(International Political Economy Series) Steen Fryba Christensen, Li Xing (Eds.) - Emerging Powers, Emerging Markets, Emerging Societies - Global Responses-Palgrave Macmillan UK (2016) PDF

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RELIGION AND THE POLITICS OF DEVELOPMENT
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EMERGING POWERS, EMERGING MARKETS, EMERGING SOCIETIES
Global Responses
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Emerging Powers,
Emerging Markets,
Emerging Societies
Global Responses
Edited by
Steen Fryba Christensen

Associate Professor, Aalborg University, Denmark
and
Li Xing
Professor, Aalborg University, Denmark
Palgrave
macmillan
Selection and editorial matter © Steen Fryba Christensen and Li Xing 2016
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Names: Christensen, Steen Fryba, editor. | Xing, Li, 1962– editor.
Title: Emerging powers, emerging markets, emerging societies : global
responses / edited by Steen Fryba Christensen, Li Xing.
Description: New York : Palgrave Macmillan, 2016. | Series: International
political economy series | Includes index.
Identifiers: LCCN 2015032828 |
Subjects: LCSH: Economic development—Developing countries. |
Developing countries—Economic conditions. | Developing countries—
Foreign relations. | Developing countries—Politics and government. |
BRIC countries—Foreign relations. | BRIC countries—Economic
conditions. | BISAC: BUSINESS & ECONOMICS / Development / Economic
Development. | POLITICAL SCIENCE / International Relations / General. |
POLITICAL SCIENCE / Economic Conditions. | POLITICAL SCIENCE / Public
Policy / Economic Policy. | POLITICAL SCIENCE / Globalization.
Classification: LCC HC59.7 .E485 2016 | DDC 338.9009172/4—dc23
LC record available at http://lccn.loc.gov/2015032828
Contents
List of Figures and Tables ix
List of Contributors xi
List of Abbreviations xii
Part I Introduction and Theoretical Discussion

1 The Emerging Powers and the Emerging World Order:
Back to the Future? 3
Steen Fryba Christensen and Li Xing
2 From “Hegemony and World Order” to “Interdependent

Hegemony and World Re-order” 30
Li Xing
3 BRICS and Capitalist Hegemony: Passive Revolution in

Theory and Practice 55
Ian Taylor
Part II The Global South

4 How Prioritized Is the Strategic Partnership between Brazil
and China? 87
5 India as an Emerging Power in the Global Order:

On Geopolitics and Geo-economics 110
Jørgen Dige Pedersen
6 Situating the Gulf States in the Global Economic

Redrawing: GCC–BICs Relations 132
Crystal A. Ennis
7 BRICS in Africa and Underdevelopment: How Different? 162

Ian Taylor
vii
viii Contents
8 Reconfiguring Political Alliances and the Role of Swing

States: The Strategy of Bolivia and Its Relations with the
BRICS 185
Óscar García Agustín
Part III Europe

9 A Small State Maneuvering in the Changing World Order:
Denmark’s “Creative Agency” Approach to Engagement
with the BRICs 211
Camilla T. N. Sørensen
10 New Tourists at Old Destinations: Chinese Tourists in

Europe 235
Karina Madsen Smed and Ane Bislev
Conclusion
11 Emerging Powers, Emerging Markets, Emerging Societies:
Global Responses 259
Index 268
Figures and Tables
Figures
1.1 The nexus between the scenarios of world orders and

the processes of ongoing developments 5
2.1 The four pillars of American hegemony in the world
order 33
2.2 The emergence of a Chinese financial order 35
2.3 The core aspects and components of hegemony in the
world order 41
6.1 GDP growth in the GCC and BICs 134
6.2 GCC exports 143
6.3 GCC imports 143
6.4 Oman – Private sector labor by nationality 147
6.5 Bahrain imports and exports 154
6.6 Kuwait imports and exports 154
6.7 Oman imports and exports 154
6.8 Qatar imports and exports 155
6.9 Saudi Arabia imports and exports 155
6.10 United Arab Emirates imports and exports 155
11.1 The ongoing transformations in the world order 260
Tables
1.1 Selective worldwide adaptation to the changing world

order – Standing on two boats 10
2.1 The leading three trading partners of the BRIC countries
(excluding South Africa) 48
3.1 BRICS outward FDI flows, 2000–2011 74
3.2 Average annual GDP growth percent change (y/y) 77
6.1 Gulf sovereign wealth funds in global ranking 138
6.2 GCC trade partners 142
6.3 Oil and gas as a percentage of national imports 144
7.1 General indicators of the BRICS 170
7.2 Correlation between GDP growth for SSA and the
Commodity Price Index (CPI) 179
10.1 Chinese outbound tourists, 2013 242
ix
x List of Figures and Tables
10.2 Chinese tourist arrivals at selected European

destinations 244
10.3 Choice of European DMOs 245
10.4 DMO approaches to the Chinese tourists 250
Contributors
Ane Bislev is an assistant professor at the Research Center on Devel-

opment and International Relations, Department of Culture and Global
Studies, Aalborg University, Denmark.
Steen Fryba Christensen is an associate professor and senior researcher

at the Research Center on Development and International Relations,
Department of Culture and Global Studies, Aalborg University, Denmark
Crystal Ann Ennis is an assistant professor at the Institute for Area

Studies, University of Leiden, the Netherlands.
Óscar García Agustín is an associate professor and senior researcher

at the Research Center on Development and International Rela-
tions, Department of Culture and Global Studies, Aalborg University,
Denmark.
Jørgen Dige Pedersen is an associate professor and senior researcher at

the Department of Political Science, Aarhus University, Denmark.
Karina Madsen Smed is an associate professor at the Tourism Research

Group, Department of Culture and Global Studies, Aalborg University,
Denmark.
Camilla Tenna Nørup Sørensen is an assistant professor at the Depart-

ment of Political Science, Copenhagen University, Denmark.
Ian Taylor is a professor at the Department of International Relations,

Saint Andrew’s University, Scotland, UK.
Li Xing is a professor and Director of the Research Centre on Devel-

opment and International Relations, Department of Culture and Global
Studies, Aalborg University, Denmark.
xi
Abbreviations
ADS Approved Destination Status

AIIB Asian Infrastructure Investment Bank
ALBA Bolivarian Alliance for the Peoples of Our America
APEC Asia Pacific Economic Cooperation
ASEAN Association of Southeast Asian Nations
BICs Brazil, India, China
BRICS Brazil, Russia, India, China, South Africa
CELAC Community of Latin America and Caribbean States
CNTA China National Tourism Administration
COSBAN China–Brazil High Level Commission of Agreement and
Cooperation
DMOs Destination Management Organizations
EMs Emerging Markets
EU European Union
FDI Foreign Direct Investment
FTAA Free Trade Area of the Americas
G-6 USA, Germany, Japan, the UK, France and Italy
G-20 Group of 20 biggest economies established in 1999
G-20 Group of 20 developing countries established during the
Cancún meeting of the Doha Round in 2003
G-77 Group of 77 developing countries
GCC Gulf Cooperation Council
HIPCs Highly Indebted Poor Countries
IBSA India, Brazil and South Africa
IFC International Finance Corporation
IMF International Monetary Fund
LEDCs Less Economically Developed Countries
MDRI Multilateral Debt Relief Initiative
MENA Middle East North Africa
NATO North Atlantic Treaty Organization
OAS Organization of American States
OECD Organisation for Economic Co-operation and
Development
SSA Sub-Saharan Africa
SWF Sovereign Wealth Funds
xii
List of Abbreviations xiii
TALC Tourist Area Life Cycle

UAE United Arab Emirates
UN United Nations
UNASUR Union of South American Nations
UNWTO United Nations World Tourism Organization
WTO World Trade Organization
Part I
Introduction and Theoretical
Discussion
1
The Emerging Powers and the
Emerging World Order: Back to
the Future?
Introduction: World order scenarios and ongoing

transformations
Since the late 1990s, and especially in the new millennium, the world
has been witnessing the dramatic rise of China, together with several
large developing countries – Brazil, Russia, India – and many other coun-
tries that are labeled as the “Second World” (Khanna, 2012). In the
current era of globalization and transnational capitalism, the ascen-
dance of these emerging powers has redefined international relations
(IR) and the international political economy (IPE) of upward mobility
among the core, semi-periphery and periphery countries – a three-level
hierarchy understanding of the world economic system as seen in world-
system theory (Wallerstein, 1979, 2004). Furthermore, in concrete terms,
the rise of new powers is affecting a number of global relationships –
this includes those between great powers, the global South and develop-
ing countries – and new patterns of regionalization and regionalism are
being generated.
Consensus exists today that “great transformations” are taking place
in IR and IPE; these have reshaped the terrain and parameters of
social, economic and political relations at both national and global
levels. However, it is still being debated whether these transformations
only represent some functional redistribution of comparative advantage
within the existing world order, or whether they actually symbolize
more serious structural changes – a paradigm shift – in which the
institutions and regimes, as well as the norms and values grounded on
the existing world order, need to be redefined. For the past five years, the
3
4 Introduction and Theoretical Discussion
editors of this book have been engaging in studies of the relationship

between emerging powers and the existing world order, paying special
attention to the extent to which emerging powers have exerted pressure
on the existing international order in terms of both opportunities and
constraints. We have also studied the extent to which both the existing
hegemon and the emerging powers are intertwined in a constant process
of shaping and reshaping the world order.
In recent years, the editors of this book have published extensively on
this topic, focusing in particular on the rise of China (Li, 2010, 2014;
Li and Christensen, 2012; Li and Farah, 2013; Christensen and Bernal-
Meza, 2014). These publications are part of global academic research
efforts to generate conceptual and theoretical frameworks for the inter-
pretation and understanding of the transition and transformation
processes taking place in the existing world order.
Currently, the world order is seen to be displaying changing charac-
teristics in three different but overlapping ways: world disorder, world
new order and world re-order.
World disorder: There are confrontations and clashes between exist-
ing and emerging powers due to disagreements and conflicts of interest,
leading to the disruption of international regimes and of the established
structure. The situation is vividly described by Schweller (2011, p. 287):
Its [the order] old architecture becoming creakier and more resistant
to change. New rules and arrangements will be simply piled on top of
old ones. And because there will be no locus of international author-
ity to adjudicate among competing claims or to decide which rules,
norms, and principles should predominate, international order will
become increasingly scarce.
In Schweller’s heuristic formulation, it is “the age of entropy” in which

“[i]nternational politics is transforming from a system anchored in
predictable, and relatively constant, principles to a system that is, if
not inherently unknowable, far more erratic, unsettled, and devoid of
behavioral regularities” (Schweller, 2014).
World new order: The world is to be led by a new order; the argument
is that disorder will prompt the existing and emerging powers to nego-
tiate on new terms of relationship shaped by new norms and values,
and new international law, leading to a redefined new world order.
This is unlikely to happen because the world is composed of multi-
ple and equally powerful players, i.e. states, transnational corporations,
transnational networks and transnational interest groups. They are
Steen Fryba Christensen and Li Xing 5
Figure 1.1 The nexus between the scenarios of world orders and the processes of
ongoing developments
struggling to achieve their own goals and pursue their own interests
in their own ways. None of these actors is able to shape the world order
and impose its own agenda single-handedly.
World re-order: The existing order exhibits a capacity for resilience
by responding to changing environments in which a transition from
unipolarity to multipolarity is taking place. This order will undergo,
willingly or unwillingly, a transformismo1 process in which new ris-
ing powers are accommodated into the existing structure, while the
essential features of the existing order are maintained. This also implies
that the hegemony that sustains the order is undergoing transition
and transformation from a “unipolar-shaped” hegemony to one of
“interdependence” (Figure 1.1).
While claiming that the world today is in a changing process of “re-
ordering” – some scholars call this “a world order in transition” with
a clear connotation of the “shift of balance of power” (Christensen
and Bernal-Meza, 2014) – this chapter deems it to be necessary: first
and foremost, to uncover the ongoing processes taking place in the
world order that are bringing about functional and structural transi-
tions/transformations within the existing world order. Currently, three
parallel processes are taking place: the crises of the hegemony of the
existing world order, the rise of China and other emerging powers, and
global responses and adaptations to the changing world order.
Process 1: The crises of the hegemony of the existing world order

Historically, world orders, disorders or re-orders have always resulted
from the disturbing dynamics unleashed by the rise of new powers and
the resistance of established powers. The current global crisis has been
interpreted from different perspectives and in different ways. Some aca-

demics regard it as the market’s natural and periodical pattern of ups
and downs. Some scholars see it as a fundamental systemic crisis, i.e. a
crisis of the existing model of accumulation, or a crisis of the core of
the capitalist system (Christensen and Bernal-Meza, 2014). A dysfunc-
tional international system is leading to chaos. It can be argued that
the current international order is suffering crisis on four different but
interconnected counts (Flockhart and Li, 2010): the state of multilateral
cooperation, the growing need for multilateral cooperation, the uneven
record of liberal foreign policies, and major shifts in the global balance
of power.
Firstly, multilateral cooperation seems harder to achieve and sustain
than liberals had anticipated, suggesting that the order is in a crisis of
functionality, i.e. nation states and regional and international institu-
tions are unable to deal with global crises in an effective and collective
manner. The big question today is the extent to which the World Bank is
relevant to the alleviation of global poverty, and the extent to which the
International Monetary Fund (IMF) is still useful and effective in coping
with global financial crises. The United Nations (UN) seems to be power-
less in the face of veto powers. No international organization or national
player is functional in resolving global security crises – the Syrian civil
war, the Iranian and North Korean nuclear stalemates, the re-occupation
of Iraq by terrorist groups, the crisis in the Ukraine, the territorial dispute
in the East and Southeast China Sea.
Secondly, while multilateral cooperation is problematic, there is a
growing need for it to meet an ever-expanding set of novel challenges
in an increasingly globalized world. This is to suggest that world order
is experiencing a crisis of scope; it is beyond the capacity of nation states
and international institutions to resolve such a vast range of global prob-
lems, spanning from energy crisis to environmental degradation, from
transnational organized crime to global terrorism, from territorial dis-
pute to nuclear non-proliferation, and from civil wars to vast global
inequalities.
Thirdly, the uneven record of liberal foreign policies in delivering a
secure and just world order has challenged liberal values and prevented
world order from living up to its perceived promises and expectations.
As a result, it might be argued that world order is experiencing a cri-
sis of legitimacy, i.e. a notion similar to Habermas’ “legitimation crisis”2
(1975). This implies that nation states have lost confidence in interna-
tional institutions that they believe are just, benevolent and worthy
of their support and adherence. Moreover, they have lost faith in the
leadership and legitimacy of the hegemon and the core principal states’
ability to manage global affairs and to fulfill the proclaimed “end of
history”.
Lastly, but not finally, major shifts are taking place in the global bal-
ance of power – removing it from the USA and Europe. World order
is experiencing a crisis of authority, which is seen as a political strug-
gle over the distribution of roles, rights and authority within the liberal
world order (Ikenberry, 2012). This understanding of a “crisis of author-
ity” is largely shared by international scholars (Flockhart and Dunne,
2013). The most obvious evidence is the fact that the rise of China
and other emerging powers, including the Second World, has increased
their decision-making power in the core international economic insti-
tutions, such as the World Bank and the IMF, and is challenging the
hegemonic power exercised by the core states underpinning world
order.
Debates on the continuity or discontinuity of “US hegemony” in
world order continue. Some scholars draw a dark picture portraying a
world ruled by non-Western countries such as Russia and China (Kagan
and Kristol, 2000), claiming that without the USA, or without the
future leadership of the USA, the world would not have peace, pros-
perity and liberalization (Kagan, 2012; Lieber, 2012). Other scholars
maintain their endorsement of the continuity of US hegemony, seen
from the perspectives of its leadership, economic wealth and mission
of global management (Cumings, Hobsbawm and Chomsky, in Clark,
2009, p. 25). It is posited that, despite its relative decline, the USA
remains the sole hegemony in the BRICS’ IR lexicon. Ian Clark disagrees
with the concept and application of “hegemony” in connection with
the USA. He strongly argues that hegemony is “a status bestowed by
others, and rests on recognition by them” and is meant as “an insti-
tutionalized practice of special rights and responsibilities conferred on
a state with the resources to lead” (Clark, 2009, p. 24). Seen from the
perspective of “international society”, which views hegemony as a con-
dition of legitimate leadership within international society, the idea
of American hegemony is unachievable in contemporary international
order (Buzan, 2008, 2011; Clark, 2009). However, some of the hardcore
US elites still firmly believe that US hegemony will remain unchallenged
and unchanged, as the former US national advisor Thomas Donilon
declaims “We’re No. 1 (and We’re Going to Stay That Way)” (Donilon,
2014).
Nevertheless, globalization and transnational capitalism are not head-
ing towards the consolidation of the US-led hegemony but, rather,
towards diversification and differentiation in the sources and exercise

of hegemony in 21st-century “decentralized globalism” (Buzan, 2011),
depending on the economic sectors, political processes and/or social
units in question. This development is regarded as a form of what
sociological theorists call “functional differentiation”. This means that,
in diverse ways, the definition and role of hegemon/hegemony have
become differentiated and interdependent in the late 20th and early
21st centuries.
Process 2: The rise of China and other emerging powers

Since the beginning of the new millennium, the rise of China has
become the focus of attention on the part of opinion- and decision-
makers in the international system. The thesis of The End of History and
the Last Man (Fukuyama, 1992) has been discarded, as has the assertion
of “The Clash of Civilizations?” (Huntington, 1993), while the external
impact of Chinese development and integration with the world econ-
omy as well as its global presence is being felt worldwide, contributing
not only to many opportunities, but also many uncertainties:
• Its currency (the Chinese Yuan) has been the subject of dispute.
• Its trade has raised concerns for workers and firms in both developed
and developing countries.
• Its hunger for energy and raw material has led to geo-political
competition and commodity price increases.
• It has rivaled the USA and the rest of the developing countries as a
destination for foreign direct investment, and the effects of its own
overseas investments have begun to be felt across the world.
• Beijing’s policies on finance, currency, trade, security, environmen-
tal issues, resource management, food security, raw material and
commodity/product prices are increasingly seen to be affecting the
economy and lives of millions of people outside China’s borders,
because China’s shifts in supply and demand cause changes in prices,
leading to adjustment in other countries.
For many years, the rise of China has been raising global debate, partic-
ularly in the USA, about the “future of the West and the US” and the
future of global order (Ikenberry, 2008, 2011).
In addition to China, a number of other emerging powers – such as
the BRICS (Brazil, Russia, India, China and South Africa) and the Sec-
ond World (Khanna, 2008, 2012) – are changing the world’s political
and economic landscapes and realities by introducing a new dynamic
to global governance and by shaping new global economic and political

relations.
According to a recent report by the IMF, the economies of Brazil,
Russia, India and China now account for 20 percent of world eco-
nomic output, i.e. a four-fold increase was seen in the first decade of
the new millennium (Forbes, 2012). The BRICS and the Second World
are now part of IR and IPE vocabularies, symbolizing a rising phe-
nomenon of the changing world order in which that order can no
longer be controlled and governed by the US-led postwar treaties. In this
context, the term “BRICS” has been heuristically, and also sarcasti-
cally, applied by global media, not just as a new acronym but, rather,
as metaphor for the changing global order, as seen in the title of a
media article – “Building the New World Order BRIC by BRIC” (Roberts,
2011).
Process 3: Global responses and adaptations to the changing world

order
Processes 1 and 2 indicate the fact that the global redistribution of
power is inevitable. Implications of this ongoing redistribution of global
power will be magnified by the fact that the rising powers are not only
sharing their political and economic decision-making power with the
West, they are also sharing their own political and economic norms of
governance and capitalism. Seemingly, the emerging world order will
not have one or two hegemonic power centers; rather, it will have a
number of parallel centripetals competing for global/regional political,
economic and cultural influence in a “war of position”3 under sev-
eral groupings of states driven by certain common interests, i.e. the
“historical bloc”.4
This situation is presenting both opportunities and constraints to var-
ious countries and regions. This particularly impacts countries in the
global South, but also affects Northern countries or regions – these
include Northern middle powers, one of which, although located in the
Southern hemisphere, is Australia because of its level of development.
Such countries and regions are compelled to adjust their international
geopolitical and geo-economic strategies and policies to this new and
complex changing world order. It also raises many questions. Are old
alliances still maintained, or are new patterns of relationship forming?
Is the new centrality of the “emerging economies” becoming vital and
indispensable for some countries and regions? How does this changing
pattern of economic interdependence, together with the changing bal-
ance of global economic power, prompt countries in Africa, Asia, Latin
Table 1.1 Selective worldwide adaptation to the changing world order –

Standing on two boats5
Established/ Global South and Emerging powers

emerging powers middle powers
USA Australia China

USA EU China
USA South America China/Brazil
USA ASEAN China
USA/EU Africa China/Brazil
India South Asia China
Russia Central Asia China
America, the Middle East, Europe and Oceania to navigate and position
their economic and political strategies and policies towards the nexus
between the traditional powers and the new emerging powers, as well
as between emerging powers? What are the implications of this shifting
power equation for regional orders and subsystems?
Table 1.1 shows a “standing on two boats” dilemma, in which dif-
ferent and various priorities of national interest make it a complex
and difficult exercise for the global South and middle powers (central
column) to adjust and position themselves in relation to the estab-
lished/emerging powers (left-hand column) and the emerging powers
(right-hand column).
Adaptation to power transition is not always easy; it is often conflict-
ual. For example, China has become the No. 1 trading partner of almost
every country in East and Southeast Asia, and symmetrical interdepen-
dency between China and other regional states will continue to grow.
Meanwhile, nationalistic sentiment, territorial disputes and historical
issues have recently become more contentious among countries in the
region.
The objective of the book
Through presenting the multiple transformations taking place in the

existing world order, this book aims to contribute to the ongoing global
debate about the rise of China, the BRICS and other emerging powers
that are bringing about transformative economic and political changes
in the global system. So far, academic analyses within this debate have
focused on whether the new situation poses a challenge to the existing
world order and whether the rise of the BRICS is, or is not, to be seen
as a significant novelty in the global political economy. In other words,

most of the existing literature takes as its point of departure the spill-
over effect and impact generated by the rise of China and emerging
powers in causing the diffusion of Western/US hegemony and in shifting
the global power balance. This book turns the discussion around 180
degrees and focuses on the implications of the new situation for other
countries and world regions. In other words, the emphasis of the book
is on analyzing and understanding the global responses to the impact
caused by the new emerging powers.
The book – which describes the complex situations in which various
countries now find themselves as part of the “re-ordering” process –
attempts to find theoretical and empirical answers to some interesting
and challenging research questions:
(1) Are new patterns of international economic and political relations

emerging in terms of the formation of new alliances as a result of
global responses to the new situation?
(2) Is global re-orientation towards the emerging markets/powers grow-
ing in some countries and regions? How are these countries and
regions navigating and repositioning their economic and political
strategies and policies?
(3) Empirically, how does this changing pattern of economic interde-
pendence, this new global economic geography, this new interna-
tional division of labor, affect the economic and political outlook
and behavior of countries in Africa, Latin America, the Middle East,
Europe and Oceania towards the traditional powers and the new
“emerging powers”?
(4) What are the long-term implications of this shifting power equation
for regional orders and subsystems, as well as for the global order
and the international system in general? What are the theoretical
and practical implications of this to the global order?
The book, the chapters of which present a variety of perspectives,

seeks to answer such questions through various case studies, as well as
through theoretical conceptualization. Thus, the intention is to con-
tribute both to the theoretical debate and to the empirical evidence
concerning ongoing transformations in the global order. An impor-
tant focus is placed on the ways in which different countries and
regions react to the new global re-ordering characterized by the rela-
tive weakening of the old power alliance behind the US hegemony and
the strengthening of the new relationships with the emerging powers.
Global responses are observed in the process related to the ways in
which countries are trying to increase their synergies and opportunities,

while minimizing their weaknesses, disadvantages and vulnerabilities.
This focus is bound to become more central in future academic debates
on the changing global order.
The research agenda proposed in this volume is broad, both in geo-
graphical and dimensional terms. We suggest that the rise of the BRICS
is a central component triggering current transformations in the global
system. China’s rise is of particular importance, but the rise of two other
peripheral countries – Brazil and India – is also significant. The three
countries emphasized here are all countries that affect systems elsewhere
with regard to regional and global order. The chapters of this volume
thus look into the processes of response and adaptation in other world
regions, as well as in intra-BRICS relations, particularly in terms of the
relations of India and Brazil with China. Cases studied in the book cover
Latin America, Africa, the Gulf countries and Europe, as well as India and
Brazil.
In spite of the fact that Asia is highly relevant to the scope of our
research agenda, Asia has not been included in the book. The reason for
this is that, according to our understanding, it is not, as such, a “new
phenomenon” that Asia is responding to China’s rise today. The region
has been responding to China’s development since the founding of the
People’s Republic and has historically been part of China’s process of
opening and reform, and its rise. Thus, Asia’s response to an ascending
China is not a new process, unlike those taking place in Latin America,
Africa and other regions.
We foresee that the research agenda proposed in this volume will trig-
ger numerous future research efforts that will pay attention to particular
regions such as Asia, Latin America and Africa. Such research should
have a broad, substantial agenda and focus on the responses and adap-
tations of states, markets and societies to developments at the systemic
level and involve, for instance, the BRICS – particularly China, Brazil
and India.
Competing theories and paradigms
Following the initial presentation of the current state of world order,

as well as the intended objective of this book, we now move on to
introduce and interpret what we consider to be some of the most signif-
icant competing theoretical contributions in the debate on world order.
These contending theoretical paradigms represent a high degree of eclec-
ticism. The volume defends theoretical eclecticism for two main reasons.
Firstly, theoretical eclecticism or pluralism is employed due to the broad

thematic and substantive focus on states, markets and societies, as well
as on different dimensions, such as politics and economics. Secondly, we
believe that openness to a plurality of theoretical perspectives is likely
to provide comprehensive and varied insights into current transforma-
tions in the world system, and that this could not be accomplished from
a narrow and monistic theoretical perspective.
Realist and liberal theoretical traditions on world order

In the realist and liberal theoretical traditions on world order, the nation
state is considered the central unit of analysis, while the international
system is seen to be characterized by anarchy in the sense that “there is
no higher authority to which a state can appeal for succor in times of
trouble” (Gilpin, 2001, p. 17).
In his significant contribution to theorization on world order,
Charles Kindleberger (1973), who is seen as a major inspirator behind
hegemonic stability theory, argues that a leader is needed to guarantee
a stable world order characterized by a liberal international economic
system and relative peace. Hegemonic stability is ensured when the lead-
ing power possesses superior power capabilities and is willing to provide
essential “public goods”, such as openness to international trade and
the function of a “lender of last resort”. The motivation of the leading
nation state for providing such a framework is both national self-interest
and more idealist motivations of service to others (Gilpin, 2001, p. 99).
Understanding this will enable us to comprehend the current discussion
on the rise of China and global “public goods”. Recently, the USA has
been complaining about China’s “free-riding”6 behavior and Beijing’s
failure to fulfill the role and obligations of a “stakeholder” of world
order. In other words, China is seen as benefitting from the “hegemonic
stability” provided by the USA without making its own contribution to
the “public goods”.
The leader’s capacity and willingness to provide such a framework
is considered essential for ensuring the survival of international liberal
order. Kindleberger argues that the long period of economic depres-
sion in the 1930s, which led to the outbreak of World War II, was a
consequence of the absence of a leader nation undertaking this role
(Kindleberger, 1973 in Gilpin, 2001, p. 18).
Within the realist theoretical tradition, Kindleberger’s position is
largely accepted. However, using the concept of “hegemon”, rather than
Kindleberger’s concept of “leader”, Robert Gilpin argues from a realist
perspective that the hegemon’s motivations for fulfilling the stabilizing
role of the “hegemon” are selfish and not based on an idealist sense
of duty to perform a stabilizing function for the benefit of all states.
Based on his state-centric understanding, this selfish behavior is also
reflected more generally: “the economic/foreign policies of a society
reflect the nation’s national interest as defined by the dominant elite
of that society” (Gilpin, 2001, p. 18). Gilpin considers national security
the main concern for states (2001, p. 18) and argues (2001, p. 99) that
“at times the leader had to exercise power to achieve its objectives of
establishing and managing a liberal world economy”. In other words,
leadership or hegemony rests not only on collaboration and consen-
sus, but also on hard power. Gilpin adds that, apart from guaranteeing
a liberal world economy, the “leader must also encourage other states
to obey the rules and regimes governing international economic activi-
ties” (2001, p. 100). Furthermore, he suggests that the national interests
of the hegemon “could [also] include the economic and military inter-
ests of allies” (2001, p. 99). In other words, in geo-political terms, the
hegemon is seen as the leader of an alliance within the broader inter-
national context and, in order to maintain a leadership position, the
hegemon may find the defense of the national interests of allies to be in
its own national interests.
The description of the hegemon’s motivations as being based on an
understanding of self-interest implies that the hegemon may promote
policies that diverge from the ideal of a liberal world economy, e.g. if
it were considered to be in its interest to pursue economic protection-
ism (see Gilpin, 2001, p. 97). Similarly, the hegemon as a dominant
power could also potentially choose aggressive military policies if this
were considered to be in its own interest. This does not imply that
international institutions and the legal order enshrined in the United
Nations are irrelevant. Gilpin points out that “the existence of anar-
chy, however, does not mean that international politics is characterized
by a constant and universal Hobbesian war of one against all; states
obviously do cooperate with one another and do create institutions in
many areas” (Gilpin, 2001, p. 17). However, the perception of interests
of the dominant state may cause it to go against the rules and principles
enshrined in multilateral institutions.
In his influential book Beyond Hegemony, Robert O. Keohane (1984)
refutes the assumption that a hegemonic leader is needed in order
to guarantee the survival of international liberal order. He affirmed
that international liberal order can be maintained even in the absence
of hegemony. Theoretical interest in this issue was sparked by the
widespread perception of a relative decline in the power of the United
States at the time when Keohane wrote Beyond Hegemony. His argument
was that continued stability was likely to prevail in spite of hegemonic
decline, due to the legitimacy of international liberal order and the mul-
tilateral institutions set up by the USA and its coalition partners at the
end of World War II. His argument was that these multilateral insti-
tutions were widely considered to be functional for the stability of the
international economy. Keohane’s contribution is central to the theoret-
ical current within the liberal tradition of “neoliberal institutionalism”.
In other words, states would uphold existing international economic
regimes based on their perceptions of national self-interest. John Gerard
Ruggie (1993) claims that some states would even be willing to accept
outcomes that produced quite asymmetrical negative outcomes for
themselves, due to the belief in what he called “diffuse reciprocity”. This
concept reflects the idea that even states will accept relative losses today
if they expect this to be in their own interest in the longer term.
In a recent influential contribution to this debate on “the rise of
emerging powers” and “the future of the West’s hegemony”, John
Ikenberry (2011) defends a similar argument. His main point is that the
relative decline of the USA and the rise of emerging powers – particularly
China, but also India and Brazil and others in the current histori-
cal period – are not likely to undermine international liberal order.
Ikenberry expects that emerging powers will join this order rather than
seek to subvert it; this is in their own interest, since liberal order is at
the heart of their successful development trajectories. China and other
new rising powers have benefitted immensely from the open system of
multilateral economic institutions, and they depend on its continuity.
Thus, China and the BRICS countries in general are expected to main-
tain the liberal order while demanding more influence on it. Ikenberry
reasons that: “The struggle over international order today is not about
fundamental principles. China and other emerging great powers do not
want to contest the basic rules and principles of the liberal interna-
tional order; they wish to gain more authority and leadership within
it” (Ikenberry, 2011, p. 57). He argues that the diffusion of power in
the world economy does not lead to a crisis of liberal international
order. Instead, “today’s power transition represents not the defeat of
the liberal order but its ultimate ascendance” (Ikenberry, 2011, p. 57).
Ikenberry makes it clear that, although he considers the USA to be a piv-
otal great power that is likely to be able to go on to lead, it will no longer
be hegemonic. Li Xing’s concept and theory of “interdependent hege-
mony” (Li and Agustín, 2014) presented in this chapter can be seen as a
way to deal conceptually with Ikenberry’s understanding of the current

world order.
Li Xing and Óscar García Agustín argue that the world is in a phase
characterized by the crisis of hegemony of the USA, although the
structural essence of the world capitalist system (market access, capi-
tal accumulation and mode of production) is not necessarily in crisis;
rather, this system is maintained and extended by the emerging powers.
Their contribution can be seen as being in line with both the liberal tra-
dition of Ikenberry and the more Marxist-inspired world-system analysis
tradition of Immanuel Wallerstein, with its focus on the capitalist world
system. The world order, seen from Li Xing’s perspective, is moving
towards an “interdependent hegemony” in which the defenders of the
existing order and the emerging powers are intertwined in a constant
process of shaping and reshaping world order. “Interdependent hege-
mony” reveals the dynamic and dialectical nexus between the existing
world order and the potential emerging world order.
From a liberal perspective, Randall Schweller (2014) reaches the con-
clusion that the concept of hegemony is not useful for characterizing
the current world situation. From his perspective, there is no hegemonic
power now. Instead, the world is in a state of disorder. Disorder is char-
acterized by the condition of entropy in which a wide range of different
actors, including states and non-state actors of different types and with
differing interests and agendas, seek to advance their own interests. This
will not necessarily lead to a major war or to a general tendency towards
economic depression as in the 1930s, however. The main argument
from this perspective is that the world is in a post-hegemonic situation
characterized by disorder and a lack of leadership. Schweller sees this
tendency as a confluence of various factors, such as the rise of new pow-
ers, the relative decline of the USA, and the lack of willingness of the
USA to take on the role of leadership. Therefore, the concept of “global
hegemony” is not applicable to the current situation. Schweller does not
suggest that the growing level of global disorder will lead to severe eco-
nomic instability and economic depression; neither does he suggest that
it will necessarily lead to a new world war. Analysts who agree with the
interpretation of disorder differ on what they see as likely economic and
political outcomes of such a disorderly post-hegemonic situation.
Critical perspectives in conceptualizing world order and hegemony

In Marxist or neo-Marxist-inspired critical approaches to world order
and hegemony, social classes and social forces, rather than the nation
state, are seen as the central units of analysis. In the context of explain-
ing the rise of new emerging powers and the capitalist world order, the
two strands of theoretical conceptualization – i.e. world system analysis
or theory, and neo-Gramscian perspectives – offer an alternative analysis
and understanding.
The world system perspective is characterized by a historical and
holistic approach in which the capitalist world system constitutes the
main unit of analysis. Wallerstein divides the capitalist system into
three categories that correspond to different positions in the interna-
tional division of labor: the core, the semi-periphery and the periphery
(Wallerstein, 1979, 2004). In this way, he builds on the Latin American
historical structuralist school of thinking, which shares a systemic vision
with Wallerstein but was initially constructed around the categories of
core and periphery (Bernal-Meza, 2005).
The historical capitalist world system has been expressed by “cycli-
cal rhythms” including hegemonic cycles, i.e. the upsurge and decline
of different guarantors of the capitalist world order. These cycles were
produced by gradual but significant structural changes or shifts in the
patterns of capital accumulation and the distribution of power, result-
ing in geographical dislocations. However, the essence of the system
has remained unaltered, i.e. its capitalist ordering with the fundamen-
tal relations of inequality characterizing the capitalist system (Li and
Christensen, 2012; Li, 2014). Wallerstein (1997) sees the rise of China
as part of the rhythmic cycles of the world system, which continue
to follow the logic of a capitalist system of accumulation. China can
be seen as a competitor for global hegemony (Christensen and Bernal-
Meza, 2014, p. 29). Historically, most countries are kept from advancing
due to relations based on dependency and due to unequal exchange
associated with their particular positions within the international divi-
sion of labor. However, world system theory does not suggest that a
peripheral position is necessarily a destiny that cannot be changed.
It is, indeed, possible to advance within the system, thus changing
positions and categories within the systemic-structural morphology of
world system theory by taking advantage of capital mobility and the
relocation of production. Historically, the division of labor within the
capitalist world economy resulted in flows of commodities, labor and
capital across different geographical areas through chains of produc-
tion and exchange that may have altered the patterns of comparative
advantages.
Wallerstein’s idea of cyclical rhythms focuses on the system’s contra-
dictions and crises, and he suggests that these rhythms tend to follow
long cycles, the so-called “Kondratieff cycles”. In an analysis under-

taken in 2000 of the phase starting in 1945 with the end of World
War II when the USA emerged as the undisputed hegemon within
the capitalist world order, Wallerstein argues that the period follow-
ing 1976 was characterized by major dislocations, or structural failures,
leading to a long history of anti-systemic movements and a serious
decline in the legitimacy of state structures that threatened to sub-
vert the political pillars of the existing world system. He claims that
the modern world system is in a structural crisis and has entered a
period in which it displays a chaotic behavior. According to his view,
it is not possible to pre-determine where this will lead (Wallerstein,
2000). World system theory, thus, seems to suggest that the capital-
ist world system may fall apart (Wallerstein, 1979). In the 1970s, this
focus on the possible demise of capitalism and the introduction of
socialism was a prominent theme, and was also a theme of Latin
American dependency theorists such as Fernando Henrique Cardoso
and Enzo Faletto (1979); Wallerstein can be seen to be part of this
current. Not only did dependency theorists write about the possible
demise of capitalism; typically, they also called for such an outcome,
thus promoting anti-systemic political movements. So far, history has
not moved in this direction as capitalism has proved to be resilient.
While acknowledging the historical “cyclical rhythms” of the world
capitalist system, some scholars attribute the survival of the system to
the dynamic and resilient features of capitalism which are being glob-
alized and diversified into a new stage manifested by a phenomenon
of global “varieties of capitalisms” (Hall and Soskice, 2001), includ-
ing the new emerging markets (Nölke, 2010). Historically, the world
capitalist system has always contained varieties of capitalism, such as
the so-called “American capitalism”, “European capitalism”, “European
Nordic welfare capitalism”, “Asian crony capitalism” and “Russian mafia
capitalism”.
However, the capitalist world system is currently in a period of transi-
tion or transformation as a consequence of the diffusion of power within
the system. Where this historical cycle will lead is not clear, neither in
terms of its hegemonic features, nor in terms of the more precise char-
acteristics of the patterns that will characterize the future distribution of
labor and the process of capital accumulation. These issues will have
strong implications for the distribution of power and for the precise
shape and characteristics of the features of the system in the com-
ing hegemonic or post-hegemonic situation. Will neoliberalism prevail?
Is neoliberalism actually hegemonic as some neo-Gramscian scholars
suggest (see Chapter 3 by Ian Taylor), or is neoliberalism actually dis-

credited as suggested by other neo-Gramscian scholars (Ougaard, 2013)?
The theoretical discussion will now move to neo-Gramscian perspectives
on hegemony and world order.
Ian Taylor’s contribution to this volume follows a neo-Gramscian
approach to theorizing the rise of the BRICS in the global order. He
underlines that the rise of the BRICS can best be understood through
the neo-Gramscian concept of “passive revolution”. From this perspec-
tive, the rise of the BRICS in the global order does not change the
capitalist order. Rather, capitalism is maintained in its neoliberal form.
Neoliberalism, or varieties of neoliberalism, is consolidated as the mode
of accumulation through a process of restructuring and accommoda-
tion (passive revolution) of emergent dominant social forces within
the BRICS whereby “the relationship ruler-ruled is maintained or re-
imposed”. Taylor argues along the same lines as Li Xing and John
Ikenberry that “there are mutual economic interests and interdepen-
dencies among BRICS, the US and the EU”, which explains why the
common strategy of these players is to pursue multilateral negotia-
tion and cooperation. This explains the receptiveness of the traditional
powers towards the emerging new powers. As Taylor argues, in a cap-
italist order, the interests of the emergent dominant forces within
the BRICS rest on the terms that are favored by transnational fac-
tions and transnational capital. This means that hegemony rests with
transnational factions of capital across nations.
Morten Ougaard’s neo-Gramscian interpretation is similar to this,
with a few differences. In his interpretation, a crisis of hegemony is
seen, as is also Li Xing’s view. He emphasizes the concept of a “histor-
ical bloc” as used by Nicos Poulantzas, meaning the dominant classes
in a society. According to Poulantzas, one class or class faction must be
leading or hegemonic in order to guarantee a stable order, although this
order must be negotiated and compromises must be made with other
classes or class factions in order to guarantee a stable order. Otherwise,
a political crisis emerges (Ougaard, 2013, p. 4). Poulantzas’ focus was
on a national society, but Ougaard projects this understanding onto
the international or global level. Ougaard refers to Peter Evans (2008,
p. 283, in Ougaard, 2013, p. 15), who has argued that a tendency is
seen in countries such as Brazil, India, China and Mexico that national
elites are internationalized. He proceeds to argue that the differences of
interest and agenda between these elites and the elites in the North are
being reduced over time and have become marginal. Likewise, Matthew
Flynn refers to Leslie Sklair, who speaks of the existence of a “dominant
transnational capitalist class” that is increasingly disconnected from

national interests (Flynn, 2007, p. 13). Ougaard, however, finds that this
is going too far. He argues that, internationally, expanding businesses in
emerging countries should be seen as nationally delimited factions of
the hegemonic transnational power bloc (Ougaard, 2013, pp. 15–16).
This position is clearly in line with Ian Taylor’s theoretical perspective.
However, Ougaard stresses that the BRICS countries are in opposition to
the dominant traditional powers due to conflicts of interest in areas such
as international trade rules and rules on cross-border financial transac-
tions (Ougaard, 2013, p. 16). He thus stresses the existence of certain
conflict lines within the transnational power bloc and argues that these
should be seen as a political crisis of hegemony (Ougaard, 2013, p. 13);
moreover, the conflicts between the old power bloc in the North and
the new powers in the South both involve a “game” between states and
a game between social forces (2013, p. 17).
A significant difference between the theoretical interpretation of Ian
Taylor and Morten Ougaard seems to emerge on the basis of this dis-
cussion. According to Ougaard, the crisis of hegemony is a consequence
of the deep and complex crisis of the neoliberal development model, in
which no new hegemonic project has imposed itself (2013, p. 12). This
means that world order could be seen to be in a process of transition,
though it is not clear where it is moving. Taylor, on the other hand,
speaks of continued neoliberal hegemony and argues that this reflects
the maintenance or re-imposition of the relationship between the ruler
and the ruled (Chapter 3, in this volume).
In this context, Jan Nederveen Pieterse (2011) discusses two opposing
narratives (Pieterse refers to them as “scripts”) or theoretical interpreta-
tions of the significance of the process of power diffusion taking place
in the global political economy. The first narrative follows Ian Taylor’s
interpretation. Pieterse speaks of “recalibrating the old order” and argues
that this is a script of “global plutocracy”, with Anglo-American capital-
ism and financial markets in the West back in the lead and emerging
markets joining the club. This echoes what we have called “re-order”
and corresponds to Taylor’s view concerning the maintenance or re-
imposition of the relationship between the ruler and the ruled. Pieterse’s
other narrative or script is that of the “emergence of new logics” on
the basis of a new situation and process characterized by “emancipatory
multipolarity”. In this script, major emerging countries representing the
majority of the world population have joined the “global head table”.
This not only implies that emerging powers are joining the club of
other leading powers, but that, instead, they are seen as functioning
as representatives of the developing world, and their aim is seen to be

that of changing the existing order substantially in a direction that is
more socially balanced.
In Ikenberry’s liberal interpretation (2011), this scenario would still
correspond to his scenario of a cemented liberal world order in which
“the hegemonic organization of the liberal international order slowly
gives way” and “more states gain authority and status” within it.
The peripheral realist or autonomist perspective

