensurate radical social and political responses and self-protective measures, not only to restore systemic stability but to transform the world system.     

The G20, the Crisis,and the Rise of Global Developmental Liberalism

The emergence of the G20 leaders' meeting during the recent global financial crisis as the ‘premier forum for international economic cooperation’ reflects a significant shift of hegemony over global governance towards the emerging economies but does not challenge the authority or objectives of the international financial institutions. On the contrary, successive G20 initiatives, culminating in the adoption of the Seoul Development Consensus for Shared Growth in November 2010, reveal both a further strengthening of the already close institutional relationship between the G20 and the Bretton Woods institutions and a strong shared commitment to a developmental form of global liberalism. This article charts the ascendancy of emerging economy perspectives through the lens of the G20, maps their ties to the imf and other international organisations, sets out the content of the new global developmental liberalism, and assesses the implications of emerging economy hegemony for the advanced and the emerging economies, respectively.     

21世纪初印度与亚太多边机制关系分析

随着世界经济的区域化和全球化,多边外交成为一个国家矗立于世界舞台的重要途径,尤其对新兴大国来说更是如此。为了尽快融入亚太地区,印度非常重视对多边外交的应用,积极开展与亚太多边机制的合作,努力使这种合作向制度化方向发展。本文主要分析印度与亚太多边机制关系发展的现状、动因及其意义。     

Turkey and Russia in a shifting global order: cooperation,conflict and asymmetric interdependence in a turbulent region

The current global political economy is characterised by the intensifying economic interaction of BRICS and ‘near BRICS’ economies, with emerging powers increasing their influence in neighbouring regions. The growing partnership between Turkey and Russia constitutes a useful case study for examining this transformation, in which Western supremacy and US hegemony are under increasing challenge. Turkish–Russian relations shed light on broader themes in global political economy. First, significant economic interdependence may be generated among states with different political outlooks, in the form of loose regional integration schemes driven by bilateral relations between key states and supporting private actors or interests. Second, growing economic interdependence may coexist with continued political conflict and geopolitical rivalry, as indicated by the Syrian and Ukrainian crises. An important strategy that emerges is the tendency to compartmentalise economic issues and geopolitical rivalries in order to avoid negative spill-over effects. This facilitates the coexistence of extensive competition with deepening cooperation, as reflected in relations in the field of energy.     

If Asia Wants to Prosper,Don't Listen to the IMF

The great story of the last decade has been the “rise of the rest”—emerging economies such as China, Brazil, Turkey and India—to a position rivaling that of the established, advanced economies. As the aftershocks of the financial crisis of 2008–2009 continue to ripple through the global system, will the rising rest stay or track or be derailed? Some of the world's top economists examine this question in the following section.     

The “Expectation Revolution” Is Rattling Chile,Turkey and Brazil

The great story of the last decade has been the “rise of the rest”—emerging economies such as China, Brazil, Turkey and India—to a position rivaling that of the established, advanced economies. As the aftershocks of the financial crisis of 2008–2009 continue to ripple through the global system, will the rising rest stay or track or be derailed? Some of the world's top economists examine this question in the following section.     

Crises and unpredictability in developing countries

Developing countries have suffered most of the financial crises in the context of the process of economic and financial globalisation. Both current and previous crises have revealed that unpredictability is a feature common to all the episodes which occurred during the process of globalisation. Although certain alarms went off, any of those external financial crises were actually predicted by the advanced methods in use for prediction and country risk analysis. Taking into consideration the information above, the aim of this paper is to check the ability to foresee external financial crises in developing countries of both the country risk index published by Euromoney and the Credit Ratings variable included therein. We have focused on the external financial crises that took place between 1992 and 2011, that is, in a full globalisation era. The results are negative. It appears that neither the index nor the sovereign ratings are able to reflect early enough the vulnerabilities that arise previously to the setting off the crisis episodes. This leads us to conclude that the existing models of country risk have limits. Thus, it would necessary to develop new instruments to measure this risk, considering uncertainty as an essential feature of the current economic and financial environment.     

Can the global South take over the baton? What cosmopolitanism in ‘unlikely’ places means for future world order

As the West’s centrality fades, the global South may have a decisive influence in shaping future world order. Will that future see a retreat from globalisation to hard-edged particularisms? Or will the emerging post-Westphalian global society let the global South take over the baton of cosmopolitan institution building in its own way? This article draws on a multi-country survey of educated youth to find promising signs of imagined common ground with other countries. It suggests the flavours of cosmopolitan integration that the global South is likely to support in coming decades.     

Financial crises as catalysts for regional cooperation? Chances and obstacles for financial integration in ASEAN+3, MERCOSUR and the eurozone

This article compares and analyses the different answers from the Association of Southeast Asian Nations+3 (ASEAN+3), Mercado Común del Dur (MERCOSUR) and the eurozone on financial crises in their respective regions. All three regions were hit by economic turmoil between 1997 and 2012, but whereas ASEAN+3 and the eurozone answered with establishing regional liquidity arrangements (RLAs) in order to fight future crises, financial cooperation did not take off in MERCOSUR. Thus, the paper asks why some regions establish RLAs in cases of crisis and others do not. It argues that the variance of regional financial integration in different world regions is due to different interests of regional powers in their respective regions. The regional powers of ASEAN+3 and the eurozone are institutionally and/or economically highly embedded within their respective regions, but this is not the case for Brazil in MERCOSUR. China and Japan suffered from negative externalities of the Asian crisis, and, consequently, have had an interest to stabilize their neighbours’ economies after the crisis. In contrast, Brazil was able to follow a beggar-thy-neighbour strategy at the turn of the millennium, which externalized some of the costs of Brazil's own economic crisis towards Argentina. As a result, Brazil has had no interest in providing liquidity for its regional neighbours after the crisis. France and Germany are not only economically but also institutionally highly embedded in the eurozone because they share a common currency with their regional neighbours. Thus, the stability of the eurozone is a vital interest for Europe's regional powers, and they devote significant resources to stabilize the economies of the eurozone's periphery.     

