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FEBRUARY 6: The post-Cold War world has witnessed the markets emerge as the ruling international authority, more potent than any military ...

FEBRUARY 6: The post-Cold War world has witnessed the markets emerge as the ruling international authority, more potent than any military or political power. When arrayed against any nation, including the US, they can impose previously unthinkable changes. The worldwide elimination of barriers to trade and capital, and the rise of communications technology, have created the global financial marketplace. Average daily worldwide trading in financial instruments now exceed 1 trillion. This is largely carried out by huge financial institutions with short investment horizons.

They are beyond the control of any government. The end of the Cold War and the global advent of market economy make a return to multipolarity almost inevitable. According to The Economist, 8220;each period of history has produced its own patterns of relations8230; among the world8217;s powers and that some in the past have been near monopolies in some corners of the world, but never on a global basis, while others such as the Cold War have beentemporary duopolies8221;. The US, Japan, China, Russia and Europe will define the emerging pattern of the 21st century. Since geoeconomics has largely replaced geopolitics, it is not so much the military capability as the economic strength and clout of a nation or regional grouping which will define the new world order.

Francis Fukuyama of the End of History fame says that the ideological conflicts that dominated the world since the 1930s will now disappear. These conflicts will be superseded by milder economics rivalries. In the post-Cold War era, the ideological glue among nations has come unstuck. Alignments will now be along perceived economic interests reflected in regional economic groupings. While no lasting power alliance can be predicted, competitive economic blocs are already emerging. The Economist does not expect either a Europe-China alliance to emerge to keep Russia under control, or a US-Chinese alliance directed at Europe or Russia.

But a loose alliance among Europe, America and Russia tocontain China is probable. A second likely scenario is an alignment between China and the Islamic world which may push Russia and Europe close.

The three major economic blocs have already emerged which will be in constant competition: 1 A German-centred European bloc; 2 A US-led Western Hemisphere block, centred on NAFTA; and 3 a Japan or China-led Pacific Rim region. The EU appears to be the strongest grouping so far. Later the EU could rope in Russia and possibly North Africa. The NAFTA, too, is already in operation and it will gradually encompass Latin America. As far as the third grouping is concerned, it is not clear who will eventually lead the Pacific Rim region. Till the Asian meltdown, Japan was the obvious leader, with South Korea fast making up with the leader. China is apparently growing with phenomenal speed. Besides, it has all the attributes of a global power. But its ideological rigidity and the possible collapse of its development model may upset the Chinese applecart.

In the entirescheme of things, the Third World has very little say and except for some potential regional or economic power, these countries are likely to be relegated to the status of 8220;neocolonial resource zones to be courted by the three major blocs.8221;

Excerpted from The Third World in the Age of Globalisation8217; by Ash Narain Roy, Madhyam Books, Rs 150