Some consider the autonomist theory the school of thinking of “real-
ists from the periphery” (Giaccaglia, 2012, p. 92). It builds on the
Latin American historical-structural and systemic theory of develop-
ment. During the Cold War period, analysts from within this perspective
suggested that developing countries should pursue a strategy of diver-
sifying their IR, diverting their exclusive focus from the USA in order
to strengthen their room for maneuver (i.e. autonomy), enhance their
own development and promote solidarity between developing countries
(Giaccaglia, 2012, p. 92). This perspective is still quite strong, particu-
larly in Brazil and Argentina. It is introduced through the arguments of
three Brazilian autonomist scholars in connection with their analytical
interpretation of the rise of emerging powers, such as the BRICS.
Samuel Pinheiro Guimarães (2003, p. 108) argues that the interna-
tional system in the 1990s after the end of the Cold War had led to a
problematic tendency to centralize power in a number of “hegemonic
structures” dominated by the leading core countries. Moreover, he
described the world as “characterized by instability, by growing dispari-
ties between countries, and by the arbitrary use of force”. The USA and
its coalition were seeking to introduce different rules and norms in the
economic sphere and in the political/security sphere which would cen-
tralize power and development to their advantage. The rules and norms
should then be legalized through international agreements in different
multilateral institutions, thereby freezing power relations to the advan-
tage of the leading core states (see Guimarães, 2003, pp. 103–109; and
Christensen and Bernal-Meza, 2014, pp. 30–31).
From the perspective of the dominant powers, the search for new
binding global rules in the economic sphere and the introduction
of informal rules favorable to military intervention and “conditional
sovereignty” were seen in a positive light; they were considered as a
way to control the process of economic globalization and to protect
individuals from gross and systematic violations of their human rights.
However, Guimarães found that these trends were highly worrisome; he
saw them as part of a web of formal and informal rules and practices
that served the interests of powerful states and their elites and thereby
open to misuse. He favored a different development that would increase
the decision-making “autonomy” of developing (peripheral) countries
and protect them from the misuse of military power by the dominant
liberal states. Guimarães argued that, on the one hand, the strategic
objectives of what he called “Great Peripheral States” should partici-
pate in the hegemonic structures in a sovereign and non-subordinated
way, which might reduce their vulnerability to these structures (2005,
p. 157). Furthermore, the “Great Peripheral States” should fight for the
construction of a multipolar world, and Brazil should pursue the cre-
ation of alliances aimed at reducing the effects of the concentration of
power between countries and states in order to create a more balanced
world order less characterized by violence and privilege of the powerful
(Guimarães, 2005, p. 178).
In a later text, Lima and Castelan argue along the same lines (2011).
They find that the emergence of the “Great Peripheral States” – partic-
ularly China, Brazil and India – has, in fact, led to a more multipolar
ordering of the world and complicated the scenario of a “unipolar polit-
ical order centered on the United States”. They furthermore criticize the
liberal perspective, arguing that the BRICS should be seen as simply join-
ing the existing liberal order. From their perspective, the BRICS coalition
is revisionist as regards the current economic liberal order. Lima and
Castelan argue that the BRICS have resisted US promotion within the
financial G20 of a new rule that would set limits for the accumulation
of reserves in national central banks. From the position of the BRICS,
such a new rule or principle would go against the principle of autonomy
or sovereignty, which they defend. Moreover, Lima and Castelan point
out that the BRICS are promoting generalized respect for a global legal
order and thus disagree with military interventions carried out without
legal sanction by the United Nations and its Security Council (Lima and
Castelan, 2011).
Writing from the realist autonomist perspective, Amado Luiz Cervo
(2012) argues that the BRICS are against NATO’s strategy of violence as a
solution to conflicts. He also speaks of counter-hegemonic power strate-
gies used by the BRICS towards the traditional powers in an effort to
transform the international order towards a more balanced, democratic
and inclusive order. Lima and Castelan (2011) argue that the BRICS are
seeking a legal multilateral order centered on the United Nations (UN)
and the World Trade Organization, and are critical of the hegemony of
liberal economic norms. Instead, they defend financial regulation, the
coordinating system of the state, economic security, and the primacy

of development and social inclusion. They conclude (2011) that the
world is experiencing an interesting moment characterized by an imbal-
ance between the order and the distribution of power that is becoming
increasingly diffuse. Lima and Castelan see this as a variant of an inter-
national power transition in which conflict is institutionalized around
changes in the rules and norms of international institutions. In other
words, these two Brazilian theorists disagree with Ikenberry’s argument
that the rules and principles of the liberal international order are not
being questioned by the BRICS.
Chapter contributions
After this introductory chapter, Chapter 2 by Li Xing contributes a theo-

retical framework with which to conceptualize the emerging world order
in an era of the rise of China, the BRICS and other emerging powers.
The chapter analyzes the transformation of IPE and the emerging world
order by providing a framework of understanding of the dialectic nexus
between the rise of the emerging powers and the existing world order
as an interdependent dynamic process of mutual challenge, mutual
constraint and mutual accommodation. The central conceptual notion
applied by the chapter is “hegemony”. Through disaggregating the com-
ponents of hegemony in the existing world order and understanding
the fact that hegemony is being restructured, the chapter posits that the
existing world order is undergoing a re-ordering process in its transition
from “hegemony and world order” to “interdependent hegemony and
world re-order”.
Chapter 3 by Ian Taylor theorizes the issue of world order transfor-
mation from a neo-Gramscian perspective. On this theoretical basis,
he analyzes transformations in the current world. He argues that the
rise of the BRICS does not lead to a substantial change in world order.
Instead, what the world is experiencing is a process of adaptation and
co-optation of the BRICS and their economic elites by traditional pow-
ers and leading transnational economic classes. This process is best
understood through the Gramscian concept of “passive revolution”.
The chapter argues that the rise of the BRICS, rather than challenging
neoliberal hegemony, cements this as the pursuance by the BRICS of
different varieties of neoliberalism. As a consequence, the transnational
factions of economic elites within the BRICS form part of a global cap-
italist class in which transnational factions are hegemonic. Relations
between the BRICS and Africa are seen to be exploitative, as are the rela-
tions of the advanced industrial Western counties with Africa. Ian Taylor
thus suggests that the BRICS should not be seen as providing different
and more “emancipatory” opportunities for Africa.
Chapters 4 and 5 look into the situations in Brazil, China and India.
Chapter 4, by Steen Fryba Christensen, raises the question as to how
prioritized the strategic partnership between Brazil and China is from
the Brazilian and the Chinese perspectives. The question of the relative
priority given by Brazil and China to their strategic partnership is signif-
icant with regard to the issue of the degree of cohesion within the BRICS
coalition. While some analysts see the BRICS coalition as the most sig-
nificant novelty in the international political system, other analysts are
expecting that the BRICS coalition will prove to be just a temporary
foreign-policy strategy for the member states, and that it will eventu-
ally fall apart due to the vast differences between the countries and
their conflicting interests. The chapter argues that Brazil attaches great
importance to its strategic partnership with China, although impor-
tant elements of contention and conflict of interest with China also
apply. For China, the strategic partnership is less prioritized than in the
case of Brazil. However, relations with Brazil have become more signifi-
cant, particularly after the outbreak of the international financial crisis
in 2008.
Chapter 5, by Jørgen Dige Pedersen, brings up a similar discussion
in his analysis of India’s geo-economic and geo-political strategies.
The author questions the relative significance of the BRICS coalition
in Indian foreign policy and in the strategic thinking of India, and
argues that the orientation of India’s foreign policy is very complex
and includes not only aspects of coalition-making with the BRICS and
strengthened ties with traditional powers, but also conflictual elements
in India’s bilateral relations with China. Finally, the chapter discusses
India’s likely direction and priorities, and concludes that India’s tra-
ditional policy as a developing nation still remains and gives rise to
contradictory policies.
Chapters 6 and 7 examine some cases from the perspectives of Africa
and the Middle East. Chapter 6, by Crystal A. Ennis, analyzes how global
shifts in economic geography affect local development choices and the
geo-economic positioning of the Arab Gulf economies. Focusing on the
structurally embedded challenges in Gulf economies related to energy
commodity specialization and labor supply issues, the author finds that
the Gulf economies are increasingly engaging with Brazil, India and
China – and that their international trade relations are increasingly
moving towards Asia. However, this has no impact on the security

policies of the Gulf countries, which remain allied with the USA. The
chapter discusses the extent to which the changes in the trade pat-
terns of the Gulf countries may incentivize change or further entrench
structurally embedded challenges in Gulf economies, such as a high
dependence on oil and on foreign labor supply.
Chapter 7, by Ian Taylor, analyzes African national responses to the
growing relevance of emerging countries in Africa. It focuses on rela-
tions with the BRICS countries. The author asks if the rise of the
BRICS has provided Africa with new, qualitatively different and supe-
rior opportunities for a positive insertion into the global economy. Does
the interest of BRICS countries in cooperation with Africa provide it
with better development opportunities than those offered by traditional
Northern partners? Ian Taylor argues that this is not the case. Relations
between BRICS countries and African countries are not substantially dif-
ferent from African relations with traditional Northern partners, and
African countries continue developing increasingly deep patterns of
dependency with their external partners.
Chapter 8, by Óscar García Agustín, analyzes the changing patterns of
alliance in Bolivia’s foreign policies. The chapter focuses on the ways in
which, besides the security dimension, political alliances at an inter-
national level may imply a simultaneous development of collective
notions of norms, values and identities. Building on social movement
theory’s concept of “positionality” and the focus on collective identities
of sociological institutionalist theory, the author argues that Bolivia is
seeking to take part in a new political alliance revolving around the
BRICS in an attempt to promote shared values towards the “West”.
Bolivia is conceived of as a “swing state” seeking to promote its own
interests, norms and values by engaging in a constellation of alliances
which, besides the BRICS, also includes participation in regional orga-
nizations such as Unasur, CELAC and ALBA. This analysis points in the
direction of a post-hegemonic state of affairs for the world, as well as for
Latin America.
Chapters 9 and 10 focus on European cases. Chapter 9, by Camilla
T. N. Sørensen, analyzes the development of Danish foreign policy in
recent years; Sørensen shows how Denmark is seeking to manage the
shift under way in the global economic and political order. Typically,
Denmark is portrayed as an activist proponent of Western liberal world
order. However, as regards the world order questions inherent in the
rise of the BRICS, the Danish strategies remain rather mute, revealing
the dilemma of ensuring Danish economic interests – which link up,
in particular, with the new emerging power centers, while promoting

Danish values – which are closely linked to the existing Western lib-
eral world order. The chapter concludes with a case study of the Danish
strategy and policy towards China. Theoretically, the author offers a
neoclassical realist argument for the analysis of the foreign policy of
small states.
Chapter 10, by Ane Bislev and Karina Smed, provides a case study of
Chinese tourism in Europe. With the change in the global economic
power balance, the world has seen substantial changes in the global
division of labor. This topic is usually analyzed in terms of production
systems and international production networks but is also of relevance
to the tourism sector. In their analysis, the authors look into the rise
in Chinese tourism in Europe in order to understand how countries
adapt their tourism strategies and infrastructures in order to attract
Chinese tourists – the fastest growing and highest spending segment
of international travelers.
Chapter 11, written by Steen Fryba Christensen and Li Xing, con-
cludes the book by drawing up and discussing the findings of the
different chapter contributions, as well as reflecting these findings in
relation to the research questions and the theoretical discussions pre-
sented in this Introduction. On this basis, some tentative conclusions
are drawn, and the authors suggest directions for future analyzes of
world order in an age of globalization, transformation, multipolarity,
flux and indetermination.
Notes
1. The notion of transformismo used by Gramsci refers to a strategy in elite poli-
tics aimed at accommodating opposing forces that may disrupt the status quo
and threaten the hegemony of the ruling elite. The intention of the strategy
is to create a flexible, centrist coalition of government in order to isolate the
extremes of the left and the right, and to incorporate extended cultural, social,
economic and political networks.
2. Jürgen Habermas identifies crisis as comprising several levels: a crisis of effi-
ciency and rationality at the level of the system, a crisis of legitimacy at
the socio-cultural level, and a crisis of motivation at the individual level
(Habermas, 1975).
3. The notion is originally derived from Antonio Gramsci; it refers to social
politics and a political strategy of ideological struggle which emphasizes the
“non-violent” aspects of civil society. This strategy should be distinguished
from another Gramscian term: a “war of maneuver”, i.e. a direct, violent and
immediate assault on the state (Gramsci, 1971).
4. The notion is originally derived from Antonio Gramsci; it refers to histori-
cal congruence between material forces, institutions and ideologies. Broadly
speaking, it implies an alliance of a “coalition of social forces” united under a

common hegemonic project (Gramsci, 1971).
5. The direct meaning of the Chinese proverb of “standing on two boats” refers
to a metaphor implying a dilemma, i.e. “one foot cannot stand on two boats”.
The implication behind the proverb is that “a person cannot serve two masters
equally and impartially”.
6. In a video interview by Thomas L. Friedman on August 8, 2014, President
Obama claimed that the USA is a different sort of superpower compared with
China, because China is a free rider.
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2
From “Hegemony and World
Order” to “Interdependent
Hegemony and World Re-order”
Li Xing
Conceptual understanding: Hegemony and world order
In studies of world politics and international relations (IR, IPE and world
order), the concept of “hegemony” is often applied to describe different
enduring aspects of an order in the international system. It is a use-
ful instrument in conceptualizing and understanding the dynamic and
dialectic interplays in world order and international relations/systems.
Realism perceives hegemony as the dominance by one leading state
in interstate relations, such as in the concept often used by realism:
“hegemonic stability”. Liberalism sees hegemony as being embedded in
the interactions of each individual at the bottom, and in the norms and
values of international institutions as rule-settlers at the top. And world
system theory emphasizes state-based class and material forms of a hege-
mony which is shaped and maintained by a global division of labor.
This division of labor constantly generates and regenerates unequal
exchange, and that, in turn, differentiates the strong/rich versus the
weak/poor, not only economically, but also politically and militarily.
“Hegemony” as a concept applied in social and political science is, to
a large extent, derived from Gramsci (Gramsci, 1971). The Gramscian
notion of hegemony was originally applied at the national/domestic
level, where it involved a number of interrelated elements such as power,
class struggle and interest, national-popular, civil society, material base
and party politics. The Gramscian political theory of hegemony is aimed
at providing a conceptual framework for understanding the dialectical
relationship between state and society, between politics and class, and
between culture and ideology, so as to denote the factors behind the
predominance of a ruling class which is able to exercise overarching
30
Li Xing 31
structural power over other social groupings and classes economically,

politically and culturally. Hegemony is achieved by economic, politi-
cal and cultural leadership leading to a broadly shared historical bloc.1
It implies a societal acceptance of a large range of norms and rules rang-
ing from mode of production to organizations, systems, regimes and
social order. Eventually these norms and rules become internalized into
a “common sense”.
Based on Gramsci’s concept on hegemony in a national context,
Robert Cox (1981, 1983) made a great contribution in developing the
“Gramscian school of international relations”, in which the concept
of hegemony is raised from the national to the international level.
It is a critical theory of understanding the nexus between hegemony,
world order and historical change. The neo-Gramscian school views
hegemony as a form of international order, and explains how inter-
nal/national hegemony, in which ruling class and social forces have
been able to occupy a leading position within a nation state, is then
extended and projected outwards on a world scale, leading to the shap-
ing of the international order. The way to study hegemony by looking
at the different interconnected components – ideas, material capacities,
institutions, social forces, forms of state, world orders – and their inter-
actions between national and international actors and institutions is
referred to by Cox as a method of historical structures (Cox, 1983). Struc-
tural power is understood by Susan Strange as “the power to decide how
things shall be done, the power to shape frameworks within which states
relate to each other, relate to people, or relate to corporate enterprises”
(Strange, 1998, p. 25).
As an extension of Gramsci’s conceptual tool, Cox’s approach intends
to study the historical patterns regarding when and how hegemony
begins and consolidates, and when and how it declines and ends. Fol-
lowing this line of thinking, and based on the study of the history of
world order, Cox explains how the realization of “universal in concep-
tion” (Gramsci’s “common sense”) – the perceived understanding of
an order – is accomplished. One of Cox’s areas of investigation is to
examine US hegemony through the lens of international organizations
in order to show how “universal in conception” is generated and how
these organizations help to develop the legitimacy of hegemony of the
US-led world order by using a variety of instruments, such as rules, prod-
ucts, ideology, elites and the introduction of counter-hegemonic ideas,
and so on. This implies that the outwardly extended hegemony driven
by national ruling classes and interest groups is structurally shaped and
systematized by international organizations and regimes that enable the
hegemon, with the support of its alliance of core states, to perpetuate its
favorable position in the world order, and to lead and shape the develop-
ment of world systems in general. To claim a status of global hegemony
is, to paraphrase Cox (1983), to assert a comprehensive capacity to
shape international social relationships which connect a web of social
classes across different countries; thus, world hegemony is both a social
structure (social forces, social classes), an economic structure (mode of
production, capital and market) and a political structure (legitimacy and
authority).
Due to the fact that the hegemony of an existing order is constantly
being challenged, the concept of hegemony also denotes a resilient
capacity of world order in which the hegemon is able to contain
emerging crises, and to accept a reconciliation process of reform and
reorganization for the sake of production and reproduction of the legit-
imacy of hegemony. However, it must be understood that any reform,
whether occurring willingly or unwillingly, must not challenge the eco-
nomic order on which the hegemony of world order is based. To lose
economic order is to lose the material basis on which the hegemon relies
to sustain its hegemony.
American hegemony and the postwar world order

The existing world order is also alternatively called the “postwar world
order”, i.e. the order was constructed and maintained largely by the
USA, the only remaining global superpower that was not devastated by
the war. The hegemony of the US-led postwar order can be understood
as being founded on four supporting pillars, which support the capacity
and sustainability of US hegemony:
• A capitalist world economic system: the Bretton Woods system

of trade liberalization; the US dollar’s dominant position; global
economic interdependence; a capital alliance with developing
economies.
• A global/regional political alliance and collective security: an
American-European-Asian security alliance, and a military coalition
with Third World authoritarian states.
• A global trade regime: consolidating a Eurasia-centered global trade
network.
• A global value system of norm and ideology: the “American Dream”
as an integrated symbol of individual freedom, the pursuit of success,
free competition and liberal democracy; and a wide range of theories
on development and international relations.
Li Xing 33
Figure 2.1 The four pillars of American hegemony in the world order
The essence of the four pillars of US hegemony, which combines hard

and soft powers, was safeguarded and sustained in order to meet both
visible and invisible objectives (Figure 2.1). The visible objective was
to resist the expansion of Soviet and Chinese communism, as well as
that of other hostile anti-USA political forces; the invisible objective,
which was central, was to defend the gross inequalities in world order
and the tremendous privilege and power this global disparity of wealth
brought to the United States. This unspeakable but fundamental goal of
US postwar hegemony is vividly spelt out by George Kennen:
We have 50 percent of the world’s wealth but only 6.3 percent of its
population . . . In this situation we cannot fail to be the object of envy
and resentment, . . . . Our real task in the coming period is to devise a
pattern of relationships that will allow us to maintain this position of
disparity, . . . . We should cease to talk about the raising of the living
standards, human rights, and democratization. The day is not far off
when we are going to have to deal in straight power concepts. The
less we are then hampered by idealistic slogans, the better.
(Kennen, 1976, National Security Council (NSC)
Memorandum 68)2
National Security Council (NSC) Memorandum 68, one of the key US for-
eign policy guidelines of the postwar era, underlined two parallel
US policy objectives. One was to foster a “world environment in which
the American system can survive and flourish”, and the other was to
“foster the seeds of destruction within the Soviet System” (NSC-68,
cf. Robinson, 1995, p. 643). The Memorandum made it clear that, even
if there was no Soviet Union threat, the United States would face the
great problem of achieving a global order and security (ibid.). The central
interest of Washington’s strategic goal, as indicated by the Memoran-
dum, was to facilitate the access of the USA and its Western allies to
Third World markets, labor powers and raw materials – goals which even
predated the Cold War (McSherry, 2000, p. 29). This resource-security
priority can be further confirmed by a secret State Department policy
document of September 1962 titled “United States Overseas Internal
Defense Policy”:
The broad U.S. interests in the underdeveloped world are as follows:

(1) A political and ideological interest in assuring that developing
nations evolve in a way that affords a congenial world environment
for international cooperation and the growth of free institutions.
(2) A military interest in assuring that strategic areas and the man-
power and natural resources of developing nations do not fall under
communist control . . . (3) An economic interest in assuring that the
resources and markets of the less developed world remain available to
us and to other Free World countries . . . .
(McSherry, 2000, p. 29)
The material base of producing and reproducing the hegemony of the

postwar world order, led and driven by American capitalism, which
expressed the interests of the capitalist world system as a whole, did
establish a variant “ultra-imperialist” economic order. This was accom-
plished through the reorganization of the capitalist world economy by
creating new conditions for the continuation of capital accumulation.
The coordination problem within the world system was resolved by “the
existence of a superordinate power, capable of imposing discipline on
the system as a whole, in the common interests of all parties” (Anderson,
2002, pp. 20–21). Here, American hegemony denotes a capacity to keep
the important but unstable equilibrium between its own fundamental
interests and those of its allied countries, so as to ensure that the allied
countries did not withdraw their consent to the rule of the USA.
Theoretical reflections on the challenge by emerging powers

From the perspectives of realism, the hegemony of the US-shaped post-
war world order must aim to maintain the patterns of global relationships
in the world capitalist system, which will always produce and reproduce
gross inequalities and continue to generate the advantages, benefits and
privileges which this global disparity of wealth has brought for the
USA and other core Western countries. Seen from this perspective, it
is not surprising that the BRICS and rising powers in general – China,
in particular – are perceived as a serious threat to the patterns of global
relationships. Such perceptions are clearly spelt out by one of the key
Li Xing 35
Figure 2.2 The emergence of a Chinese financial order
US mainstream opinion writers, Fareed Zakaria: “Beijing seems to want

to fund goods in a way that replaces the existing international system
rather than bolsters it. And in recent years, China has made determined
efforts to exclude one nation from all its plans – the United States”
(Washington Post, November 13, 2014). China is seen to be preparing for
and constructing a post-US financial order through its own approach to
“public goods” (Figure 2.2), such as the BRICS Bank, the Asian Infras-
tructure Investment Bank (AIIB), and the regional development fund
named “Silk Road” (the name of an ancient trading route linking China
with various regions). Seen from the perspectives of neo-Gramscian IR
theory, the crucial question is whether China is constructing alternative
financial institutions through which this country aims to develop a new
legitimacy of hegemony and a Chinese-shaped international financial
order.
Liberalism, on the other hand, regards US hegemony as being benign
and globally beneficial, and sees the US-led postwar world order as being
built on the general principles of “liberal internationalism” (liberal
order). Liberal world order has always been assumed to be integrative
and expansive, with low barriers to global economic participation, as
well to the emergence of new emerging economies. The order can be
characterized as an open, rule- and institution-based international sys-
tem emphasizing norms of non-discrimination and market openness
(Ikenberry, 2008, 2011). In line with this type of viewpoints, some
scholars firmly believe that the rise of China, the BRICS and other
emerging economies does not symbolize the decline of the existing

liberal order; rather, it represents the order’s inclusive capacity to
accommodate and integrate latecomers. Accordingly, the liberal school
believes that the success of the emerging economies is achieved within
the liberal order rather than without, and it implies the strength of
the liberal order rather than its weakness (Ikenberry, 2008, 2011). The
China–USA commitment to climate change legislation and other coop-
erative deals reached at the Asia Pacific Economic Cooperation (APEC)
summit in Beijing in November 2014 proves that China is no longer
taking a back seat in global diplomacy. China’s prosperity is achieved
through its integration in the liberal world order, which will eventually
encourage Beijing to assume great power status and responsibilities.
Another school of thought which provides a good framework for
understanding the rise of emerging powers is world system theory. This
theory is more historical and holistic, reaching beyond the perspectives
of both realism and liberalism. The explanations given by world sys-
tem theory (Wallerstein, 1979, 1997, 2004) are based on the long-term
history of the evolution of the world system, which reflects a series of
“cyclical rhythms”, i.e. the rise and fall of the system’s contradictions
and crises, as well as the upsurge and decline of successive guarantors,
with each one shaping a particular pattern of control and governance.
These cyclical rhythms are still active and are continuously bringing
about minor but structural shifts in certain directions. The history of the
world system shows that the division and re-division of labor within the
capitalist world economy result in the movements of commodity, labor
and capital across different geographic areas through chains of produc-
tion and exchange, as well as in comparative advantages. The rise of
China and other new emerging powers, seen from the perspectives of
world system theory, serves as contemporary evidence that the historical
“cyclical rhythms” are still in operation, and are successively incorporat-
ing other parts of the world into their division of labor. Accordingly, the
BRICS phenomenon demonstrates that the world capitalist system has
been expanding beyond its core territories and incorporating new cen-
ters of capital accumulation and new spaces for capitalist relocation and
investment.
However, a more pessimistic picture on the future of the world capital-
ist system drawn by scholars such as Li Minqi (Li, 2008), who also take
the world system perspectives, is based on the analysis that the inclusion
of China and India in the world market symbolizes the physical end of
global capitalism’s geographical expansion. China’s competition is seen
to lead to peripheralization of existing semi-periphery countries within
Li Xing 37
the current world system, because “China’s competition will completely

undermine the relative monopoly of the existing semi-peripheral states
in certain commodity chains. The value added will be squeezed, forcing
the traditional semi-peripheral states to accept lower wage rates close
to the Chinese rates [which they cannot do]” (Li, 2008, p. 436). The
minimization of the semi-periphery space within the existing world cap-
italism system caused by the rise of China will eventually lead to the
demise of the entire system.
The research question
The main aim of this chapter is to find some analytical answers and
explanations to the burning inquiries and questions currently pursued
and posed by worldwide IR and IPE scholars and policy-makers. Here,
the author intends to ask a different question: Is the nexus between
the US-led/West-dominated existing world order and the emerging world
order brought about by the rise of China and other emerging powers more
interdependently intertwined in essence than it is conflictual in appearance?
Nowadays, global attention has been increasingly drawn to the inter-
actions between emerging powers and the existing powers. Debates on
the possible conflict and war between existing and rising powers con-
stitute global headlines from time to time. The most vocal scholars
are certain American realists (Mearsheimer, 2006, 2010) who argue that
conflicts or wars are seen as being connected with the rigid hegemony
of the existing order, which leaves limited option for the rising power to
secure its interests.
Worldwide media and academic discussions are still proceeding with
a heavy focus on the potential transition to a new world order in which
the rise of China and the BRICS is generating global forces that are
bringing about transformative changes within the existing Western-
based world order. Different Western policy-makers, politicians and
academics are proposing various imaginable scenarios regarding such
possible changes.
Currently, the two mainstream schools of international relations are
competing to provide the world with the “correct interpretations” of the
possible outcomes of interactions between the emerging and existing
powers. The realist school of international relations bases its worldviews
and understandings on the fundamental perception that “the mightiest
states attempt to establish hegemony in their own region while making
sure that no rival great power dominates another region. The ultimate
goal of every great power is to maximize its share of world power and
eventually dominate the system” (Mearsheimer, 2006, p. 160). Hence,

from the established Western tradition of international relation theory
in conceiving challenge and crisis as a vehicle for disorder and insta-
bility, realism would logically interpret the rise of China and other
emerging powers as an inevitable challenge to and a crisis for the prevail-
ing world order. To some scholars, there is an embedded contradiction
between emerging powers and the existing international system still
governed by “Western conceptions of order and based on the primacy
of post-World War II US-sponsored rules, drawn from liberal models of
capitalism and democracy” (Barma et al., 2007, p. 23). The conclusion
seems to be that serious conflicts between the rising powers, such as
China, and the existing powers, such as the USA, are inevitable.
In contradiction, the liberal school envisions a positive conver-
gence of interest between the rising powers and the inclusiveness and
resiliency of the existing world order (Ikenbury, 2008). Liberalism main-
tains that the existing order is a rule-based system with well-developed
international institutions. The system is resilient and is able to accom-
modate new ascendant players, so that conflict or war is not inevitable
because the rising powers might also have an interest in creating a new
order that is conducive to its preferences (Green and Kliman, 2011). This
line of reasoning denotes that it is in Beijing’s interest to accept the US-
led order because China’s success is seen as the result of its economic
integration in the existing order, and China’s future prosperity is and
will be dependent on it. However, the liberal school offers no advice to
the existing order as to how, for the sake of its own survival, the order
can accommodate necessary changes or modifications brought about by
the rise of emerging powers. Neither the realist ideology nor the liberal
school turns 180 degrees and places itself in the shoes of emerging pow-
ers; whether the late-comers will accept or resist the established order
or create a new world order also depends on the roles that emerging
powers, especially China, decide to play (Schweller and Pu, 2011).
Now, the world is witnessing neither the repetition of history mani-
fested by the world wars (apart from some signs of rivalry between great
powers) between the rising and existing powers, nor the harmonious
integration and accommodation of those who have lately entered the
established system. So, a different but interesting question to which this
chapter attempts finds some answers to is this: What if the assertions
by both the realist and liberalist beliefs are not an adequate explanation
of the dialectic essence of the relationship between the rise of emerging
powers and the emergence of a world re-order (not a new world order)?
Li Xing 39
In other words, if neither of these dichotomous situations was to occur,

what would be the projection of the future emerging world order?
Methodological consideration
This chapter is designed to be theoretical and conceptual. It attempts to

contribute to interpreting the transformation of an international polit-
ical economy and conceptualizing the emerging international order in
a dynamic and open-ended way without falling into deterministic pos-
tulation. In other words, the chapter aims to provide a framework for
understanding the dialectic nexus between the rise of the BRICS and
the existing international order as an interdependent dynamic process
of mutual challenge, mutual constraint and mutual accommodation.
Since the chapter is conceptual and theoretical in nature, method-
ologically, the chapter’s conceptual and analytical processes are mani-
fested by a dialectic mode of thinking. Employing a dialectic method, the
author intends to look into elements of inter-relationship, contradiction
(mutual generation and destruction), transformation and co-existence.
One characteristic of this method is the relational approach, i.e. the
international order is not an accidental collection of unrelated states
out of context; rather, it should be seen as a connected whole in which
each actor is part and parcel of a single historical process. Another char-
acteristic is the historical approach, i.e. the existing international order
(politics, institutions and ideas) should be understood in a specific his-
torical context; new historical transformations (new contexts, such as
globalization and transnational capitalism) are generating new social
and political forces that are shaping new politics, institutions and ideas
in a dialectic and dynamic nexus between the existing and the emerging
world orders.
The chapter’s conceptual tool in examining the dialectic nexus
in world order between the existing and emerging powers is based
on the analytical lens of hegemony. It is a combination of both from
the perspectives of Gramscian political theory (Gramsci, 1971) – i.e.
the interplay of ideas, institutions and material capabilities shaping
the specific contours of state formation, and from those of the neo-
Gramscian school of international relations (Cox, 1981, 1983); in
other words, world orders shaped by a combination of a particular
constellation of social forces, the state and the dominant ideational
configuration. The notion of hegemony in international relations is
understood as a capacity to transfer national patterns of power rela-
tions (mode of production, and socio-economic and socio-political
relations) to international arenas, shaping the latter around particular

state–market–society interactions.
Placement of discussion: From hegemony to interdependent

hegemony
The hegemonic dominance of the US-led world order can be identified

in four areas of structural power dominance (Strange, 1987) and in five
areas of monopoly (Amin, 1997). According to Susan Strange, structural
power refers to “the power to choose and to shape the structures of the
global political economy within which other states, their political insti-
tutions, their economic enterprises, and (not least) their professional
people have to operate”, and it contains four interconnected features:
• security defense capacity;

• control of the system of production of goods and services;
• control of the structure of finance and credit; and
• dominance of knowledge and ideas (Strange, 1987, p. 565).
According to Samir Amin, the rise and fall of a world order is, in our age,
largely determined by the competition in the following “five monopo-
lies” (Amin, 1997, pp. 4–5), which have some overlapping aspects with
those of Susan Strange’s structural power characteristics:
• monopoly of technology, supported by military expenditures of the

dominant nations;
• monopoly of control over global finances, and a strong position in
the hierarchy of current account balances;
• monopoly of access to natural resources;
• monopoly over international communication and the media;
• monopoly of the military means of mass destruction.
Figure 2.2 indicates that the notion of hegemony can be decomposed

into various aspects. The BRICS and emerging powers have successfully
penetrated into some power areas in terms of economic competition,
capital accumulation, and political and economic influence, as well
as technical and material capacities. China is performing outstand-
ingly and is the best among emerging powers in terms of its global
share of high-tech manufacturing commodities,3 as well as its financial
competitiveness as regards foreign currency reserve, the increasing role
of the Chinese currency yuan and its overseas aid, and the country’s
Li Xing 41
Figure 2.3 The core aspects and components of hegemony in the world order
( strongly shared influence/dominance, shared influence/dominance)
investment in the developing world. However, emerging powers are

still in a relatively subordinate position in the areas of norm- and
value-setting, global governance, cultural and ideological leadership,
and media control.
It is argued that, in the current era of interdependent hegemony,
neither the USA nor the West is able to sustain the areas of power
monopoly single-handedly (Figure 2.3). It implies that the sources to
feed and maintain the areas of structural power and monopoly are no
longer dominated exclusively by the West and, to a large extent, they
are dependent on the inputs from emerging powers.
The chapter opens up the concept of hegemony to a critical analysis
so as to provide a better understanding of the dialectic nexus between
hegemony and world order in the context of the rise of China, the BRICS
and other emerging powers. It attempts to further develop hegemony

theory in light of new global development and transformation, propos-
ing an alternative concept – interdependent hegemony – which is argued to
be a better concept through which to describe, understand and analyze a
world order that is in ongoing transformation. By acknowledging “hege-
mony” as an important concept with which to understand and analyze
politics and international relations today at different levels, the appli-
cation of “interdependent hegemony” aims to offer a framework for
conceptualizing the dynamic and dialectical nexus between the exist-
ing world and the potential emerging world order. This can be applied
to explain the extent to which emerging powers can be seen as a unified
alliance, a historical bloc, and to what extent they are generating struc-
tural challenges to the existing international order, rather than merely
functional challenges. Likewise, it also helps to determine the extent to
which the hegemony of the existing US-led order is still able to keep
its resilient capacities and its structural powers, while neutralizing or
accommodating the challenges from emerging powers.
“Interdependent hegemony” conceptualized
The chapter sees the world order to be in a process of “interdepen-

dent hegemony”, which signifies a dialectic process of mutual challenge,
mutual constraint, mutual need and mutual accommodation. Inter-
dependent hegemony symbolizes a dynamic situation in which the
system’s defenders and the new powers are intertwined in a constant
interactive process of shaping and reshaping world order, whereby
nation states, global governance, transnational actors, civil societies
and interest groups are incorporated into the dominant project of
transnational capitalism.
While “hegemony” explains how the embedded pattern of relation-
ship of existing the international order has historically shaped the
frameworks within which actors such as state, market, society and
people relate to each other, “interdependent hegemony” intends to
decompose the conceptual unity of hegemony into various aspects of
dominance, leadership and the shaping of power (see Figure 2.3). Inter-
dependent hegemony takes into consideration a series of interconnected
factors, such as the historicity of development and underdevelopment,
upward mobility to the status of nation state and the political econ-
omy of the current transformation of world order. While it is important
to understand the structural hegemony of the postwar US-led world
order, interdependent hegemony aims to analyze the extent to which
Li Xing 43
emerging powers are seeking, together with non-governmental actors

and groups, to define the trend in world order and the extent to which
their rising hegemonic power is facing the existing order’s structural
constraints.
The notion of “interdependent hegemony” in this chapter denotes
a growing global phenomenon in which both the “First World” (the
established powers) and the “Second World” (emerging powers) are
intertwined in a constant process of shaping and reshaping interna-
tional order in the nexus of national interest, regional orientation, a
shared political agenda, political alliance and potential conflict. This
notion is understood to manifest certain characteristics:
• The core concept of interdependent hegemony is defined as a primar-

ily interactive and dynamic relationship between the existing con-
stellation of international order and the emerging powers in terms
of mutual opportunities, constraints and challenges. The dichoto-
mous conundrum of “invitation and challenge” can be understood
as the dialectics of the “unintended consequence”: emerging pow-
ers were invited and were forcibly pressed by the existing order to
join in the processes of integration and globalization, while the eco-
nomic success of emerging powers was becoming a challenge to the
existing order. Such an unintended consequence is well-observed by
Chris Patten, the last British Governor of Hong Kong, who posited
that China is “the first example of a country which has done aston-
ishingly well in this international system, but challenges its basic
foundations” (as quoted in BBC News, 2008). His words vividly depict
the dialectic nexus between China’s success and the existing world
order, which is beyond a simple historical retrospect, being a causal
analysis by both realist and liberal ideologists. China’s success is
achieved through its integration in the international system while, at
the same time, it contradicts or challenges some of the order’s basic
norms – two sides of the same coin.
• Interdependent hegemony also exemplifies the fact that global cap-
italism is entering into a stage of “varieties of capitalism” in which
social forces or social classes consist of varieties of actors and form
varieties of alliances. “Capitalist classes” are not only private eco-
nomic actors but also states, such as Chinese state-owned enterprises
(Li and Shaw, 2013; Yang, 2014). The effective integration of state
interests and capital logic is causing some emerging powers, espe-
cially China, to win a “war of position”4 by redefining the systems
of alliance and by reshaping the terrain and parameters of global
social, economic and political relations. The existing and emerging

powers are intertwined in a constant process of shaping and reshap-
ing world order in the nexus of global responses, adjustments and
tensions.
• In an era of interdependent hegemony, the principal motivation
behind nation state’s policy and action is mainly based on “national
interest” in terms of cost–benefit analysis, rather than in terms of
political and ideological alliance. This can be seen in the differ-
ent regions in the world, particularly in East Asia, where countries
are struggling to position themselves strategically in the face of the
rivalry between the superpowers. Eastern and Southeastern countries,
including Australia, are carefully balancing themselves in relation to
the security alliance with the USA, on the one hand, and in relation
to the economic and trade relationship with China, on the other.
• Interdependent hegemony marks the end of Fukuyama’s “the-end-
of-history” (1992) thesis and prompts Western mainstream opinion-
makers to wonder “What’s gone wrong with democracy?” (Economist,
March 1, 2014). It can be argued that interdependent hegemony
leads the world into a post-hegemony era in which there will be
no hegemonic norms and values defined by one single country (the
USA), or by a core cultural civilization (the West). For example,
the rise of China today is opening the country to multiple norms
and values; this is turning the global debate from a political dis-
course on “human rights and democracy” towards a development
issue of “management and governance”. In other words, Chinese
success is opening international community to multiple factors and
explanations regarding mechanisms that cause nations to grow, and
regarding the set of mutually dependent relationships between prop-
erty rights and economic growth, between the rule of law and a
market economy, between a free currency flow and economic order,
and, most importantly, between democracy and development. These
norms and values should not be defined by the existing powers alone,
and they are becoming “interdependent” – open, less rigid, and
non-universal. This also implies that the emerging world order and
international relations will return to being based on “conventions”
(interest and concern), rather than being driven by “convictions”
(value politics) (Flockhart and Li, 2010).
• On the one hand, interdependent hegemony seemingly offers emerg-
ing powers an opportunity to form anti-Western alliances for political
purposes; on the other hand, these alliances are issue-based, rather
than norm-based, and will not be turned into a new alternative
Li Xing 45
hegemony. Rather, anti-Western alliances will constitute a coun-

terbalance, so as to enhance multilateralism or avoid unilateral
hegemony. Most emerging powers in general, and China in partic-
ular, have led a very opportunist foreign policy in order to find the
balance between defending their “national interest” and resist the
hegemons of the existing order. Beijing has no unified global strategy
grounded on norms and principles; rather, it has different tactics and
policy approaches to different global political, economic and secu-
rity problems on a case-by-case basis. China’s UN voting behavior
and record indicate that Beijing’s problem-solving tactics regarding
global issues in its foreign policy are characterized by a selective inter-
play of four approaches: watching, participating, circumventing and
shaping (Wuthnow et al., 2012).
• Interdependent hegemony can offer emerging powers a fruitful
opportunity to develop a collective “positioning” strategy and “bal-
ancing” tactics. However, interdependent hegemony also illustrates
the fact that emerging powers are not yet able to form a “histori-
cal bloc” as a substitute for an organic and homogenous hegemony.
This is because emerging powers have different relationships with
the existing powers and a different global influence. Some emerg-
ing powers also have unresolved political and historical problems
among themselves, such as the China–India conflict over the bor-
der issue, and the China–Brazil dispute over China’s disapproval of
Brazil’s drive for permanent membership of the UN Security Council.
• Emerging powers are aware of the limits of their national powers and,
therefore, they want to rely on interdependence to overcome such
limits. Accordingly, interdependent hegemony is “incipient”; it is a
new sort of hegemony that differs from the conventional form of
hegemony. For example, the recent China–Russia political and mili-
tary alliance is aimed at overcoming their respective individual limits
in resisting the US-led hostility towards both the Russia–Ukraine
territorial and energy conflict and the China–Japan confrontation
regarding territorial disputes, including similar tensions between
China and the Philippines, and China and Vietnam.
• Interdependent hegemony depicts a new type of hegemony
grounded in the enlargement of the independence of maneuver
possessed by emerging powers to counterbalance the power of the
USA (and the EU) while, at the same time, creating interdependence
within the global order. The idea, for instance, of the BRICS bailing
out the European economic crisis, albeit that it has not become a real-
ity, showed the symbolic and actual potential of the major emerging
powers to reverse the traditional North–South dependent relation-

ship and to transform it into an interdependent relationship between
the First World and the Second and Third Worlds.
Interdependent hegemony between the existing and

emerging powers
This chapter sees interdependent hegemony as containing a set of

dialectic relationships between the existing and emerging powers:
• Emerging powers are the most active participants in globalization

and transnational capitalism driven by the existing powers, while
the latter are being hampered by the financial crisis brought about
by their own globalization;
• Emerging powers benefit from the existing world order and are
becoming successful while, at the same time, they challenge some
of the ideological and practical foundations of the latter;
• Emerging powers participate vigorously in the Western “neoliberal
project” – globalization, marketization and competition – while their
state-capitalism is performing better, not through the “free market”
but through the “governed market” (Wade, 1990).
Even The Economist has to concede the “crisis of Western liberal

capitalism” and a halt to free-market triumphalism, while recognizing
the “rise of a powerful new form of state capitalism in emerging mar-
kets” and the positive role of the state as the “visible hand” (January 21,
2012). Contrary to Fukuyama’s triumphant prediction two decades ago
of the end of mankind’s “ideological struggle” with the indisputable vic-
tory of “economic and political liberalism” (1992), the chapter sees the
two forms of capitalism to be dialectically intertwined in terms of their
strengths and weaknesses.
Hence, through the lens of “interdependent hegemony”, the chapter
claims that the relationship between emerging powers and the exist-
ing world order is more interdependent than conflictual. The major
propositions and arguments are that:
• the rise of emerging powers should not be seen as leading to the

decline of US-led hegemony and the existing world order;
• the relationship between emerging powers and the existing inter-
national order is understood as being interdependent and mutually
accommodating;
Li Xing 47
• the BRICS Development Bank and the currency reserve pool is to

serve the development needs of the BRICS and other developing
countries as a “supplement” to global and regional development
banks;
• it is still questionable whether the BRICS can be seen as a new
constellation in international relations;
• there is still a long way to go before the BRICS and the emerging
powers are able to generate structural changes in the global order in
terms of shaping its agenda and direction.
• the rise of China is rendering Washington unable to hold the balance
between the seemingly realist “containment” of allying with anti-
Chinese hostile forces in East and Southeast Asia, on the one hand,
and the so-called “strategic engagement” of establishing a new type
of “major power relationship” with China, on the other.
The rise of emerging powers should not be one-sidedly seen as the

decline of the US-led hegemony and the existing world order. On the
contrary, some scholars actually interpret the success of China and other
emerging powers as convincing evidence of the functioning and vitality
of the existing liberal order (Ikenberry, 2008). China’s economic success
and that of many other countries, including the BRICS, are understood
as the result of their integration in the US-led world order. Therefore,
the big question is whether it is in the best interests of the BRICS to
push the world towards a “world without the West” (Barma et al., 2007,
2009), when taking into consideration their individual economic stakes
in the world economy and in the core Western powers. In line with
this perspective, it is argued that as the world’s largest trading nation,
and in terms of its role in history, China is resisting and challenging
“US imperialism”; but, today, it finds itself forced to become a “reluc-
tant imperialist”, a guarantor of peace and stability in those war-ridden
regions, such as the Middle East, where China is heavily dependent on
resources and materials. As one scholar vividly phrases it, “empires are
often created unintentionally, as the cumulative result of immediate
responses to one event after another” (Butler, 2014).
The relationship between emerging powers and the existing inter-
national order is therefore understood as being interdependent and
mutually accommodating. It is expected that the further success and
development of the BRICS will continue to be dependent on the func-
tioning of the existing international system, leading to their further
cooptation into the system. To put it more bluntly, it is argued that the
relationship between the BRICS and the existing international order is
Table 2.1 The leading three trading partners of the BRIC countries (excluding
South Africa)
Trading partners
BRIC country First (%) Second (%) Third (%)
Brazil EU 21.8 China 15.6 USA 9.8

Russian Federation EU 52.2 Ukraine 5.8 Turkey 5.1
India EU 20.5 UAE 14.4 USA 10.8
China EU 19.7 USA 18.0 Hong Kong 13.8
Source: Data are selected from Keeler (2012).
more cooperative than conflictual. Table 2.1 indicates that the USA and
the EU are the major trading partners of all BRICS countries, despite
the fact that they are increasing trading relations among themselves.
Therefore, the nexus between the rise of the BRICS and the existing
world order is a dialectical combination of both mutual embedded-
ness, in terms of economic interdependence, and dis-embeddedness,
in terms of political representation, norms and values, as well as the
social mode of accumulation. This implies that the BRICS are struc-
turally and economically embedded in the existing international system
in an interdependent way but, at the same time, they are also unleash-
ing challenges and oppositions in many areas, such as international aid,
trade, finance, currency, security and political ideology.
In the recent 2014 BRICS Summit in Brazil, leaders of the five emerg-
ing BRICS markets launched a development bank (equivalent to the
World Bank) and a currency reserve pool (equivalent to the IMF). These
steps are seen by global opinion-makers as the first concrete steps
towards reshaping the Western-dominated international financial sys-
tem. However, a close analysis of them will largely disqualify the claims,
such as “the End of the Bretton Woods System” or “the end of the
US Dollar Hegemony”, as some Western media tend to phrase their
headlines. Rather, the major objective of the BRICS Development Bank
and the currency reserve pool is to serve the development need of the
BRICS and other developing countries as a “supplement” to those global
and regional development banks, such as the World Bank, the Asian
Development Bank, the African Development Bank, the Latin American
Development Bank and the European Development Bank. The BRICS
do not have any intention – or even the capacity – to “replace” these
global and regional development banks. According to its descriptions,
the BRICS Bank’s major functions are narrowly defined as “funding
infrastructural projects” and “sustainable development projects”. The
Li Xing 49
suspicion for its “ambition to replace the existing global financial order”
can be falsified by two facts: one is that India and China are among the
main beneficiaries of the current development bank architecture, and
are both among the largest borrowers from the World Bank; also, the
entire capital stock of the new BRICS Banks will be in US dollars, as
compared with only 10 percent of the World Bank’s capital in US dollars
(the rest is in member countries’ national currencies).
However, notwithstanding any unintended challenge from emerging
powers to the existing order, the US refusal to accept any necessary insti-
tutional reform – e.g. with regard to the IMF and the World Bank –
in order to accommodate the rightful proportion of decision-making
power of emerging states, particularly China, is forcing them to look
beyond the existing Bretton Woods structure and create an entirely new
or alternative architecture. The ongoing development of the Chinese-
based AIIB today is a strong example of this emerging new global
financial architecture.
It is still questionable whether the BRICS will be able to act as a col-
lective unit or a “historical bloc”, or whether they are no more than a
forum based on a “marriage of convenience” or “sleeping in the same
bed while having different dreams” (Li, 1998; Li and Shaw, 2014). The
BRICS might share similar global interests but hold different visions
regarding their roles as regards the existing order. In other words, it is
likely that, for the sake of creating an alternative hegemony, they are
unable to go beyond their bilateral differences, such as the border issues
between India and China, the issue between Brazil and China of a per-
manent Security Council seat and historical lessons observed between
China and Russia.
Although the BRICS and the emerging powers are seen as seriously
challenging the existing order, there is still a long way to go before they
are able to generate structural changes in the global order in terms of
shaping its agenda and direction. On the one hand, emerging powers
are unlike the previous aggressive and destructive rising powers, such
as Japan and Germany in the 19th and early 20th centuries; they are
also unlike the Western powers, whose overseas historical expansion
was based on military forces and colonization. On the other hand, they
are also dissimilar to existing Western powers, which are more or less
molded by similar cultural values and political beliefs.
Lastly, but not definitively, the rise of China, embedded in the emer-
gence of interdependent hegemony, is rendering Washington unable
to hold the balance between the seemingly realist “containment” in
allying with anti-Chinese hostile forces in East and Southeast Asia, on
the one hand, and the so-called “strategic engagement” in establishing
a new type of “major power relationship” with China, on the other.

