Features
Importance of emerging economies to foreign policy thinking
Even as the pall of economic gloom cast by the COVID-19 pandemic continues to linger world wide, something of particular note is the characterization of Sri Lanka by some sections as ‘a High-Income Country’ in the making. SL@100, described as ‘a private sector-led initiative’, for example, expects Sri Lanka to be a member of this ‘High-Income’ bracket by 2048. That is, by the time the country notches 100 years of ‘political independence’.
It is quite some time since Sri Lanka came to be seen as an economic hub of sorts in South Asia but one would need to comprehensively assess the tremendous damage done to this region and others by the pandemic prior to making overly optimistic economic predictions for Sri Lanka and even the world. How quickly will the world economy recover from the current economic crunch? This is the question. To be sure, the Asia-pacific in particular is bound to bounce back as a fast-growing region, given some time, but Sri Lanka’s economic fortunes would depend crucially on how clear-headedly, hard and consistently she works to put her economy in order.
It is a tough proposition given the complexities of the questions facing the country. However, hopefully, the SL@100 prediction would come to pass, sooner rather later, considering the situation of local economically-vulnerable groups, which is crying out to be put right. While the observer cannot be faulted for predicting a return by Sri Lanka to the ‘growth track’ with the eventual revival of the global economy, it is left to be seen whether such growth will indeed be ‘equitable and inclusive’, as SL@100 expects it to be.
Considering that the Asia-Pacific will remain the growth centre of the world economy, the lingering effects of COVID-19 notwithstanding, countries both economically weak and strong will need to increasingly integrate their economies with the region and fashion their external policies accordingly. This is particularly true of small countries, such as Sri Lanka. But the same goes for those countries which were seen as growing and powerful prior to the pandemic and continue to be seen in these terms.
While it goes without saying that power politics or Realpolitik considerations will be a determining influence over the foreign policy formulation of the world’s biggest powers, the latter too will be compelled to increasingly adopt a policy of integrating their economies with those of the Asia-Pacific, which region is home to many emerging economies. By the latter phrase, informed opinion essentially have in mind vibrant, ‘High-Income Countries’ and prior to the pandemic Sri Lanka was seen widely as one such economy.
While it is hoped that Sri Lanka would swiftly re-coup its losses from the global economic downturn and come to be seen unreservedly as an emerging economy, the importance of the latter category of economies remains, considering that the Asia-Pacific in particular is continuing to be resilient. An important research finding, prior to the pandemic, was that emerging economies of particularly the South were fast catching-up with the G7 in growth terms and it would be in the interests of countries, developing and otherwise, to make progressive economic integration with emerging economies a number one foreign policy priority.
Many an important finding in this connection is contained in the 2016 book titled, ‘China and India – History, Culture, Cooperation and Competition’, edited by Praramita Mukherjee, Arnab K. Deb and Miao Pang (SAGE Publications India Pvt. Ltd). At page 102 we are told by Chinese researcher Chen Jixiang that the growth gap between some 11 emerging economies and those of the G7 had narrowed from $9.88 trillion in 1990 to $2.5 trillion in 2013. Argentina, Brazil, China, India, Indonesia, South Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey count among the emerging economies. Standard Chartered is quoted as forecasting that the GDPs of emerging economies will account for 63 per cent of world GDP by 2030.
It ought to be plain to see that it would be in the interests of countries, both South and North, to be part of the emerging economies’ growth spurt. This process will be greatly facilitated by foreign policies that are framed and formulated on pragmatic and economic considerations. Needless to say, political ideology pales in significance amidst these realities. The economy becomes ‘the thing’.
However, Non-Alignment will remain significant for small countries of the South, such as Sri Lanka. The economic vulnerabilities of the latter dictate this policy course. They would need to relate on cordial terms with all those countries that matter on the economic plane, so as to be able to realize their best economic interests. In the case of South Asia, Sri Lanka would do well to be on the best of terms with India and Pakistan while relating with equal cordiality with China.
Most of the above considerations apply to the external policy formulation of the big powers as well. These are truly multi-polar times, considering that power is today diffused and spread among a multitude of states. While, inter-state rivalries would continue to be part of the stuff and substance of international relations, US-China relations being a case in point, economic survival would continue to compel even the biggest of powers to bring to the centre stage of foreign policy, economic pragmatism.