The continuing Kurdish problem in Turkey after O¨calan's capture

This article sets out to critically explore an important dimension of the International Monetary Fund's (IMF) recent bid for economic stability, namely the transparency requirements vis-à-vis emerging market economies. The article argues that this requirement symbolises an attempt to bolster ideological obligation to neoliberalism while progressing towards a certain form of legal obligation between states. This claim is developed by first identifying three facets that have undermined the economic stability of the global system: (1) the emergence of 'competition states'; (2) a non-hegemonic political economy; and (3) the reperipheralisation (or re-marginalisation) processes in the global South. After establishing this larger analytical backdrop, the article goes on to evaluate the Fund's transparency requirements as an attempt to preserve the status quo in the global political economy.     

Russia and the Secession of Kosovo: Power,Norms and the Failure of Multilateralism

Theoretical debates about multilateralism positively juxtapose it to unilateralism or bilateralism, because it is seen as a natural ideational fit with the growth of global governance. The major schism on the concept is between normativists who emphasise shared values and the realists' concerns with strategic interactions and power asymmetries. The Kosovo crisis beginning in 1999 could be seen as the first major crisis of multilateralism in the international system after the end of the Cold War. It was a crisis about the role and interests of a hegemonic USA and a weakened Russia. As a case, Kosovo demonstrates the paradoxes and limitations of multilateralism in the field of international security, when there are different types and levels of multilateralism interacting. The US and EU leaderships saw Kosovo as essentially a regional problem which could be manipulated to rejuvenate and enhance Western multilateral cooperation in NATO. This view found support among an upper echelon of officials in the UN, surrounding Secretary-General Kofi Annan, which favoured a multilateral intervention in Kosovo as proof of commitment to the developing norm of ‘right to protect’. Russia, however, saw its multilateral engagement over Kosovo as a strategic interaction to counterbalance and compensate for its weakness vis-à-vis NATO. The multilateral interactions by these three parties appear to have deepened mistrust as the process failed to resolve the final status of Kosovo, leading to its unilateral declaration of independence in 2008. The case demonstrates the importance of shared interests for successful multilateral interactions.     

'New regionalism' in Central America

Central American regionalism is in a state of disarray after having been surrounded by great enthusiasm in the early 1990s. This article explores whether a 'new regionalism' framework can improve our understanding of this turn of events. It is argued that Central American integration lacks a series of features assumed to characterise 'new regionalism'. It has not been accompanied by spontaneous societal integration, its main stimulus has come from external actors, and the goal of the process has narrowed from originally being human welfare and security in a wide sense, to primarily being integration in the global economy. This is reflected in the integrationist rhetoric, where globalisation has entered the centre stage and is presented as a threat to which regional action should respond. This change has also rendered regional agreements largely superfluous as the member states pursue policies aimed at global integration regardless of the integration process.     

Political structures and financial liberalization in pre-crisis East Asia

East Asian economies differed dramatically in their vulnerability to the financial shocks of 1997–98. In the current literature on the Asian crisis, one key factor commonly adduced to explain the uneven crises is different national approaches to liberalizing the financial market. While extant analyses have yielded important insights into the correlation between divergent liberalization patterns and uneven crises, they have failed to deal with the crucial question of why East Asian economies diverged in their respective paths to financial market liberalization. To account for differences in liberalization approaches, this article develops an institutional explanation of financial policy choices. It posits that variations in liberalization patterns stem from fundamental differences in the organizational structures of the private sector, the bureaucracy, and the party system that shape the economic interests and political behavior of social groups and state agencies in the policy-making process. In making this argument, the article focuses on Korea, Singapore, Taiwan, and Thailand, the four major East Asian economies that pursued different liberalization strategies during the 1980s and 1990s and had contrasting performance in the recent financial crisis. It argues that cross-national differences in the above-mentioned domestic political structures within the four economies are the primary sources of their divergent liberalization approaches and outcomes, which, in turn, impacted financial stability to differing degrees and generated varying abilities to withstand external shocks. The author thanks Benjamin Cohen, Stephan Haggard, Otto Holman, Geoffrey Underhill, and anonymous SCID reviewers for their helpul comments on earlier drafts. Generous financial support from the Amsterdam School for Social Science Research and the Netherlands Fellowship Program is gratefully acknowledged. The usual disclaimers apply. Xiaoke Zhang is research fellow in the Amsterdam School for Social Science Research and the Department of Political Science at the University of Amsterdam. He is the author ofThe Changing Politics of Finance in Korea and Thailand (Routledge, 2002) and the co-editor ofInternational Financial Governance under Stress (Cambridge University Press 2003).