Soon, the USA will realize the impossibility of keeping such an unsta-
ble equilibrium between engagement and containment. According to a
US think-tank, the US “congagement” strategy (a combination of con-
tainment and engagement) is doomed to be a failure because it is “an
ephemeral evasion rather than a coherent policy” (Carpenter, 2014).
The securitization approach (Buzan et al., 1998; Williams, 2003) of the
USA policy to “rebalance Asia”5 is doomed because its commitment to
the cost of the consequence of securitization in East Asia (territorial dis-
pute with China) cannot be matched by the cost of losing the Chinese
market and the USA’s close economic ties with China.
Conclusion
This chapter takes its point of departure from the neo-Gramscian con-
ceptual approach and the analytical apparatus centered around the
notion of “hegemony”. It further develops this notion and provides
an alternative framework of “interdependent hegemony” in order to
provide a better understanding of the global impact of the rise of emerg-
ing powers brought about by globalization and the transformation of
international relations and the international political economy. This
alternative framework is considered to be a better conceptual tool in
analyzing the dynamic nexus between the role of emerging powers as
a counter-hegemonic socio-political force and the hegemonic resilience
of the existing international order.
Today, the existing structure of global governance lacks sufficient
power, authority, legitimacy and scope to manage global affairs and
to regulate globalization and transnational capitalism; no existing or
emerging power is capable of hegemonizing and leading the world, and
making economy and ideology confluent. The major emerging powers
(China and the BRICS) are testing the extent of the hegemonic vacuum
and the limits of the existing order in terms of rules of the game, while
the existing powers (the USA and Europe) are crisis-ridden and power-
less with regard to defining and defending the post-superpower world
order. The existing powers are losing their hegemony, but emerging
powers have produced neither a unified ideology, nor a new institutional
framework for global governance that is politically and ideologically
universal. Their roles in relation to the existing structure – whether as a
spoiler, a supporter, or a shirker – will depend on the “interdependent”
nature of the issue concerned. The world order is seemingly displaying a
mixture of characteristics of the three ongoing developments – disorder,
new order and re-order.
Li Xing 51
Seen from certain perspectives, the BRICS have become a hegemony-

generating mechanism through which the countries can regularly
exchange opinions, seek convergence, identify areas of cooperation and
influence the international agenda. However, this chapter posits that
the BRICS is not a group of revisionist powers, and should not be seen
as a transformative historical bloc aiming to act collectively and pur-
posefully “against the West” (Laidi, 2011). Rather, it is more proper to
regard the BRICS as reformative powers, aiming to reform the “unfair
aspects” of the existing order and become part of the global rule-setters,
rather than only be rule-followers. Accordingly, the future emerging
order will be characterized by the “rise of the rest” (Nowak, 2008), in
which there will be new alliances and structures for resolving global
issues, and in which leading nations will have both conflicts of interest
and inseparable interconnections.
Today’s world order is seemingly facing two sides of the same coin:
on the one side is the return of the history of “great power rivalry”
characterized by conflicts and wars, and on the other is “interdepen-
dent hegemony” characterized by accommodation and integration.
At the present time, the existing and emerging powers are inter-
twined in a constant process of shaping and reshaping the interna-
tional order in the nexus of national interest, regional orientation, a
shared political agenda, economic interest, security alliance and poten-
tial conflict. As one prominent Chinese commentator, Weiwei Zhang,
phrases it:
the world is . . . witnessing a wave of change from a vertical world

order, in which the West is above the rest in both wealth and ideas,
to a more horizontal order, in which the rest, notably China, will be
on a par with the West in both wealth and ideas.
(cf. Lloyd, 2015)
It is expected that the world order will continue to be in a process

of transition and transformation. The relationship between the rise of
emerging powers and the existing order will be based on a dialectic of
waxing and waning; and the interaction between them will continue
to be in a state of flux, rather than in a purposeful forward (integra-
tion and accommodation) or a retrograde (conflict and war) movement,
as anticipated by deterministic ideologies. This is because a more hori-
zontal order offers more spaces for interaction and competition, and the
level and seriousness of the competition are beyond that which the West
can imagine. In the future, both the emerging and existing powers will
have to find a regional and global role which the other will accept and
support. In order to do so, both will have to go through a considerable

period of struggle, adjustment and tension.
Notes
1. The notion, originally derived from Gramsci, refers to a historical congruence
between material forces, institutions and ideologies – or, broadly speaking, it
implies an alliance of a “coalition of social forces” united under a common
hegemonic project (Gramsci, 1971).
2. George Kennen was the former Head of the US State Department Policy Plan-
ning Staff. His selective quotations are taken from the complete text of the
section of Policy Planning Staff/23 (Kennen, 1948). The complete paper was
published in 1976 in Foreign Relations of the United States 1948, Vol. 1, No. 2.
3. According to Eurostat 25/2009, China surpassed the USA, EU-27 and Japan
as the largest high-tech exporter in the global market. In 2006, the global
share of China’s high-tech exports surged to 16.9 percent, followed by the
USA at 16.8 percent, the EU-27 at 15 percent and Japan at 8 percent.
See http://ec.europa.eu/eurostat/documents/3433488/5280893/KS-SF-09-025-
EN.PDF/6a222c3d-5202-41b0-9701-755acc6c2c88?version=1.0
4. The notion is derived from Antonio Gramsci, who refers to a slow and
protracted political strategy of ideological struggle that aims to occupy the
critical terrain of popular “common sense”, i.e. ideologies, doctrines and social
mythologies. The concept intends to be distinguished from another notion
termed by Gramsci as “war of maneuver”, which refers to a direct, violent and
immediate assault on the state for achieving political power (Gramsci, 1971).
5. The fundamental goal underpinning the US strategic shift is to devote more
effort to regain its weakened position in the Asia-Pacific region and to shape
the development of the region’s norms and rules in an era when China
emerges as an ever-more dominant regional power.
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3
BRICS and Capitalist Hegemony:
Passive Revolution in Theory and
Practice
Ian Taylor
In May 2008, Russia hosted the first formal summit between Brazil,
Russia, India and China (BRIC) in Yekaterinburg; in December 2010,
South Africa was formally invited to join the BRIC group of large emerg-
ing economies (BRICS). The BRIC acronym was originally coined in 2001
by Jim O’Neill, chief economist for Goldman Sachs, when the global
investment banking and securities firm advanced the argument that
these emerging economies (or “contender states” engaged in a catch-
up struggle – see van der Pijl, 2006) were likely to surpass the traditional
economic powerhouses of the global economy by 2040 (O’Neill, 2001).
According to the report prepared by Goldman Sachs, “in less than
40 years” the states dubbed the BRICs were expected to surpass the
G-6, making up the world’s main “engine of new demand growth and
spending power”, thereby “offset[ting] the impact of greying popula-
tions and slower growth in the advanced economies”. The Goldman
Sachs report saw the four initial BRIC states as prospective “engines of
growth”, arguing that stable and cumulative growth in Brazil and India,
alongside the sheer size of the economies of China and Russia, would
fundamentally change the global economy and, by implication, the
global balance of power away from the dominant West. Methodologi-
cally, the concept has some severe flaws. Its projections were based on
trends in demography and a fairly simple model of capital accumulation
and productivity, with an extrapolation of current growth trajectories on
a straight line – always upwards. As Sharma (2012) notes, “These fore-
casts typically took the developing world’s high growth rates from the
middle of the last decade and extended them straight into the future,
55
juxtaposing them against predicted sluggish growth in the United States

and other advanced industrial countries”. Furthermore:
The Goldman Sachs concept merely “projected” (rather than rec-

ommended or proposed) on the basis of demographic trends and a
largely unrealistic model of growth what could be expected to (rather
than made to) happen in the case of two resource-rich and two
human resource-rich economies. Appropriately, perhaps, in a post-
modern and market-driven age, it was the work of the employees of a
private bank. It did not even bother about the rest of the Third World.
It assumed and reinforced the worldwide neo-liberal policy bias.
(Desai, 2007, p. 785)
Based on superficial research (“when O’Neill coined the term BRIC

in 2001, he had never properly visited three of the four countries”
(Guardian, January 17, 2010), precisely because it reified the global
thrusts of neo-liberal policy prescriptions, the concept caught on rapidly
amongst global elites and has now entered the global lexicon: “Embody-
ing neo-liberalism and reworking prior categories, the designation of
emerging markets began with a section of the World Bank and was soon
embraced by fund managers, traders, and the financial media in the
early 1990s” (Sidaway, 2012, p. 53).
With near zero interest rates in the US topped up by . . . liquidity injec-

tions and low interest rates across OECD economies, the ocean of
antediluvian predatory “loan capital” funds available to Wall Street
by the Fed stream[ed] toward so-called emerging markets such as
China and other BRICS countries.
(Westra, 2012, p. 168)
Recognizing both the economic and political capital to be made

from Goldman Sach’s anointing (and advertisement) of their growing
economies, the concept was enthusiastically embraced by policy-makers
and academics within the respective BRICS states.
What is interesting (and revealing) about the BRICS concept is that it
is but the latest incarnation of efforts by the capitalist core to define and
incorporate centers of accumulation outside the core, as well as locate
and identify new spaces for capitalist investment. Up until the 1980s,
the term “less economically developed countries” was used to denote
markets that were deemed less “developed” than the West. According to
Antoine van Agtmael, the World Bank economist in the International
Ian Taylor 57
Finance Corporation (IFC) widely credited with inventing the term

“emerging markets”, by the 1980s the Bank was:
identifying the opportunity to rebrand these countries, which,

despite their enormous economic potential, were still lumped
together with the world’s perennial basket cases as “underdeveloped
countries” stuck in the “Third World”. At the time, Third World
stock markets were simply off the radar screen of most international
investors . . . But until the IFC built its Emerging Markets Database and
index in 1981, there was no way to measure stock performance for a
representative group of these markets, a disabling disadvantage when
stacked against other international indices, which were skewed in
favor of developed countries.
(van Agtmael, 2012, p. 76)
As van Agtmael makes clear, this branding was done with the aim that it
“provided investors with the confidence to launch diversified emerging-
market funds” (2012, p. 76).
The concept of emerging markets was swiftly and enthusiastically
embraced, with the urging that such spaces “should be included in
the global opportunity set” (Errunza, 1983, p. 51). Given that the con-
cept emerged from the IFC, an institution mandated to offer advice on
investment and asset management, it was unsurprising that the very
purpose of the emerging markets’ idea was to promote “the integra-
tion of the world’s core stock markets with markets in peripheral and
semi-peripheral states for purposes of portfolio investment” (Lavalle,
2000, p. 194). As Lai (2006, p. 627) notes, this process has reflected
“the intriguing geographical ‘Imagineering’ that goes into the construc-
tion and maintenance of ‘emerging markets’ as a category, and the roles
played by fund managers, brokers and analysts”. Strictly speaking, the
term “emerging markets” should not be considered as being equiva-
lent to “emerging economies”, as the development of capital markets
and the finance sector is seen as but one of the empirical indicators of
a developing country moving towards industrial development and up
the global division of labor. In practical terms, however, the notion of
emerging markets and emerging economies very quickly became blurred
and the two rapidly came to denote the same.
Indeed, as economies beyond the capitalist core began to develop,
increased attention began to be focused on these upstarts, with dis-
cussion about the roots behind the “rise of the rest” (Amsden, 2001).
The implications that such developments have for the dominant power
relations in the global political economy were often the implicit sub-
text behind such analysis: Amsden’s own book’s sub-title was, in fact,
Challenges to the West from late-industrialising economies. High levels of
economic growth and future projections have invariably been tied to
geopolitical considerations and how best might the core react. This
became quite explicit in the concept of the “pivotal states” of the late
1990s, which was primarily focused on politico-security matters and the
implications that this had for American military status (Chase et al.,
1999). In such futurology, these pivotal states (Algeria, Brazil, Egypt,
India, Indonesia, Mexico, Pakistan, South Africa and Turkey) were iden-
tified as those where there was a threat of internal instability, but also
those which exert significant influence in their respective regions and,
possibly, at the international level.
Alternatively, the “Big Ten” emerging markets were postulated, being
“countries like China, India, and Brazil – which are acquiring enough
power to change the face of global politics and economics” (Garten,
1997, p. xxv). The total Big Ten (Argentina, Brazil, China, India,
Indonesia, Mexico, Poland, South Africa, South Korea and Turkey)
were postulated as fundamentally changing international relations. This
futurology has now become somewhat ridiculous, with the myriad of
neologisms and acronyms being put forward, e.g. BRICSAM (BRICS plus
Mexico), the BRIICKS (the BRICS plus Indonesia and South Korea), the
Next-11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,
the Philippines, Turkey, South Korea and Vietnam), CIVETS (Colombia,
Indonesia, Vietnam, Egypt, Turkey and South Africa), TIMBIs (Turkey,
India, Mexico, Brazil, and Indonesia) and so on ad nauseam. However,
as Sharma (2012, p. 4) cautions:
The current fad in economic forecasting is to project so far into the

future that no one will be around to hold you accountable. This
approach looks back to, say, the seventeenth century, when China
and India accounted for perhaps half of global GDP, and then for-
ward to a coming “Asian century” in which such pre-eminence is
reasserted. In fact, the longest period over which one can find clear
patterns in the global economic cycle is around a decade. The typ-
ical business cycle lasts about five years, from the bottom of one
downturn to the bottom of the next, and most practical investors
limit their perspectives to one or two business cycles. Beyond
that, forecasts are often rendered obsolete by the unanticipated
appearance of new competitors, new political environments, or new
technologies.
Ian Taylor 59
Interestingly, these collective tropes – that late industrializers would

necessarily either threaten the West’s domination, or require a robust
response – can trace their origins to the ideas of Oswald Spengler and the
declinist literature (Spengler, 1991). This declinism has a long record,
yet existentialist angst about Western supremacy and its longevity is
currently acute, in part due to this rise of the rest (see Ferguson,
2011).
The response in the core to the emerging economies has been to
formulate strategies for how the West (or invariably, the USA) should
react to these challengers, primarily to retain Washington’s pre-eminent
position within the extant world order. This concern stems from the
assertion that “Today, a group of fast-growing developing countries – led
by China and India – are rising up and in the next several decades will
have economies that will rival the United States and Europe” (Ikenberry
and Wright, 2008, p. 3).
Of course, there can be little doubt that China has, indeed, grown
spectacularly since the inception of its Socialist Modernization policies
and that the other BRICS have steadily – if more gradually – expanded
their economies. Revealingly, if the purchasing power parity (PPP) mea-
sure of gross domestic product (GDP) is used, Beijing’s economy is
already three-quarters the size of that of the USA, while Brazil, Russia
and India have economies of similar size to those of Japan, Germany,
Britain, France and Italy (IMF, 2010). While the BRICS “already have
a bigger share of world trade than the US” (Guardian, January 17,
2010), what the term “BRICS” really captures revolves around both anxi-
eties and expectations within international politics regarding how these
rapidly emerging economies from the notional “developing world” will
interact with the established powers, possibly stimulating “a fundamen-
tal shift of influence away from the Western world” (Financial Times,
January 15, 2010). Thus, much focus on the BRICS is not so much eco-
nomic (though that is certainly the realm from which the origins of the
concept arise) as having an intrinsically political centrality to it. Placing
political economy central to any analysis helps towards a greater nuance
regarding Western declinism and “the rest” – in some studies leading to
a challenge to what has been termed “the emerging market hype” (Heinz
and Matthias, 2012). Instead, looking at the rise of the rest in terms not
only of their semi-dependent, semi-peripheral status, but also as arbiters
of the advancement of the broader global agenda of deepening capitalist
accumulation, is apposite.
In short, is the excitement about emerging economies more gener-
ally – and the BRICS, more specifically – about how these notionally
“challenge” the core, or more about how these states are being
incorporated into the extant global economy under conditions that pro-
mote the interests of dominant factions and core elite interests, as well
as deepening a form of dependency?
Theorizing the BRICS
It can be contended that the BRICS concept might be seen as a polit-

ical attempt to further the hegemonic status of liberal capitalism by
accommodating emerging centers of accumulation and growth within
the extant system. The Gramscian concept of global hegemony is, here,
projected onto the architecture of global governance, whereby:
Hegemony at the international level is . . . not merely an order among

states. It is an order within a world economy with a dominant mode
of production which penetrates into all countries and links into sub-
ordinate modes of production. It is also complex of international
social relationships which connect the social classes of the different
countries. World hegemony is describable as a social structure, an
economic structure, and a political structure; and it cannot be simply
one of these things but must all three.
(Cox, 1983, p. 171f.)
Within this framework, hegemony is a device through which the norms

of the economic order are propagated. Socialization processes act to
enforce certain dominant ideas, with organic intellectuals debating and
promoting a particular hegemonic project, and helping define what is
and what is not “realistic”. In capitalist societies, a core norm at the
center of the hegemony of capitalism is the “inherited respect for the
sacredness of property” (Engels, 1845/1975, p. 503). Socialization acts
to facilitate and further deepen the ability of a particular hegemonic
norm to be generally accepted as the “correct” order of things: “Experts
in legitimation” act “in mediating the ideological and political unity of
the existing hegemonic structure, rendering it acceptable to allied and
subordinate groups, universalising its dominance” (Merrington, 1977,
p. 153). Such activity is intimately linked to a clear economic base
and “exercises an organisational function in the wide sense” – while,
at the same time, transcending this so as to open up space for other
social forces to give their consent – an integral component of notions
regarding hegemony (Gramsci, 1971, p. 97).
Ian Taylor 61
“What is important about multilateralism in the post-war order”,

Lavalle (2000, p. 198) remarks, commenting on the emerging markets
concept, is that:
it takes a particularly American form. Specifically, the multilateralism

of the later twentieth century represents the efforts of US policy
makers to remake the world in a distinctly American image of a
liberal polity governed by the rule of law. Thus any discussion of
the integration of the world’s equity markets cannot be divorced
from considerations of US hegemony, which in turn operates through
multilateral organisations.
(Lavalle, 2000, p. 198)
The above reading takes as its starting point that the essential entities
of the international system are not states per se but, rather, state–society
complexes. The international system then needs to be understood not
as an inter-state system of discrete entities but, instead, as an articula-
tion of social forces, different forms of states and world orders. In this
realm of world orders, “rationality” becomes so accepted as the “norm”
that a “nation’s conception of the world becomes universalised” (Cox,
1989, p. 829). In other words, a particular hegemonic project becomes
so embedded as the normative order that the national elites over-
seeing state–society complexes view it as essentially inviolable. This
involves a “transnational process of consensus formation among the
official caretakers of the global economy. This process generates con-
sensus guidelines, underpinned by an ideology of globalization, that are
transmitted into the policy-making channels of national governments
and big corporations” (Cox, 1996, p. 304).
The emergence of the BRICs is, indeed, an attempt by finance cap-
ital to incorporate new and “emerging” powers into the extant world
order – with the active assistance and endorsement of the elites of the
BRICS nations themselves. Consider: in discussing international politics,
Gramsci asked: “Do international relations precede or follow (logically)
fundamental social relations? There can be no doubt that they follow.
Any organic innovation in the social structure, through its technical
military expressions, modifies organically absolute and relative rela-
tions in the international field too” (Gramsci, 1971, p. 176). As Lenin
observed, “No idea could be more erroneous or harmful than to sepa-
rate foreign from home policy” (1917/1966, p. 85). Within the BRICS
states, social relations and the dominant modes of production have
changed as these states have progressively embraced neo-liberalism. This

has strengthened the hand of externally oriented factions and finance
capital which, in turn, has “modifie[d] organically absolute and relative
relations in the international field” for the BRICS. Simply put, this has
encouraged these impulses to seek greater integration into the global
neo-liberal project. The elites in the capitalist heartland have responded
to such developments, welcoming the process, particularly given that
the BRICS were “designed as a framework for dialog where interests
converge, not as a confrontational, anti-Western coalition” (Roberts,
2010, p. 51).
It should be pointed out that neo-liberalism does not have the same
features everywhere and that this is most graphically illustrated by the
varieties of capitalism being pursued by the different BRICS. The eco-
nomic and political elites of each BRICS state all share a commitment
to the logic of the market, be it a pragmatic developmentalism – as in
China, or an open embrace of the “free market” – as in South Africa
and, arguably, Brazil and India. They all, however, share some degree
of commitment to liberal pro-market policies and reform. It is impor-
tant to realizes this, as it is quite obvious that the economic and social
policies being pursued by the BRICS are not identical and are certainly
not all in synchronization with the capitalist core. But that is not the
point. In fact, “national neo-liberalisms may be in different phases of
the life course of neo-liberalism and may be out of synch with the life
phase of neo-liberalism in the transnationally hegemonic formations”
(van Apeldoorn and Overbeek, 2012, p. 8). This is to be expected and
depends on, inter alia, “variation[s] in the mode of insertion into world
market structures”; “path dependencies and historical legacies”; “varia-
tion in the balance of class forces within countries”; and “variation in
the composition of the hegemonic bloc” ( van Apeldoorn and Overbeek,
2012, p. 9).
Here, Peter Hall’s work on policy paradigms is useful. According to
Hall (1993), policy paradigms bear a resemblance to Kuhn’s notions, in
that policy paradigms are durable and resistant to disconfirmation and
they adapt to disconfirming evidence. With regard to varieties of neo-
liberalisms, the BRICS (and other developing country economies) are
pursuing policies that are not exactly akin to the original Washington
Consensus, but are so close that they represent what Hall would term
as “second-order” variants within the transnational paradigm of neo-
liberalism. Somewhat different – but not that much.
Strategic thinking by Washington’s elites – and the elites of the other
core capitalist economies – recognizes the need to accommodate the
Ian Taylor 63
growing centers of accumulation within the management of the global

political economy, not least to share some of the costs. Under Barack
Obama, this self-interested pragmatism has had greater space to be
operationalized, as compared with the wild unilateralism and haughty
imperialism of the George W. Bush era. Indeed, “the Obama adminis-
tration somewhat better recognizes the limits of US power in a world
arguably shifting toward multipolarity”. This leads to a call for more
representative international institutions, “giving a broader voice – and
greater responsibilities – for emerging powers” and for more “diplomacy
and engagement with both allies and hostile powers” (van Apeldoorn
and de Graaff, 2012, p. 222).
The need by the core to integrate the emerging economies into the
existing world order – not least to help stabilize it and to incorporate
the leading factions of rising states into the global historic bloc – is
eminently sensible from the core elites’ objective material interests and
subjective political perspective. As Kiely rightly notes:
US hegemony has itself been exercised in part through the inter-

nationalization of capital and an increase in US foreign invest-
ment . . . While all major capitalist powers have benefited from such
internationalization, the US has benefited most, as it has increas-
ingly shed some of its lower-value activities at home, but continued
to concentrate its higher-value activities within the US. Of course
US deficits are still significant, but the ability of the US to manage
these depends in part on the very same internationalization of capital
and the willingness of the US’s so-called challengers to finance these
deficits.
(Kiely, 2012, p. 244)
The diffusion of capital throughout the global system and the emer-
gence of various centers of accumulation allow Washington to pursue
this apportioning of costs:
The grand strategy-makers of the Obama administration are clearly

aware of at least the rising financial costs of [Washington’s] imperial
logic . . . However, while cognisant of the strain on America’s resources
and seeking to adjust the strategy accordingly, this in itself does
not change the overall ambition of America’s current grand strategy-
makers, which remains that of maintaining a US-centered liberal
capitalist world order.
(van Apeldoorn and de Graaff, 2012, pp. 601–602)
Thus, inclusion of the BRICS in global governance roles (at a subaltern

level, naturally) helps to spread costs. This is precisely why the National
Security Strategy of the USA recurrently calls for “deeper and more effec-
tive partnerships with other key centres of influence – including China,
India, and Russia” (White House, 2010, p. 3). Thus, sharing costs and
getting the contender states on board in relation to the extant world
order is at the heart of the core’s approach to the BRICS.
The originator of the whole concept of the BRICS (Jim O’Neill) framed
it thus: “many signs suggest that US policymakers are coping admirably
with the emergence of the BRICs, allowing the economic forces of
globalisation to benefit their globally minded companies and thereby
supporting an environment in which the BRICs can emerge” (O’Neill,
2011, p. 158). In an interview with the Financial Times (January 15,
2010), O’Neill was more explicit about the need to socialize the growth
markets into the extant neo-liberal world order, saying that “In order
for globalisation to advance, it had to be accepted by more people”.
What was interesting about O’Neill’s comments was that he stated that
incorporating the BRICS into the present world order would not be “by
imposing the dominant American social and philosophical beliefs and
structures” (Financial Times, January 15, 2010). But, here, O’Neill misses
the point. Dominance by a state is not particularly central to the notion
of hegemony: it is the promotion of a particular dominant ideology and
the construction of an international institutionalization that underpins
the system that is important:
hegemony is understood to involve not dominance of one state by

another, but rather the institution and maintenance of a world order
which serves the interests of the dominant class of the dominant state
while at the same time it serves the interests of the dominant classes
of other states as well.
(Neufeld, 1995, p. 13)
What O’Neill depicted as important properties of the BRICS’ elites (“gov-

ernments that appeared willing to embrace global markets and some
elements of globalisation”) more than fits within the liberal world order.
The goal is to manage their rapid future growth, but within the domi-
nant neo-liberal capitalist paradigm, one that will not threaten the eco-
nomic status quo of close market integration and the freedom of finance
capital. “The strategy of the Atlantic ruling class, which continues to
occupy the commanding heights of the global political economy . . . has
been to open up the contender state–society complexes”, resulting in “a
Ian Taylor 65
governing class submitting to liberal global governance and ‘open for

business’ ” (van der Pijl, 2012, p. 504).
Interestingly, it appears that O’Neill and Goldman Sachs are more
than aware of the cultural dimension and need to acculturate, with a
complex “process of consensus formation” socializing non-Western into
the dominant paradigm. In a report on Goldman Sachs’ operations in
the BRICS countries, it was considered that the bank’s expansion:
[I]is going hand in hand with a complex process of cultural engi-

neering. As the bank acquires more non-Western staff, it is devising
programmes to rotate its locally hired employees through headquar-
ters, to ensure that they learn “Goldman values” . . . says one top
executive. “That is our goal across the world. The idea is to get embed-
ded, to show that we are there for the long term . . . but also to ensure
that our Goldman values are everywhere in the world”.
(Financial Times, January 15, 2010)
It is extremely interesting how a report for an investment company has

been transformed into real world politics. At the time of the launch of
the concept, “the four countries chosen by O’Neill had different reac-
tions to the designation. There was delight in Russia, bafflement in
China, cynicism in Brazil and indifference in India” (Cameron, 2011,
p. 2). No surprise then that the Russian government promptly hired
Goldman Sachs to manage a $10 billion fund to attract foreign direct
investment (FDI) (Michailova et al., 2013, p. 3). However, “It should
be noted that analysts of Goldman Sachs did not assume the existence
of economic policy coordination between the BRIC countries”. This was
especially “since it was not assumed that the BRIC countries would form
an economic bloc” (Arkhangelskaya, 2012, p. 2).
The crystallization of BRIC countries occurred a few months after Dow
Jones introduced its BRIC 50 Index in mid-2006. This was a basket
of the largest companies listed on the exchanges of the four emerg-
ing economies previously identified by Goldman Sachs. In 2006 and
2007, the foreign ministers of the BRIC countries met informally on the
sidelines of the annual UN General Assembly meeting in New York.
Consequently, on June 16, 2009 the BRIC leaders held their first sum-
mit in Yekaterinburg, Russia. Russian, at the time, President Dmitry
Medvedev stated that “this really was a historical and very significant
event, because it marked the emergence of a new forum for resolv-
ing global problems” (President of Russia, 2009). As analyses frame it,
from an investment report, “the countries are using the idea to forge
tentative links” (Cameron, 2011, p. 2), which, in turn, reflected “signs

that the four BRIC countries are seeking to form a political club or for-
mation to convert its growing economic power into greater geopolitical
‘influence’ ” (Arkhangelskaya, 2012, p. 2). Indeed, the states have rapidly
taken ownership of the concept and have begun to utilize the idea to
forge nascent ties. This reflects an interesting interpenetration of ideas
and theories from the corporate world having practical influence. As one
Brazilian official put it, “It is somewhat ironic [that we use the word
BRICs] . . . but that reflects the fact that in the modern world it is peo-
ple like Goldman Sachs and McKinsey who have the resources and
minds to develop ideas” (Financial Times, January 15, 2010). Equally
remarkable is the “stark embrace by the historically powerful finan-
cial countries (the US and UK in particular) of Brazil, India and China
(Russia has for several years been a part of the G-8)” (Germain, 2009,
p. 683).
Beyond the desire to promote a neo-liberal world order and open up
opportunities for externally oriented capitalist factions in each country,
other subsidiary motivations for membership of the BRICS can be iden-
tified. For Brazil, the BRICS present an opportunity to promote Brazil’s
emerging status and solidify its self-proclaimed status as the voice of
Latin America. Russia eagerly joined as a means to recover some prestige
lost in the aftermath of the collapse of the Soviet Union and to bal-
ance China’s rise. India has used its BRICS membership to demand the
international respect its elites believe they are due, while China sees the
BRICS as a useful tool to promote a stable international environment
through a reformist agenda. For South Africa, membership of the BRICS
feeds into Pretoria’s long-held exceptionalism, the belief that South
Africa is (or should be) the default African nation, and to compensate
for the decline in interest in South Africa internationally post-Mandela
and after the debacle of Mbeki’s tenure.
Returning to the originators of the concept, such ideational activ-
ities by the investment banks and asset managers fit with Gramsci’s
notion of organic intellectuals, where such intellectuals are “naturally
‘condensed’ by the organic nature of their relation to the social groups
whose expression they [are]”. In short, they are “a real, organic van-
guard of the upper classes, to which economically they belong . . . They
[are] intellectuals and political organisers, and at the same time com-
pany bosses, rich farmers or estate managers, commercial and industrial
entrepreneurs, etc.” (Gramsci, 1971, p. 60). To achieve and main-
tain hegemony, intellectual and moral leadership must be obtained by
fashioning the ideological conditions for its construction. This role is
Ian Taylor 67
fulfilled by a technical intervention within civil society by intellectuals,

invariably working within the remit of advocacy-type “think-tanks”, of
which number Goldman Sachs Asset Management might be counted in
this context. As Scholvin (2010, p. 12) notes, in discussing the likes of
Goldman Sachs’ reports, “political science is often merged with polit-
ical advice and political ideology: the concepts presented so far are
not scientifically objective but rather tend to legitimize certain poli-
cies (for example, privileged cooperation with China and India)”. The
think-tanks and other actors theorize on the optimal environment for
accumulation and propose policies as to how this may be achieved
within the extant world order.
The global crisis and emerging powers
Those economies that were the most negatively affected by the finan-
cial crisis were precisely those who had most intensely adopted the
“free market” philosophy and the notion that neo-liberalism gener-
ates market efficiency principles (Wade, 2003, p. 36). How apt, then,
that Hayek’s theories were seen as “stupid” and leading down the
“road to reaction” when they were first publicized (Finer, 1963, p. 67).
In contrast to those economies dominated by the neo-liberal ideologues,
relatively speaking, the emerging powers have weathered the storm
quite adeptly. Indeed, it is precisely those countries that did not embrace
neo-liberalism willy-nilly that are now being called upon to provide
massive capital injections in order to steady the global economy (Kose
and Prasad, 2010, p. 7).
However, here we need some caution before celebrating the actual
end of neo-liberalism. While the financial crisis has certainly raised
consciousness of the ethics regarding financial accountability and state
regulation, and the wisdom of increased control of the global econ-
omy, the actual philosophical underpinnings of neo-liberalism remain
largely intact. Structural change in terms of governance or develop-
mental policies has not really transpired. Instead, a problem-solving
attitude dominates that is focused on “fixing”, rather than replacing,
the status quo. This is one which takes “the world as it finds it, with
the prevailing social and power relationships and the institutions into
which they are organized, as the given framework for action” (Cox,
1986, p. 208). The essential aim of any problem-solving approach is
to make these relationships and institutions operate as smoothly and
efficiently as possible by dealing with the particular sources of diffi-
culty that threaten the stability of the given order. As the model of
institutions and relationships – the overarching normative order – is

not disputed, issues can be investigated with regard to the specialized
sections of activity in which they are situated.
For many analysts, this is precisely what has happened. Crouch, for
instance, writes of the “strange non-death of neo-liberalism” (2011). For
Hall (1993, p. 284), the defining characteristic of a policy paradigm shift
is the rise of a competing paradigm that radically alters both the “hierar-
chy of goals and [the] instruments employed to guide policy”. Anything
less than this denotes adaptation within the existing paradigm. Mea-
sured against this standard, neither the policy changes recently adopted
by states, nor those adopted within international financial institu-
tions (IFIs) qualify as a paradigm shift. In this sense, the Washington
Consensus lives on.
It is quite obvious that the BRICS are structurally integrated into the
ongoing world order under the hegemony of neo-liberal capitalism and
within the broad policy paradigm of neo-liberalism. “What is important
to emphasise is that generally speaking all – including those located
in rising contender states – of [the] new global . . . players display an
outward-looking, economically expansionist (rather than protectionist)
outlook, integrating themselves into transnational circuits of capital-
ist production and finance” (van Apeldoorn et al., 2012, p. 482). They
do not represent a different or alternative order, other than one where
these new powers are incorporated as notional equals. Any cultural or
historical differences that may exist between the BRICS and the “tra-
ditional” powers play but a secondary role in determining their basic
posture and interests which, in itself, is shaped and constructed by the
necessities of capital. This should be palpably obvious. After all, in the
evolutionary development of Western capitalism, all manner of national
differences have been acculturated into accepting certain norms and
standards (most notably why “the West” includes Japan).
Whatever conflicts and debates that may emerge between the BRICS
and the capitalist heartland are of an inter-capitalist nature, within the
broader hegemonic order. A turn to Marx may help elucidate the issue:
Conceptually, competition is nothing other than the inner nature

of capital, its essential character, appearing in and realised as the
reciprocal interaction of many capitals with one another, the inner
tendency [presents itself] as external necessity. Capital exists and
can only exist as many capitals, and its self-determination therefore
appears as their reciprocal interaction with one another.
(1858/1973, pp. 414–415)
Ian Taylor 69
Marx’s analysis demonstrates that capital exists as private discrete cen-

ters of accumulation, but ones which are driven by inter-capitalist
competition. This is why, in its quest to expand and reproduce, capital is
continuously opening up new spaces for profitability – and why invest-
ment banks such as Goldman Sachs are eager to identify and promote
these new centers of accumulation and investment.
Yet, it cannot be denied that, post-crisis and in tandem with the rise of
the emerging powers, alternative governance and developmental mod-
els are at least being debated. Despite neo-liberalism being hegemonic
in recent decades, the variegated nature of actually existing capitalisms
under conditions of free market orthodoxy belies any one strict applica-
tion of an ideal type, as has already been noted. Varied in institutional
form and spatially differentiated, “neo-liberalism” – as a catch-all phrase
meant to capture contemporary capitalism – is, in fact, refracted in dif-
ferent forms, such as the welfare-centered continental European model,
or Asian state capitalism, which integrate capital, the state and subordi-
nated labor. This existing space with regard to policy has been arguably
amplified post-crisis.
Emerging powers – who are widely seen to have brought inflation
under control, developed greater trade and financial linkages among
themselves (which then contributed to their buoyancy as a group), and
diversified their productive bases and export profiles – are tempting as
alternative models to the much-resented Northern-inspired economic
projects (Kose and Prasad, 2010, pp. 8–9). Recognition of how the finan-
cial crisis played out differentially across the globe and the relative
resilience of the emerging powers’ economies in comparison with those
of the North has had a powerful effect on some thinking within Africa
and where best the continent’s future lies in terms of strategic engage-
ment. This is then tied to a re-thinking regarding Africa’s continued
traditional ties to the North – even if this is, at minimum, a realization
that other worlds exist beyond the North–South axis.
Certainly, ideational moves and the growing importance of the emerg-
ing powers in the broad international system have invigorated a wider
debate regarding the self-appointed right of the USA and G-8 to domi-
nate global governance. As the emerging powers have augmented their
material strength and concomitant political influence, South–South
political and economic linkages, and the rhetoric and ideas that go with
this, have been revitalized and a testing of their collective position in the
service of alteration to the “conventional practices and procedures” of
the extant institutions of global governance now proceeds (Scott, 2007,
p. 4). This has been most graphically illustrated in the lobbying by the
emerging powers for increased representation within IFIs. The ongoing

crisis in Europe and the fragile recovery from recession in the USA has
hurried the shift in world economic power towards the emerging mar-
kets, and clearly they want their growing weight to be reflected. Deals
on voting power were struck at the IMF in 2008 and late 2010, giving
emerging nations greater influence, including one pledge to raise China
from being the sixth largest shareholder to the third (although, at the
time of writing, this had yet to be ratified). Yet, this shift of votes clearly
will not satisfy. As one report put it:
Emerging countries accounted for two-thirds of global growth over

the past five years, the World Bank calculates. This has made the
meagre voice of the likes of China, Brazil and India look woefully out
of date. And the World Bank sees no let-up in this process. If, as the
Bank expects, poorer nations continue to outpace richer rivals, the
status quo power structure at the IMF and World Bank will constantly
be lagging. This makes it all but certain that IMF chief Christine
Lagarde and incoming World Bank President Jim Kim will be the last
to benefit from the monopoly of Europe and the United States over
the top jobs.
(Swann, 2012)
Certainly, the emerging powers are giving rise to the reorganization

of global relations and emphasizing the necessity to rethink defini-
tions and practices of global governance, such as enabling a broader
constituency to influence the global governance agenda.
Do these developments as exemplified regarding IFI voting rights
reflect a determination on the part of powerful states to strengthen
multilateral institutions in a last desperate attempt to seek new arrange-
ments with the emerging powers, or does this activism by the emerging
powers signal an end to the ongoing world order? This is the question
to which we next turn.
World orders, old and new (?)
The term “order” is used to denote “the [common] sense of the way
things usually happen” – not “orderliness” or the lack of upheaval in
global affairs (Cox, 1986, p. 249, fn. 2). A world order differs from
an international order in that a world order is essentially normative,
while an international order indicates the interactions between states
Ian Taylor 71
and across borders, i.e. inter-nations. The various organizations that gov-
ern this international order do not, in themselves, “make” the world
order, though they do help legitimize and construct it. According to Cox
(1986, p. 218), three components make up the structure of a hegemonic
world order: material capabilities, ideas and institutions. The material
capabilities of a world order are composed of:
Productive and destructive potentials within a world order that exists

as technological and organisational capabilities, and in their accu-
mulated forms as natural resources which technology can transform,
stocks of equipment (for example, industries and armaments), and
the wealth which can command these.
(Cox, 1986, p. 218)
There is no specific spatial location of such material capabilities. How-

ever, the interrelated elements of such power capabilities as security,
production, finance and knowledge within the global political economy
fulfill the divergent structures of power.
Notably, Cox’s conceptualization of world orders privileges the ascen-
dant ideas of a particular era. By doing so, two forms of idea are
distinguished: inter-subjective meanings and collective images. Inter-
subjective meanings are made up of shared ideas regarding the nature of
social relations and tend to continue behavioral habits and expectations.
An example of such inter-subjective meanings is the notion “that people
are organised and commanded by states which have defined territories;
that states relate to one another through diplomatic agents” (Cox, 1986,
p. 218). It is clear that states are not seen as fixed, but as historically
determined, mutable creations conceptualized via inter-subjective expe-
rience. As another account points out, “the historical structures of the
feudal manor and the fief that confronted serfs and lords in mediae-
val times appeared as real and as enduring as do our modern historical
structures of the nation-state and the interstate system” (Gale, 1998,
p. 271).
The second form of idea is the collective images of social order.
These differ from inter-subjective meanings in that collective images
are widely debated over and, unlike inter-subjective meanings, are not
commonly indisputable or survive comparatively unquestioned. For
example, within “wider society” the state and state system as inter-
subjective meanings pass essentially unscathed as ontological “facts”,
yet the actual organization of the state and the inter-state system
(and related questions regarding alternative structures or developmental
paths, or the weight that emerging powers should have with regard to
global governance decision-making) is the battlefield of a variety of posi-
tions that may call into question the very legitimacy of existing power
relations within the existing inter-state structure (Cox, 1986, p. 219).
The third and last constitutive element of Cox’s conceptualization of a
world order is its institutions. This is at both parochial and international
levels, and acts largely in propagating the hegemonic order:
Institutionalisation is a means of stabilising and perpetuating a par-

ticular order. Institutions reflect the power relations prevailing at the
point of origin and tend, at least initially, to encourage collective
images consistent with these power relations. Eventually, institutions
take on their own life; they can become a battleground of opposing
tendencies, or rival institutions may reflect different tendencies. Insti-
tutions are particular amalgams of ideas and material power which in
turn influence the development of ideas and material capabilities.
(Cox, 1986, p. 219)
At the international level, multilateral institutions play a vital role in

consolidating hegemony, and propagate and ensure the continuance of
a particular hegemonic project by the mediating and legitimizing func-
tion that they perform. It is via interventions, negotiations, the making
of concessions and the arrival at “consensus” that paramount sectional
interests are able to be displayed as the common interest. The three ele-
ments then constitute Cox’s notion of world order. It is when these three
components conglomerate in a particular arrangement that it is possi-
ble to speak of a hegemonic world order. Broadly speaking, “the stronger
the position of the ruling group or state, the less the need for the use of
force” (Payne and Gamble, 1996, p. 9).
For a world order to end, the inherent contradictions that exist within
it must become naked and irreconcilable. One scenario might be where
the world order “generates global inequalities which eventually lead
to feelings of frustration, alienation, and opposition” that then dele-
gitimize the hegemonic order (Smith, 2005, p. 121). This, then, may
result in the hegemon having to use force to maintain its dominance,
which ironically then accelerates its decline. Cox (1996, p. 518) then
identifies four alternative scenarios for what may follow in such a sce-
nario. One might be where the perpetuation of the core principles of the
declining hegemony is sustained through collaboration with a group of
other powerful states in a process of burden-sharing. Another might be
where an alternative powerful state founds a new hegemony, while a
Ian Taylor 73
third option might be where a declining world order results in a non-

hegemonic global order, with no operational universal principles of
order. This generally concludes with fierce rivalry between powerful con-
tender states. Finally, a coherent alternative counter-hegemonic project
may arise, consisting of various collective forces which arrive at a degree
of agreement regarding universal principles, without either supremacy
or dependence making up this new order.
At the moment, it is clear that the emerging powers (either as individ-
uals or as a group) do not make up a coherent counter-hegemonic project
that might challenge the existing order. While we can go through the
foreign policy demands of the BRICS individually or as a collectivity,
it seems clear that the emerging powers are set on using their newly
acquired material positions to advance stronger positions in the interna-
tional system in the areas of finance, export markets and raw materials,
but none has any sense of a new world order. As Michael Cox (2010,
p. 26) correctly notes, for China “it would be nigh on catastrophic
to make any move to counter-balance the power of the US or to act
globally in a way that challenged a world order that has underwrit-
ten 35 years of domestic stability and record economic growth” for
itself. What can be said for China might equally be applied to the other
BRICS.
A look at the outward flow of direct investment from the BRICS coun-
tries demonstrates just how integrated they are into the global economy
and why their material interests are in the smooth running of the world
order and the continuation of the status quo. The total stock of out-
ward FDI from emerging countries (as measured by UNCTAD) went from
$103,622 in 2000 to $207,229 in 2011.
The “rise” of these emerging powers – as most emblematically typified
by the BRICS – needs to be contextualized within the broader story of
global capitalism and the changes that have occurred over the last 40
years or so (Table 3.1). The “internationalisation of production, circu-
lation and investment” combined with the “interpenetration of private
capital and the nation state” has resulted in the global economy becom-
ing “the arena for competition among capitals that tends now to take
the form of geopolitical conflict among states” (Callinicos, 2005). This
conflict is, of course, not military in nature under current circumstances,
but is expressed through economic and political competition.
This process in itself derives from the crisis of the Golden Age in the
1970s, and the development of greater trade competitiveness and cap-
ital mobility that attended it. Industrial overcapacity, increasing wage
demands by labor combined with commodity-based cost-push inflation,
74
Table 3.1 BRICS outward FDI flows, 2000–2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Brazil 2,282 −2,258 2,482 249 9,807 2,517 28,202 7,067 20,457 −10,084 11,588 −1,029
Russia 3,177 2,533 3,533 9,727 13,782 12,767 23,151 45,916 55,594 43,665 52,523 67,283
India 514 1,397 1,678 1,876 2,175 2,985 14,285 19,594 19,257 15,927 13,151 14,752
China 916 6,885 2,518 2,855 5,498 12,261 21,160 22,469 52,150 56,530 68,811 65,117
HK 59,374 11,345 17,463 5,514 45,726 27,196 44,979 61,081 50,581 63,991 95,396 81,607
Macao 0 11 71 −5 −92 60 636 23 −83 −11 −312 62
SA 271 −3,178 −398 565 1,350 930 6,063 2,966 −3,134 1,151 −76 −635
Amounts in US$ millions, at current prices and exchange rates.

Source: UNCTAD (2012).
Ian Taylor 75
led to stagflation. This milieu impelled a fundamental restructuring

of global capital with spatio-temporal transpositions that enabled the
reproduction and expansion of capitalism. Solutions to the crises
of the 1970s were located in both the capitalist heartland and the
semi-periphery. Neo-liberalism in the heartland generated a favorable
environment for both finance capital and capital investment through
deregulation, liberalization and privatization, while production was
restructured on a global scale. Most notably, labor-intensive indus-
tries were relocated to outside the core, reducing production costs and,
equally, disciplining labor in the heartland. Meanwhile, the debt crisis of
the 1980s was used to “organise the internal relations of production in
each country” to “favour the further penetration of external capitals”
(Harvey, 2003, p. 47). The Structural Adjustment Programmes of the
IFIs were the strategies of choice in this regard. In this rapidly globalizing
world economy, its “architects require[d] a universal vision, a picture of
a globally conceived society, to join classes in different countries . . . [in
order] to institutionalise global capital accumulation” (Mittelman and
Pasha, 1997, p. 51). The vision was neo-liberalism and the objective was
to remove spatial barriers to the restructuring of capital by removing
obstructions to trade and investment.
These dynamics have produced the “contradictory fusion” of territo-
rial and capitalist logics (Harvey, 2003, p. 26). They have also stimulated
accumulation by dispossession as the foundation for a reorganized
exploitative relationship between core and periphery, North and South,
and also new competition. New competition stems from the emergence
of new economic powers that have risen over the last 30 years or so and
that have developed rapidly as a result of this global capitalist restructur-
ing. The global movement towards the rightward on economic policy at
the expense of any redistributionist vision not only profoundly altered
the global balance of power, it also held out the temptation to South-
ern elites that export-based economies and international trades were the
panacea for all their problems. This, of course, existed alongside a mate-
rial improvement in the relative political power that these elites felt was
their due and their right. This has encouraged key elites in the South –
no more graphically exemplified than by the BRICS – to flex their mus-
cles regarding their status in the world system. Whether this is to do
with improved economic opportunities for home-grown capital or the
expression of political nationalism, there is no doubt that we are observ-
ing the emergence of a new set of elite actors who trace their origins to
the profound global spatio-temporal restructuring of capitalism that has
occurred since the crises of the 1970s.
Yet, such elites in the South have largely accepted many of the pre-
cepts of the hegemonic neo-liberal project; they have also hoped that
bodies such as the WTO may be vehicles by which the markets of
the North can be truly opened up to competition from the develop-
ing world – a process which stands to benefit important factions of the
Southern-based elites. Indeed, “it may well be that in the final analysis
the state in peripheral formations including most would-be contender
states ultimately serves as an instrument for continued and intensified
accumulation by dispossession” (van Apeldoorn et al., 2012, p. 482).
This reflects the change in attitude towards most global multilateral
institutions among many of the key Southern elites. Formerly regarding
such bodies as clubs for the rich, emerging countries have become active
participants in the ongoing debates over global governance; seeking out
the best deals they can for their local elites while acting to express their
new-found confidence that stems from an improved economic position
and a strong belief that they are the future. Such attitudes have been
emboldened by the financial crisis.
Certainly, the ability of key emerging powers to manage the after-
math of the financial crisis qualitatively better than the capitalist core
economies provoked some assertive demands by the BRICS. In a report,
published in the International Economic Bulletin, Dadush and Stancil
presented a set of projections for the expected GDP growth of the
G-20 economies (excluding the EU) up to 2050. The projections were
developed from hypotheses regarding labor force growth, the rates of
investment, and the speed and scope of technological change. Expand-
ing on earlier studies, including those performed by Goldman Sachs,
PricewaterhouseCoopers and the World Bank, and by adjusting for ini-
tial qualities of governance, education and infrastructure, as well as
updating population and investment rate projections, Dadus and Stancil
(2009) demonstrated that the economies outside of the G-8 are those
most likely to exhibit robust growth.
The presumption that it is the G-8 nations that are of greatest sig-
nificance in managing the international system has been irrecoverably
shattered (Table 3.2). Emblematically, it was the G-20 and not the G-8
that met in 2009 in order to respond to the financial crisis (Cargill,
2010, p. 12) and it is now the G-20 that is recognized as the pre-
mier global economic forum, effectively replacing the G-8 (see Bradford
and Lim, 2011). Using their compelling material positions, the emerg-
ing powers now seek to contribute actively and to shape the practices
and procedures of the multilateral institutions dedicated to questions
of global governance (Scott, 2007, p. 4). Given the predictions and
Ian Taylor 77
Table 3.2 Average annual GDP growth percent change (y/y)
Country Pre-crisis trend Crisis years Projections

(1997–2007) (2007–2009) (2009–2050)
Argentina 2.62 2.01 4.09

Australia 3.56 1.54 2.85
Brazil 2.8 2.17 4.16
Canada 3.29 −1.04 2.62
China 9.62 8.76 5.56
France 2.36 −1.03 2.09
Germany 1.56 −2.08 1.44
India 7 6.35 6.19
Indonesia 2.68 5.02 5.01
Italy 1.46 −3.11 1.27
Japan 1.15 −3.07 1.08
Korea 4.3 0.61 2.47
Mexico 3.32 −3.09 4.29
Russia 5.68 −1.19 3.33
Saudi Arabia 3.23 1.75 4.7
South Africa 3.67 0.41 4.28
Turkey 4.05 −2.87 4.33
United Kingdom 2.89 −1.86 2.13
USA 3.01 −1.16 2.7
upward trajectory of emerging powers, such states have an intense inter-

est in “a commitment to orderliness and security on interstate relations
and to facilitating . . . orderly change in the world system” (Cox, 1989,
p. 825). In other words, emerging powers are, by default, bound to
notions of middlepowermanship, a concept that is explored in the next
section.
The BRICS, intermediate powers and middlepowermanship
The whole concept of BRICS is built on the notion of coalition-building,

which may be defined as a group of decision-makers who agree to
act together to achieve a common goal when participating in negotia-
tions. Such a definition covers deliberate cooperative activities aimed at
obtaining shared policy preferences while excluding ad hoc, insignificant
policy convergences between state actors. The BRICS define themselves
largely as part of the South (Russia is somewhat ambivalent on this
score) and the countries are developing rather than developed, emerging
rather than emerged. Yet, the BRICS are all developing nations “in the
middle” with regard to relative capacity and material strength. Can they
thus be considered “middle powers”? The problem with using the term
“middle powers” is that it brings with it a great deal of Realist conceptual
baggage.
Those basing their definition of middle powers on the material
capabilities of the state have been largely Realist in their theoretical
approach. In an extensive discussion concerning the nature of “power”
and how to measure it, Bernard Wood suggested that the gross national
product (GNP) of a state is the determining criteria in any attempt
to “measure tangible capabilities” (Wood, 1998, p. 17). Using this
method, Wood created a list of countries deemed to be of middling
GNP and, ergo, “middle powers”. Yet, such a taxonomy is (obviously)
profoundly flawed, for a listing of middle powers based on their GNP
rankings includes generally accepted middle powers such as Canada and
Sweden – but also included are states such as Austria, Belgium, Romania
and Venezuela, none of whom are usually defined as “middle powers”.
Carsten Holbraad’s definition of middle powers also related strongly to
the material capabilities of a state.
Holbraad modified this, however, by reference to geopolitical crite-
ria, i.e. by qualifying middle power candidates by their position within
their respective regions. This gave (in 1975) South Africa and Nigeria in
Africa; China, India, Iran and Japan in Asia; France, Italy, Poland, Spain,
the United Kingdom and West Germany in Europe; Canada and Mexico
in North America; Argentina and Brazil in South America; and Australia
and Indonesia in “Oceania and Indonesia”. By doing so, Holbraad’s
definition “lost” virtually all those states in Europe usually considered
middle powers, e.g. Norway and Sweden. His division into “upper”
and “lower” middle powers was also problematic (see Holbraad, 1984).
Yet, perhaps the fundamental problem with both Holbraad and Wood’s
efforts to define middle powers is the paucity that such capability-
oriented approaches give in predicting, or at least rationalizing, the
international behavior of such states. Reliance on the GNP of a state,
although not entirely irrelevant in providing the material ability to
enact out a role, is devoid of any real explanatory power.
In order to get past this problem, “middle powers” may be seen to
refer to more than a state in a moderate material power position and,
instead, to refer to the way such states create a form of identity or ideol-
ogy for themselves and pursue specific behaviors. To move beyond the
baggage of “middle powers”, Hurrell (2001) deploys the term “interme-
diate power” to indicate such countries as India, Brazil, South Africa and
Malaysia. Such intermediate powers possess more agency than a small
and invariably vulnerable state in the pursuance of foreign policy, yet
lack the structural position to dominate. Intermediate powers occupy an
Ian Taylor 79
intermediary position in the overall power structure of the international

system and their behavior reflects a “meeting point” between agent and
structure. The intermediate power’s freedom of action cannot be con-
fused with the manifestation of structural leadership expected from the
major powers.
Returning to Hurrell’s denotation of intermediate powers, of key
importance is the self-identification and behavioral profile. Here, Robert
Cox’s notion of middlepowermanship may be fruitfully deployed:
In the middle rank of material capabilities, but . . . also stand[ing]

in the middle of situations of conflict [the middle power] seeks to
expand the area of common ground which will make it possible to
curtail risk in the management of conflict. Possessing middle range
capability (military and economic) is a necessary condition of the
ability to play this role, but it is not an adequate predictor of a
disposition to play it. An ability to stand a certain distance from
direct involvement in major conflicts, a commitment to orderliness
and security in interstate relations and to the facilitation of orderly
change in the world system are the critical elements of the middle
power role.
(Cox, 1989, p. 827)
Middlepowermanship therefore denotes a style of foreign policy behav-

ior. Clearly, as a regulative ideal, an intermediate power must be
comprehended in terms of both levels of the global order:
In terms of the international level, middlepowermanship direct[s]

the . . . state to play a prominent role in multilateral fora . . . orientating
the . . . state to a role supportive of the hegemonic global order . . .
[and] . . . by fulfilling an important role of facilitator and mediator,
[the intermediate power] help[s] defuse potential conflicts which,
if not addressed, might . . . undermine . . . the stability of the global
order.
(Neufeld, 1995, pp. 16–17)
In this light, intermediate powers play a supporting role in maintaining

a world order from which their key elites benefit. In short, intermediate
powers in general act as facilitating agents to manage the global order.
This order is supported and consolidated by particular behavioral norms
and rules.
The role of intermediate powers is to support the principle of adher-
ence to conventional rules of conduct by all powers, great or small, as
a means to promote stability in global governance. The United States’
Secretary of Defense, Leon Panetta, recognizes this with regard to the

BRICS, noting that emerging centers “like China and Brazil and India,
not to mention obviously Russia . . . provide a challenge to us not only in
trying to cooperate with them, but making sure that they don’t under-
mine the stability of the world” (cited in Parrish, 2011). Of course, “the
stability of the world” here means a neo-liberal global order with the
USA as the hegemonic guardian. This has important implications for
such intermediate powers as such a role directs the particular country
to serve its interests in a broad sense of the ongoing hegemonic order.
Consequently, intermediate powers’ concern with stability and order in
the international system which lubricates their passage upwards in the
global pecking order often results in their behavior being supportive of
the status quo. This role (as is the world order) is in continual movement
and “is not a fixed universal but something that has to be rethought
continually in the context of the changing state or the international
system”. Hence, the intermediate power’s role “is to support this pro-
cess . . . in the context of a hegemonic world order” (Cox, 1989, pp. 825,
826). An activist role on the world stage where interest in global issues
beyond their immediate concern is also typical (Jordaan, 2003, p. 167).
This is related to material power, derivative of accumulation:
[T]he rise of China as a state-led capitalist power and less spectacu-

larly, the rise of such capitalist powers such as Brazil and India, can
itself be seen as a project of creating a system of global circuits of
capital accumulation replacing the old national circuits . . . and with
that in further pushing for marketisation and commodification on a
world scale . . . In this scenario we are likely to witness a transnational
restoration of neo-liberalism as a globally dominant project and
practice.
(van Apeldoorn and Overbeek, 2012, pp. 10, 11)
Though multilateral fora are the natural arena of operations for middle
powers, simply predicating middlepowermanship around an expanded
interest in multilateralism can lead to confusion. It is the type of inter-
national role and attitudinal position of the governing elite that is of
greatest importance, as well as the role these elites advance for their state
with regard to the ongoing world order. The BRICS are a good exam-
ple of this phenomena, where a tactical middlepowermanship role –
essentially, problem-solving – seeks to smooth out the international
system so that the ongoing world order may function as “efficiently”
as possible while opening up space for intermediate powers to claim
their place in the sun. Jordaan’s (2003) analysis of “traditional” middle
Ian Taylor 81
powers such as Australia and Canada and emerging middle (or inter-
mediate) powers such as Brazil and South Africa is of importance here.
After all, the intermediate powers have an intrinsic interest in a pre-
dictable world which can guarantee their trajectory. This leads them,
in their foreign policy behavior, to look to multilateralism and inter-
national law for solutions, with coalition-building also being of great
importance.
The BRICS and legitimacy
One issue that the BRICS face is the question of legitimacy. The devel-
oped world confers legitimacy on the BRICS by viewing them either
implicitly or explicitly as regional leaders and through invitations to
represent their respective regions in various multilateral settings such
as the G-8, G-20 and small negotiation groups within the ambit of the
WTO. Washington has, indeed, explicitly recognized India, Brazil and
South Africa as leaders in regional security management. The BRICS
members’ regional status might be said to add to their intermediate
status and to grant a degree of legitimacy to their claims and efforts.
Equally, their supposed neutrality originates from their regional posi-
tions and strength and the coalition-building that they conduct, which
“undermines the impression that they are mere hegemonic proxies”
(Jordaan, 2003, p. 177). Certainly, a key issue facing intermediate pow-
ers in achieving their status is the recognition of their role by other
states within the international system. In the context of the BRICS, this
must come from the developing world itself if it is to make any sense
and have any degree of legitimacy outside the Northern corridors of
corporate and political power. This, though, is where the question of
legitimacy becomes complex. As Laïdi (2012, p. 619) asks:
One might assume that the BRICS draw their legitimacy from the
fact that they bring together regional powers that have set their
political ambitions on the international scene. But in this case, why
not include Turkey? In the end, are the BRICS just creating a form
of emerging aristocracy looking to be co-opted by developed coun-
tries to the detriment of rival countries? Is this but a coalition of
contenders for a permanent seat on the Security Council?
(Laïdi, 2012, p. 619)
All five countries’ regions view them with varying attitudes ranging from
suspicion of hegemonic intentions (often attributed to Brazil, South
Africa and China, within their respective regions) to active hostility (e.g.
in the case of India and Pakistan) to fear (with regard to both China
and Russia). As the Egyptian ambassador to South Africa explained it,

“The problem comes in when South Africa wants to decide for the
entire developing world. It cannot fly the flag of the whole group until
those positions are endorsed by the whole group” (Taylor, 2005, p. 24).
This is a fundamental problem. On the one hand, the BRICS might be
seen as representing an assertive South that is beginning to demon-
strate a degree of agency that we have not seen since the post-colonial
period began. On the other hand, regional jealousies and politicking
undermine the notion that these five countries can (or should) act as
spokespeople either for their own regions, or for the developing world
as a collectivity. Yet, at the same time, the BRICS will find it essentially
impossible to disengage from their regions given the levels of economic
(and political) investment that they have put into their own neigh-
borhoods, and the way in which the political economy of each region
dialectically affects the BRICS own standings and security.
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Part II
The Global South
4
How Prioritized Is the Strategic
Partnership between Brazil and
China?
Introduction
This chapter aims at conducting a broad analysis of Brazil–China rela-

tions in order to reveal the extent to which the strategic partnership
between Brazil and China is prioritized. This question is of great impor-
tance within the thematics of this book as it deals with the issue of
the character of the BRICS coalition, as well as with the issue of intra-
BRICS cohesion. Many observers and analysts of the dynamics of global
politics find that the rise of China and the formation of the BRICS
coalition on the international political scene is a significant novelty in
the international system, and relations between China and Brazil are of
great importance to intra-BRICS relations and BRICS as a group. María
Regina Soares de Lima and Ricardo Castelán (2013) suggest that from a
realist perspective, the world “is witnessing a very interesting moment
of imbalance between order and power” in which emerging powers
are gaining in relevance. Will China and Brazil’s strategic partnership
influence the nature of this imbalance?
In a review essay on the importance of China for Latin America
and the Western hemisphere as a whole, Nicola Phillips (2011, p. 90)
points out that the literature on this topic mostly focuses on the eco-
nomic dimension, although some contributions also include political
and geopolitical aspects and foreign-policy oriented themes. She further
notes that most contributions neglect the Chinese perspective. In this
analysis, I attempt to address Brazil–China relations from the Brazilian
and the Chinese perspectives, and I aim to take economic, political and
geopolitical aspects of the relationship into account.
87
88 The Global South
Furthermore, I relate my analysis to the unfolding of developments in

the process of economic globalization, basing it on the view that with
its gradual changes in the international division of labor and diffusion
of economic power, the globalization process affects relations between
Brazil and China. The analysis takes a chronological historical approach
but emphasizes recent developments in Brazil–China relations, in order
to accommodate the interest of this book in current developments in
the global system.
Analysis
Basically, relations between Brazil and China started in 1974 when Brazil
recognized the People’s Republic of China as the legitimate represen-
tative of China (Lessa, 2010, p. 124). Until this point in time, very
little mutual interest existed between the two countries. Mutual trade
and investments were almost non-existent, although Brazil had sought
to develop trade links with China in the early 1960s (Tavares Maciel
and Nedal, 2011, p. 237). When the authoritarian Brazilian government
installed itself in power in 1964, this overture towards China ceased
(Visentini, 2013, p. 62). The decision to establish diplomatic and com-
mercial relations with China in 1974 was surrounded by controversy
in the Brazilian authoritarian government. Critics of the policy saw
Chinese values and Chinese attempts at exporting its revolutionary and
anti-capitalist ideas as going against Brazilian culture and values (Tavares
Maciel and Nedal, 2011, pp. 238–239). The decision was built on both
commercial and strategic interests.
At the same time, this was a way for both Brazil and China to stress
their autonomous presence on the global political stage in consonance
with a Third World-oriented agenda promoting a new international
economic order that would be more beneficial to the Third World
(Visentini, 2013, p. 76; Altemani de Oliveira and Lessa, 2014, p. 5; León
Manríquez and Álvarez, 2014, p. 15). It should be stressed that Brazil’s
recognition of the People’s Republic of China also responded to changes
in the international geopolitical context. In the late 1960s, China pur-
sued friendly relations with the USA, while it moved away from the
Soviet Union (USSR – Union of Soviet Socialist Republics) in geopolitical
terms (León Manríquez and Álvarez, 2014, p. 15). The US government
of Richard Nixon responded positively to this initiative as part of its
geopolitical strategy of encirclement of the USSR. This made it easier for
the Brazilian government to establish diplomatic ties with China, given
the Brazilian government’s policy of alignment with the USA (Visentini,
Steen Fryba Christensen 89
2013, p. 62). From the perspective of China, there was an obvious inter-
est in establishing bilateral ties as part of its promotion of the “one
China” policy, according to which the People’s Republic of China, rather
than Taiwan, should be accepted as the legitimate representative of
China.
The diplomatic recognition of China by Brazil in 1974 did not lead to
any immediate significant changes. The two countries remained distant.
But, with the initiation of the Chinese economic reform process in 1978,
some trade restrictions between the two countries were lifted and bilat-
eral trade started to grow. Bilateral political relations began to improve
in the 1980s with state visits to China by Brazilian President Figueiredo
in 1984 and President Sarney in 1988. During Sarney’s visit, the two
countries signed an agreement jointly to develop satellites in the frame-
work of the China–Brazil Earth Resources Satellite Program (Tavares
Maciel and Nedal, 2011, pp. 238–239). The two countries further devel-
oped South–South technical cooperation in strategic and high-profile
areas such as technical cooperation in the area of nuclear power and
other high-tech areas. This cooperation was greatly welcomed from a
Brazilian perspective as it compensated for the lack of financial resources
Brazil experienced for a considerable while in the 1980s (Visentini, 2013,
p. 88). At the same time, these lines of cooperation reflect the interest
of both countries in developing advanced technological capacities that
were independent of the leading industrially developed countries.
Bilateral trade remained insignificant, however. In 1991, only 0.7 per-
cent of Brazil’s exports went to China, while 0.6 percent of its imports
came from China (Oviedo, 2014, p. 152). Bilateral trade followed a
South–South pattern, as it mostly consisted of natural resources. China’s
main export to Brazil was oil, while Brazil’s main export to China was
steel (Oviedo, 2014, p. 147). When the Cold War came to an end in
1991, the two economies were similar in size, with Brazil’s GNP slightly
larger than that of China (Oviedo, 2014, p. 155). Thus, the economic
relationship can be described as symmetrical at the time, although
Brazil was more developed in terms of industrial production and income
per capita. Bilateral relations were thus highly limited and, from the
perspective of both countries, of low significance. From a Chinese per-
spective, Latin America and Africa as a whole were largely irrelevant
throughout the 1980s (Armony, 2011, p. 24), and it was not until after
the end of the Cold War that China started engaging with Latin America
(León Manríquez and Álvarez, 2014, p. 15).
The nature and level of economic interactions started to change
in the 1990s as a consequence of China’s economic reforms and the
90 The Global South
consequent changes in the Chinese development model, which empha-

sized exports and the strengthening of the manufacturing sector. China
received substantial FDI in the manufacturing sector, and gradually
moved from being a relatively insignificant producer and exporter of
manufacturing products to a situation, in 2008, where China’s share
in global manufacturing exports had risen to 11.5 percent. In contrast,
Brazil’s share in global manufacturing exports stayed flat at a low 0.7 per-
cent (Gallagher, 2010, p. 5). Presently, China has become the biggest
exporter in the world and the second largest economy. Also in terms of
GDP, China has consistently outperformed Brazil since 1991. In 2012,
the Brazilian economy was just 27.3 percent of the size of that of China
(Oviedo, 2014, p. 155).
From a Brazilian perspective, bilateral trade with China has developed
well in some ways, as Brazil achieved a positive trade balance helped
along by impressive improvements in Brazil’s terms of trade between
2003 and 2008; this was due to commodity price hikes, which were
largely a consequence of rising demand from countries such as China
and India (Saslavsky and Rosenberg, 2009, p. 191; Sevares, 2012, p. 328).
The outcome of this was that the nature of bilateral trade turned highly
asymmetrical in its composition: China has specialized in manufactur-
ing exports, and Brazil has specialized in primary sector exports (Sevares,
2012, p. 332). At the same time, Brazil lost some of its market share
to China in Third markets in the manufacturing sector (Li Xing and
Christensen, 2012, pp. 43–44). Thus, the nature of mutual trade has
turned into the traditional North–South pattern, China being the suc-
cessful partner specializing in manufacturing exports while investing
in Brazil. This is a challenge to bilateral relations as it has provoked a
perception of threat in Brazil with regard to China. Political-economic
aspects of this issue will be analyzed later in this chapter.
When Fernando Henrique Cardoso became president in Brazil in
1995, the share of Brazilian exports to China had increased from 0.7 per-
cent in 1991 to 2.6 percent (Brazilian Central Bank, 1997, p. 124). This
share had grown modestly to 4.0 percent by 2002 when Cardoso’s presi-
dency ended (Brazilian Central Bank, 2003, p. 149). Bernal-Meza (2014,
p. 31) argues that this reflects the strategy of Brazilian governments
prior to 2003 of turning Brazil into a global trader through strategic
associations with countries such as China, India, Argentina and South
Africa. However, in the 1990s, Brazil focused strongly on OECD markets
(Visentini, 2013, p. 98). The financial and economic crisis experienced
by Brazil during 1998–1999 strengthened the aim of nurturing more
diversified trade patterns. Facing the economic crisis, President Cardoso
criticized what he termed “a process of asymmetrical globalization”, and

the aim of diversification was highlighted in the national development
plan 1999–2002, which stressed the desirability of increasing Brazil’s
economic cooperation with other major developing countries, as well
as with South America (Lessa et al., 2009).
In 1993, Brazil and China signed a strategic partnership agreement.
Analysts differ on how significant this step was from the perspective of
priority. The general view is that China did not prioritize its relations
with Brazil and Latin America as a whole. The latter remained a small
trading partner for China (Dussel Peters, 2011, p. 95) and also remained
marginal in China’s global vision well into the 1990s (Phillips, 2011,
p. 89). Pereira and Castro Neves (2011, p. 9) find that China basically saw
Brazil as a source of natural resources needed by the Chinese economy.
Tavares Maciel and Nedal (2011) argue that neither Brazil nor China pri-
oritized the other in the 1990s and early 2000s. However, Lessa (2010,
pp. 123–124) finds that China came to play a very central role in the
strategic thinking of Brazilian foreign policy from 1995 and onwards,
due to the potential present in bilateral scientific and technological
cooperation and in significant bilateral trade flows. Bilateral scientific
and technological cooperation was developed in a number of economic
sectors such as “energy and mining, finance, agriculture, quality supervi-
sion, inspection and quarantine, industry and information technology,
space cooperation, science, technology and innovation, and education,
among other areas” (Haibin, 2010, p. 185). In general, the degree of pri-
ority given to the strategic partnership and mutual relations between
Brazil and China can be seen as relatively low for both countries until
2002. Focus was largely on bilateral economic relations.
Christensen (2012, p. 239) argues that Brazil prioritized relations with
the USA, the EU and its Latin American neighbors. This can largely be
explained by existing trade patterns. In 2002, more than 50 percent of
Brazilian exports went to the USA and Europe, while Latin America was
a significant export destination with a larger share of Brazilian exports
than Asia as a whole. Visentini (2013, pp. 97–99) notes that the Brazilian
government at the time focused strongly on improving its external
image, particularly in relation to the USA and other creditor coun-
tries, in order to gain external credibility and pursue economic growth
through a neoliberal economic strategy emphasizing OECD markets. He
further emphasizes that Brazil lacked a consistent strategy towards Asia,
in spite of the fact that Asia was becoming the main economic growth
pole in the world (Visentini, 2013, pp. 106–107). During Franco’s presi-
dency (1993–1994) and, later, Cardoso’s presidency, there was a growing
92 The Global South
focus in the diplomatic discourse on pursuing a global trader profile

and on collaborating with other poles than the hegemonic traditional
powers; in practice, however, relations with the USA and its allies were
prioritized both in terms of the economic agenda and Brazil’s multi-
lateral agenda, which mostly adapted to the agenda of the traditional
Western powers in a strategy of “bandwagoning”.
China, for its part, pursued its strategic priority of a peaceful rise
with a focus on economic development. In this strategy, the USA was
seen to be the most significant individual partner (Haibin, 2010), while
Latin America was perceived to be of marginal importance. The Chinese
development model depended on FDI and inclusion in international
production networks on the part of leading economies such as the USA,
Japan, Taiwan and other Asian economies (Phillips, 2011, pp. 95–99).
The fact that the USA was one of China’s main export markets and one
of the main providers of FDI, along with the fact that the USA played
a role as the hegemonic power in the global system at this point, helps
explain China’s strategic posture.
Brazil–China relations 2003–2008
Brazil’s foreign policy strategies changed significantly after Luíz Inácio

da Silva, known as “Lula”, became president in 2003. The Lula gov-
ernment emphasized the active promotion of South–South relations,
seeking to strengthen bilateral economic and political ties to devel-
oping countries and regions broadly (Christensen, 2012, p. 232), as
well as to pursue different issue-based “specific alliances”, often with
large emerging powers. Vigevani and Cepaluni (2007) refer to the over-
all strategic orientation of the Lula government as one of pursuing
“autonomy through diversification”, giving priority to links with the
South. This strategy was based on an activist realist-inspired (Bernal-
Meza, 2010) foreign policy that aimed at promoting Brazil as a great
power with a permanent seat on the United Nations Security Council.
Relations with China intensified during this period, at both bilateral
and multilateral levels, reaching the level of a true strategic partnership
(Visentini, 2013, p. 117). At the same time, a number of Latin American
countries went through a turn towards the political left and, at the Sum-
mit of the Americas in 2005, the Free Trade Area of the Americas was
dropped by several Latin American countries, including Brazil. As José
León Manrique and Luis F. Álvarez argue (2014), a unipolar world sud-
denly no longer seemed an obvious reality, and many Latin American
countries enthusiastically welcomed closer and more intense relations
with China. This can be seen as being part of a strategy of balancing

their relations with different powers, not least China, and thus as a sig-
nificant step away from the strategy of alignment with the USA of the
1990s.
The period from 2003 became a golden time from the perspective of
the Brazilian economy. Growing export receipts, particularly from com-
modities, helped the Brazilian government stabilize the economy and
assure substantial economic growth (Christensen, 2012). China, for its
part, continued to experience very high yearly economic growth figures
of around 10 percent, based largely on its successful growth in export
receipts from the expanding manufacturing sector.
The relationship between Brazil and China developed significantly
during this period. In 2004, the leaders of the two countries, Lula and
Hu Jintao, exchanged formal state visits (Pereira and Castro Neves,
2011, p. 3), and the two governments agreed on a mechanism for
dialogue between the public and the private sectors, the High Level
Bilateral Commission COSBAN (Tavares Maciel and Nedal, 2011, p. 243).
In November of that same year, Brazil decided to recognize China as a
market economy and thus support its full entry into the WTO (Lessa,
2010, p. 124). Amado Luíz Cervo (2010, p. 30) argues that the joint
communiqué of Lula and Hu Jintao presenting COSBAN shows that
both governments saw their relations as strategic. As Tavares Maciel and
Nedal (2011, p. 243) point out, “The year 2004 was portrayed as a water-
shed” in a bilateral relationship that was becoming consistently close
and positive.
However, although this point of view is strongly reflected in accounts
of the bilateral relations between the two countries, it is not a generally
accepted view. The Brazilian government’s decision to accept China’s
status as a market economy was controversial inside Brazil. The indus-
trial employer interest organization Fiesp was against it and defended
protectionist measures against the growing competitive pressure and
rising imports of Chinese manufacturing products (Pereira and Castro
Neves, 2011, pp. 5–6).
From the perspective of China, support for their market status was
clearly significant, as general acceptance of this status would help to
smooth China’s integration into the global economy. It was not clear
what Brazil might gain from its recognition of China. The Lula gov-
ernment’s policy towards China was mainly based on the growing
bilateral trade and the basic common identity of the two countries,
which inspired the global strategic vision of the Lula government to
favor coalition building with emerging powers (Guilhon-Albuquerque,
94 The Global South
2014, p. 112) as a way to strengthen Brazil’s autonomy and influence

on the international scene. In 2005, when Brazil sought to advance
its bid for a permanent position on the UN Security Council, it did
not receive China’s support. According to Tavares Maciel and Nedal
(2011, pp. 241–242), Brazil had been under the impression that it
would receive China’s support after Brazil had supported China in the
WTO the year before; they argue that China’s failure to do so damaged
pro-Chinese sentiment in Brasília. The validity of this interpretation is
difficult to prove, however, as no clear link was made between these
two issues in the official discourse of the Brazilian government, and
because Brazil–China relations seemed to become increasingly close and
intense after 2005. However, as Tavares Maciel and Nedal (2011, p. 243)
point out, strong opposition existed to the treatment of China as a mar-
ket economy by the Brazilian media and special interest groups, and
the recognition of China was never implemented in practice. The chal-
lenge from China was discussed quite extensively by the academic and
the political communities and was thus high on the national agenda
inside Brazil. In 2005, the theme of the 17th National Forum – which
had strong participation from leaders in academia, politics and busi-
ness organizations – was the challenge from China and India, and
Brazil’s responses to this challenge. Joao Paulo dos Reis Velloso (2005a,
p. 40) identified the challenge from the two other great peripheral pow-
ers to be their impressive improvements in economic competitiveness,
which was felt in particular by Brazil in the advanced OECD mar-
kets. In his synthesis of the discussions at the National Forum, Velloso
highlighted the fact that Brazil had lost to China in four out of five
major Brazilian export markets and in a wide range of sectors within
the manufacturing sector, when comparing the periods 1966/1997 and
2001/2002 (Velloso, 2005b, p. 12). Within the opposition to the gov-
ernment, there was a widely held view that it was absurd for Brazil to
pursue a strategic partnership with one of its main rivals. They found
that this policy reflected the government’s ideological Third World-
oriented and anti-American or even anti-Western thinking, and that
such a policy worked against the protection of Brazil’s objective national
interests.
The competitive pressures from China in the manufacturing sector led
Brazil to launch a large number of anti-dumping investigations against
China within the WTO during the 2000s and, in some cases, China vol-
unteered to Brazil that it would show voluntary export restraint (Li Xing
and Christensen, 2012, p. 44). The tendency towards using trade defense
mechanisms was further exacerbated after the international financial

crisis that broke out in 2008.
Regardless of this, mutual trade continued to grow significantly and,
by 2009, China had become Brazil’s main export market. Between 2003
and 2013, Brazil’s exports to China continued to expand, going from
US$4.5 billion to US$46 billion (Oviedo, 2014, p. 150).
The attitude to China’s significance for Brazil is characterized by
polarization (Gallagher and Porzecanski, 2009). The tendency through-
out the first decade of the 21st century was to emphasize China as
an opportunity and as an engine of growth for Brazil. In this liter-
ature, analysts present Brazil and other South American commodity
exporters as winners in the relationship with China, while Central
America and Mexico are seen as losers. Others, however, stress the risk of
“de-industrialization” in Brazil due to competitive pressure from China.
Other criticism of China’s impact on Brazilian development points out
that the enormous expansion in, for instance, soy production, largely
destined for the Chinese market, is having negative environmental
consequences in Brazil.
The Lula government was not only interested in its bilateral eco-
nomic relations with China. In fact, Tavares Maciel and Nedal (2011)
argue that Brazil was particularly interested in relations at the mul-
tilateral level. China’s main interest continued to be at the bilateral
economic level, with an emphasis on the import of natural resources
from Brazil as well as the export of manufactured products to the grow-
ing Brazilian market. Initially, China was more ambivalent than Brazil
with regard to the desirability of forming coalitions and networks of
emerging countries, due to their prioritization of the USA and other
important OECD markets (Haibin, 2010, p. 191; Tavares Maciel and
Nedal, 2011, p. 241). This ambivalence seems to have disappeared after
the international financial crisis in 2008. Guilhon-Albuquerque (2014,
p. 116) contends that China’s foreign policy strategy has become bolder
than expected. It appears that China has developed a more independent
foreign policy in the post-financial crisis context, which has speeded up
the process of rebalancing the global economy in the direction of Asia
and the developing world, whereas the traditionally developed countries
have experienced problems in assuring economic growth and stability
(Christensen, 2013).
The Brazilian government’s particular interest in relations with China
at the multilateral level responded to particular understandings and
interpretations of the international system at the top of the foreign
policy hierarchy. Samuel Pinheiro Guimarães, the Secretary General of
96 The Global South
Foreign Policy during the Lula government, found the international

system to be characterized by the concentration of power through
“hegemonic power structures” in different dimensions. He argued that
the dynamic of the system was conducted by “core” countries that pro-
moted the freezing of power imbalances in the international system
through their promotion of rules and norms in their own favor within
international institutions such as the WTO and the UN (Guimarães,
2003, pp. 103–109; Guimarães, 2005, pp. 15–16). This did not mean
that he was against such multilateral institutions. In fact, historically,
Brazil has defended multilateral mechanisms in decision-making. How-
ever, Guimarães found that the strategic objectives of great peripheral
states such as China, India and Brazil were to participate in hegemonic
structures in a sovereign and non-subordinated way for the purpose of
promoting rules and norms in their interest (Guimarães, 2005, p. 157).
From this point of view, it was desirable for large peripheral states to
struggle to defend national autonomy and promote a multipolar order-
ing of the international system (Guimarães, 2003). He considered it
strategically opportune for Brazil and other great peripheral states to
construct “specific alliances” in order to reduce the effects of the con-
centration of power in the global system and in order to be included
in the center of power and in the hegemonic structures (Guimarães,
2005, p. 178). In concrete terms, this would imply their increasing
inclusion in decision-making in the different arenas responsible for
global governance, as well as their increasing participation in advanced
manufacturing production, either through participation in global pro-
duction networks or through the internationalization of their own large
businesses.
Brazil played an active and leading role in promoting coalition for-
mation with other emerging powers (great peripheral states) during the
Lula government. The first step was taken with the creation of the
IBSA Dialogue Forum in June 2003 (Christensen, 2012). The IBSA coun-
tries (India, Brazil and South Africa) became active in the development
of the G-20, a coalition of developing countries in the WTO’s Doha
Round during the negotiations in Cancún Mexico in August of the same
year. The G-20 consisted of the three IBSA countries, as well as China
and a number of other developing countries from Latin America, Africa
and Asia. The G-20’s aim was quite narrow; namely, to promote the
liberalization of developed countries’ agricultural sectors (Christensen,
2012; Casanova and Kassum, 2014). As the Doha Round dragged on
without any final agreement, certain differences emerged in the negoti-
ating positions of the states within the G-20. In 2008, Brazil thus took
on a more flexible negotiating posture than, for instance, China, India

or Argentina, displaying its willingness to include industrial trade rules
promoted by the USA and the EU. China, India and Argentina objected
to this (Bernal-Meza, 2010; Pereira and Castro Neves, 2011, p. 8).
With the outbreak of the international financial crisis in 2008, the
inclusion of major developing states in the global political hierarchy
gathered further speed as the USA decided to call a wider meeting of the
states with the largest economies in the world, recognizing the greater
importance of such states. As a consequence, the financial G-20 became
the main locus for discussing global responses to the international
financial crisis (Christensen, 2013).
Brazil–China relations 2008–2015
The international financial crisis led to a significant fall in Brazilian

export receipts and to negative economic growth in 2009. Brazil
responded with a number of policy interventions in order to re-ignite
economic growth, which resumed strongly in 2010.
Bilateral economic relations with China contributed to this successful
outcome as China was the only growing Brazilian export destination
in 2009 (Li Xing and Christensen, 2012). Exports to China contin-
ued to expand their share of total Brazilian exports, rising to around
16 percent in 2011 (Brazilian Central Bank, 2013, p. 105). At the
same time, China’s FDI in Brazil increased explosively from a very low
level until 2009 (Oviedo, 2014, p. 123). As from 2010, the situation
changed, and Brazil has received substantial foreign investments since
then (see Becard and Macedo, 2014, p. 147). Furthermore, Petrobrás
received a loan of US$10 billion from China in 2009 in the context of
a financing market which had cooled down. This caused China’s rela-
tive importance for Brazilian economic development to grow rapidly.
Reflecting China’s interest in imports of natural resources, Chinese
investments were mainly directed towards natural resources – such as
iron ore, oil and gas, the purchase of land and, to a lesser extent, the
manufacturing sector. This created suspicions inside Brazil regarding
the motivations behind Chinese investments. The President of Fiesp,
Benjamin Steinbruch, and the former Minister of the Economy, Antônio
Delfim Netto, expressed their opposition to allowing certain Chinese
investments in natural resources, particularly steel. A law that limited
land purchase by foreign companies and individuals was passed. Behind
the negative attitudes towards Chinese FDI in Brazil was the view that
98 The Global South
this differed qualitatively from FDI from other countries due to the char-
acteristics of the Chinese economy and the strong and intimate ties
between the Chinese state and Chinese investors (Tavares Maciel and
Nedal, 2011, p. 250).
China was further motivated by its strategy of going global to invest
in Brazil, as well as in other developing countries (Becard and Macedo,
2014). This could be associated with the growing weight of devel-
oping countries in the world economy and the unstable economic
context in large parts of the developed world after the outbreak of
the international financial crisis. At the same time, China also devel-
oped an increasing level of diplomatic assertiveness in all world regions
(Guilhon-Albuquerque, 2014). Niu Haibin (2010, p. 186) argues that a
consequence of the international financial crisis was that China also
started changing its overall foreign policy strategy, placing renewed
emphasis on a more strategic engagement with Brazil and other emerg-
ing powers, and a more independent South–South policy. This was
reflected in the expansion of the diplomatic relationship between Brazil
and China. In 2010, the two countries signed the Joint Action Plan
Brazil–China 2010–2014. The idea was to expand the relationship from a
focus on bilateral relations within the framework of COSBAN towards a
broader strategic level and a focus on cooperating on multilateral issues
in different negotiation arenas and thematic areas. The Joint Action
Plan, signed by president Lula and by China’s leader Hu Jintao, focused
on enhancing bilateral cooperation and dialogue, as well as on coop-
erating on the broadest multilateral issues, such as “arms control and
climate change, coordination in UN, WTO, and G-20, support of coop-
eration mechanisms for major developing countries, need to safeguard
the rights and interests of developing countries” (Haibin, 2010, p. 186).
Tavares Maciel and Nedal (2011), however, warned against taking the
communiqués that introduced COSBAN in 2004 and the Joint Action
Plan in 2010 at face value. They found that the reality of the relation-
ship between the two countries did not correspond with the upbeat
diplomatic rhetoric. On the other hand, the interaction and cooperation
between Brazil and China on the international political scene clearly
intensified after the international financial crisis. This does not mean
that relations were problem-free, though.
The cooperation between the BRICS countries takes place at two
levels. The level that has gained the most attention is that directed
at coordinating common negotiation positions in global multilateral
fora. The other level is intra-BRICS cooperation. At this level, the BRIC
(prior to South Africa’s inclusion) set up mechanisms in order to foster
cooperation between BRIC development banks. Furthermore, the group

made arrangements for trade with their own currencies through BRIC
central banks, thereby reducing the role of the US dollar for mutual
trade (Christensen, 2013; Casanova and Kassum, 2014). Furthermore,
in 2009, the BRIC group defended the more general view as to the
role of the US dollar that the international financial system as such
ought not to continue to be centered so strongly on the US dollar, and
they started diversifying their own reserves (Flemes, 2010, pp. 150–151).
The very independent policy positions of the BRIC countries could
be seen to be directed against the USA. Brazil’s foreign minister at
the time, Celso Amorim (2009), stressed that this was not the aim.
The BRIC group should not be seen as being against other countries.
Rather, it defended the democratization of the world, seeking to include
Southern states and their agendas and interests. While this seems to
be a reasonable argument, a consequence of the growing clout of the
BRICS, and particularly China, along with the economic difficulties
experienced by the USA and other highly developed economies after
the financial crisis, has caused a change in global power balances.
The BRICS and the strategic partnership between Brazil and China
play a role in this development. Another important aspect highlighted
by Altimani de Oliveira and Lessa (2014, pp. 6–8) is that China has
started developing its diplomatic strategies more independently from
the USA compared with those in place before the international financial
crisis.
In 2011, Brazil’s new president, Dilma Rousseff, expressed the view
that the Brazil–China strategic partnership was maturing, and that
there was much potential for promoting mutual benefit (ChinaDaily,
2011). In saying so, she reflected the win–win argument and rhetoric
of Chinese diplomacy but, at the same time, she indirectly criticized
that not enough was actually being done to ensure mutual benefit. She
expressed the desire to move the bilateral relationship into a new era of
partnership. In terms of the bilateral economic level, she suggested that
this should “go beyond complementarity” and lead to a qualitative leap
that would foster more joint investments and also more value-added
Brazilian exports (Guilhon-Albuquerque, 2014). This has not really hap-
pened, though. China, for its part, has criticized Brazil for raising taxes
and import barriers against Chinese-made products such as cars, shoes,
toys and men’s suits. Bilateral talks have continued. Issues of coopera-
tion in science and technology have continued to be pursued; officially,
the objective is that of strengthening both countries’ economies in this
strategic area and also of making more space for Brazilian manufacturing
100 The Global South
exports (Reuters, 2012). During 2012 and 2013, however, the Brazilian
manufacturing sector production remained stagnant (Brazilian Central
Bank, 2014, p. 16), and this trend has continued. At the same time,
Brazil’s economic growth has declined to a very low level, and the cur-
rent account deficit has increased, in part due to volatility in Brazilian
export prices in commodities (Brazilian Central Bank, 2014). In early
2015, the Brazilian economy was still facing increasing difficulties, due
to a lack of economic dynamism, and, in May, a large number of bilateral
agreements were signed between Brazil and China, focused on attract-
ing Chinese FDI towards investments in the underdeveloped Brazilian
infrastructure (Folha de São Paulo, May 18, 2015). From one perspec-
tive, this represents a development in the common interests of Brazil
and China. From another perspective, it can also be seen as the cemen-
tation of the asymmetrical pattern in bilateral economic relations that
follows from a traditional North–South set-up in which China is the
Northern country that exports high value-added goods to Brazil and
provides FDI, while Brazil basically exports commodities to China and
is at the receiving end as regards financial relations. While both coun-
tries can be said to be gaining at some level, China is benefitting most,
due to the characteristics of the economic relationship. The bilateral
economic relationship is becoming increasingly asymmetrical as China
upgrades its position in the international division of labor, while Brazil
does not.
At the multilateral level, the BRIC countries responded to the financial
crisis and the new role of the financial G-20 by introducing annual BRIC
Summit meetings to be attended by the respective presidents; the first of
these summits was held in 2009. From the outset, the main focus of the
BRIC Summits was to coordinate common BRIC positions within the
G-20 in order to gain more influence on the development of rules and
norms within global economic governance institutions (Christensen,
2013, p. 280) as a counterweight to the G-7 (Visentini, 2013). Brazil
and China share “identity” as regards the level of their position in the
global political hierarchy. They share a feeling of historical exclusion
from power in the international system and have a common desire
to alter this situation (Mielniczuk, 2013, p. 1080). Increased coopera-
tion at the multilateral level has produced some results. One example
is the 2010 negotiations over rules for capping the allowed accumu-
lation of foreign reserves in central banks. This policy was supported
by the developed countries led by the USA, which wanted to rebalance
international trade. The BRICs, led by China, resisted this policy. They
argued in favor of the maintenance of national autonomy in exchange
policies, noting the important stabilizing factor which reserve accumu-

lation had proved to have for the countries themselves, as well as other
developing countries, during the international financial crises (Lima and
Castelán, 2013). The BRIC countries have also cooperated on a major
reform of the IMF, including a quota reform, new lending facilities and
broad governance reforms, including a change in the existing principle
determining that the IMF must be headed by an American represen-
tative. As regards a quota reform, the BRICs were supported by the
USA, while Russia was a loser of the reforms adopted in 2010. During
the financial crisis, the expanded BRICS insisted on equal treatment
for different types of countries in the IMF. This position was based
on the view that the EU countries experiencing financial crisis situ-
ations should not be treated differently by the IMF than developing
countries. Instead, the same (financial) criteria should be used across
the board (Lima and Castelán, 2013). This is an example of how the
BRICS are seeking to gain influence on the rules, norms and principles
of the global (economic) order, although this is not a major challenge to
the existing order. Guilhon-Albuquerque (2014, p. 114) argues that the
Rousseff government has been motivated by an ambition to promote
a new world order. This order should be characterized by global gov-
ernance mechanisms that are more democratic. In the official rhetoric
of the BRICS, they also suggest that they are to be seen as champi-
ons of greater economic and social balance in the world (Mielniczuk,
2013). In this respect, they like to see themselves as representatives
of the South as a whole. Visentini (2013) finds that the BRICS have
functioned as a counterweight to the G-7, and that the Rousseff govern-
ment has strengthened its ties to China in recent years. Some analysts
are very skeptical of the BRICS, however, and see them as promoting
neoliberal policies, much like the dominant developed Western pow-
ers (Andreasson, 2013; Bond, 2013). This position depicts the BRICS as
neo-colonial powers that have joined the neoliberal capitalist agenda of
the dominant Western (Northern) states (see, for instance, Bond, 2013;
Taylor in Chapter 3, in this volume). It seems reasonable to argue that
the BRICS have largely joined the neoliberal capitalist agenda, even
though, at the same time, they are seeking to adjust this agenda to their
own benefit. The self-image of the BRICS as protectors of the social and
development-oriented interests of the South can be seen largely as a self-
congratulatory discourse aimed at promoting a favorable image in the
developing world, since it is not very evident that the contribution of
the BRICS to Southern development is significantly different from that
of Northern countries.
At the 2014 BRICS Summit, the member countries agreed to establish

two important new institutions: a BRICS development bank and a con-
tingent reserve facility fund. These two institutions show similarities to
the World Bank and the IMF, but they are to be governed by the BRICS
countries themselves and in accordance with their strategies. It is too
early to conclude anything about these institutions, but it is clear that
they add another aspect to the cooperation between Brazil and China.
These banks are focusing on cooperation and development of the BRICS,
as well as contributing with financing for investments in the develop-
ing world. They are not directly focused on restricting the capacity and
influence of the IMF. However, the two institutions are an example of
the growing clout of the BRICS, and are likely to contribute to the diffu-
sion of power in the international system in the direction of the BRICS –
or, at least, of the most powerful of these countries.
The BRICS are not restricting themselves to the economic dimension
in their collaboration. In recent years, they have attempted to coordi-
nate positions in the realm of international security issues. During his
presidency, Lula suggested that the BRIC group should adopt a common
UN strategy but, initially, China was not very interested in this, due to
the country’s opposition to the common ambition of Japan, India, Brazil
and Germany of gaining permanent seats on the UN Security Coun-
cil. Daniel Flemes (2010, pp. 149–151) argues that another reason was
China’s prioritization of its relations with the USA. Although China is
pursuing a foreign policy that can be seen to be increasingly indepen-
dent of US positions and preferences, it still has not explicitly backed
Brazil’s inclusion as a permanent member of a reformed UN Security
Council. This is the most evident factor to suggest the limits to China’s
strategic prioritization of its relations with Brazil. China seems to prefer
maintaining its privileged position as one of the five permanent mem-
bers of the UN Security Council and sees Brazil as a potential ally in
specific security issues, but not as an ally in general.
As regards Iran’s nuclear program, all members of the UN Security
Council supported economic sanctions against Iran in 2010 in order
to exert pressure on the regime to refrain from developing nuclear
weapons. Brazil and Turkey, on the other hand, sought to engage diplo-
matically with the Iranian government and found that the sanctions
were premature (Christensen, 2013, p. 282). The BRICS countries were
all critical towards the NATO policy towards Libya. The UN had autho-
rized the establishment of a no-fly zone during the Libyan crisis in 2011,
supposedly in order to protect civilians in the context of the internal
Libyan civil war. The BRICS countries criticized the behavior of the
NATO countries, as they found that NATO focused on regime change

rather than on the no-fly zone. This arguably influenced the BRICS’ posi-
tion towards the Syrian crisis, in which the BRICS defended the principle
of non-intervention. Cervo (2010, p. 9, 2012, pp. 42–44) goes so far as to
say that two competing models exist of dealing with humanitarian crises
provoked by domestic political instability involving armed conflict. One
is NATO’s inclination to use violence and armed intervention, while
the other is the Brazilian/Chinese approach, which is focused on non-
intervention and a strong commitment to promote dialogue between
the actors involved in armed civil strife in order to find a solution
through diplomacy. It should also be stressed that Brazil acted against
the backdrop of the experiences from the Libyan crisis when actively
promoting the development and support of an addition to the UN prin-
ciple of Responsibility to Protect, also known as R2P, adopted in 2005.
Brazil’s contribution was the promotion of the principle of Responsibility
while Protecting, also known as RwP. This position places great emphasis
on diplomatic dialogue. One purpose was to work against interventions
based on the interests of the intervening parties, rather than on the
official humanitarian purposes serving as the official reasoning behind
intervention. RwP can be considered a middle position between a prin-
cipled defense of non-intervention and self-determination, on the one
hand, and the NATO approach to R2P and military intervention more
broadly, on the other. It is important to note that Brazil’s RwP position
does defend military intervention in principle. Brazil’s proposal, how-
ever, was neither supported clearly by Western powers, nor by China and
Russia (Casanova and Kassum, 2014, p. 141). Thus, this is another exam-
ple of non-cooperation between Brazil and China in the international
security dimension.
The BRICS should certainly not be seen as a military alliance that rep-
resents a challenge to NATO. Brazil and China do not share security
concerns in general, and they are not consistent allies as regards this
dimension. Arguably, both China and Brazil have pursued geopolitical
strategies aimed at strengthening their own influence in different world
regions. Brazil’s emphasis has been on South America and the South
Atlantic, in particular. China has a particular core interest in the South
China Sea but is gaining a greater role in all world regions. It can be seen
as a potential challenger to US hegemony, or at least to the capacity of
the USA to be the leading power in a number of countries, particularly
in Africa. As regards South America, and to some extent Latin America
and the Caribbean, both Brazil and China have become increasingly
influential, causing the US leadership role to decrease in a number of
countries. The position of the USA is no longer as strongly secured as it

was some 20 years ago. However, even though they are cooperating in
the two regions mentioned, Brazil and China are not obvious allies as
they also are engaged in a competitive dynamics in terms of economic
linkages and influence.
Conclusion
Historically, relations between Brazil and China were very distant and
not prioritized by either party. This largely continued until the end
of the first decade of the 21st century. In Brazil’s case, however, the
change in government in 2003 led to significant changes in its foreign
policy strategy, with a new prioritization of South–South cooperation
and coalition building, causing the relationship to China to become
highly prioritized as a means to advance Brazilian economic interests,
as well as its autonomy and growing influence on the international
political scene. Although China did collaborate in the G-20 coalition
in the WTO international trade negotiations from 2003, it did not share
this prioritizing of South–South cooperation. However, with the inter-
national financial crisis that erupted in 2008, China gradually changed
its cautious posture on the political scene, adopting more indepen-
dent and assertive foreign policies. Its cooperation with the other BRICS
countries in the financial G-20, and more generally in global economic
governance mechanisms, gained in importance to China and became
a strategy to advance its agenda and interests, often in opposition to
the USA. Until the financial crisis, China’s interest in Brazil had mainly
focused on bilateral economic elements. For Brazil, China was becom-
ing increasingly important as an economic partner in the 21st century,
and this relationship helped Brazil stabilize its economy and achieve
significant economic growth. However, in the overall Brazilian foreign
policy strategy from 2003, relations with China were seen as particularly
important at the multilateral level, as a way to advance Brazil’s economic
and political rise.
For Brazil and China, their mutual relationship is mainly targeted at
building up power resources. From a realist perspective, the two coun-
tries can be seen as aiming at national economic development and at
achieving greater influence on the international political scene.
As regards their ambitions in the area of world order, both are status
quo powers. They are not seeking to turn the capitalist order upside
down. Their aim is to rise within the existing order while promoting
the multi-polarization of the international system. Their ambition goes
beyond joining the international liberal order; they wish to turn this
into a “shared order” in which they have a larger say in the establish-
ment and maintenance of the rules, norms and principles that govern
the order. Moreover, they are promoting a change in global power bal-
ances, which would strengthen their own relative power capacities while
reducing the relative power of the traditional developed powers from the
North and West.
Overall, this has been a successful agenda, one in which the BRICS
coalition has been an important element in their common aim to rise
in the global system. The results have been particularly promising for
China, however, while Brazil has experienced some limited success. The
BRICS are not a homogenous entity. Power relations between Brazil and
China and within the BRICS as a whole are highly asymmetrical. China
is by far the most powerful of the nations. Although the two countries
share identity in terms of a common feeling of historical marginaliza-
tion from influence in the global system, they do not share identity and
interests in all aspects. China is a powerful competitor in the economic
dimension and has not supported Brazil’s ambition of gaining a perma-
nent seat on the UN Security Council. While the two countries have
been able to pursue a common agenda in terms of global economic
governance issues, this is not as evident in the area of security issues.
From a structural and systemic methodological perspective, China can
be seen as a potential challenger to US hegemony (Bernal-Meza and
Christensen, 2014). The trend towards the greater use of BRICS coordi-
nation and network power seems to suggest an increased prioritization
by Brazil as well as by China of their bilateral strategic partnership.
Cervo (2012) and Christensen (2013) argue that Brazil prioritizes its
relationship with other emerging powers, particularly the BRICS, and
that their relationship with China is of pivotal importance. However,
the relationship is not problem-free, and some analysts are not con-
vinced by the rosy picture painted by the official rhetoric from the two
governments. Raúl Bernal-Meza (2014) highlights problematic aspects
of the bilateral trade relations, as well as disappointment on the part of
Brazil at the perceived lack of Chinese support of Brazil on the inter-
national political scene. In his assessment, the Rousseff government is
becoming increasingly skeptical of its relationship with China. The win–
win rhetoric of China is perceived by some to distort the reality of a
relationship that is asymmetrical and particularly beneficial for Chinese
economic and political interests. José Luis Fiori is skeptical of the
long-term prospects of the geopolitical cooperation between China and
Brazil. He argues (2013, p. 47) that, in the geopolitics between different
nations, economic similarities and ideological affinity can only func-

tion effectively when they coincide with the necessities of the national
economic and security interests of the countries. In his view, the differ-
ences that exist between BRICS countries in terms of their characteristics
and interests will prevent them from playing an important long-term
geopolitical role. Lima and Castelán are more positive and argue that
the politicization of the BRICS is a sign of political intelligence, and that
they have successfully managed to advance their interests in specific
areas.
This assessment seems reasonable. It should also be highlighted that,
although Brazil and China do not share identity and interests in general,
and are not allies in world politics in general, they are advancing a wide
range of common agendas and initiatives, such as the recent establish-
ment of new BRICS financial institutions. These institutions can help
both countries in advancing their economic interests and their growing
clout in different countries and regions, particularly in the develop-
ing world. This is a potential challenge to US interests. Nevertheless,
it should again be highlighted that the asymmetry in power between
Brazil and China has increased during the last 25 years. The bilateral
economic relationship follows a traditional North–South pattern, with
China performing the role of the North and Brazil the role of the South.
However, bilateral economic relations with China worked to Brazil’s
benefit in much of the decade of the 2000s, and Chinese FDI to Brazil at
the present time may also play a positive role for Brazilian development.
From the perspective of China, the relationship with Brazil is function-
ing well in the economic dimension. This is also the case in the political
dimension, in which Brazil often acts as an ally of China in multilat-
eral settings, helping China to advance its interests and its international
agenda for more influence.
The BRICS should not be seen as a fully fledged alliance, and Brazil’s
and China’s relative prioritization of each other in the future is diffi-
cult to predict. Both countries take an instrumental approach to their
strategic partnership. Given the overall characteristics and results of
their bilateral relations, it is not implausible that Brazil’s prioritization
of China will be somewhat reduced in the future. China, for its part, is
likely to pursue an increasingly assertive and influential role in all world
regions. It should be expected that China will seek common agendas
with Brazil where it sees this to be in its interest; however, it is not likely
that its prioritization of Brazil will grow, although China is likely to seek
to maintain a good relationship with Brazil, using this as a means by
which to promote its own interests.
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5
India as an Emerging Power in the
Global Order: On Geopolitics and
Geo-economics
Jørgen Dige Pedersen
“Ultimately, foreign policy is the outcome of economic policy,

and until India has properly evolved her economic policy, her
foreign policy will be rather vague, rather inchoate, and will
be groping”. Speech by Jawaharlal Nehru in the Constituent
Assembly, December 4, 1947.
(Nehru, 1961, p. 24)
Introduction
India eagerly embraced its position as an emerging power and a mem-

ber of the BRIC(S)1 coalition and was triumphant when the financial
crisis started in the USA and, initially at least, seemed to affect only
the rich Western economies. However, India did not escape the reper-
cussions of the crisis and, from around 2010, growth rates plummeted
among all BRIC(S) countries. “Broken BRICs” became a popular view-
point (Sharma, 2012). While Russia and Brazil experienced the most
marked decline, India saw its growth rate almost halved, and pessimism
concerning the future became widespread. India went from annual
growth rates of 8–9 percent to 4–5 percent. This was not bad seen in
a global context, but dramatically short of expectations, domestically
and internationally.
The election of a new dynamic prime minister in 2014, heading a
majority-based government, seems to have changed the mood in India,
as well as the country’s international image. Since coming into power,
Narendra Modi has initiated a whirlwind international diplomacy cam-
paign, visiting (or being visited by) neighboring countries, the most
110
Jørgen Dige Pedersen 111
important being Asian nations, including Japan and China, and the
USA. In addition, he has attended a number of international meetings of
the powerful nations of the world, including the G-20 and the BRIC(S)
coalition in 2014. One consistent message conveyed by Narendra Modi
was that India means business, and that the country is determined to
resume economic growth and reclaim its position as one of the great
powers in the global system. Clearly, the election of Modi has energized
India’s foreign policy and reflects an increasing optimism on behalf of
an India that is currently believed to be embarking on an era of rising
growth rates.
The rise of India – and its possible resurgence – comes at a time
when the global system has been gradually changing from a system
of geo-political competition to a system where economic factors seem
to dominate, i.e. a geo-economic competition (Luttwak, 1990).2 This
implies that it becomes of increasing importance for countries in the
international system to advance their economic interests strategically,
and that countries are perceived of in terms of their real or poten-
tial economic might, rather than their military might. The rise of the
BRIC(S) in the current century can be interpreted as one indication of
this change in global politics. Some of the members of this loose coali-
tion do, indeed, possess considerable military might, but it seems that
their recent economic resurgence – in particular, that of China – is what
has instigated their perceived rise. Moreover, India’s recent recognition
as a rising power owes much less to its nuclear program and to its gen-
eral military build-up than to its remarkable economic progress since
the turn of the century.
The rise of India and the rise of emerging powers in general have
already changed the global system. For India, this has prompted the
country to adapt to a new situation in which it is playing a larger and
possibly different role in the global system. In addition to this, India
has had to adapt its external strategies to a changing and more complex
world with several economic and political power centers.
The purpose of this chapter is to trace the changes and the continu-
ities in India’s foreign economic and political strategies while reacting
to the global changes, in particular to the changes related to the emer-
gence and rise of new powers. The portrayal of India’s foreign policy
changes will be organized around what can be seen as two recent, and
important, turning points in India’s post-independence foreign policy
development. Earlier points in time have normally been regarded as
important turning points in Indian foreign policy. One is the 1962
war with China, which led to permanent animosity between the two
countries; the other is the 1971 war with Pakistan, which resulted in the
creation of Bangladesh and the decline of Pakistan as a serious regional
rival to India. In contrast to these events, the two recent turning points
in focus here contain important elements of economic change, thus
reflecting the changing nature of global politics. The first and most sig-
nificant turning point came in the period 1989–1991, which saw the end
of the Cold War and the onset of liberal economic reforms in India. The
second was in the period 1998–2001/03, which witnessed the Indian
nuclear tests, the terror attacks on the USA and the onset of India’s
impressive economic growth. The use of the term “turning points” is
meant to indicate changes in the international (or domestic) situation
resulting in significant reorientation in a country’s foreign policy. In the
case of India, I argue that events during the two periods in question
have resulted in India taking up new and sometimes unexpected roles
of foreign policy behavior, bringing about a considerably more complex
pattern than previously seen.
India’s traditional foreign policy orientation
As a former British colony and a developing nation, India’s foreign pol-

icy has always been strongly inclined towards the twin objectives of
“development” and “independence”. The primary objective of its for-
eign policy has been to help the country develop economically, without
compromising its newly won political independence. During the long
period of the Cold War between East and West, this resulted in two
distinct aims in India’s foreign policy: (economic) self-reliance and (polit-
ical) non-alignment.3 Navigating between East and West without joining
either camp was seen not only as politically desirable, but also eco-
nomically beneficial because of the possibilities it offered to bargain for
economic benefits from either side in the global conflict. This balancing
act was performed over a long period of time with various degrees of
elegance and success. This has often been denounced as being overtly
“ideological” (Mohan, 2013), but it can equally well be interpreted as a
rational and pragmatic way of ensuring India’s basic and most pressing
aims at the time: political and economic independence.
India’s development strategy during the period of the Cold War has
frequently been characterized as “inward-looking” and even “isolation-
ist”. There is little doubt that, during this period, India gave priority to
its internal development (cf. the quote from Nehru). However, this char-
acterization does not cover the full picture of India’s foreign policy, in
particular when taking its foreign economic policy into consideration.
Since the 1970s, India has increasingly been taking practical steps to
promote a more offensive economic element in what had always been
a rather defensive strategy. In official declarations, India had always
emphasized the building of strong ties with other countries which were
perceived to be in similar situations in the global system, i.e. other
developing nations emerging from colonial rule. India thus became an
important leader of developing nations when they formed the Non-
Aligned Movement and the Group of 77 within the UN during the 1950s
and 1960s. In the 1970s, India was also one of the initiators behind the
demand by developing nations for a New International Economic Order.
During the 1970s and 1980s, the Indian economy had achieved a
sufficient degree of economic self-reliance – despite disappointingly
modest economic growth rates. The country now felt confident enough
to start building economic ties with the outside world, in particular
with other developing nations in Africa and South and Southeast Asia.
It also started constructing the institutional framework for supporting
this economic expansion under the heading of “South–South relations”.
Indian private companies were increasingly permitted – sometimes even
encouraged – to make investments abroad. Support for exports or invest-
ments was provided by the Export-Import Bank of India, established in
1982, by many state-owned banks which established branches abroad,
and by an increasing number of government-led trade missions. Increas-
ing bilateral aid to other developing nations and Indian contributions
to multilateral development banks also facilitated this first wave of
international expansion of Indian capital (Pedersen, 1993).
India’s foreign trade reflected the increase in self-reliance in the sense
that it became more diversified in terms of trading partners. Just after
independence, India was, for obvious reasons, still closely tied to the
UK but, by the 1960s, the USA had emerged as the largest source of
India’s imports. During the 1960s, the USA had also become India’s
largest export market. This new US dominance in India’s external eco-
nomic relations was modified during the 1970s and 1980s due to the
fact that the USSR and the OPEC counties gained importance in imports
(OPEC) and in exports (USSR); this led to an overall generally diversified
and well-balanced international trade pattern. Trade with developing
nations in Asia, Africa and Latin America slowly expanded to a level
of around 15 percent of India’s exports and 18 percent of its imports by
the late 1980s.4 The nature of trade also diversified, with a more compre-
hensive menu of both exported and imported products. Most notably,
manufactured products had emerged as the most important category
of export products during the first four decades of India’s development
efforts. At the same time, India’s economic ties to the USA in terms of
aid, trade and investments suffered, partly as a result of a deterioration
in the political relations between the two countries, India being highly
critical of the Vietnam War, for instance. An observer of India–USA ties
at the time termed the relationship “a missed partnership” (Mansingh,
1984: ch. 3).
Overall, by the end of the 1980s, India’s trade with the wider world
was still limited in scope, but well-developed in composition. In order
to expand both growth and trade, the normally financially cautious
Indian governments had taken out an increasing number of com-
mercial loans abroad during the 1980s, thus gradually increasing the
country’s external vulnerability. This vulnerability would contribute to
the multi-facetted crisis that marked a turning point in India’s overall
development policy and in its foreign policy.
The first turn of events: A multidimensional crisis and its

consequences
Global events in the period 1989–1991 were exceptionally dramatic in

their impact on India’s position in the international system. One impor-
tant event was the crisis in West Asia caused by the Iraqi invasion of
Kuwait, which led to US intervention and a major war. This had a two-
fold negative impact on the Indian economy. Oil prices increased, and
India’s oil import bill multiplied, while the usually large remittances
from Indian workers dropped dramatically as workers in large num-
bers returned from this region. Another monumental event was the end
of the Cold War and the final collapse of the Soviet Union in 1991.
This deprived India of a major trading partner and a long-term friend,
seriously upsetting India’s policy of non-alignment. The negative eco-
nomic impacts of these events combined with India’s increasing debt
payments, and the cumulative effect was a severe balance-of-payments
crisis. India was forced to approach the IMF for an emergency loan
and, later, the World Bank for a structural adjustment loan, prompting
a reversal of the country’s previous economic strategy of self-reliance.
The New Economic Policy of 1991 reduced the role of the Indian state,
enlarged the space for private companies, and opened the economy for
imports and foreign investments; this resulted in a much more market-
based strategy, which exposed Indian companies to competition from
global markets. The crisis and reforms resulted in India’s foreign pol-
icy becoming more inclined towards securing the country’s economic
interests.
The collapse of the Soviet Union caused India to reorient its for-
eign policy to adjust to the new global situation. The ability to balance
between East and West was no longer as relevant as had been the case
during the Cold War. “Suddenly, New Delhi was free to reinvent its
foreign policy”, as one observer later characterized the new situation
(Mohan, 2006, p. 19). The problem was to identify how India could
transform its foreign policy and, at the same time, maintain maximum
independence – which was its traditional aim. In particular, the new sit-
uation called for a reconfiguration of its relations with the world’s now
sole superpower, the USA, and also for redefining its relationship with
a rapidly growing East Asian region, now including the rising China.
(Mohan, 2003, pp. xv–xvi; Nayar and Paul, 2003: ch. 6).
The first element in India’s foreign policy reorientation was the so-
called “Look East” policy initiated by Prime Minister Narasimha Rao in
the early 1990s (Mohan, 2003, p. 211ff; Malone, 2011, p. 202ff). Initially,
the policy was an attempt to cultivate closer relations with the Southeast
Asian nations organized in ASEAN, and it was centered on promoting
economic collaboration, trade and investment. India thus became a full
dialogue partner of ASEAN from 1995 onwards. The commercial center
in the region, Singapore, became especially important for the expan-
sion of the economic ties with the whole region. Later, “Look East”
was extended to the broader Asian region, including East Asia, Australia
and New Zealand. The policy succeeded in enlarging and intensifying
India’s trade with the region to such a degree that, in monetary terms,
it compensated fully for the dramatic decline in its trade with the for-
mer Soviet Union and Eastern Europe (Pedersen, 2008, pp. 118–119).
India’s relations with its immediate neighboring countries in South Asia
were also improved by the “Gujral Doctrine” (named after the Indian
Foreign Minister, later Prime Minister, I. K. Gujral). The doctrine called
for peaceful relations, mutual non-interference and an Indian expres-
sion of willingness to accept asymmetric distribution of gains and cost
in its relationship with its small neighbors in the South Asian region
(Sen Gupta, 1997, p. 309ff; Mohan, 2003, p. 241ff).
During the 1990s, India also tried to strengthen its relationship with
other states in the region around the Indian Ocean. Countries in the
Gulf region – in particular, the small oil-rich states – became useful eco-
nomic partners, while South Africa was courted as an old friend and
important partner in an Indian Ocean community (Sen Gupta, 1997,
p. 309; Mohan, 2003: ch. 8).
During most of the 1990s, India was successful in finding new friends,
but these were not sufficiently strong; neither had they sufficient
interest in engaging intimately with India to compensate fully for the

loss suffered by the collapse of the Soviet Union. India was forced to
realize that its reorientation of foreign policy would have to be centered
on two new elements: a going-it-alone strategy to assert its individual
great power ambition; and a closer collaboration with the remaining
superpower, the USA.
The two new elements were not necessarily in harmony. In 1998, the
new Indian government led by the right-wing Hindu nationalist party,
the Bharatiya Janata Party, made the decision to go ahead and carry out
a series of nuclear weapons tests prepared by the previous government.
This decision made global headlines and led to strong international con-
demnations, besides (as expected) causing Pakistan to “go nuclear” with
a similar series of tests. For India, the tests were not solely directed at
Pakistan but should, primarily, be seen as a response to the perceived
threat from China’s nuclear arsenal.5
In the global community, this decision led to a period of strained
relations. The USA and European states, as well as Japan, all saw the
tests as a serious break with important and desirable international
norms, although India had not ratified the Non-Proliferation Treaty.
They introduced severe economic sanctions on India, including a halt to
international aid, restrictions on financial loans and selective commer-
cial restrictions. However, the sanctions were relatively short-lived in
most cases and relations with most countries were soon normalized, as
symbolized by the visit to India by US President Clinton in March 2000
and the resumption of loans from international institutions (Mohan,
2003, p. 93).
In the economic realm, the establishment of the World Trade Orga-
nization in 1995 marked a further intensification of India’s economic
engagement with global markets, signifying that economic globalization
would be a permanent feature of the new global order within which
India had to navigate.
The second turn: The rise of India as great power
The period from 1998 to around 2001 or 2003 marked a new turning
point in India’s foreign policy and in its position in the global system,
but it was not as dramatic as the previous turn of events. The 1998
nuclear tests marked the determination by the Indian political elite to
achieve great power status. In themselves, the tests changed very lit-
tle in the sense that most observers had long known that both India
and Pakistan possessed a sizeable nuclear capability, and the so-called
“peaceful” nuclear test in 1974 had demonstrated India’s technical
skills in producing a nuclear device. Two additional events made the
period one of yet another significant change in India’s foreign rela-

tions. The attacks on the World Trade Center in New York in September
2001 changed the global political agenda, with international terrorism
suddenly emerging at the top, leading to a renewed US interest in inten-
sifying and improving the country’s relations with India, not the least
because of India’s support for the war in Afghanistan. India was also
increasingly affected by terrorist attacks on its home territory, mostly
sponsored by a variety of groups located in Pakistan. The never-ending
conflict over Kashmir in particular became closely linked to interna-
tional terrorism, and the India–Pakistan conflict escalated further during
the brief and limited war in the Kargill region of Kashmir in 1999.
The second event causing a major change was the unexpected and
sudden increase in India’s own economic growth rate. The economic
reforms of the 1990s had failed to produce any significant increase in
India’s economic growth rate, despite the country’s increasing integra-
tion into the global economy. In 2001 and 2003, the large international
financial conglomerate Goldman Sachs had included India in a group
of four promising investment markets which were predicted collectively
to overtake the traditionally dominant Western powers. This was the
BRIC group (Wilson and Purushothaman, 2003). Also, around 2003 the
Indian economy suddenly began to expand at a rate well beyond that
which Goldman Sachs had predicted and beyond that which the Indian
government had itself foreseen and hoped for. This economic expan-
sion, combined with the marketing efforts of Goldman Sachs, probably
was more important than the nuclear tests in projecting India into the
global arena as one of the emerging powers. For India, this meant that
it suddenly had to find a method to manage this new situation.
India did, indeed, embrace its new role as a rising great power, but it
has been difficult to manage the new role while maintaining significant
elements of its traditional foreign policy in a world that was changing
precisely due to the rise of not only India, but also other “emerging”
powers, not least neighboring, fast-rising China. Complexity became the
name of the new game that India had to play in the new century.
India’s complex challenges today: Three contemporary

foreign policy roles
While it is clear that in the new century, India found itself in a new
and obviously more advantageous situation, less certainty has existed
in the relevant policy-making circles in New Delhi about how India
should manage its foreign relations in the new circumstances. Tradi-
tionally, consensus has largely prevailed within the Indian elite on the
broad principles of foreign policy. This has given the Ministry of Exter-
nal Affairs a virtual monopoly as regards the actual policy-making. The
recent chain of events has only changed this situation marginally and,
broadly speaking, the picture is still one of overwhelming foreign pol-
icy consensus (Ollapally and Rajagopalan, 2012). However, increasing
uncertainty exists among scholars as to the proper characterization of
current Indian foreign policy, partly because of ongoing changes in the
real world of India’s foreign policy. Is India becoming a close ally of the
USA? Yes, . . . and no! Is India’s global power increasing? Yes, . . . and no!
Is India still a developing country? Yes, . . . and no! On many important
parameters, it has become increasingly difficult to identify easy and firm
answers to questions such as these, which seek to clarify India’s global
position.
In the following, I shall describe and analyze India’s reaction to the
new global situation characterized by the rise of new powers, one among
which is India itself, as well as the way in which the country has, at
the same time, maintained a large degree of continuity in its foreign
policy and in its structural position in the global system – politically
and economically.
The study will be organized along three themes that I argue cap-
ture both the complexity and the contradictions of India’s present-day
position in the world. Contemporaneously, India has to:
1. manage and sustain its own rising power in the global system;
2. relate to and manage its policy towards other rising powers in this
system and to the system’s hegemonic power, the USA; and
3. accept the fact that it is still a very large and very poor country
desperately in need of “development”.
The last element implies, among other things, a continued reliance on a

substantial inflow of resources from the richer part of the world in terms
of aid, investments and technology. Of course, it is not possible to study
all possible areas of Indian foreign policy in this article. My focus will be
on presenting important examples that illustrate the changes in Indian
foreign policy in recent years and the presence of all three roles that
India has to combine today in its policy towards the new global order.6
Managing and sustaining India’s own rise

As previously mentioned, the 1998 nuclear tests marked an important
watershed in India’s recent history, in the sense that they signaled an
India ready to become a major and independent world power. An impor-

tant signifier of world power status is permanent membership of the
United Nations Security Council. Based on the country’s size alone,
India has long argued that it would qualify as a permanent member,
and since 2004 it has joined together with Brazil, Germany and Japan to
form the Group of 4 (G-4); these are countries seeking permanent mem-
bership of the Council. So far, neither the group nor any of its individual
members has been successful but, with India as an active member, the
group has continued to campaign for having the Security Council reflect
“the realities of the international community in the 21st century” as
argued in the group’s first collective statement.7 Apart from contributing
to the collective organization of the aspiring countries, India’s member-
ship of the group can be seen as an indication of the recognition by the
other major powers of India’s newfound great power status.
India’s status as a nuclear power presented the immediate problems of
coming to terms with the international non-proliferation regime and
the institutional mechanisms from which India had been excluded.
In this regard, India’s improved relationship with the USA was extremely
helpful. Despite India continuing its policy of not joining the Com-
prehensive Test Ban Treaty, the Non-Proliferation Treaty and other
international agreements controlling the behavior of nuclear weapons
states, it has managed, with the help of the USA, to acquire international
legitimacy as a responsible nuclear weapons state. Negotiations with the
USA in the period 2005–2008 were concluded by a bilateral agreement
that opened the Indian market for imports of nuclear technology from
US (and other) companies, and also installed a control regime compliant
with the International Atomic Energy Agency to monitor India’s civilian
reactors (Malone, 2011, pp. 169–170; Narlikar, 2013, pp. 600–601). The
agreement removed a major irritant in USA–India relations and helped
pave the way for an improved relationship between the oldest and the
largest democracies in the world.8
In terms of military power, India has intensified its attempt to build
up military capabilities that would match its own ambitions as a ris-
ing power. This has been aided by economic growth after 2003, which
facilitated a rapid increase in India’s defense budget.9 For all practi-
cal purposes, this enables the expansion and modernization of all the
country’s military forces, i.e. ground, air and naval, including the inte-
gration of nuclear weapons into all forces. In recent years, India has
emerged as the world’s largest importer of arms traditionally sourced
from Russia but increasingly also from the USA, Israel and Italy, and
France is expected to become a major supplier of combat aircraft in
the coming years (Wezeman and Wezeman, 2014). In combination with

domestic advances in missile technology and the manufacturing of a
variety of arms for all three military forces, this means that India is
rapidly expanding its military capabilities. In particular, the Indian navy
has been expanded with the introduction of new or refurbished aircraft
carriers and nuclear-powered submarines capable of launching missiles
(possibly nuclear) and operating over a wide geographical area. It is also
in the maritime field that India has made the largest strategic advances,
with the publication of an ambitious Maritime Military Strategy in 2007
(Ministry of Defence, 2007). The strategy calls for the Indian navy to
play a central role in India’s new great power ambitions, and the navy
has, indeed, been used to signal India’s wish for a dominant position in
the Indian Ocean and also for extending its influence into the greater
Asian region, including East Asia. Not by accident, India has justified its
naval expansion mainly by pointing to its wish to secure the country’s
important trading routes across the Indian Ocean. Closely related to this
is another motive which has been launched, i.e. that of countering what
is perceived to be China’s threatening naval expansion in the same area.
In recent years, India has used its naval forces to assist the government
of the Maldives against a suspected military coup, and the Indian navy
has taken part in the combat against piracy along the coast of Somalia.
Regular training exercises with US navy ships also indicate one impor-
tant motive for collaboration with India on the part of the USA: to use
India as a counterweight against a rising China.
In terms of economic expansion abroad, the period following the
year 2000 has witnessed a dramatic increase in all types of economic
outflows from India. India’s export/GDP ratio has doubled, assisted
by the Indian government in many ways – one being the establish-
ment of a large number of bilateral trade and investment agreements
in recent years (Government of India, 2014, p. 133). The Indian gov-
ernment has also directed its large oil and gas companies to invest in
energy extraction projects in Africa, Central Asia, Russia and even as
far away as in Latin America (Madan, 2010). Private Indian companies
had first ventured abroad in the late 1960s and early 1970s but, for
balance-of-payments reasons, the Indian state had limited the extent
to which companies were allowed to expand internationally (Madan,
2010). In 2003, these restrictions were finally lifted, and many Indian
companies have expanded internationally since, spreading their invest-
ments around the globe, mostly in the USA and Europe (Pradhan and
Sauvant, 2010). A significant part of this expansion has come through
the acquisition of local companies, including some well-known Western
companies; for instance, Tata Motors bought Jaguar and Land Rover
from the UK in 2008. Partly to support its own commercial activities
abroad, India has also intensified its own relatively modest and erratic
aid activities in South Asia and in Africa (Price, 2005). A demonstra-
tion of India’s role as an international donor came in the aftermath of
the great 2004 tsunami, when India argued that it did not need for-
eign assistance to deal with the devastation along its coastline but that
it would provide its own assistance to neighboring countries affected
by the tsunami (Price, 2005, p. 14ff). In 2012, a separate Indian aid
agency (the Development Partnership Administration) was created in
the Ministry of External Affairs (Ministry of External Affairs, 2014).
Other areas in which India – as a rising power – might have been
expected to play a major role is in taking a greater responsibility by con-
tributing to – and bearing an increasing share of the cost of – upholding
the basic structure of the global order, its “public goods” and basic rules.
In general, India has accepted the basic institutions of the existing world
order but, despite its rising power, it is difficult to identify instances in
which India has contributed significantly to making or shaping the basic
rules governing the world (Narlikar, 2011, 2013; Sidhu et al., 2013). This
is partly a consequence of India’s two other foreign policy roles: its con-
tinued status as a poor developing nation challenging the domination
of the rich countries, and its membership of the group of rising powers
that are seeking a reform of and a better place for their own countries in
the international order before agreeing to contribute to upholding this
order. One exception to this subdued role arose when India declared its
willingness to contribute extra financial resources to the IMF to enable
the organization to better address the crisis in the Euro area (Kapur,
2013, p. 242). India’s membership of the G-20 also demonstrates a readi-
ness to influence the rules governing the global economy (Kapur, 2013,
p. 242). The Indian navy’s activities against piracy in the Indian Ocean
could also be regarded as small contributions to maintaining global
maritime order.
As an upcoming power, India naturally advocates in favor of a better
position for itself in the global order. This is a standpoint that generally
combines well with India’s traditional advocacy for a more democratic
and just world, seen from the viewpoint of developing nations.
Managing the rise of other powers

India’s response to a new global order with the rise of emerging pow-
ers (other than India itself) has been two-fold and may be interpreted
along the classical international relations strategies of balancing and
bandwagoning. Already, during the 1990s, India had sought a closer

relationship with the USA. The improvement of relations was tem-
porarily halted by the nuclear tests in 1998, but after 9/11 2001, the
relations between the two countries have improved, as witnessed by
the US assistance in ending India’s nuclear isolation, the increasing
naval collaboration and the increase in India’s import of US military
equipment.10 The rapprochement between the USA and India has also
been motivated by the fact that both countries are in the “firing line”
of Islamist-inspired terrorism, not least due to India’s support for the
USA in Afghanistan and India’s conflict with Pakistan over Kashmir.
Viewed in isolation, India’s policy could well be seen as an example
of a classical bandwagoning strategy. However, this would amount to a
one-sided interpretation, as there are other important facets to India’s
relationship with the USA.
One is that India has also been engaged in what may be regarded as a
classical balancing policy towards the USA. The balancing is to be found,
however, in another area of foreign policy, which concerns the increas-
ingly important global economic relations. The creation of the BRIC(S)
alliance in 2006–2009 was, in large measure, motivated by a common
desire among the participant countries to seek a reform of the inter-
national institutions governing the global economy: the IMF and the
World Bank. While all countries were members of and had exerted some
influence within these institutions, the USA together with other Western
countries has clearly been dominating policy-making within both insti-
tutions. The initial raison d’être of the BRIC(S) coalition was to press
for more influence within these institutions but, gradually, the BRIC(S)
countries have engaged in a much broader dialogue on global affairs,
sharing a common feeling of opposition to a Western-dominated world
order. Heads of states have met regularly (annually), and India has been
a key contributor to the group. Moreover, they have slowly increased
collective efforts in a wide range of activities mostly related to the pro-
motion of various forms of economic development.11 In addition to this,
they have recently decided to establish their own international institu-
tions to represent – in principle, at least – alternatives to the Bretton
Woods institutions. This includes establishing the New Development
Bank and a common currency arrangement akin to the IMF.
The rise of other countries in the global order has not only presented
India with a chance to engage in a balancing behavior towards the USA.
While India has found it unproblematic to relate to and support most
other rising powers, the rise of China has presented a clear dilemma
for India; one that India has tried to deal with in a manner similar to
its reactions to the USA, i.e. a combination of balancing, on the one

hand, and collaborating, on the other.12 China’s rise in the global econ-
omy has caused both anxiety and envy in neighboring India but, at the
same time, China’s rise has presented a number of specific economic
opportunities and, as a result, the economic ties between the two coun-
tries – trade, in particular – have strengthened dramatically. China has
become India’s largest individual trading partner, but one with which
India runs a large and worrying deficit. Another opportunity on the
part of India has come from China’s vast economic resources. When
these resources were deployed, as for example with the recently pro-
posed Asian Infrastructure Investment Bank, India became eager to join,
despite US reservations (Economic Times, 2015).
In terms of security, China is seen as the only serious threat to India,
and the expansion of its ties with India’s immediate neighbors in South
Asia has been a cause for Indian concern. Chinese construction of roads
and harbor facilities in Myanmar, Bangladesh and Sri Lanka has been
viewed with anxiety by India, especially when linked to the increasing
presence of Chinese naval ships in the area. China’s improvements of
roads and railways in Tibet are also considered a security threat by India.
Most important from the Indian perspective has been China’s role as a
firm supporter – both in terms of military and economic sources – of
India’s arch-enemy, Pakistan.
In the broader global system, however, India and China have more
often been partners than opponents – in the BRIC(S) coalition and else-
where – and they are united in their wish for a less Western-dominated
global system.
Besides the BRIC(S) coalition, India has also nurtured a closer rela-
tionship with South Africa and Brazil within the IBSA Dialogue Forum,
which was formed a few years earlier (2003). However, the agenda of
IBSA has been related to India’s traditional and still important role as a
poor developing country and its associated strategy of promoting South–
South collaboration. In general, the IBSA group has worked in favor of
increased mutual (South–South) trade and better conditions for develop-
ing nations within the WTO (Stephen, 2012). Some overlap has existed
with the work of the BRIC(S) coalition, but the focus on trade issues
has been specific to the IBSA group; India and Brazil, in particular, have
succeeded in gaining more importance in the trade negotiations within
the WTO.13 Thus, inside the WTO, India has in recent years obtained a
position as a so-called “veto-player” (Narlikar, 2011). While seldom pop-
ular among Western countries, India has consistently portrayed itself as
a guardian of the interest of the poorest nations. India’s great power role
within the WTO has thus overlapped with and been influenced by the
third role in its contemporary foreign policy.
Managing the role as a poor developing nation

India is, indeed, a poor nation and home to the largest concentration
of poor people in the world. While estimates of the number of poor
Indians vary considerably, there is no doubt that the number is to be
counted in hundreds of millions, despite India recently graduating into
the World Bank category of “lower-medium income country.”14 In terms
of indicators relating to health and education, India ranks among the
poorest countries in the world, and it even compares negatively with
some of its even poorer neighbors (Drèze and Sen, 2013).
India has long been a major recipient of foreign aid. It has been the
largest recipient of aid from the World Bank and from other major
donors and, despite its impressive economic growth, India has contin-
ued to receive large flows of concessional aid.15 In 2003, the Indian
government decided – ostensibly for bureaucratic and technical rea-
sons – to discontinue receiving aid from a number of small donors
and only seek aid from large donors, especially from multilateral orga-
nizations. A not-so-hidden agenda behind the decision was to signal a
reduced need for foreign aid in the light of the increase in the generation
of its own financial resources and a desire to limit political dependency
relations (Price, 2005). In reality, total aid has continued to increase,
most of it today coming from the World Bank, the Asian Development
Bank and bilaterally from Japan (Government of India, 2014).
It is evident from its continued reliance on aid and other sources
of external finance and technology that India still has large develop-
mental needs. India has been active in seeking foreign investments
from wealthy countries, and it is still receiving a far larger amount of
direct investments from foreign companies than the amounts which
Indian companies have, in turn, been investing abroad. The main argu-
ments for receiving foreign investments have been the need for financial
resources and the need for the advanced technology that the govern-
ment hopes will accompany the investments. Another sign of India’s
lack of development is its reliance on remittances from their export of
lowly skilled workers to the oil-rich Gulf States. The share of remittances
coming from higher-skilled IT professionals working in the USA or
Western Europe is increasing, however.
India’s own global position thus explains its continued role as a
spokesperson for the world’s poor countries. India’s participation in the
BRIC(S) coalition and the policies that it is trying to promote in this
context are also often framed as part of a strategy to defend and promote
the interests of the world’s poor countries, while often simultaneously
promoting India’s own economic and political interests. In this context,
it will be interesting to study how the lending policy of the New Devel-
opment Bank will materialize, and what interests it will pursue. India’s
continued North–South perspective in its foreign policy may frustrate
many a policy-maker in the global North, especially in the USA, but this
policy still resonates well with the world’s majority of poor countries,
which still regard India as a friend and one of their own. The continued
presence of key institutions – although, in some instances, largely sym-
bolic – in the old Third World coalition in international politics (such
as the Non-Aligned Movement, the Group of 15, the South Center and
the G77) and India’s key role in all of them are also indications of the
continuity of this policy.16
The real challenge for India’s foreign policy: Managing

complexity and contradictions
Recent accounts of India’s foreign policy have noted the “frequent con-
tradictions” in official pronouncements (Malone, 2011, p. 286), that the
policy is “clearly multidimensional” (Pant, 2009, p. 19); that India is a
“different great power” (Cohen, 2002, p. 34); that its policy is “anacro-
nistic” (Narlikar, 2006, p. 64), “ambiguous” (Smith, 2012, p. 369), or a
“mix of East and West” (Sullivan, 2014, p. 648).
What unites these interpretations is the agreement that India’s foreign
policy is highly complex. I suggest that the complexity stems from the
fact that India, today, has to manage three different roles, and that the
challenge is how to forge these together (if possible) into one coherent
foreign policy. There are plenty of contradictions in the present policy.
How, for instance, can India criticize the World Bank, establish a poten-
tial competitor to the Bank and, at the same time, be the bank’s largest
and most faithful client? How can India accept foreign aid, criticize the
conditions associated with this and, at the same time, extend aid to
other countries – aid that is often closely related to its own commer-
cial or political interests? How can India be the largest arms importers
in the World, building its own nuclear armed military forces, and, at
the same time, argue in the UN in favor of global disarmament and
the abolishment of nuclear weapons? And how can India reconcile its
increasing great power behavior and the pursuit of its own political and
economic interests, while defending special treatment for poor countries
in the WTO?
Double standards and contradictory behavior are hardly uncommon

in international politics, but it does seem that India occupies a posi-
tion in the global order that causes this behavior to be particularly
frequent; so far, the Indian authorities have not explained how to rec-
oncile the different foreign policy roles. Managing contradictory aims
and policies does require a certain level of adroitness, intellectual and
diplomatic capacity, and an ever-widening scale of empirical knowl-
edge inside India’s diplomatic corps. In addition, the broadening of
the scope of foreign policy, especially with the increasing importance
of economic aspects, also requires a certain amount of coordination
with other foreign policy players, such as the Prime Minister’s Office
and key ministries such as those of Finance, Defense and Commerce.
In terms of intellectual inputs and help for policy-formulation, India has
some well-established and semi-independent research centers and think-
tanks, especially in areas relevant to various aspects of foreign economic
policy-making.17
Nevertheless, some observers of the foreign policy-making establish-
ment in India have noted a lack of policy-making “soft-ware”: a lack of
expertise and man-power within the Ministry of External Affairs and
within the key think-tanks, as well as a lack of mutual interaction
between the different institutions (Markey, 2009; Madan, 2013). The
Ministry of External Affairs is still very much in charge of foreign pol-
icy, and the Ministry is dominated by officers of the (generalist) Indian
Foreign Service whose numbers are far smaller than those of compara-
ble emerging powers such as Brazil and China (Markey, 2009; Madan,
2013). Combined with a compartmentalized structure of the Ministry,
this has made it difficult to formulate and coordinate the increasing
number of parallel policies that India’s new global position requires.
Observers also deplore the lack of overall strategic vision required to
guide policy-making. In recent years, the Ministry of External Affairs
has not produced any overall and coherent policy document. As a
reaction to this, in 2012, an independent group of academic analysts
and policy-makers proposed their own suggestion for “a foreign and
strategic policy for India in the 21st century” titled “Nonalignment
2.0” (Khilnani et al., 2012). Presented as an attempt to formulate a
coherent strategy to serve the interests of India as a rising power,
the strategy was remarkable in that it completely ignored the tradi-
tional element in India’s foreign policy: “the developing nation India”.
Poverty and abysmal lack of human development are barely men-
tioned and, while this neglect probably illustrates the limited concern
for India’s poor population on the part of a dominant section of the
Indian intellectual elite,18 it is hardly helpful for the policy-making

bureaucracy for whom this aspect is still a major element in its foreign
policy.
The lack of expertise and man-power has been officially recognized,
however, and since 2008, the Ministry of External Affairs has worked to
increase the number of officers gradually (by 50 every year) according to
a plan running until 2018; at the same time, the Ministry has decided
to intensify the training of the present officers (Ministry of External
Affairs, 2014). Whether these initiatives will be sufficient to achieve sat-
isfactory management of the complex set of policy tasks that India is
now facing is doubtful but, at least, this is an indication that the new
global order and India’s rise in it has posed challenges to India’s foreign
policies, which are now being recognized as such. It also shows that
the government has decided to deal with this issue somehow. Before
these very recent changes take effect, India’s default position will, in
many instances, most likely be one of “muddling through”, as a former
foreign secretary termed it on one occasion (Saran, 2013, p. 52). This
approach is nicely captured by the Indian expression jugaad (impro-
vising solutions in the context of limited resources) (Madan, 2013,
p. 108), which is being used in many other circumstances throughout
India.
Conclusion
India has come a long way since Nehru made his remark quoted at the
beginning of this chapter. India’s foreign policy has become less vague
and its aims have become clearer, but it is still, in many aspects, “grop-
ing”. Nehru saw the fundamental aim of foreign policy as contributing
to the building of India as a nation, and this is basically still what is
happening. Changes have been seen in recent years, however, due to
the often dramatic changes in the global order and in India’s position
within this order. These changes have made foreign policies and foreign
policy-making more complex and caused them to be characterized by
both important continuities and newly emerged contradictions.
There are also stable ingredients in India’s foreign policy. Being
“friends with all, but allies with none” seems to be a stable policy
element. The importance of foreign economic policies has become a
permanent feature, and the new government of Narendra Modi has
emphasized this even more than previous governments. Judging by the
initial actions of the new government, and especially Narendra Modi
himself, it may even be speculated that foreign policy in general seems
to have been given a more important place in overall policy-making

than expected by most observers. India has become a much more
outward-oriented nation, one which is deliberately trying to take advan-
tage of the increased interconnectedness between societies, as expressed
by the growing Indian diaspora in countries such as the USA and
Australia.19
Many middle-class Indians and Indians who have settled abroad see
India’s rise in recent years and its more active foreign policy under the
new government as signs that it has already achieved great power status.
In the view of this chapter, this is a premature conclusion. India is a
country which is playing different and partly contradictory roles in the
world. It will have to adopt many parallel and different foreign policy
agendas – one of which is the great power agenda – but a result of this is
that the foreign policy has been, and will continue to be, characterized
by inconsistencies that cannot easily be subsumed under one coherent
strategy. In this crucial respect, it will remain difficult to attach a simple
label to India’s foreign policy – even under the new government.
Notes
1. Officially, South Africa joined the BRIC group of countries in 2010. To sim-
plify matters, I use the abbreviation BRIC(S) in all references to the group.
2. Baru (2006, 2013) is a prominent Indian example of geo-economic think-
ing. While Luttwak (1990) can be credited for inventing the term “geo-
economics,” the viewpoint has been around for quite some time. See
Kennedy (1987); Strange (1996).
3. Chakrabarti (1982, p. 19) terms the non-alignment policy: “Friendship with
every nation.” To Nayar and Paul (2003), India’s striving for self-reliance is
part of its aspiration to major power status.
4. Data on India’s foreign trade are from the EPW Research Foundation (1993).
A large part of the increase in the share of developing nations in the 1980s
was due to an increase in trade with the Asian Tigers.
5. This includes a long discussion on the background for India’s decision to
go nuclear at this precise time. Among the factors was India’s concern over
the increasingly restrictive international non-proliferation regime. Mohan
(2003: ch. 1).
6. Smith (2012) discusses India’s complex foreign policy in terms of different
elite-constructed identities. Her identities are slightly different from those
I prefer to see as structurally determined roles.
7. “Joint Press Statement issued by India, Brazil, Japan and Germany on the
need for UN Reforms”, reprinted in Government of India (2004). See also
Malone and Mukherjee (2013).
8. The reference to both countries’ democratic credentials is commonplace in
diplomatic circles whenever their “natural” friendship needs emphasizing.
9. Cohen and Dasgupta (2010) see this re-armament as being costly because
of its lack of clear direction. They are highly skeptical of the quality of the
Indian armed forces.
10. Indo-US relations are described in great detail in all major works on India’s
foreign policy. See Mohan (2003: ch. 4); Malone (2011: ch. 7).
11. Examples of this are meetings of their respective national development
banks, business associations, ministries of agriculture, academic experts and
representatives of other national institutions. An overview of the activi-
ties and declarations of the BRIC(S) coalition can be found at http://brics6.
itamaraty.gov.br
12. The following paragraphs are based upon Pedersen (2012).
13. See the IBSA webpage: http://www.ibsa-trilateral.org/about-ibsa/background
14. One should not read too much into this categorization, as “medium income”
according to the World Bank starts at a level of income that is less than
10 percent of the starting point of the high income group.
15. India has overall been the largest recipient of international aid in the world.
In pr. capital terms, however, India has received very little aid.
16. The assessment in this section is in line with that of Smith (2012, p. 384),
who stresses India’s multiple identities.
17. Examples of local think-tanks are the Indian Council for Research on Inter-
national Economic Relations, Research and Information System, Centre for
Policy Research, Institute for Defence Studies and Analysis, Indian Institute
of Foreign Trade, Centre for WTO Studies.
18. This fits with the characterization of the worldview of the Indian elite in
Cohen (2002: ch. 2) and in Smith (2012).
19. While visiting both countries, Narendra Modi drew large gatherings with
citizens of Indian origin.
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6
Situating the Gulf States in the
Global Economic Redrawing:
GCC–BICs Relations
Crystal A. Ennis
Introduction
The steady decline of oil prices in the last quarter of 2014 magnifies con-
cerns over the fiscal health of Gulf States.1 Perpetual failure to diversify
significantly has further exposed Gulf economies to risk. Despite the
experiences of oil decline in the past, especially the experience of the
1980s–1990s, the region has circled back to similar questions on how
to respond to economic imbalances derived from sustained dependence
on natural resource export and labor import. These questions have extra
resonance in countries such as Bahrain and Oman, with more limited
hydrocarbon revenues and more acute socio-economic pressures. Yet,
the global economy of 2015 has also changed significantly from the last
sustained oil crisis. Today, emerging economies such as the BICs (Brazil,
India, China), and especially Asian economies, are playing a more signif-
icant role. Compared with the mid-2000s, hydrocarbon trade with the
West is declining relative to trade with Asia and, overall, the Gulf is less
central to energy markets.
With economies so tied to the factors of production and trapped in
path dependencies of oil economies, this chapter asks how shifts in the
global political economy incentivize change, or further entrench struc-
turally embedded challenges in Gulf economies. It proceeds through
this analysis in three stages. The chapter opens with background on
the modern development story of Gulf economies, situating the region
within geo-economic trends. This is followed by an empirical explo-
ration of shifting patterns of trade and labor. Finally, the chapter assesses
132
Crystal A. Ennis 133
the impact of the global economic redrawing and the rise of emerg-
ing economies on the Gulf. Overall, the chapter argues that a desire
for status quo stability perpetuates economic activities within the hege-
mony of economic liberalism, while reinforcing structurally embedded
economic challenges. In fact, the Gulf States have embraced a sort
of neoliberal rentierism which integrates the economies within the
global (capitalist) economic order, while deepening the primarization
of the economy and facilitating the rentier system with its economic
distortions.
The Gulf in geo-economic trends
Resources and geography have granted Gulf Cooperation Council (GCC)

countries a natural connection to processes of globalization. The extrac-
tion and sale of petroleum resources has structured Gulf interaction with
the global economy, especially since the oil boom of the 1970s. These
same factors have also corresponded with four decades of relative wealth
in comparison with the GCC’s oil-importing neighbors. GDP growth
rates in the GCC averaged 6.58 percent between 2004 and 2012, mir-
roring that of BICs economies (World Bank, 2014; Figure 6.1). GCC
economies generally maintain considerable trade surpluses, ranging
between 10 percent and 30 percent of GDP (Gulf Investment Corpo-
ration, 2012, p. 13). Resting on 33 percent of the world’s petroleum
reserves and featuring GDP per capita rates ranging from $21,042 in
Saudi Arabia to $100,143 in Qatar, the region’s economic strengths are
obvious (GCC, 2012, pp. 18, 62).
Equally important to the narrative of strength in these economies are
the economic challenges they confront. Economic diversification has
been on the development agenda since hydrocarbons became the main
source of income. Despite this awareness being featured in development
plans for several decades, the Gulf development experience is charac-
terized by its limited diversification and weak innovation. In fact, oil
revenues constitute between 77 percent and 93 percent of the state bud-
get and between 65 percent and 91 percent of export earnings in each
GCC country (Hvidt, 2013, p. 13). This has allowed the state to pursue
state-led development with a redistributive model (Luciani, 1990; Hvidt,
2007, p. 562). Along with generous social benefits for citizens, Gulf gov-
ernments are the heart of expenditure that keep the economy flowing
and the chief employment provider to citizens. Therefore, in examining
GDP growth and wealth in the Gulf, one should be mindful of domestic
and regional political conditions and changes.
Figure 6.1 GDP growth in the GCC and BICs

Source: World Bank data (2014).
It is thus important to note that government expenditure (drawing on

hydrocarbon revenue) is a key driver of growth. With popular agitation
within and/or near the GCC borders in 2011, government spending
spiked and has remained high since (Gulf Investment Corporation,
2013; Ennis, 2015, p. 117, pp. 130–131). Despite a gradual slowing of
expansionary fiscal policies over the past two years, particularly since
the oil price decline, non-oil fiscal deficits and the breakeven oil price
have risen.2 In the last several years, breakeven oil prices have reached
over $100 per barrel in Bahrain and Oman (IMF, 2012a, 2012b, p. 93;
Ennis, 2015, p. 117). This underlines the importance of diversification
in the region, as well as the critical relationship between government
expenditure and political stability.
The private sector has traditionally been organized around state
contracts largely in the construction industry and downstream oil activ-
ities. Successful retail establishments tend to operate through lucrative
agency licenses for international brands, with consumer-driven expan-
sion into large malls and hypermarket chains. This has been facilitated
by a growing middle class, whose livelihood is primarily tied to state
employment, and concomitant increasing consumption levels (Hanieh,

2011). The largest sector by employment, construction, draws a major-
ity of its workforce from labor-sending economies, especially South
and Southeast Asian ones in recent decades. This trend is reflected
across much of the private sector. In fact, the largest labor attractors
in Gulf economies are sectors and occupational categories that gen-
erally do not employ Gulf nationals (see Ennis and Al-Jamali, 2014
on the case of Oman). Thus, along with its reliance on hydrocar-
bons, the region has remained substantially dependent on foreign labor,
with expatriates constituting an astounding 50–94 percent of the labor
market (Ennis, 2013). These dependencies have positioned the Gulf
within the Global Political Economy (GPE) in a particular way, with
domestic economic conditions shaping the former’s interaction with the
latter.
Katzenstein’s argument, decades ago, that domestic structures shape
international economic policy behavior and interdependence, resonates
today in these states (Katzenstein, 1977). With the GCC’s centricity to
commodity markets and its position in global capital and labor flows,
it is no surprise that the Gulf’s most important economic partners have
been those of energy importers and labor exporters. Recent conditions,
stemming from the palpable necessity of economic diversification, have
also prompted wider ties in other fields related to the region’s policy shift
to promote a vision of developing a knowledge economy. For instance,
some Gulf actors have been pursuing advanced cooperation with India
in IT and cyber security sectors (Rizvi in Dahiya, 2014, p. 100). This
is part of an agenda aimed at stimulating indigenous innovation and
small- and medium-sized enterprises (SMEs).
Dubai has led the region in diversification and financialization.
In addition to developing a strong service market, Dubai has fashioned
its competitive edge as a logistics hub in the region. With free ports
and one of the busiest international airports in the world, Dubai capi-
talizes on these strengths (see Hvidt, 2009). It has emerged as a preferred
destination in global supply chains as a transportation hub between
East and West. The United Arab Emirates (UAE) has also become a suc-
cessful financial hub in the last few years, benefitting from instability
in Bahrain which previously acted as such. According to one report,
43 percent of capital flows into the UAE in 2012/2013 came from emerg-
ing markets and only 13 percent from developed countries (Ahmad,
2013). As well, Dubai’s free trade zones, featuring 100 percent foreign
ownership and no taxes, have positioned the UAE ahead of the game.
Mirroring the progress of the UAE, other GCC countries have been
developing ports, industrial zones and logistics capacities. It remains less

certain how successful similar strategies can be in such nearby markets,
likely leading to disappointing outcomes and regional competition.
For generations, transnational capitalism has been affecting relation-
ships in the international system. Regionalism processes, in Hettne’s
view, can be understood in tandem with the transformation of the world
economy and are best conceived of as a global phenomenon which
stresses that integration should be market-driven and outward-looking
(Hettne, 2005). Viewed from the GCC, the reconstitution of global rela-
tionships in the last decade clearly demonstrates the transformational
power of globalization viewed through the lens of capital accumu-
lation and the supraterritoriality of its organizational behavior. It is
only recently that scholars have begun to examine the ways in which
non-Western development paths are shaping and being shaped by the
outcomes, technologies and logic of neoliberalism in different milieus
(Ong, 2007; Wu, 2008; Kanna, 2010). Here, neoliberalism is understood
“not as a fixed set of attributes with predetermined outcomes, but as a
logic of governing that migrates and is selectively taken up in diverse
political contexts” (Ong, 2007, p. 3). Understanding neoliberalism in
the Gulf political context is useful in unraveling the fraught character
of capitalism across diverse locales, including the antagonisms between
competing political and economic interests. Scholte describes how the
pursuit of expanding markets, reducing labor costs, taxation and reg-
ulation, and the opportunity for additional capital accumulation have
impacted transborder or supraterritorial relations (Scholte, 1997). This
effect, specifically the demands of corporate actors on increasing profit
or surplus value, perpetuates the aforementioned dependencies of Gulf
economies.
Indeed, the reliance of the Gulf on both resource export and labor
import has created a series of distortions that are difficult to correct. The
obvious outcomes of these distortions are the consequences of a failure
to diversify on public expenditure capabilities and the potential reper-
cussions on economic and political stability. A second result includes
the implications associated with relying on a foreign workforce for pro-
ductivity gains and the consequences on national employment when
the private sector fails to attract and/or absorb local labor. That Gulf
economies have been diversifying their export markets has undoubt-
edly been a positive move given the increasing energy independence
of the USA. However, a political unwillingness to devote constant, seri-
ous attention to economic diversification, sustainability and national
employment challenges raises questions about the region’s fiscal and

political health.
The financial power of the GCC has brought the region into discus-
sions of shifting economic power, and the transparency and financial
risks associated authoritarian systems. Demonstrative of this, capital
outflows from the GCC between the early 2000s and the late 2000s
increased by 100 percent to Asia, the Middle East North Africa (MENA)
and Europe, while only increasing by 50 percent to the USA (Momani in
Legrenzi and Momani, 2011, p. 169). This shift was not only prompted
by the rise of the East, but also motivated by a more politically difficult
investment environment in the West post 9/11. The Dubai Ports (DP)
fiasco in 2007 is just one manifestation of a less-friendly investment
climate in the USA, with Gulf investors increasingly associating invest-
ment in the USA with high political risk (Momani, 2008, p. 303). Dubai
Ports has since secured many other partners for its port and logistics
activities, and currently has 65 locations across all six continents, with
expanding operations in India and China (Bundhun, 2014; “Marine Ter-
minals”, 2014). Likewise, many Gulf corporations have increased their
global activities in the past decade.
Sovereign Wealth Funds (SWFs), the main investment vehicles for
many GCC states, similarly became notorious for their limited trans-
parency in the 2000s – their sheer estimated volume raising concerns
(Abdelal, 2009; Helleiner, 2009; in Seznec, 2008, chs 7–9; Legrenzi and
Momani, 2011). According to the data presented in Table 6.1, several
GCC states sit next to Norway and China among the largest SWF hold-
ers. The value of GCC SWFs represents an estimated US$2,669.5 billion
of a US$7,109.6 billion global total, with the Middle East constituting
37.1 percent of the global value (SWFI, 2014).
Changing of the guard
The shift is not simply about looking East for economic opportunities.
Gulf States are being forced to reconcile with the declining centricity of
the USA and Western world as the stewards of the global order. In the
aftermath of the 2008 financial crisis, where the recovery of Western
economies has been tepid, economies in the East continue to grow, even
if at a weaker rate. Emerging markets have increased structural impor-
tance. Meanwhile, the USA has upset its traditional allies in the Gulf,
such as Saudi Arabia, by abandoning its other allies in the region in the
upheaval of the 2011 uprisings and, more recently, by re-engaging with
Iran. These political developments seem to foment Saudi fear about a
138
Table 6.1 Gulf sovereign wealth funds in global ranking
Ranking SWF Country Establishment Source Assets (bn$)
1 Government Pension Fund: Global Norway 1990 Oil 893.0

2 Abu Dhabi Investment Authority UAE 1976 Oil 773.0
3 SAMA Foreign Holdings Saudi Arabia N/A Oil 752.2
4 China Investment Corporation China 2007 Non-commodity 652.7
5 SAFE Investment Company China 1997 Non-commodity 567.9
6 Kuwait Investment Authority Kuwait 1952 Oil 548.0
9 Qatar Investment Authority Qatar 2005 Oil & gas 256.0
13 Abu Dhabi Investment Council UAE 2008 Oil 90.0
20 Investment Corporation of Dubai UAE 2006 Oil 70.0
21 International Petroleum Investment Company UAE 1984 Oil 68.4
24 Mubadala Development Company UAE 2002 Oil 60.9
39 Emirates Investment Authority UAE 2007 Oil 15.0
41 State General Reserve Fund Oman 1980 Oil & gas 13.0
42 Mumtalakat Holding Bahrain 2006 Non-commodity 10.5
47 Oman Investment Fund Oman 2006 Oil 6.0
52 Public Investment Fund Saudi Arabia 2008 Oil 5.3
60 RAK Investment Authority UAE 2005 Oil 1.2
Source: Sovereign Wealth Fund Institute data (2014).

changing regional status quo. In addition to this, the American “Pivot

to Asia” policy theme further distances the USA.
Parallel to these trends, economic growth has coincided with the
Gulf’s expanding visibility on the global stage, made possible by grow-
ing energy wealth and capital accumulation due to the oil boom
of the 2000s. The region’s centricity to commodity markets, not to
mention Saudi Arabia’s traditional function as a swing producer, has
long made the GCC a force to be reckoned with in energy markets.
Saudi Arabia’s recent unwillingness to fill this role also demonstrates
as much. Recently, individual Gulf actors have been making political
names for themselves via their involvement in a variety of global issues
including, but not limited to, Saudi Arabia’s place in the G-20, Qatar and
Saudi Arabia’s involvement in regional politics and crises, and Oman’s
increasingly recognized role as quiet negotiator (Gause, 2011; Kamrava,
2013; Marc Valeri, 2014). One aspect of this global engagement has been
the Gulf’s involvement in South–South cooperation, from trade to aid
(Coates Ulrichsen, 2011; Momani and Ennis, 2012). This broadening of
strategic international economic alliances and international investment
partnerships reflects an evolution in the main dimensions of power:
trade, security and finance.
The last few years of political change and economic uncertainty have
shaken the Gulf, and confronted it with the necessity to find new part-
ners. The trade shift has already started, as demonstrated in the next
section, but with security the region is especially keen to maintain status
quo ties with the USA. Indeed, energy and security interests have tradi-
tionally dominated GCC countries’ interactions with the international
community. With the British departure from the region in the early
1970s, the USA gradually filled its shoes. The GCC, a regional organiza-
tion since 1981, is a configuration of six US allies formed for the purpose
of security, as a counterweight to Iran, and economic cooperation.
By the 1990s, the USA was performing a leading security role. As part
and parcel of the arrangement, each state plays some role in advanc-
ing American strategic objectives in the greater Middle East. Qatar, for
example, hosts the US Central Command (USCENTCOM), with military
installations such as Camp al-Sayliyah and the Al-Udeid Air Base, while
Bahrain hosts the headquarters of the Fifth Fleet, American naval forces
spanning the Persian Gulf, Red Sea and Indian Ocean (Zambelis, 2012,
p. 7; Kamrava, 2013; Matthiesen, 2014).
Stemming from the US–GCC security alliance, GCC–Asia ties have
ventured little into security arrangements. Moreover, Asian partners
that have also been courting players such as Iran in the pursuit of
energy imports are not viewed as adequate substitutes for US protection.

As beneficial as a more diversified pool of trading partners is econom-
ically, the focus has not shifted to political security. China and India
are unlikely to be willing or interested in filling a US role as secu-
rity guarantor (Maclean, 2013). Individual GCC actors have, however,
engaged in variable levels of defense cooperation and strategic alliances
with India, China, and other Asian players such as Japan (Al-Tamimi,
2013, pp. 8–9; Brahmand, 2014). Although America’s growing energy
independence and the Pivot to Asia agenda may translate into weaker
significance placed on the GCC allies, an American security presence
is unlikely to subside in the near future. Obama’s rapprochement with
Iran exacerbates fears of US abandonment, especially among the GCC’s
more hawkish members Saudi Arabia and the UAE (Al Shayji, 2014). It is
perhaps revealing that of the six GCC members, only Kuwait, Oman and
Qatar were among the first wave of applicants to be founding members
of the new Asian Infrastructure Investment Bank despite US opposition
(Ministry of Finance, 2014; Schomberg, 2015). As of April 2015, only
Bahrain had not applied.
The implicit external security provided to the region and its contin-
ued importance to energy markets has facilitated stable authoritarian
political structures and perpetuated a preference for the status quo. The
Gulf States are cautiously engaging with the new economic redrawing –
or, as Acharya has called it, a “multiplex order”, akin to a multiplex
theatre, where numerous screens or games are playing simultaneously
(Acharya, 2014). These scenes are providing a range of options in the
realm of ideas, power and leadership, and various Gulf actors are trying
to hedge their bets with different partners while still maintaining the
status quo both domestically and internationally. In fact, even in basic
economic terms, conventional distinctions between resource exporters
and importers have become blurred. The Gulf oil exporters are also large
importers of agricultural products while, at the same time, their levels of
energy consumption have risen exponentially. Some have even warned
that the upward trend of domestic energy consumption threatens future
export earnings (Lee et al., 2012; Krane, 2014). With the transforma-
tion of consumer power from West to East impacting the nature of the
game, Gulf States and other natural resource exporters confront broad
structural shifts (Lee et al., 2012, p. 8).
Shifting patterns in trade and labor
The changing dynamics of trade in the last decade was the focus
of a 2011 OECD report on globalization. According to the report,
economic activity has reached a level where it is now more interna-

tional than at any earlier period, demonstrated by trends in trade,
production and consumption (OECD, 2011, pp. 14–15). While a
great deal of the growth in intra-GCC economic relations is car-
ried out as FDI in non-tradable sectors such as construction and
real estate, external economic relations are organized around resource
export. Trade profiles issued by the WTO demonstrate an evolution
in Gulf trade even in a span as short as six years. This demon-
strates both the shift East and rising relations with the BICs (see
Table 6.2).
Both the level and the direction of GCC trade have been shifting
since 2000. In 2012 alone, GCC exports and imports grew approxi-
mately 12 percent and 13 percent, respectively, relative to the previous
year. During the same period, trade with Japan and China increased
somewhat significantly, while exports to the EU contracted and imports
only increased modestly (Gulf Investment Corporation, 2012, p. 13).
In line with the general trend of rising trade levels, trade with the
BICs has grown exponentially. By 2012, GCC exports to Brazil had
increased by 261 percent and imports by 216 percent from their 2005
levels. GCC trade with India and China rose even more extraordi-
narily, with the percentage increase in exports at 1253 percent and
imports at 339 percent with India, and exports at 391 percent and
imports at 282 percent with China. The same period saw a large but
comparatively modest increase in trade with the USA, with a percent-
age increase of 109 percent in exports and 145 percent in imports.
Figures 6.2 and 6.3 illustrate the marked increase in overall levels of
trade.
As Table 6.2 illustrates, even in the few years since 2006 the configu-
ration of trade partners has been evolving, with India and China both
taking a more prominent place in most cases, and Brazil in both Bahrain
and Oman. Although the GCC countries fill only a small portion in
terms of overall trade in the BICs accounts, Saudi Arabia and the UAE
feature in India’s top five trading partners. India is, in fact, the num-
ber one overall trading partner of the UAE (see Figure 6.10). Japan has
remained a strong recipient of GCC exports, but has seen its position
as an exporter to the GCC weaken in favor of China and India (IMF
direction of trade, 2014).
By 2005, each GCC country was a member of the WTO, with Bahrain
and Kuwait acceding in 1995, Qatar and the UAE in 1996, Oman in
2000 and Saudi Arabia in 2005 (WTO, 2014). This has meant that
trade reforms have been implemented at varying speeds. Oman and
Saudi Arabia have implemented the most comprehensive commitments
Table 6.2 GCC trade partners
GCC Main Destination & Origin of Exports & Imports
Country 2006 2013
Exports Imports Exports Imports
Bahrain 1. Saudi Arabia 1. EU 1. Saudi Arabia 1. EU

2. US 2. Japan 2. Qatar 2. China
3. EU 3. Saudi Arabia 3. Oman 3. Brazil
4. Taiwan 4. Australia 4. UAE 4. US
5. Korea (Rep) 5. China 5. EU 5. Saudi Arabia
Kuwait 1. Japan 1. EU 1. China 1. . . .
2. US 2. US 2. UAE 2. . . .
3. EU 3. Japan 3. Saudi Arabia 3. . . .
4. Taiwan 4. Saudi Arabia 4. EU 4. . . .
5. Singapore 5. China 5. India 5. . . .
Oman 1. UAE 1. UAE 1. UAE 1. UAE
2. Korea (Rep) 2. EU 2. India 2. EU
3. EU 3. Japan 3. China 3. India
4. Iran 4. US 4. Saudi Arabia 4. China
5. Saudi Arabia 5. India 5. Iraq 5. Brazil
Qatar 1. Japan 1. EU 1. Japan 1. EU∗
2. Korea 2. Japan 2. Korea 2. US∗
3. Singapore 3. US 3. EU 3. China∗
4. UAE 4. UAE 4. India 4. UAE∗
5. India 5. Saudi Arabia 5. Singapore 5. Japan∗
Saudi Arabia 1. Taiwan 1. EU 1. Japan 1. EU
2. US 2. US 2. US 2. US
3. Japan 3. Japan 3. EU 3. China
4. EU 4. China 4. UAE 4. Japan
5. . . . 5. Australia 5. India 5. Korea
UAE 1. Japan 1. EU 1. India 1. EU
2. Taiwan 2. Japan 2. Iran 2. India
3. Iran 3. US 3. Iraq 3. China
4. EU 4. China 4. Switzerland 4. US
5. Oman 5. India 5. EU 5. Japan
World Trade Organization, Trade Profiles, 2006, 2013.

∗ 2012 Trade Profile. No data 2013.
(World Bank, 2010, pp. 19–20). Bahrain and Oman also have bilateral
free trade agreements (FTAs) with the USA. These, however, are accused
of undermining regionalization efforts and regulations that protect local
industry and businesses through preferential treatment of American
Figure 6.2 GCC exports

Source: IMF Direction of Trade data (2014).
Figure 6.3 GCC imports

business (Kennedy, 2015; Lawson, in Legrenzi and Momani, 2011).

Future studies should examine the impact of these bilateral FTAs in
the region to determine the extent to which such accusations prove
accurate.
Trade agreements with the BICs have been ongoing. China and the
GCC are in trade negotiations to establish an FTA and a free trade zone
(Al-Sharhan, 2014). Likewise, India and the GCC have been negotiat-
ing an FTA since the early 2000s, signing a Framework Agreement on
Economic Cooperation on August 24, 2004. It has been held up due
to concerns over several provisions. Two stand-offs include the demand
by Saudi Arabia and the UAE to include oil imports in the FTA, which
could cause India to lose import duty revenues and raise Indian con-
cerns over protecting their chemical and petrochemical industry (Rizvi
in Dahiya, 2014, pp. 94–95). Besides these, Brazil has been negotiating
a Mercosur-GCC FTA, with negotiations allegedly at a fairly advanced
stage (Amorim, 2011a; Yousef, 2012).
To China, India and other Asian partners, the Gulf is a strategically
important partner because of its energy resources. Both China and India
have rapidly growing economies, even with the recent slowdown, and
have seemingly insatiable appetites for energy. Average oil consumption
in Asia as a percentage of global oil consumption increased from 5.9 per-
cent in the 1980s, to 10 percent in the 1990s and to 19.7 percent in 2012
(Gulf Investment Corporation, 2013, p. 1). According to commodity
trade data, China imports 35 percent of its crude oil from GCC coun-
tries. India imports 43 percent of its crude oil from the GCC, a marked
increase from some 13 percent only 13 years earlier (see Table 6.3). Sheer
Table 6.3 Oil and gas as a percentage of national imports
Percentage of Total Oil Imports China Percentage of Total Gas Imports China
Region 2000 2013 Region 2000 2013
GCC 33.40% 35.53% GCC 38.86% 37.22%
All Gulf 47.61% 51.36% All Gulf 44.44% 37.62%
Percentage of Total Oil Imports India Percentage of Total Gas Imports India
Region 2000 2013 Region 2000 2013
GCC 13.69% 43.55% GCC 76.33% 90.97%
All Gulf 17.20% 62.46% All Gulf 88.79% 90.99%
Percentage of Total Oil Imports Brazil Percentage of Total Gas Imports Brazil
Region 2000 2013 Region 2000 2013
GCC 18.17% 17.69% GCC 8.03% 2.17%
All Gulf 25.04% 21.93% All Gulf 8.03% 2.17%
Percentage of Total Oil Imports USA Percentage of Total Gas Imports USA
Region 2000 2013 Region 2000 2013
GCC 17.75% 23.03% GCC 1.50% 0.66%
All Gulf 24.69% 27.87% All Gulf 1.50% 0.66%
Source: UN Commodity Trade data (2015).

economic size makes this significant. Not only did China surpass Japan
as the second largest economy in the world after the USA in 2010, but
India’s growth rate is projected to outpace China’s by 2016 (Bloomburg,
2010; IMF, 2015). A PriceWaterhouseCoopers report (2013, p. 2) projects
that China will surpass the USA by 2017 in purchasing parity terms and
by 2027 in market exchange rate terms.
That China and India have reached similar levels as the USA in trade
with the GCC follows a specific agenda in the Gulf, coined the “Look
East” policy, which fittingly views Asia as one of its most important mar-
kets for energy exports (Al-Tamimi, 2013, p. 4; see Figures 6.5–6.10 in
the Appendix). Investment ties are also increasing. Gulf SWFs, the Abu
Dhabi Investment Authority and the Kuwait Investment Authority were
granted Qualified Foreign Institutional Investor (QFII) status to oper-
ate in China by the Chinese Securities Regulatory Commission (CSRC)
and the State Administration of Foreign Exchanges (SAFE) in 2008 and
2011, respectively. In 2012, Qatar was also granted QFII status (CSRC,
2013). The FDI arm of the Qatar Investment Authority, Qatar’s SWF,
Qatar Holding had requested permission from Beijing to invest US$5 bil-
lion in the Chinese securities market. Receiving QFII status resulted in
Qatar becoming the largest foreign investor in Chinese capital markets
(Zambelis, 2012, p. 5). Qatar’s SWF has also been investing in India’s
infrastructural development, with investment commitments of at least
US$10 billion annually, half of which is dedicated to infrastructure
(Dahiya, 2014, p. 101).
With 2015 starting amid new oil lows, and oil futures entering a
period of contango, the oil market has been changing. Saudi Arabia
has held fast to a choice not to serve as the swing producer. Given a
new competitive environment and the impact of US shale, Saudi Arabia
has opted for a strategy of increasing market share, rather than holding
prices. In fact, the decline of crude oil prices has prompted a price war
among oil exporting nations bidding to increase their market share in
Asian economies. Gulf States are coming out as winners in the effort
to strengthen their position in the region (Dipaola and Shenk, 2015;
Reuters, 2015).
India’s rapid expansion is a large opportunity for the Gulf. Natu-
rally, South Asia and the Arabian peninsula have strong historic ties and
have long been connected through Indian Ocean trade routes, and later
by British imperial interests. The discovery of oil in the Gulf initiated
stronger relations between the countries, in labor, goods and services.
Today, in addition to energy needs, India’s rapidly growing economy
has a substantial absorptive capacity for infrastructural investments,
where the GCC has a competitive advantage (Rizvi in Dahiya, 2014,

pp. 90–114). In fact, GCC investments in India rose from US$223 mil-
lion in 2005 to US$2,639.5 million in 2012 (Rizvi, in Dahiya, 2014,
p. 95). Lack of unity in customs and investment regulation across the
GCC, however, means Indian companies have to negotiate different reg-
ulations and procedures for investment on a country-by-country basis
(Pradhan, 2010; Dahiya, 2014). India’s position in the IT industry also
provides ample opportunity for partnership with countries, such as the
Gulf States, seeking to develop their knowledge capacity. Moreover, with
over six million Indian nationals working in the Gulf, there is signifi-
cant demand for Indian products and services across the GCC. Not to
mention, the impact of remittances from the Gulf.
The impetus of Brazilian relations with the GCC is not as centered
on energy as India and China. Brazil has, however, engaged in strate-
gic business cooperation, establishing companies in special industrial
areas that are open to foreign investment and becoming partners in
downstream activities. For example, Vale (a Brazilian corporation) has
two large iron ore pellet plants at the Sohar Industrial Estate in Oman,
and operates a distribution center and an ore terminal for very large
ore carrier (VLOC) ships (Vale, 2014). Under Lula da Silva’s govern-
ment, Brazil expanded its relations with the MENA as part of a broader
drive towards strengthening relations with developing regions. Along
with fruitful ties with countries such as Libya, Syria and Lebanon, Brazil
built up relations with the GCC members, especially Bahrain, Oman
and the UAE (Herz et al., 2011, p. 4). Imports from Brazil, in fact,
increased seven-fold between 2002 and 2010, while exports to Brazil
quadrupled in the same period (Casarões, 2013, p. 6).3 Given that the
GCC imports approximately 80 percent of its food, it looks to Brazil and
the broader region as a food source. For example, Qatar, through Hassad
Foods (a wholly owned subsidiary of Qatar Holding established with
a food security mandate) spent around US$700 million in 2010 alone
to acquire farmland. It specifically targeted Brazil for the production of
beef, poultry, sugar and grain (Economist Intelligence Unit, 2011, p. 23,
“Hassad Food’s new approach to secure food security”, 2009). The Mid-
dle East currently receives roughly one-third of Brazil’s poultry exports
(Economist Intelligence Unit, 2011, p. 23).
Along with energy exporting, therefore, the Gulf views its trade rela-
tionship with the BICs as a way of diversifying its export basket. While
the USA has been speaking about energy independence in recent years,
China has been speaking of “energy interdependence” and “strategic
partnerships” (Alterman, 2013, p. 3). Strategic partnerships between
various GCC countries and the BICs are centered on the construction
of manufacturing bases, with projects ranging from water desalination
to technology infrastructure and education (Raghavendran, 2012). This
trend is likely to continue, with GCC investment into the BICs focusing
on areas of competitive strength including energy and service sectors
such as port operations, tourism and financial services. Investment into
infrastructure is also an attractive sector for the GCC, especially in
tourism and telecommunications (EIU, 2011, pp. 4–5).
The rise of emerging economies is also impacting domestic labor mar-
kets within Gulf States. Significantly, it is not only trade and foreign
investment that are spoken of in neoliberal terms, but also the gover-
nance of migrant labor (Buckley, 2012). In fact, neoliberal logic dictates
the rationale of the continued reliance on foreign labor. This logic is
seen on two sides of the discussion: the cost-effectiveness of hiring
migrant labor, and the attractiveness of Gulf markets as providing better
opportunities than those afforded to migrants in their home countries.
As mentioned earlier, a majority of workers in the Gulf private sector
labor force are migrants from Asian countries. Indian labor comprises
the largest segment. Figure 6.4 presents data on Oman which demon-
strates this trend. Yet, parallel to the rise of the Indian economy, the
number of Indian workers is stagnating in comparison with overall
increases in the number of non-nationals in the private sector. Here,
Bangladeshi labor is increasingly substituting for Indian labor. This
trend likely stems from the increasing attractiveness of the Indian labor
Figure 6.4 Oman – Private sector labor by nationality

Source: NCSI data, various reports, 2015.
market to Indian nationals. With salaries for skilled workers increasing,

the chance to remain closer to home, and more opportunities available
overall, there is less incentive to relocate to economies which offer less
competitive salaries. As a result of a strengthened labor market at home,
Indian nationals can now demand higher salaries, making them less
attractive to potential employers looking to depress labor costs. Cities
such as Doha and Dubai remain attractive. However, the continued
strengthening of economies that served as traditional labor senders to
Gulf States is likely to intensify this trend, shifting labor corridors to
other source nations.
This phenomenon is important to Gulf domestic economies for two
reasons. First, the ability to continue to draw on cheap labor perpet-
uates the segmented labor market in the region where nationals and
non-nationals generally do not compete for the same jobs. A series of
economic challenges evolve out of this, including the difficulty Gulf
States have in employing their growing body of young graduates, and
shifting the employment burden away from the state and to the private
sector. Already, the way the labor market has evolved over the last
four decades has created a path dependence from which it is difficult
to break free. Despite governments noting the importance of reducing
the reliance on foreign labor for decades, efforts to enhance private
sector employment opportunities for nationals and reduce the public
sector employment burden have lagged. In fact, oil booms have tended
to intensify economic activity around sectors which generally provide
few employment opportunities to nationals (Ennis, 2015, p. 122). These
trends are a concern for economies such as Bahrain, Oman and Saudi
Arabia, which have more acute levels of unemployment than the others.
Second, and arguably more directly related to shifting labor corri-
dors, is that the average skill level of migrants from countries such as
Bangladesh lags behind that of India. With Gulf economies allegedly
seeking to develop knowledge economies in their bid to diversify,
widening reliance on a lower-skilled workforce is counterproductive.
As indicated elsewhere, innovation is less likely in situations where
labor is cheap and replaceable. The opportunity cost for technological
innovation is simply too high (Ennis, 2015, p. 130).
A faux shift
The Gulf States may be looking East but they remain well-embedded
within the capitalist framework and entrenched neoliberalism with its
promises of prosperity, growth, employment and knowledge transfer.

This continues to guide interaction with the world even with the
shifting importance of relationships.
In the Gulf, this is evident in the volume and direction of trade, as well
as in changing labor patterns. What does this shift really mean, however,
to the countries in the GCC? This section discusses some of the broader
arguments of the impact of the BICs on status quo hegemony in relation
to its meaning for the Gulf actors. Ultimately, it argues that the evident
shift is somewhat artificial in that, even with the USA playing a less
hegemonic role, the global capitalist order remains robust and structures
the nature of economic relations between states. The neo-Gramscian
use of hegemony as a historic bloc is thus more relevant to interpreting
any deficit of meaningful change than realist assessments of declining
hegemony and shifting power alone.
The promise of this shifting global order to the countries tradition-
ally associated with the global South has been the opportunity for an
alternative to the status quo. The BICs, it has been said, represent an
opportunity for counter-hegemonic reorientation away from the West
and the championing of emerging and lesser-developed economies.
The first statement of the leaders of the first BRIC summit in 2009
claimed their support of a multipolar world and their aim of reforming
international financial institutions to ensure that emerging and devel-
oping countries have greater voice and representation (BRICS, 2009).
At the very least, the BICs have represented a notional association with
South–South cooperation with a view to reorganizing global governance
(Kornegay, in Amorim, 2011b; Francis and Narnia, 2013, pp. 1–32).
Geography has made economic and cultural exchange with some BICs
natural. This has been especially true of India. China’s evolution in the
1980s facilitated improved official ties. Then China is said to have begun
shifting its ties away from supporting socialist movements in the region
and “gradually built a reputation as a supportive rather than subversive
force” (Calabrese, 1992, p. 472). Some would argue that the BICs, like the
Gulf States and others in the “global South”, are cognizant of the impact
of imperialism on their societies and economies, where these have been
distorted in the service of the economic and strategic interests of an
imperial power. In this regard, they are said to share “elements of post-
colonial thinking” that has grown out of similarities in their historical
experiences (Chin and Thakur, 2010, p. 122). Today, each of the BICs
is, in fact, a particularly attractive partner for Gulf trade and business
interests.
The BICs’ commitment to non-intervention was demonstrated

throughout the Arab uprisings of 2011 and 2012. While affirming
their commitment to multilateralism, the BICs abstained from vot-
ing on UNSC 1973 for intervention in Libya.4 Overall, BICs countries
have remained proponents of the principles of state sovereignty and
non-intervention. They also tend to raise fewer concerns regarding
political and social rights, save in cases where their own nationals are
affected.5
Where the Gulf economic environment is somewhat unfamiliar in
a Western context, differences, such as the segmented labor market
and state-led development, raise fewer concerns with partners such as
China. In contrast, slow progress on an EU-GCC FTA has been attributed
to disagreements over political reforms such as human rights, foreign
labor and civil society partnerships, along with domestic energy subsi-
dies (World Bank, 2010, p. 20). Human rights records and the strength
of civil society do not tend to be sources of concern among emerging
market economic investors. Speaking about the BICs, Chin and Thakur
note,
All three see themselves as developing countries still making the tran-
sition to major global players. They perceive their national interests
as tied to exporting a variation of “the developmental state” as a
new model. A more assertive China is encouraging a shift from a
universal conception of political values to recognizing diversity in
human civilization, and recalibrating the multilateral order to set
aside claims of universal civil and political rights to focus instead on
solving common problems.
(Chin and Thakur, 2010, p. 120)
As with civil and political matters, heavy state involvement in eco-

nomic matters is not worrying for ties with emerging market economies
which also have long records of government intervention towards
developmental aims.
Where some view interaction with economies such as China a threat,
others argue that China’s interaction with resource exporters is geared
towards “multilateral developmental purposes”, which serves to stabi-
lize Chinese development and simultaneously aid developing countries
(Strange, 2011, pp. 544–545). Indeed, relations between various mem-
bers of the GCC and the BICs are often framed in policy rhetoric as part
of the strengthening of South–South cooperation and economic devel-
opment not tied to Western interests (Chin and Thakur, 2010; Amorim,
2011a; Momani and Ennis, 2012). This contributes to something of

a normative illusion of good-will or solidarity from “southern” actors
as opposed to calculated pursuits of economic benefits. For instance,
Strange argues that China’s recent engagement in resource diplomacy
provides an “example of the projection of monetary power that has
challenged neoliberalism and US structural as well as hegemonic domi-
nance while securing China’s developmental objectives” (Strange, 2011,
p. 554). This is viewed as part of its management of its developmental
dependence on FDI for growth where China employs resource diplo-
macy targeting alliances with primary producers in the “semi-periphery
and the third world” (Strange, 2011, p. 546).
Perhaps China is perceived as a hegemonic challenge to an American
order exploiting globalization and the neoliberal order for its own man-
aged development. Yet, a view from inside other regions reveals further.
In the Gulf, intended or unintended, a consequence of the shift has
been the reconstitution of the Gulf’s structural position in the economic
order globally and the re-entrenchment of hydrocarbon pathologies
domestically. This aligns with trends seen elsewhere where developing
countries deepen their dependence on mineral extraction as emerg-
ing powers exert their weight, simultaneously contesting traditional
Western power and reinforcing a global capitalist economy which serves
their interests.
As with the BICs, the Gulf is embroiled in the processes and vicissi-
tudes of the global economy. Dominant economic activities illustrate
how hydrocarbons are at the heart of the region’s production circuit.
Although the Gulf has increasingly moved away from a simple focus
on the upstream sector, most activities are tied to this basic flow. Some
developments have more carefully integrated the Gulf into the global
economy. For instance, the expansion of the downstream sector saw for-
eign multinationals relocate to the Gulf for its less expensive feedstock.
Investment and industrialization in the downstream sector has resulted
in companies such as SABIC, the Saudi Basic Industries Company, in
Saudi Arabia becoming one of the top six petrochemical companies in
the world and the largest ethylene producer (Seznec and Kirk, 2010;
Hanieh, 2011; SABIC, n.d.).
However, continued economic development based on industrializa-
tion and sustained focus on downstream sectors is not likely to continue
to serve the Gulf well. With changing economic trends, including the
rise of the IT sector and trade in services, dedicated attention to stim-
ulating knowledge industries is required to remain competitive and
important to global value chains. Early de-industrialization threatens
to unravel carefully constructed political economies built on the oil

industry and capital accumulation. The nature and form of produc-
tion processes gives observers insight into the dynamics of state society
interaction domestically and helps us understand how increasing levels
of trade can impact domestic political economy structures. Certainly,
the “production of goods and services which creates both the wealth of
a society and the basis for a state’s ability to mobilise power behind its
foreign policy, takes place through a power relationship between those
who control and those who execute the tasks of production” (Cox, 1981,
pp. 134–135).
It should not be surprising, then, that the changing global demand
patterns have repercussions on diversification plans in the region. This
also means that the impact of decades of international financial insti-
tutions’ economic advice to the Gulf continues to influence economic
behavior and conceptions of what development endeavors are impor-
tant. In this way, the Gulf can be viewed as “fully capitalist and subject
to the same dynamics as other neighbouring states” (Hanieh, 2013,
p. 124). The rhetoric of market supremacy, even while the state plays a
major role, continues. Economic policy advice to Gulf economies gener-
ally prescribes one-size-fits-all development guidance that has resulted
in several ambitious programs which, in the end, do not correspond
with political and economic realities (Ennis, 2015). This can partially be
viewed as a market failure, in that market forces encourage the reliance
on one resource countering efforts for sustainability, and also provide
incentive structures (in the form of low-cost labor) that marginalize and
suppress both national and foreign labor.
Along with these market incentives, political considerations impact
the state’s economic reform impetus. Policy responses to popular pres-
sure and a politicized domestic and regional environment since 2011
indicate that Gulf governments hastily recoil well-laid diversification
plans and continue, or even intensify, networks of patronage and the
oversized role of the public sector. In addition to increased spending on
salaries and public jobs as mentioned earlier, governments continue to
utilize price controls, and energy and commodity subsidies as measures
to appease dissatisfaction with socio-economic and political outcomes.
Thus, market forces, combined with a political unwillingness to weaken
the state’s position, have resulted in a series of perverse incentive struc-
tures ultimately serving to reinforce developmental path dependencies
in the region.
Even though there may be a broader array of actors at the global eco-
nomic table, we continue to see a general maintenance of the status
quo. Emerging economies seem unable to alter the global capitalistic

order and, indeed, may not desire to do so. As Hanieh observes, the
globalized structure of the world market means that all major economic
players:
are deeply enmeshed in mutual trade and capital flows, sharing a

common interest in the stability of global capitalism. This means
they have little interest in seeing a qualitative break with the pat-
terns of uneven development in the Middle East, or with the region’s
embrace of neoliberal reforms.
(Hanieh, 2013, p. 44)
Within the region, the desire for status quo stability at domestic,
regional and global levels in the realms of security and economy perpet-
uates economic activities within the hegemony of economic liberalism.
This has undoubtedly led to a reinforcement of structurally embedded
economic challenges.
Conclusion
Economic ties around the world are being re-imagined. Whereas some
observers consider that the rise of emerging economies challenges
both the American and the liberal order, others suggest the con-
trary. This chapter has contended that neoliberal capitalism remains
hegemonic and similarly structures the interaction of emerging powers
in the global economy. The chapter has provided a preliminary view
of what the global economic redrawing has looked like with a view
from the Gulf. This contributes to an emerging body of literature on
how the rise of emerging economies impacts other regions and how
neoliberalism interacts in the non-West. This chapter has shown how
a desire for stability and preference for the status quo has propelled
Gulf economic activities within the hegemony of economic liberal-
ism and, alongside this, reinforced deep structural challenges in Gulf
economies. This can be interpreted as the region’s embrace of a vari-
ation of neoliberal rentierism that, while integrating economically in
the capitalist order, also contributes to an increasing primarization of
the economy in most Gulf States and facilitates the allocative model
with its distorting economic effects in all.6 During periods of high
oil income, this model has been effective. Yet, if oil prices maintain
their sluggish pace in the future, this will eventually upset a tentative
balance.
154
Appendix
Figure 6.5 Bahrain imports and exports

Figure 6.6 Kuwait imports and exports

Figure 6.7 Oman imports and exports

155
Figure 6.8 Qatar imports and exports

Figure 6.9 Saudi Arabia imports and exports

Figure 6.10 United Arab Emirates imports and exports

Notes
1. By Gulf States, I refer to the six member countries of the Gulf Cooperation
Council (GCC): Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the United
Arab Emirates (UAE). When I speak about Iran and Iraq, also Gulf countries,
I specify them by name.
2. The breakeven oil price refers to the price of oil required for governments to
keep their budget in balance, given their level of spending.
3. Special thanks to Guilherme Casarões for providing me an early view of his
forthcoming paper.
4. In fact, it was only South Africa, the newest member of the BRICS, that voted
in favor of intervention (Herz et al., 2011, p. 6).
5. This particularly applies to instances of laborer, contract violation, or domes-
tic labor abuse where countries such as India and the Philippines have been
making stronger statements and taking measures on the protection of their
nationals working abroad.
6. Dubai and Bahrain stand out against the trend of intensified oil activities,
although it should be noted that Dubai was bailed out by oil money when hit
by financial crisis in 2009, and Bahrain and Oman received financial support
from wealthier Gulf neighbors to respond to 2011 political turmoil.
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7
BRICS in Africa and
Underdevelopment: How
Different?
Ian Taylor
Barely a week passes without some new official report, media article,
or conference eulogizing Africa and its growth figures, this then being
automatically and uncritically extended to announcements about the
unlimited potential for capital accumulation and profit to be made in
this new frontier. This is natural, given the ongoing dominant social
system and its normative values where the underlying logic and driv-
ing force of capitalism and capital is the accumulation of profits; in the
words of Marx, the “boundless drive for enrichment” and the “passion-
ate chase after value” (Marx, 1867/1976, p. 254). It is this “dynamic of
endless accumulation” and quest for “accumulation for its own sake”
(Brenner, 2006, p. 80) that makes capitalism such a pioneering and pro-
ductive economic system, albeit intrinsically and pitilessly exploitative.
Played out in Africa, “Business conferences are filled with frothy talk of
African lions overtaking Asian tigers” (Economist, March 2, 2013).
What is interesting is the way in which the discourse about “Africa
Rising” reflects – and is an extension of – the wider narrative sur-
rounding emerging economies, mostly emblematically captured in the
acronym BRICS (Brazil, Russia, India, China and South Africa). The
BRICS term has become a neologism symbolizing a putative changing
world order where the normative principles associated with the capi-
talist core are allegedly threatened by a new set of alternatives. In fact,
“a new growth regime” has developed through integrating “emerging
markets” into the extant capitalist structures (Aglietta, 2008). This has
serious implications for those who place hope on the BRICS as centers
of resistance to the dominant neoliberal system. This is particularly (but
162
Ian Taylor 163
not exclusively) so with regard to Africa, where numerous elites and

intellectuals have greeted the BRICS as the heralds of a new dawn.
Clearly, the ever-increasing role of emerging economies in Africa has
been of importance to the continent. According to the United Nations
Economic Commission for Africa “trade with the BRICS has grown
faster than with any other region in the world, doubling since 2007
to $340 billion in 2012, and projected to reach $500 billion by 2015”
(UNECA, 2013a, p. 1). What has accompanied such developments is the
apparent sudden realization that Africa is not marginal to the world.
Sub-Saharan Africa is, in fact, very well integrated into the global system
and has been for decades. It is the pundits, as well as diverse speculators
and opportunists, who have abruptly discovered that Africa’s foreign
trade represents 45 percent of its Gross National Product (compared
with 30 percent for Asia and Latin America, and 15 percent for the core
countries). Quantitatively, the continent is “more”, not “less”, globally
integrated. However, the problem, which will be expounded upon as
this work progresses, is the terms of this integration.
Obviously, the situation depends on national context but, broadly,
“As a result of their colonial legacy, the present-day economies of the
African countries are characterized by a lop-sided dependence on the
export of raw materials, and the import of manufactured goods” (Harris,
1975, p. 12). That this assessment was written nearly 40 years ago and
that there has not been any radical departure from such a milieu for
most countries reflect the tragedy of much of Africa’s post-colonial tra-
jectories. Set in motion by colonialism and the insertion of Africa into
the global political economy, the status quo has been ably assisted by
the African elite political class – “the policemen of . . . multinational
corporations” (Nkrumah, 1970, p. 63).
Any analysis of Africa’s relations with the BRICS (or any other exter-
nal actors) needs to be grounded in the above understanding of the
dialectical relationships engendered. This necessarily recognizes that
“government serve as the foreman to keep civil society producing a sur-
plus to be accumulated by foreign finance capital and parasitic native
social classes that enjoy almost absolutist power” (Mentan, 2010, p. xii).
This latter clique needs some discussion.
The state–society complex in Africa
Due to the manner in which colonialism created states in Africa and

the nature of the independence process in most African countries, the
ruling classes lack hegemony over society (Gramsci, 1971). By the ruling
class, we mean the senior political elites and bureaucrats, the leading
members of the liberal professions, the nascent bourgeoisie and the top
members of the security arms of the state (Markovitz, 1987, p. 8). The
early years of post-colonial nationalism in Africa were, broadly speak-
ing, an attempt to build a hegemonic project which bound society
together around more issues than simply discontent with the impe-
rial powers. This project quickly collapsed into autocracy and failure,
a process accelerated by dynamics linked to the Cold War and to the
failure by the new political leaders to make a decisive break from the
past: “the nationalist movement which arose from the contradictions of
the colonial economy achieved political independence, not economic
independence” (Ake, 1981, p. 93). Consequently:
unlike the ascending bourgeoisie of Europe, which transformed all

political and economic institutions into its own image and became
socially hegemonic, the petit-bourgeoisie in Africa has no criteria of
its own, it merely inherited colonial institutions with which the mass
of the people did not identify.
(Nabudere, 2011, p. 58)
Of course, “Africa’s leaders are neither autonomous nor robots; they

reflect diverse class and fractional interests located within the continent
but separable from their extra-continental connections” (Shaw, 1985,
p. 5). These interests vary from state to state and within each state, too:
“state power rests in the hands of a local class or classes which consti-
tute the ruling class. This class or classes have their own class interests
arising from the place they occupy in social production” (Shivji, 1980,
p. 740). How the centralized organs of the state relate to external forces
depends on the positions of various domestic classes and the balance
of forces between the external and the internal. Indeed, “African inter-
ests can expel and exclude external interests should they wish to do so.
In practice, they rarely exercise this option, preferring to modify the
‘balance of power’ over time through almost continuous negotiation”
(Shivji, 1980, p. 11). While “Condemnation there must be; but compas-
sion too, for those who talked so boldly about freedom but had so little
room for manoeuvre” (First, 1982, p. 465), this dialectic is central to
any analysis of Africa’s international relations and the agency of African
governments.
Within the realm of the superstructure, moral and political
modes that rise above notions of economic-corporate interests and,
instead, reflect broader ethico-political ones have remained missing.
Ian Taylor 165
Consequently, because the ruling classes have been unable to preside

over a hegemonic project that is viewed as legitimate, they have been
forced to revert to modalities of governance that seek to dominate.
These are commonly expressed through both the threat and actual use
of violence and the immediate disbursal of material benefits to sup-
porters within the context of neopatrimonial regimes. Without these
twin strategies, the ruling elites in much of Africa cannot maintain
order. After all, “the state [in Africa], unlike the bourgeois state, is not
entrenched in the society as a whole. It is . . . a bureaucratic connivance”
(Mafeje, 1992, p. 31). What ideological legitimacy, “in the sense of a
theoretical legitimation of the status quo . . . is expressed in the concept
of ‘development’, which is ‘that which we are all in favour of’ and given
statistical respectability in figures measuring the growth of commodity
production” (Williams, 1980, p. 40). Beyond such rhetoric however, the
substance of this belief in “development” is pretty thin.
The sort of political culture that has matured has had impor-
tant consequences for Africa, further adding to the problematique
of underdevelopment. Here, a brief definition of what we mean is
required. The orthodox criterion is the per capita measurement of
national income, used in a rather formalized comparative fashion. This
study follows Tamás Szentes’ objection to such quantitative indices as
“they do not point out qualitative sameness and differences” (1971,
p. 25). Underdevelopment is a much too multifaceted phenomenon,
irreducible to mere quantitative portrayals. Instead:
there are two aspects, two sides of underdevelopment: the basically

external, international aspect, which, from the historical point of
view of the emergence of the present state, is the primary aspect;
and the internal aspect, which from the point of view of future
development, is increasingly important.
(Szentes, 1971, p. 163)
In short, “poverty [is] not the result of some historical game of chance
in which [Africa] happened to be the losers; it [is] the result of a set
of economic relationships, rooted in the colonial era, that [has] served
to enrich a minority by impoverishing the majority” (Adamson, 2013,
p. 12).
In general, the modes of governance in Africa have encouraged despo-
tism and unpredictability. As a result, for most of the post-colonial
period, much of Africa has been trapped in cycles of crises, which
have stimulated societal conflict. Although Africa’s elites undoubtedly
command the state apparatus, with varying levels of intensity their own
practices often undermine and subvert the state’s institutions on a daily
basis. The relative autonomy of the state is absent and their rule is
intrinsically unstable, even though many manage to cling tenaciously to
power (Fatton, 1999). There is very little political space to allow reform.
Instead of a stable hegemonic project that binds different levels of soci-
ety together, what exist are intrinsically unstable personalized systems of
domination. Corruption is the cement that binds the system together
and links the patron and their predatory ruling class together. If polit-
ical elites do ever articulate a vision for the country, “their notion of
emerging out of economic backwardness amounts essentially to West-
ernisation”, where “the general trend is to try and stimulate economic
growth within the context of the existing neocolonial economic struc-
ture” (Ake, 1981, p. 139). This is, indeed, an accurate appraisal of the
contemporary “development strategies” which characterize much of
Africa, only now with the BRICS included, furthering the continent’s
underdevelopment.
Underdevelopment is a dynamic – not static – condition; it is a
relationship and:
expresses a particular relationship of exploitation: namely, the

exploitation of one country by another. All of the countries named
as ‘underdeveloped’ in the world are exploited by others; and the
underdevelopment with which the world is now pre-occupied is a
product of capitalist, imperialist and colonialist exploitation.
(Rodney, 2012, p. 14)
The external domination of Africa’s economies and the pathologies of

dependency that this engenders, constructed during the colonial period,
have proven markedly resilient. “The root dilemma of Africa’s economic
development has been the asymmetry between the role of the conti-
nent in the world and the degree to which that world . . . has penetrated
Africa” (Austen, 1987, p. 271). Broadly speaking:
The rigidity of the international division of labour has not allowed

African economies to break out of the role of primary producers, for
reasons which include lack of access to technology, the comparative
advantage of the industrialised nations in manufacturing, and the
constraints of the domestic market.
(Ake, 1981, p. 92)
Ian Taylor 167
Indeed, African economies are integrated into the very economies of the
developed economies in a way that is unfavorable to Africa and ensures
structural dependence. In short:
the geo-economy of [Africa] depends on two production systems that

determine its structures and define its place in the global system:
(1) the export of ‘tropical’ agricultural products: coffee, cocoa, cot-
ton, peanuts, fruits, oil palm, etc.; and (2) hydrocarbons and minerals:
copper, gold, rare metals, diamonds, etc.
(Amin, 2010, p. 30)
This has not radically changed since independence and is overlooked

in the excitement both to anoint Africa as the new frontier of opportu-
nity for speculators and to exaggerate the role of emerging economies as
potential redeemers.
“Africa rising”
The “Africa Rising” discourse neglects a most fundamental context:
only for nine of the forty three [sub-Saharan] countries were growth
rates during 1980–2008 high enough to double per capita income
in less than thirty years, and only sixteen in less than one hundred
years. Performance would have been considerably worse had it not
been for the brief years of relatively rapid growth in the mid-2000s.
(Weeks, 2010, p. 3)
Africa needs to grow at least 7 percent a year for the next 20 or 30 years
if any serious tackling of continental poverty is to be realized. However,
growth induced by commodity prices increases, new discoveries of nat-
ural resources or increase in sources of foreign capital “is simply not
sustainable” (Amoako, 2011, p. 24).
What GDP growth that has occurred:
is overwhelmingly characterised by the deployment and inflow of

capital intensive investment for the extraction and exportation of
African natural resources. There is a distinct lack of value added on
the African side. The principal focus of this activity is in oil which
not only offers limited opportunities for local employment, but also
deliberately and actively seeks to avoid the hiring of African labour
for fear of encountering resistance and the costs of appeasing affected

local communities.
(Southall, 2008, p. 148)
Problematically:
while the hope of the development literature has been that higher
rates of inflow of capital investment will have downstream effects
on African employment (through increased government revenues
and spending alongside an injection of consumer wealth into local
economies), there is little evidence that this will take place on
a substantial scale. The fundamental reason for this is that the
[growth] rests heavily on the engagements of foreign governments
and corporations with African elites.
(Southall, 2008, p. 149)
In most neopatrimonial administrations, sustainable and broad-based

development is unlikely to occur (cf. Kelsall, 2013).
In late 2012, the Deputy Executive Secretary of the Economic Com-
mission for Africa noted that Africa’s relatively good economic growth
performance over the previous decade had been driven mostly by non-
renewable natural resources and high commodity prices. Alongside this,
he noted, de-industrialization had been a key feature, with the share
of manufacturing in Africa’s GDP falling from 15 percent in 1990 to
10 percent in 2008, going hand-in-hand with an increase in unemploy-
ment (Addis Tribune, December 8, 2012). McMillan and Rodrik (2011)
show that, since 1990, Africa has experienced a relative shift in the
composition of employment towards sectors that create too few high
productivity jobs. Manufacturing growth has been near the bottom in
12 growth sectors – only public administration lagged behind.
This, of course, is not to write off the recent growth as devoid of
any value at all. At the minimum, improved fiscal space is being gen-
erated. Retail sectors are growing, with revenue increasing by around
4 percent per year, and there is growing investment in infrastructure
(McKinsey Global Institute, 2010). Given that there is a correlation
“between infrastructure and export diversification, and the current low
levels and distorted composition of exports from SSA [sub-Saharan
Africa] are partly due to poor trade infrastructure,” it can be stated
that the improvement in infrastructure “has per se a positive impact
on SSA growth and trade capacity” (Sindzingre, 2013, p. 44). Africa’s
debts have fallen, partly thanks to the Heavily Indebted Poor Countries
Ian Taylor 169
Initiative (HIPC) and the Multilateral Debt Relief Initiative, and partly
due to improved management, although note that “in spite of the HIPC
initiative, only half of SSA countries have witnessed a temporary reduc-
tion of their annual debt service” (Petithomme, 2013, p. 119). In social
sectors, performance is varied but increases in the years of schooling are
reported across the continent, albeit unevenly. Health outcomes, partic-
ularly life expectancy at birth, have also generally improved – in some
countries, substantially. These are all obviously to be welcomed.
However, there is a desperate need to convert natural resources and
high commodity prices into structural change, “defined as an increase in
the share of industry or services in the economy, or as the diversification
and sophistication of exports . . . or as the shift of workers from sectors
with low labour productivity to those with high labour productivity”
(Sindzingre, 2013, p. 26). This is not happening. Instead, with the arrival
of emerging economies in Africa alongside traditional trade associates,
the historical process of underdevelopment is in danger of being further
entrenched.
The new saviors?
Comprehension of the extent of the challenges facing the continent,

as well as the actual nature of Africa’s insertion into the global order
is vitally needed, as is a more critical look at some of the “new” actors
engaging in Africa (see Carmody, 2013). These have been held up in
some quarters as the new saviors of Africa – the latest cargo cult to
latch onto. In the process, the huge variation in each economic and
social profile is flattened out and all are collapsed together as “the
BRICS”, as if they somehow constitute a unified bloc of similar-status
nations. A quick glance at some figures demonstrates that this is wholly
inaccurate.
It is true that the emergence of new or “non-traditional” actors in
Africa has opened up varying degrees of space for African elites to
maneuver (Table 7.1). Problematically, however, this has been seized on
as evidence of a new and emerging set of dynamics in international
politics, one that creates room for alternatives to neoliberal capitalism.
Walter Mignolo, for example, asserts that “The economic success of the
BRICS countries comes from the fact that the leadership is engaged in
epistemic economic disobedience vis-à-vis the IMF and World Bank”
(2012, p. 43). Martyn Davies of Frontier Advisory (a research, strategy
and investment advisory firm) similarly asserts about the BRICS that
“After the onset of the (Western) financial crisis of 2008, there has
Table 7.1 General indicators of the BRICS
Population Total GDP GDP Per capita Share in Ease of doing

(millions) in US$ growth GDP in world business
(2011) rate (2011) US$ (2011) GDP (%) ranking
Brazil 197 2.4 trillion 2.7% 12,594 2.9 126

Russia 143 1.8 trillion 4.3% 12,995 3.0 120
India 1.2 billion 1.8 trillion 6.3% 1,509 5.4 132
China 1.3 billion 7.3 trillion 9.3% 5,445 13.6 91
South Africa 52 408 billion 3.1% 8,070 0.7 35
Source: World Bank (2013).
been a deep questioning of the free market ideology” (Financial Times,

March 25, 2013). This naïvety really does need challenging.
Such jubilation is somewhat redolent of Bill Warren’s thesis (1973)
that argued that the Third World, under the effect of local industrial
development, was storming ahead, playing a progressive role in reduc-
ing the gap between the core and the developing world. Yet, just then
as now, such predictions were based on growth per capita figures which
seemed to suggest a noteworthy redistribution of world industrial power.
However, as McMichael et al. (1974) wrote in their rebuttal of Warren’s
argument:
To measure distribution of world industrial power by “growth rates”

of industry, which include economies starting from the barest min-
imum of industrial production and cover a generation, is delightful
simplicity. The volume of production, the level of technology, the
research capabilities, the allocation of resources, the development of
education and the use of manpower, are equally or more relevant to
measuring the historic capacity of a country to become a significant
industrial power. Warren wishes to prove a “redistribution” of indus-
trial power, but can only scrape up a one percent difference in the
industrial growth rate between the imperial centres and the Third
World: a very slender reed upon which to hang such a weighty claim!
This might be reflected upon today. While per capita growth rates are
most relevant with regard to standards of living, from the evaluation
of any notional distribution of industrial power and the growth of the
market globally, industrial production rates are key. Aggregating figures
from the World Factbook suggests that, while the BRICS are doing well,
they are not doing that much better than the capitalist core. While in
Ian Taylor 171
2010, the average industrial production growth rate for the BRICS was
8.7 percent and for the G-7, 5.6 percent, in 2011 estimates were that
the BRICS average was 5.24 percent, while the G-7 was 1.96 percent.
This sounds substantial. However, if one leaves out Japan’s negative rates
(distorted by the earthquake and tsunami), then the G-7 (minus Japan)
have an average industrial production growth rate of 5.7 percent. This
might well indeed be “a very slender reed” upon which to announce the
replacement of the West by the BRICS.
Besides, the cost to the global ecology is never factored: “all eyes are
on the so-called emerging powers. Why? Because they have rocked the
global economy with their stunning GDP growth rates. Never mind, of
course, the cost in terms of ecological degradation and social impover-
ishments that the achievement of this status has implied” (Fioramonti,
2013, p. 154). Indeed, “According to the International Energy Agency
(IEA), the four BRIC economies alone account for over a third of global
carbon emissions caused by land use and deforestation” (International
Energy Agency, 2012a). And, of course, the status of the BRICS as poster
children for gross inequality is equally ignored:
Data from household statistics reveal that income inequalities in

all BRICS countries have remained well above the . . . OECD average.
From the early 1990s to the late 2000s, China, India, the Russian Fed-
eration and South Africa all saw steep increases in income inequality.
In the same period, Brazil’s Gini indicator was almost twice as large
as the OECD average.
(Ivins, 2013, p. 3)
Background noise about South–South solidarity aside, none of the BRICS

has any serious agenda to change the world. There is no ideal world
order that the BRICS wish to promote. Rather, increasing the bargaining
power of the elites from the BRICS with the core is the sum total of any
“vision”:
BRIC states, while officially denouncing US-originated neoliberalism

are implementing neoliberal economic policies to boost their own
economic growth . . . The rise of the BRIC states will not bring the
new economic world-order nor bring the redistribution of economic
power through the existing system, since the BRIC states have in
general accepted (not all of them in the same degree) the neoliberal
economic ideology and applied neoliberal economic policies or some
of its aspects.
(Kurečić and Bandov, 2011, p. 30)
This is an important point to make. During the period of economic

growth in emerging economies, a variety of non-academic commen-
tators emerged to gloat that the core was finished and that the future
belonged elsewhere. Deploying a rather crude Occidentalism to castigate
the West for every evil, an unprocessed form of Asian triumphal-
ism (in particular) momentarily took stage. Unformed but provocative
statements were temporarily listened to during a time when the core
appeared to be in irrecoverable crisis (see e.g. Mahbubani, 2008). Anal-
ysis such as this now seems rather embarrassing. As Sharma (2014,
p. 52) notes, such media pundits “stopped looking at emerging mar-
kets as individual stories and started lumping them into faceless packs”
and objectified spatial entities (such as “the New Asian Hemisphere”).
“They listened too closely to political leaders in the emerging world who
took credit for the boom and ignored the other global forces, such as
easy money coming out of the United States and Europe, that helped
power growth”. Some “experts” even “cited the seventeenth-century
economic might of China and India as evidence that they would dom-
inate the coming decade, even the coming century” (Sharma, 2014,
p. 53). Emblematically, “From year 1 to 1820, China and India pro-
vided the world’s two largest economies. By 2050, we will return to
the historical norm” (Mahbubani, 2011, p. 132). This supremacism,
however, was merely a celebration of elitism, hierarchy, inequality
and local imperialism; after all, “China and India dominated merely
based on the size of their populations, and economic production was
largely driven by the need to produce enough food for the masses to
survive and for the small elite to preserve their higher standards of
living” (Lin and Rosenblatt, 2012, p. 173). As one source caustically
notes:
The future is seen in terms of a historical continuity ruptured tem-

porarily by a couple of hundred years of decline . . . Celebration of
thousands of years of historical glory, punctured only by attacks by
hostile forces from without and disunity within, takes the place of the
emancipatory, progressive liberatory impulse of anticolonial or revo-
lutionary nationalisms. The source of pride is the emergent nation,
but one which is merely a modern expression of an ancient civilisa-
tional entity. There is limited tolerance of dissent from this picture of
centuries of glory upset by decades of humiliation that are over now
and will soon be followed by a regaining of rightful place as a great
power in the scheme of things.
(Anand, 2011, p. 75)
Ian Taylor 173
Interestingly, the relative rise in profile of these emerging economies has

gone hand-in-hand with internal developments within Africa where,
under strong pressure from the international financial institutions and
Western donors, many African states have opened up their economies
through deregulation, privatization, and so on. In a number of African
countries, the elites have bought into the neoliberal message and now
actively seek to attract foreign investment. These two factors have served
to facilitate the expansion of foreign capital in Africa more broadly, and
from emerging economies in particular.
Yet, alongside some new developments, many continuities remain the
same. There has been a huge rise in commodity prices and this has
contributed in a considerable way to Africa’s impressive growth figures,
if taken as an increase in GDP per capita, but the benefit to African
economies in terms of providing a sustained platform for development
is far more muted. After all, “growth is a quantitative process, involving
principally the extension of an already established structure of produc-
tion, whereas development suggests qualitative changes, the creation of
new economic and non-economic structure” (Dowd, 1967, p. 153). Per-
tinent to the notion of an “Africa Rising” are the words of Amin (2014,
p. 139):
Emergence is not measured by a rising rate of GDP growth (or

exports) . . . nor the fact that the society in question has obtained
a higher level of GDP per capita, as defined by the World Bank,
aid institutions controlled by Western powers, and conventional
economists. Emergence involves much more: a sustained growth
in industrial production in the state [or region] in question and a
strengthening of the capacity of these industries to be competitive
on a global scale.
A key question about the role of emerging economies in Africa is

whether routine collusion between exploitative foreign actors and dys-
functional regimes – a depressing and undeniable feature of Africa’s
international relations – may be simply reproduced. This is precisely
what Mallam Sanusi Lamido Sanusi, the Governor of the Central Bank
of Nigeria, warned against in March 2013 when, specifically speaking
about Sino-Nigerian ties, he asserted that:
China takes from us primary goods and sells us manufactured ones.

This was also the essence of colonialism. China is no longer a fel-
low underdeveloped economy. China is the second biggest economy
in the world, an economic giant capable of the same forms of

exploitation as the West. China is a major contributor to the de-
industrialisation of Africa and thus African underdevelopment.
(This Day, March 13, 2013)
Talking more broadly of the BRICS, the United Nations Economic

Commission for Africa notes:
[BRICS-Africa] trade is in primary commodities with few linkages to

the rest of the economy and with most export earnings going to for-
eigners, and so Africa’s development and employment receive few
gains. Also, the growth of the BRICS suggests it will become harder
for African exporters to break into new (non-commodity) sectors –
and their home country producers (as in footwear or clothing) may
be hurt by the BRICS’ low-cost output.
(UNECA, 2013a, p. 1)
Some proponents of the “Africa Rising” trope have argued that improved
governance and modes of doing business have facilitated the upsurge in
African GDP. In a detailed study, Scott Taylor (2012) argues that a “hos-
pitable climate for business” has been spurred by institutional change,
and political and economic reform. This is one of the central arguments
around which much of the new-found optimism about Africa has been
built. For instance, the Oxford Companion to the Economics of Africa claims
that “improved macroeconomic frameworks and political governance
in a majority of countries were key drivers for the improved economic
performance” (Aryeetey et al., 2012, p. 8). The Economist cannot resist
its own spin on the story, claiming that “Africa’s retreat from socialist
economic models has generally made everyone better off” (Economist,
March 2, 2013). In fact however:
If one disaggregates the countries into conflict-affected, and those not

affected by conflict into petroleum exporters and others, the recovery
during 2004–2008 appears less impressive. For the twenty-nine coun-
tries that did not export petroleum and were not burdened by severe
conflict, the average growth rate in the second half of the 2000s was
hardly different from the average ten years before.
(Weeks, 2010, p. 6)
Already, what one representative from the African Development Bank

has referred to as export-led jobless growth in Africa characterizes the
Ian Taylor 175
current situation, where job creation at 3 percent per annum has trailed
far behind GDP growth (5.4 percent per annum) and way behind export
growth, which stands at 18.5 percent growth per annum (Ancharaz,
2011). Indeed, the UN Development Policy and Analysis Division noted
that Africa’s economic growth will “continue to be driven by expand-
ing economic ties with Asia, fiscal spending on infrastructure projects
and oil-exporting countries. While income per capita is anticipated to
grow, this will not be at a sufficient pace to accelerate poverty reduction”
(UNDESA, 2013). This makes nonsense of strident claims that:
What took the UK centuries can now be a matter of decades, even

years . . . Today Africa has the greatest room to boom on the back of
two centuries of global progress . . . In other words, Africa is ideally
poised to leapfrog centuries of industrial development . . . It has an
added advantage in that it does not have to carry baggage from the
past.
(African Business, January, 2013, p. 19)
Thus, (yet another) commodity-driven boom in Africa, this time pro-

pelled by emerging economies, wipes the historical slate clean, makes
dependent relationships and unequal terms of trade vanish instanta-
neously, and positions the continent to reach OECD status virtually
overnight! Much of this is said to be hinged on the BRICS as the new
saviors.
Plus ça change, plus c’est la même chose
It hardly needs repeating here that most commodity-rich African coun-

tries, which are the main partners of the emerging economies on the
continent, have poor records in terms of inequality, human develop-
ment indices, and so on. With a few exceptions, such as Botswana
(which is, however, an extremely unequal society – see Taylor, 2003),
many are corrupt entities managed by leaders at the apex of neopat-
rimonial systems. These elites have been previously quite happy to
extract rent from Western corporations wishing to exploit their coun-
try’s resources. What is perhaps now new in Africa is the range of
competitors vying for attention. As Rampa et al. (2012, p. 248) note,
“It is clear that [emerging economies’] growing presence on the conti-
nent brings trade, massive investment in infrastructure and resources
development. Politically it helps Africa become more assertive in the
world and increases development aid and technical assistance.” This
should not however be seen in terms of India versus China, or France

versus the USA but is, rather, an expression of inter-capitalist compe-
tition, something which has long been integral to the global system.
What the emerging economies bring are more competitors and, at times,
different business practices, but the broad pattern remains the same. Yet,
we are told confidently that “[T]he Africa-pessimists have got it wrong”
(presumably including The Economist a few years ago) as “the engines
of development are still going strong. Democratic governance, political
participation and economic management look set to improve further”
(Economist, March 2, 2013).
The patterns of continuity are, of course, taking place within the con-
text of global capitalism, which historically has generated growth in the
centers and peripheries but in different ways.
Whereas at the centre growth is development – that is, it has an inte-

grating effect – in the periphery growth is not development, for its
effect is to disarticulate. Strictly speaking, growth in the periphery,
based on integration into the world market, is the development of
underdevelopment.
(Amin, 1974, pp. 18–19)
What is remarkable about the “Africa Rising” discourse is that this is

generally ignored: growth is fetishized and taken as a “good thing”
in its own right. There is no acknowledgment that what is occurring
reflects an ongoing trend of polarization, where there is “the concur-
rent construction of dominant centers and dominated peripheries, and
their reproduction deepening in each state” and continent (Amin, 2004,
p. 13).
Exploitation by capitalist productive relationships and the appropria-
tion of Africa’s economic surpluses characterizes the continent’s political
economies. Such a milieu encourages visionless African elites to focus
on the static comparative advantages of the spaces which they control.
Given the weak levels of diversification and strong concentrations in
specific export sectors, it is remarkable that a narrative has been built
that claims that Africa is “rising” in the absence of any indication of
a widening domestic manufacturing base or actual industrialization.
This is problematic, given that a task ahead for Africa is to develop
an industrial base that can assist the agricultural sector in its growth
and transformation. Both of these sectors could potentially compose
the engines of development, but only under conditions where the exi-
gencies of global capital were not paramount but, rather, domestic
Ian Taylor 177
and internal requirements of various social formations were prioritized.

A rebalancing away from allowing global capitalism to dictate the pace,
rather than the logic of domestic development, is absolutely central.
Yet, in the context of the new trading geographies being crafted, many
extant pathologies are being reproduced, even reified. As one commen-
tator puts it, the “BRIC’s trading approach towards Africa, while favour-
ing bilateral trade, does not encourage a . . . necessary African coherence
and regional integration. Rather, such an approach that is based on
mutual benefits, and thus not necessarily need-based, marginalises
countries with lower income, while favouring resource rich countries”
(Mbaye, n.d., p. 3). Such dynamics also reproduce dependency.
Due to the colonial experience, Africa was inserted into the global
division of labor in a particular fashion. This is well-known, and the
effect has been to generate and reproduce underdevelopment. As noted,
a central characteristic of capitalism is “development at one pole and
underdevelopment at the other” (Smith, 1990, p. 188) and this may
be graphically witnessed in Africa. As James Ferguson (2006, p. 38) has
noted:
Capital does not “flow” from New York to Angola’s oil fields, or from
London to Ghana’s gold mines; it hops, neatly skipping over most
of what is in between. Second, where capital has been coming to
Africa at all, it has largely been concentrated in spatially segregated,
socially “thin” mineral-extraction enclaves. Again, the “movement
of capital” here does not cover the globe; it connects discrete points
on it.
Replace New York with Brasilia or London with Beijing and the same
logic of spatially uneven investment applies to the dynamics of the
BRICS in Africa. Of course, the extraction of economic surplus by
global corporations, without reinvesting it to transform agriculture and
industry, has been a key feature of Africa’s political economy since inde-
pendence, with compliant elites collaborating in this venture (Amin,
2002).
Conclusion
The issue of Africa’s continuing underdevelopment cannot be ignored,

despite assertions that the emerging powers have brought something
new to the continent. In fact:
the empirical evidence on growth and policy related indicators is

consistent with the null hypothesis that more than twenty years
of so-called policy reform had limited impact on strengthening the
potential for rapid and sustainable growth in the sub-Saharan region.
The drivers of the brief recovery during the second half of the 2000s
appear to have been a commodity price boom, debt relief and a
decline in domestic conflicts.
(Weeks, 2010, p. 10)
World Bank figures with regard to the annual percentage growth rate of
GDP at market prices, based on constant local currency (for all income
levels, rounded up), compared with the movement of the Commodity
Price Index reveals an intimate link.
The years when sub-Saharan Africa’s growth figures surpassed 1996
levels (2004–2008) can be demonstrably linked to the period when
China and India (and other emerging economies) began to make huge
demands for commodities, as reflected in the Commodity Price Index
(CPI) (Table 7.2). In the realm of energy, concern over predicted declines
in petroleum reserves, apprehensions over the so-called “peak oil” sce-
nario, instability in the Middle East and oil price speculation placed
further pressure upwards on prices, peaking in 2008 (only to tum-
ble after the core underwent the worst recession in a century). This
reality is qualitatively different from the picture Goldman Sachs, Renais-
sance Capital et al. portray, where “spectacularly right” policies have
driven growth. Official reports from international organizations have,
at times, bolstered this latter interpretation, postulating Africa’s “eco-
nomic resurgence” as being hinged on the ability of the continent to
recover from the global crisis relatively quicker than other areas of the
world (World Economic Forum et al., 2011, p. v). While true in and of
itself, Africa’s growth record since around 2000 has occurred within the
context of overall global growth. In this regard, Africa’s growth has only
been around 1 percent higher than the world average: credible, but not
fantastic (African Development Bank, 2012).
The real story as it pertains to contemporary excitement about Africa
seems to be in the upsurge of interest in Africa by formerly non-
traditional actors. High economic growth in Africa must be understood
in the context of the rise in importance of various “emerging powers”
within the global political economy (Cornelissen, 2009). The rela-
tionship that these “new” powers have with Africa has elevated the
continent in the strategic thinking of the extant “traditional” (largely
ex-colonial) partners. As one French minister was quoted as saying,
Table 7.2 Correlation between GDP growth for SSA and the Commodity Price Index (CPI)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
GDP growth 1.3 0.9 −0.9 0.4 1.8 3.7 4.9 3.7 2.3 2.4 3.7 3.7 3.5 4.4 6.4 5.8 6.1 6.9 5.0 1.9 4.9 4.5 4.2
CPI 52.6 52.5 50.06 58.6 58.7 64.6 51.0 43.3 59.4 61.9 50.1 66.3 69.1 86.7 113.1 112.9 162.4 102.4 146.1 182.1 188.4
Source: World Bank, IMF data.

179
“Thanks to the Chinese, we [have] rediscovered that Africa is not a con-

tinent of crises and misery, but one of 800-million consumers” (Business
Day, October 19, 2007). Though this comment was directed at the “rise”
of China in Africa (see Taylor, 2009), it might be equally applied to rel-
atively new sets of economic and political linkages. Embedded in “a
fluid period of transition in the global balance of power and the interna-
tional state system characterized by traditional and emerging powers”,
the continent now plays a more prominent role in international poli-
tics (Kornegay and Landsberg, 2009, p. 171). Obviously, of fundamental
importance to Africa is what this development actually means.
Indeed, such processes may be interpreted in alternative ways. It may
be put forward that these new actors now emerging are merely exploitive
and self-interested, overall just as damaging to Africa as the extant
and well-established set of relations with the traditional powers. Alter-
natively, these new relationships may be seen as somehow reflecting
South–South values (whatever that may mean) and contributing to
Africa’s developmental goals. This appears to be what many African
elites believe. Yet, it seems obvious that Africa is the weaker partner in
these new relationships. Specifically regarding the BRICS, actors from
those states are in Africa not because of some notional love of Africa
or Africans, but for reasons based on capitalist logics. Interest in gain-
ing access to natural resources in Africa is often central (Naidu et al.,
2009, p. 3). As Kimenyi and Lewis (2011, p. 20) put it, the attention of
emerging economies towards Africa “is not based on an altruistic goal
to improve the economic well-being of Africans”; rather, just like most
other external actors, actors from emerging economies are “trying to max-
imise their own strategic economic and political interests by engaging
with African countries.” Their relationships with sub-Saharan Africa do
not exhibit any notable “exceptionalism”, displaying patterns that are
“broadly similar to those of SSA ‘traditional’ partners and mostly rein-
force existing commodity-based export structures” (Sindzingre, 2013,
p. 45). This contrasts with the diplomatic claims made by the emerging
economies that their engagement with Africa is qualitatively different –
and better – than that of the North, with relentless incantations about
“South–South” ties, “solidarity”, “mutual benefits”, “win–win relations”
and “partnerships”.
A set of new relationships based on the intensification of natu-
ral resource extraction will be equally problematic. One of the key
lessons for Africa from the financial crisis was that those countries that
were more diversified generally tended to be more resilient than those
that were highly dependent on a few primary commodities (Mutenyo,
Ian Taylor 181
2011, p. 29). Re-inscribing African dependence on commodities hardly

offers any novel framework to emerging relationships with Africa and
undermines the BRICS’ claims to be somehow “different”. Even if the
emphasis placed by some of the BRICS on addressing structural bottle-
necks in Africa has been beneficial for the continent, new roads and
railways in the absence of serious reforms will hardly make a sustainable
and long-term contribution.
This returns us to the question as to whether emerging economies’
increasing engagement with Africa is exploitive or benign. This question
can only be answered in a contextual manner, dependent upon which
actors from which emerging economy and in which sector of which
country in Africa is being discussed. But it is important to remember
that actors such as the BRICS have increased engagement with Africa as a
means to achieve their own economic and political goals and that, over-
all, Africa remains the weaker partner. The weakness is usually ascribed
to the continent’s dependent relationship in the international system
and Africa’s historic insertion into the global capitalist economy. How-
ever, dependence is “a historical process, a matrix of action” that permits
the prospect of alteration stemming from changes in the dynamics,
processes and organization of the international system and the fun-
damental tendencies within Africa’s political economy (Bayart, 2000,
p. 234). Current emergent trends, such as robust economic growth and
an increasing diversification of the continent’s international relations,
may play important roles in this regard, yet massive challenges remain.
The bulk of the growth in African exports since 2000 has been heav-
ily underpinned by mining-related commodities, deeply problematic
in terms of development. After all, the export growth that the Asian
economies used to leapfrog development was based on an increasing
list of manufactures. Africa is nowhere near that position.
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8
Reconfiguring Political Alliances
and the Role of Swing States: The
Strategy of Bolivia and Its Relations
with the BRICS
Óscar García Agustín
In July 2014, Russian Foreign Minister Sergei Lavrov was quoted saying
that the BRICS mechanism is now so developed that it “can transform
into a political alliance”. The creation of the BRICS bank was an impor-
tant step, as termed by Vladimir Putin, since it poses a clear challenge
to the International Monetary Fund and the “foreign policy decisions
made by the United States and their allies” (quoted in Durden, 2014).
With these words, Lavrov was making specific reference to the work
within the Group of 20 (G-20), where the BRICS has many allies, such
as Argentina, Mexico and Indonesia. According to him, these countries
“speak in the common voice with BRICS in the G-20 on the reform of
the international financial system” (quoted in Xinhua, 2014). Only one
month earlier and in a different context (the Group of 77 plus China
summit), the President of Bolivia, Evo Morales, turned out to be in
favor of the disappearance of the Security Council of the United Nations
(UN). His argumentation was based on the function he attributes to the
Security Council of reproducing asymmetrical power relations between
countries. Particularly, he claimed that “instead of assuring peace among
nations, it [the Security Council] has fostered war and the invasions
of imperial powers in order to expropriate the natural resources of the
invaded countries” (quoted in Vicepresidencia, 2014).
These developments reflect the changes that are taking place in the
global order. On the one hand, we find the configuration of a strong
economic and political power, still in a preliminary phase of common
development, such as the BRICS, which is creating its own mechanisms
185
and alliances with other countries. On the other hand, strong critiques
emerge from a country such as Bolivia, which has little global influence
on a traditional international organization such as the Security Council
of the UN, which is contributing to maintaining an unjust international
order. In other words, we see countries which are becoming stronger in
the global arena through the strengthening of their connections, such
as the BRICS, but which are also in need of political alliances with other
countries. At the same time, these are countries whose international vis-
ibility and impact are being enhanced through their alliances with other
emerging powers and alternative institutional frameworks, such as that
set up by the BRICS. These dynamics must be taken seriously and will
require the rethinking of both international relations and the frame-
work within which we analyze them by more focus being placed on the
ways in which political alliances are shaped.
In the literature, political alliances at the national level have been the-
orized in terms of cooperation between political parties in relation to
elections, the formation of governments and negotiation. International
alliances have typically been related to security policy and cooper-
ation with realist-oriented alliance theory, focusing on the ways in
which states engage in security cooperation on the international stage
and their rational-strategic motivations for doing so. However, interna-
tional political alliances suggest a broader notion of cooperation beyond
security and military. This chapter aims to conceptualize international
political alliances by moving beyond military, geopolitical and electoral-
political strategies, focusing instead on the ways in which political
alliances at the international level are implying a simultaneous devel-
opment of collective notions of norms, values and identity. Inspired by
literature on social movements theory on positionality and negotiation
identities, and within the framework of sociological institutionalism,
I analyze contextual processes in which one state influences and adapts
its strategies to contribute to the constitution of political alliances at
the international level by negotiating its identity and trying to achieve
common norms and values.
With this purpose in mind, I will draw on the notions of swing
states and interdependent hegemony. The latter refers to the current
international context and its configuration of power structures: the
reconfiguration of political alliances, which is currently taking place, is
coincident with a situation of declining hegemony of the USA and the
emergence of new global powers, especially the BRICS. This can be char-
acterized as a moment of interdependent hegemony. Swing states are
essential in this reconfiguration of political alliances, inasmuch as they
Óscar García Agustín 187
contribute to the geopolitical situation and pursue their own national

interests. However, the role of the swing states in the global order is
often overlooked. In order to gain further insight into the role played
by swing states in the global order, I focus on the case of Bolivia and
its relations with the BRICS countries. In an attempt to counteract the
global hegemony of the USA, on the one hand, and, on the other,
to foster an alternative, the BRICS are adapting to the new constella-
tion of alliances while trying to influence it. By analyzing the different
processes of regional integration in which Bolivia is involved (Alianza
Bolivariana para los Pueblos de Nuestra América (ALBA) and UNASUR),
the leading role assumed by Bolivia in taking over the presidency of
the G-77 + China and its clear support of the common framework that
has arisen through the BRICS (as well as the commercial agreements
with China and Brazil as the regional hegemon), I demonstrate how a
swing state such as Bolivia is gaining more influence by taking part in a
new political alliance, thereby contributing to the creation of common
norms and values within which Bolivian policies can be both included,
shaped and developed.
Swing states and interdependent hegemony
The BRICS have become a global actor (Graziani, 2014), slowly moving
from being a trade-related and economic coalition towards becoming
a political actor and speeding up the transition to a multipolar system
globally. One of the main differences when making comparisons with
other developing countries is that the members of the BRICS – partic-
ularly China, Brazil and India – are big countries. They are becoming
global players without needing “to adhere to a pre-established union or
to informally join a certain group of economies, or to accept the rules
of the game the way they are” (Olivié, 2012). This means that while we
are witnessing the decline of the USA as a global hegemon, other global
superpowers are emerging. Parag Khanna (2008a) talks about the Big
Three (the USA, the EU and China); Luis Astorga (2012) points out that
not only are there mainly two great powers (the USA and China), but
there are also emerging countries which can become superpowers (India,
Brazil and maybe the EU). What remains clear is that the global order is
moving towards multi-polarity, due to the lack of a sole hegemon and
the appearance of different superpowers.
In this regard, it would be useful to start by establishing some facts
about the shift which is taking place in the paradigm of hegemony.
Global hegemony entails “a situation in which one nation-state plays
a predominant role in organizing, regulating, and stabilizing the world

political economy” (Du Boff, 2003). The decline of US hegemony not
only includes the questioning of its economic, political and military
domination; it also implies the loss of efficiency of its diffusion of
ideological and cultural values, which has helped to legitimate the dom-
inance of the USA, perceived as the natural result of a historical progress
(Shor, 2010). Within the multi-polarity of the current order, the absence
of global hegemony is crucial in terms of the legitimation of ideolog-
ical values and the perception of which actors (if any, since this is
certainly doubtful) are capable of presenting their national values as
universal. However, the international interplay between the Big Three,
the emerging superpowers and also swing states would be missed if the
notion of hegemony were rejected altogether. Therefore, a new concept
of hegemony which addresses this interplay of actors, as well as the dis-
placement towards a multipolar order, must be developed. The notion
of “interdependent hegemony” can be valuable in accounting for the
intertwined and mutually shaping relations between the First World and
the Second World. Thus, interdependent hegemony can be defined:
First of all, as a dialectic interdependent relationship between the

existing constellations of international order and the emerging pow-
ers in terms of mutual opportunities, constraints and challenges, and
secondly, as constitution of alliances based on regional collabora-
tion in order to contain and overcome hegemony derived from one
national power only.
(Li and García Agustín, 2014, p. 55)
Within this framework, it is necessary to consider the relationship

between the USA (no longer hegemonic but still dominant); the emerg-
ing superpowers, such as the BRICS; and swing states, which assume
a determinant function since they become part of different political
alliances in the era of interdependent hegemony. In this way, swing
states contribute to the strengthening of the multilateral order.
The concept of swing states must be explained, as well. The concept
has been elaborated in works by Parag Khanna and Daniel Kliman. Here,
I briefly present some of the characteristics of swing states, according to
both authors, before I move on to modify the concept in light of the cur-
rent moment of interdependent hegemony. Khanna’s understanding of
swing states was developed as a part of his concept of the Second World,
applied to countries in Eastern Europe and Central Asia, Latin America,
the Middle East and Southeast Asia. These countries are “both rich and
poor, developed and underdeveloped, postmodern and premodern, cos-

mopolitan and tribal – all at the same time” (Khanna, 2008b). All these
countries want globalization without having to follow the American
patron, and they are all players in the geopolitical marketplace. Khanna
considers the Second World countries to be swing states, without mak-
ing any specific distinctions between them. He identifies three main
characteristics for Second World nations (Khanna, 2012): they do not
look to great powers for leadership, but to gain influence and promote
their own interests; they will become global players through strategi-
cally forging new regional power relations; and they are searching for
new modes of governance and economic ordering which are different
from those in the West. In sum, Second World states are “important
for their geographic position, natural resources and regional influence”
(Khanna, 2012, p. 62). What turned the Second World countries into
swing states was their capacity to determine which Big Three would be
decisive (Khanna, 2008a), and their ability to promote their interests in
their relations with the Big Three.
Daniel Kliman makes more delimited use of the concept as he talks
about “global swing states,” only including four: Brazil, India, Indonesia
and Turkey. Kliman explains the original meaning of the term “swing
state,” derived from American domestic politics. It refers to states (of the
American federal structure) which are decisive in the outcome of pres-
idential elections, not because they are large states (economically, or
in terms of population) but because the election results in these states
and their orientation towards the victory of one or the other party
makes them essential states that really matter in the outcome of the
presidential elections. The attributes of global swing countries, on the
other hand, are four (Kliman, 2012): they possess large and growing
economies; they occupy strategic locations in their regions; they con-
sider themselves to be democratic governments; and they do not offer
an alternative to the international order (neither do they reject it).
Kliman shows his concerns about China forging a new global order and
the main challenge that this poses for the other Big Two (the USA and
the EU) in terms of being capable of being included in the coming global
order.
Although Kliman effectively emphasizes the decisive role played by
global swing states to define the global order (which creates an inter-
dependence between the Big Three and swing states), he reduces the
number of swing states too much and, as opposed to the domestic
swing states in the USA, values states that have strong economies and
are geographically well situated. Khanna captures the diversity of swing
states more convincingly and stresses that they are both regional and
global players whose interaction with superpowers is characterized by
the strategic movements of swing states themselves, aiming at promot-
ing their own interests. However, Khanna’s conception of swing states
underlines the autonomy of the states and ignores how regional and
global relationships are also constitutive, and shape the interests and
identity of swing states. Furthermore, he does not consider that being
part of political alliances entails the existence of shared values and the
constitution of collective international identities. For this reason, I now
turn to explaining how sociological institutionalism (and inspiration
from social movement theory) can serve as an adequate framework for
accounting for swing states in the context of interdependent hegemony.
Sociological institutionalism
In order to understand the situation in which emerging powers belong-

ing to the Second World are gaining major global relevance through
their alliances in the multipolar order, I draw on some of the assump-
tions of Sociological Institutionalism, combined with the conceptual-
ization of political alliances as developed by social movements and
feminist theory. I propose a framework characterized by three elements:
institutionalization, positionality and a flexible logic of appropriate-
ness. This allows us to conceptualize international political alliances
by moving beyond the military and the geopolitical realm, as well
as electoral-political strategies, focusing instead on the ways in which
political alliances at the international level imply a simultaneous devel-
opment of collective notions of norms, values and identity. Sociological
Institutionalism questions the rationality (based on the criteria of max-
imum efficiency) attributed to the actions carried out by nation states
and emphasizes how the sociocultural context shapes, and even consti-
tutes, social actors (Awesti, 2007; Schofer et al., 2012). I follow Peter
A. Hall and Rosemary C.R. Taylor (1996) in their characterization of
Sociological Institutionalism, which is based on three features: a broad
definition of institutions, the mutual influence of identity and context,
and the explanation of change. I adapt these principles to the current
context of swing states as described above.
Firstly, institutions cannot be reduced to organizations, since the
former hold a broader meaning for Sociological Institutionalism and
include formal rules, norms and cognitive scripts, as well as frames of
meaning (Hall and Taylor, 1996). In this sense, norm diffusion con-
ceived as a three-stage process, as elaborated by Martha Finnemore and
Kathryn Sikkink (1998), is very useful. According to the authors, the

first stage is “norm emergence”; the second, involving acceptance, is
“norm cascade;” and the third is “internalization”. With this distinc-
tion, Finnemore and Sikkink explain how the process whereby norms
initially fostered by norm entrepreneurs in their attempt to convince
other countries to embrace their norms become socialized (and other
countries likewise become norm followers) and, finally, internalized and
unquestioned in the public debate and in the international order.
Secondly, Sociological Institutionalism shows the “highly-interactive
and mutually-constitutive character of the relationship between institu-
tions and individual action” (Hall and Taylor, 1996, p. 15). Although it is
undeniable that individuals, or states, are aiming at achieving their own
goals and pursue their own interests, their actions and motivations are
also socio-culturally constituted, since behavior is influenced by norms
and cognitive scripts in certain contexts.
Finally, Sociological Institutionalism places a specific focus on the
way in which institutional practices originate and change. In this con-
text, it is particularly relevant to mention the work of James G. March
and Johan P. Olsen (2005). These authors explore the interrelations
between change and continuity within institutions, while considering
the interrelations between adaptation and radical change. They pro-
pose the concept of the “logic of appropriateness” (March and Olsen,
2009) to account for reasons as to why some rules are followed, as they
seen as natural and legitimate, and others are not; and how actors, as
members of a political community, assume obligations, derived from
rules, and as a consequence act in accordance with what is perceived as
“appropriate.”
In the context of interdependent hegemony and the increasing role
of swing states, it is necessary to specify these three characteristics of
Sociological Institutionalism, i.e. a broad definition of institutions, the
mutual influence of identity and context, and the explanation of change
through the idea of the logic of appropriateness. It is too early to be talk-
ing about internalization as defined by Finnemore and Sikkink, but a
sufficient number of elements indicate that we are witnessing a moment
of “norm cascade” in which (global and regional) norm leaders are inter-
acting with swing states that are not merely followers, since they are
also contributing to establishing the norms that are being diffused. I see
the current phase as one of institutionalization; as a process of inclu-
sion and/or recognition of norms (Finnemore and Sikkink, 1998). This
process of institutionalization enhances the creation of relations and
interactions among actors in certain settings, as well as the vocabularies
and frames (i.e. discourses) used to define what is legitimate (and what
is not). Following Huntington, March and Olsen (2005) define “political
institutionalization” as the development of distinct political rules, prac-
tices and procedures independent of other institutions. In this sense,
the constitution of the BRICS enables a stage of institutionalization
in which political alliances can produce new institutions, in a broad
sense.
The mutual influence of actors and context is best understood in
the light of “positionality”. In the sociological tradition, contentious
politics is a form of organized social resistance against hegemony and
can be defined as “counter-hegemonic social and political action, in
which differently positioned participants come together to challenge
dominant systems of authority, in order to promote and enact alter-
native imaginaries” (Leitner et al., 2008, p. 157). The possibilities of a
counterhegemonic force must be tempered; however, the importance
of positionality, political alliances and the production of institutions
remain intact in the context of interdependent hegemony. In any case,
political alliances entail that “distinct positionalities and consequently
differences are negotiated, and contested, shaping the positionality of
the group/organization itself vis-à-vis the hegemon” (Leitner et al.,
2008). This does not imply that the relation to the other is not con-
tradictory and conflictual. What is essential is that these identities
are shaping one another through their interactions. National interests
not only respond to a rational strategy, but are shaped in the multi-
ple bilateral, regional and global interactions in which the country is
involved and its degree of implication in emerging political alliances.
Thus, this can best be understood with reference to how states “come to
share . . . collective identity” (Schimmelfennig, 2001), regardless of the
fact that such identity is neither closed nor totally coherent.
Finally, the “logic of appropriateness” must be revised as well. Coun-
tries, including swing states, not only adapt their behavior to the
political community, they also use their relevance as swing states to
introduce their own values and agendas as though these were shared
by the community. The lack of a coherent identity or hegemonic power
renders this logic more open to dynamics of change and it can be
expressed through the creation of new institutions, as well as through
the questioning of existing institutions. Therefore, I conceptualize this
as a flexible logic of appropriateness, inasmuch as it is a two-way
logic between the political community and the swing states, includ-
ing creative and critical dynamics. The theoretical framework can be
summarized in the following table:
Sociological Institutionalism Context of interdependent

hegemony
Broad definition of institutions Institutionalization

Mutual influence of identity and context Positionality
Explanation of change Flexible logic of appropriateness
In the following, I apply this framework to show how, as a swing

state, Bolivia assumes the new scenario of interdependent hegemony to
strengthen their national interest and international position against the
declining hegemony incarnated by the USA, and to participate in the
constitution of political alliances developed at the regional and global
levels.
Bolivia: Political alliances and changing positionalities
Together with Venezuela and Ecuador, Bolivia is usually included as part

of the new Latin American wave of socialist or national-populist coun-
tries. Rickard Lalander (2011) considers this socialism to be new, since
it is a decentralized socialism in which the key role of the state is com-
bined with strong local participation. Bolivia can be considered a swing
state, but it is not a de-ideologized country – at least, it has not been so
since Evo Morales became president in 2006. This is not to imply that
Bolivia does not act strategically but, rather, to underline that the ide-
ological component is made explicit at different levels. This is visible
in the sense that, although some alliances are founded on regional or
trade interest, the ideological identity is still present and influences the
framework of these alliances from the Bolivian perspective. Following
and complementing Lalander’s perspective, I analyze how the increasing
role of the state is combined with the expansion towards international
cooperation in the Bolivian case, in an attempt to gain influence and
strengthen their national political project.
The slowdown in Latin American growth rates since 2011, caused by
the decline in commodity prices, seems to put an end to the “golden
period” of growth which was initiated in 2004. During this period,
Bolivia was, together with countries such as Venezuela or Peru, among
the economies which benefitted the most from the commodity boom
(Werner, 2015). This affected Bolivia’s budget surplus, but the coun-
try has not experienced a deceleration, such as in Argentina, Brazil and
Venezuela. The GDP grew at an annual average rate of 5 percent between
2006 and 2013, and Bolivia was the fastest-growing economy in South
America in 2014 (Economist, 2015). Besides, political stability must not
be overlooked: Evo Morales was re-elected in 2009 and in 2014; a new
Constitution was approved by referendum in 2009 (with the aim of re-
founding Bolivia); and the involvement of the state in the economy,
together with the implementation of social programs against poverty,
has been significant.
These economic and political changes were carried out together with
a new foreign policy in which regional and international alliances were
expanded. This contributed to strengthening the national government
and to supporting a more multilateral system (Quitral, 2014). In the
following, I consider how Bolivia is embedded in the region through
ALBA and UNASUR, as well as its role in the global order through
its relationship with the BRICS and the role it has assumed in the
G-77 + China. I do so by applying the theoretical dimensions devel-
oped above, i.e. institutionalization, positionality and flexible logic of
appropriateness.
Bolivia as a regional player

The Latin American new regionalism emerged in a situation of strong
questioning of the policies of the Washington Consensus and its main
institutions, and of declining influence of the USA. The Bolivarian
Alliance for the Peoples of our America (ALBA), the Union of South
American Nations (UNASUR) and the Community of Latin American
and Caribbean States (CELAC) are examples of a new organizational
framework aimed towards a higher degree of autonomy and cooperation
in the region. It implies a new conception of sovereignty, accord-
ing to which national sovereignty is linked to the construction of a
regional polity (Legler, 2013), and cooperation between Latin and South
American states creates areas of interdependence and thereby the influ-
ence of other hegemonic powers, mainly the USA, diminishes (Ovando
and Aranda, 2013). This does not imply that there is no fragmentation
and that heterogeneity exists in all of these processes. Besides, the trade
relations between the USA and Latin American countries continue; this
is even still an undefined space of cooperation (Serbin, 2010).
However, it remains clear that the relation between national
sovereignty and regionalism is changing and that they are mutually
influencing each other in a context of interdependent hegemony in
which the USA has ceased to be the hegemon and no other hegemon
has emerged. It is relevant to raise the question of whether or not
this situation entails a regional vacuum, or if one or several regional
powers are playing a hegemonic role instead. In this sense, despite its
reluctance to assume the hegemonic position, Brazil has gained both
international and regional power with the creation of UNASUR and
the South American Defense Council (Varas, 2008; Stuenkel, 2013).
This hegemony is nuanced, however: Brazil has a close alliance with
Argentina, which is also a major player within UNASUR, and this would
lead Latin America to a non-hegemonic pole (Fryba Christensen, 2013).
Venezuela has held an important regional political leadership role, espe-
cially through the creation of ALBA. Consequently, and despite the
political and economic leaderships, the field of political alliances is open
to different types of regionalisms and the role of swing states in the
process of redefining their sovereignty.
This creates different potential situations of appropriateness in which
countries position themselves differently in processes of institutionaliza-
tion. In terms of collective identity, two main trends can be identified:
one opposing the interference of the USA, the another in favor of
strengthening the Latin American identity. As a country that is involved
in the various regional organizations, Bolivia constitutes different polit-
ical alliances which are reinforcing their regional role and the policies
carried out within the country.
Due to the search for alternatives to the Free Trade Area of the
Americas (FTAA) led by the USA, UNASUR and ALBA (Serbin, 2010)
present different types of regionalisms with more or less politicized
approaches, based on ideological principals, or on increasing the inte-
gration of the markets. Moreover, these organizations are the result of
two different types of leadership: the Venezuelan, which is evident in
ALBA; and the Brazilian, whose vision has been imposed in UNASUR.
Bolivia is moving between both and is fostering trade relations, while
expanding their ideological values and the particular political interests
of its government.
ALBA
ALBA emerged as a consequence of the cooperation between Cuba and
Venezuela. Its aim is to substitute the neoliberal principles of compet-
itiveness and free trade with those of complementarity and solidarity.
It assumes an anti-imperialist vision, which it applies at the interna-
tional level and the national level alike, since the dominant classes
contribute to maintaining imperialist interests within each country. For
this reason, according to ALBA, cooperation must be carried out by pop-
ular classes and not by the national elites if something is to change and
be done differently. This aspect shows how the regional and national
polities are intertwined, and it turns ALBA into a counterhegemonic

project; firstly, because of its opposition to the Free Trade Area of the
Americas (FTAA) and its search for a socialist alternative; and, secondly,
for trying to connect subaltern or oppressed classes beyond the nation
states. However, the idea of socialism is not completely defined (Alaniz,
2013) and it is understood as a new humanism grounded on freedom,
social justice, equality, planned economy and a strong importance given
to direct and participatory democracy. Furthermore, the socialist project
is mainly a personal one, led by the former Venezuelan president Hugo
Chávez, who expanded his national polity to the regional level and rein-
forced his opposition against the USA. Unsurprisingly, energy policy is
one of the major points on ALBA’s agenda.
The ideological proximity of Bolivia with Venezuela makes it easier to
share the principal values of socialism. Nonetheless, as this is happening
at the national level, talking about “communitarian socialism”, Bolivia
is emphasizing the indigenous nature of its policies. The concept of the
People’s Trade Treaty (TCP) was, indeed, introduced on the ALBA agenda
by Bolivia in 2006. The proposal was quite similar to the principles of
ALBA, but with more focus on cooperatives and indigenous culture. This
aspect is important in understanding how Bolivia assumes the values of
ALBA but complements these with the inclusion of indigenous values,
which have become an essential part of the national identity, especially
after Evo Morales assumed power. The role assigned to people in gen-
eral, and to social movements in particular, was institutionalized by the
creation of a Council of Social Movements, whose principals were set-
tled at the First Summit of the ALBA-TCP Council of Social Movements.
The summit was celebrated in Cochabamba, Bolivia; this acknowledges
the contribution of Bolivia, i.e. giving visibility and more presence to
popular forces.
The strong ideological content of ALBA can be seen in its firm
opposition to free trade agreements (FTAs). As a consequence, mem-
ber countries adapting ALBA’s actions to this norm will have a strong
sense of community. This is the case of the Andean Community (CAN),
whose members are Bolivia, Colombia, Ecuador and Peru. Venezuela
withdrew in 2006, when CAN was considering negotiating the FTA with
the USA; this would be incompatible with a project such as that rep-
resented by ALBA. When the European Union (EU) tried to achieve an
FTA with CAN in 2008, both Ecuador and Bolivia opposed this. Bolivia
took the hardest position against the negotiation, whereas Ecuador was
more flexible about the possibility of drawing up an agreement. Bolivia
rejected, in particular, the proposal on intellectual property and the lack
of recognition of asymmetries among countries. Besides, an ideologi-

cal reason was given for the rejection as there was concern that joining
forces with the EU would mean that the FTA would operate as a conven-
tional one (Fairlie, 2010). The EU decided to make bilateral agreements
with Colombia and Peru. Evo Morales claimed that this decision pro-
voked a serious division within CAN and he expressed his concerns
about the risk of losing the capacity to make national decisions had the
FTA been approved. This position was reaffirmed when Colombia and
Peru signed their agreements. In this case, Ecuador entirely supported
the position of Evo Morales.
Even though the main goal of ALBA is cooperation, rather than
trade, the importance of the ideological position in shaping collec-
tive identity becomes evident in the confluence between the regional
and the national agendas. This is the case of the acceptance speech
delivered by Evo Morales when he was re-elected as president: in the
speech he indicated that the USA would not impose decisions upon
him – emphasizing, in particular, Bolivian relationships with Cuba,
Iran and Venezuela (Altmann, 2010). The anti-imperialist discourse
is thus embedded in regional and international politics, and these
alliances acquire a counterhegemonic meaning. Bolivia is strengthening
its regional and international position, and the government is also mak-
ing its politics legitimate nationally by understanding them in the light
of the anti-imperial framework. It can be argued that anti-imperialism
and the rejection of the FTA in combination provide a coherent regional
identity. If this is true, it contributes to regional fragmentation as well,
as in the case of CAN; or to internal division, as illustrated by the case
of Nicaragua with its support of bilateral agreements.
The death of Hugo Chávez and the political instability in Venezuela
resulting from the presidency of Nicolás Maduro raise doubts about the
future of ALBA. Taking into account that Venezuela invested $150 mil-
lion to initiate ALBA and has so far been the economic engine of the
group, political developments in the country cannot but affect the
future prospects for ALBA. Neither Bolivia nor Ecuador can assume a
similar role within the organization as norm entrepreneurs. The pos-
sibility of a less ideological and more pragmatic approach is feasible,
especially if ALBA is restructured around economic cooperation with
China (Ellis, 2013), an approach which could gain more influence.
UNASUR
While ALBA is a Venezuelan initiative (in cooperation with Cuba),
UNASUR was initiated in Brazil. As a consequence of this difference,
the ways in which the relationship with the USA is understood also dif-
fer between the two: ALBA maintains an antagonistic and oppositional
position towards the USA, whereas UNASUR does not seek confronta-
tion and, instead, aims to shape an autonomous regional space to
improve the interaction with the USA and other international actors
(Serbin, 2010). The less ideological character of UNASUR and the more
pragmatic leading role of Brazil preclude a common identity based on
anti-imperialism, let alone socialism. In this sense, the idea of a Latin
American community is predominant, as are the interests in promot-
ing regional integration without interfering with national autonomy.
So far, it has been possible to shape a space in which more moderate
and radical political projects coexist. UNASUR is assuming the function
of offering solutions to Latin American problems through applying “the
subsidiary principle, that is to say decisions should be adopted at the
level that is most adequate for each case, without this meaning necessar-
ily that there is an antagonistic position” (Oyarzún, 2010, p. 35). Thus,
UNASUR is primarily an intergovernmental organization, rather than a
multilateral organization. Furthermore, UNASUR contributes to obtain-
ing a common position towards conflicts that are threatening security
and peace in Latin America.
Looking at UNASUR’s actions, we see how they influence domestic
politics; however, decisions are simultaneously being shaped by the
interests of its members (and the results of their negotiations). UNASUR
has been essential in solving conflicts and has played a decisive role
in supporting the governments in charge. Rut Diamint (2013) claims
that UNASUR is confusing the state with the government. Bolivia has
been supported by UNASUR on several occasions, and the position of
the government has been favored. However, different norms have been
at stake and different degrees of institutionalization. Here, I am focusing
on two cases which are meaningful in order to understand the regional
functions assumed by UNASUR and the Organization of American States
(OAS).
During the constitutional drafting process (2006–2010) in Bolivia,
the OAS and UNASUR intervened to promote democracy, and they
each held different positions (Arugay and Bonifaz, 2014). The recently
elected government of Evo Morales wanted to change the democratic
paradigm but was facing opposition within the Constitutive Assembly
established to define a new constitutional framework. The norms and
values of the OAS, supporting representative democracy, are in conflict
with the attempt to foster more direct and participatory democracy.
That is why the Bolivian government, as a member country, sought
support in UNASUR, where some countries hold the same values and
contribute to promoting them. The debate about the two competing
models of democracy was articulated at the national level, but the role
of the institutions in the socialization of norms and values were also
tested. The strategic decision of Bolivia to look to UNASUR for support
was made not only in order to reinforce the position of the govern-
ment in national deliberations, but also to question the capacity of the
OAS to continue exerting its influence in the region without being con-
tested. In terms of appropriateness, Bolivia did not need to adapt its
decisions; instead, it found a new regional framework in which its deci-
sions became legitimate in the common institutional context of shared
norms.
Another well-known situation is the mediation of UNASUR in the
Bolivian crisis in 2008, when Michelle Bachelet called for an extraor-
dinary summit in Santiago, and the Declaration of La Moneda was
adopted to support the government of Evo Morales. The process of for-
mulating a new constitution was strongly contested, not least as regards
some specific chapters on the recognition of indigenous rights and
the multinational nature of Bolivia. This led to tumultuous riots and
attempts to destabilize the government. Brazil did not succeed in medi-
ating in the conflict, and Venezuela was already defending a military
intervention. UNASUR assumed a moderate position based on negotia-
tion but strongly committed to the Bolivian government. The solution
of this conflict reflected two important aspects to bear in mind: UNASUR
replaced the OAS as the primary regional political forum, and leaders
from different political orientations agreed that the region would not
tolerate attacks on constitutional democracy. Thus, two conclusions can
be drawn: the USA was excluded from the negotiations and the solution
to the conflict – resulting in the exclusion of its position and values,
which were different from those assumed by UNASUR; and the declara-
tion reflected a moderate version, closer to the Brazilian position than
that of Venezuela (Salaverry, 2008). At the national level, legitimacy
was attributed to the government and, at the regional level, the role of
UNASUR was strengthened, as was the defense of constitutional democ-
racy and the processes of change that were taking place in different
countries.
Overall, UNASUR represents a less ideological regionalism than ALBA,
and it opens up the possibility of regional integration and the creation
of a framework in which the values and norms are mutually constitutive
for UNASUR and its members. Swing states such as Bolivia – or, at least,
the Morales government – are taking advantage of this situation in order
to gain a more relevant and significant position at the regional level

and thereby, simultaneously, attributing legitimacy to its decisions. This
would not have been possible in other regional organizations such as the
OAS, where the dynamic of interaction with the members is different.
Bolivia as a global player

The decline of US hegemony and the current situation of interdepen-
dent hegemony are acquiring relevance in the Latin American context.
Firstly, Latin America has traditionally been exposed to US interfer-
ence in their domestic policy, and this explains the feeling of anti-
imperialism, or at least mistrust, against the USA shared by most of
the countries, with Colombia being the most remarkable exception.
Secondly, one of the BRICS countries, Brazil, is the major actor in the
region. However, it cannot be considered as a sub-regional hegemon,
although its leading role is uncontestable, as is its capacity to moder-
ate the more antagonistic discourse against the USA, led by Venezuela.
Finally, the economic and diplomatic presence of one of the Big Three,
which is also a member of the BRICS, China, is more prominent with-
out implying any hegemonic intention in the Latin American region.
Therefore, the regional development presented above must be seen in
light of this global framework, where the rise of China is considered as
part of the US decline. This means that the BRICS can be interpreted as
contenders to the USA and, consequently, Latin America becomes part
of the same emerging form of contestation (Brand et al., 2012). In this
situation, characterized by a shift towards South–South cooperation, the
swing countries are finding an opportunity to forge new alliances and
become global players. Bolivia actually perceives the BRICS as a way to
gain major influence and legitimate its vision at the international level.
I will emphasize some aspects of Bolivia’s relationship with the BRICS
and, subsequently, show how it is using its presidency of the G-77 +
China to expand its values within this framework.
The BRICS
The announcement of the creation of the New Development Bank and
the Contingency Reserve Arrangement (CRA) is materializing, at least
as a first substantial step, the BRICS intentions to promote a multilat-
eral order and to offer alternatives to international institutions such as
the IMF and the World Bank Group, which have been strongly criti-
cized by the BRICS member countries. Through the existing financial
institutions, it was not possible to shape a more equitable system of gov-
ernance (Snytkova, 2015). The institutionalization of BRICS, based on
their discontent with international institutions, opens up the possibility

of new cooperations within the global South. The idea of cooperation is
grounded on the case of Bolivia and their rejection of the global role of
the USA. Since the rivalry with the USA is present, to varying degrees, in
the BRICS countries, Bolivia is framing this cooperation within its oppo-
sition to imperialism. On the one hand, Bolivia constitutes alliances
beyond the region and supports the position of the BRICS; on the other,
it constitutes a framework of legitimacy for its negotiations and the
decisions taken. Thus, linkages between the regional and the global
dynamics (from the South) are being enhanced and Bolivia, as a swing
state, is taking part in the shaping of global policies (following the
agenda of the BRICS) and taking the opportunity to promote its national
interests. In practical terms, besides its relation with Brazil, Bolivia has
reached bilateral agreements with China and Russia, and used the incip-
ient institutionalization to strengthen the institutionalization process in
Latin America.
If there is an agreement about the possibility of a new “financial archi-
tecture” through the increasing role of the BRICS and the opportunity
it represents for Latin America, there is also a risk of subordinating the
regional strategies to the BRICS strategy. The impression of a subordi-
nated strategy could be deduced from the words of the ambassador of
Russia to Bolivia, Leonid Golubev: “[Bolivia] can fit in the new political,
economic and financial organization of the BRICS group, . . . in any case,
Bolivia has to mobilize” (from IBCE to Instituto Boliviano de Comercio
Exterior, 2011). This may imply that Bolivia has to adapt to the norms
of the BRICS and support its global strategy. One interesting example is
the creation of the Bank of the South as a development bank, established
in 2009, whose objective was to challenge the dominance of the World
Bank and IMF in Latin America. However, the project has encountered
huge difficulties, and even more so after the deaths of Hugo Chávez, the
promoter of the idea, and the Argentinean president Nestor Kirchner.
Bolivia and Ecuador are continuing their efforts to concretize the project
and, in 2015, Evo Morales announced, together with Ricardo Patiño,
Minister of Foreign Affairs of Ecuador, the opening of the Bank. Thus,
there are now two projects for development banks disputing the hege-
mony of the IMF and the World Bank. Evo Morales sees the creation of
the BRICS bank as an opportunity to develop the Bank of the South, the
latter being integrated within the former. Despite the lack of a concrete
plan of how to implement this, Morales stressed the links of both banks
against the neoliberal policies implemented by the IMF and the World
Bank in the frame of the BRICS summit in Rio, Brazil, to which members
of UNASUR and CELAC were invited. This reflects the attempts to create
a (loose) sense of community against neoliberalism, as well as the fact
that difficulties in developing such organizations still exist, although
the statements from Latin American and BRICS countries are pointing
to the need for an alternative. These difficulties attributed to the BRICS
as a group may be extended to the Latin American countries.
The increasing negotiations with China and Russia are presented as
relations of cooperation and not of domination. Bolivian president
Morales (quoted in RT, 2014) claimed that: “our obligation is to work
together, although the American empire also promotes politics of inter-
vention whilst we are now interested in politics of liberation”. However,
the recent approach of Bolivia towards nuclear energy, poorly imple-
mented in Latin America, shows how Bolivia is becoming a follower
of norms as far as the relevance given by the BRICS to energy pol-
icy. The BRICS energy fund would, indeed, be used to support nuclear
expansion in Bolivia, and Russia offers assistance with nuclear energy
technology transfers and permanent training for Bolivian technicians
in various stages of the program. Furthermore, an agreement was signed
with Argentina; this was very supportive of the development of nuclear
energy. This is seen as a way of taking a position in the global order,
while the BRICS are expanding their energy policy and ensuring their
position as the principal nuclear suppliers. The vice president of Bolivia,
Álvaro García Linera, underlines this strategic movement: “Today a soci-
ety which is respected – and we respect ourselves – cannot remain on the
periphery, and we are not going to remain on the periphery” (Conca,
2014).
Bolivia is using both its regional influence (e.g. through ALBA and
UNASUR) to connect with the new global scene created by the BRICS.
At the national level, Bolivia is adapting to the norms of BRICS
values in order to gain a major global role. Nonetheless, degree to
which the regional Latin American strategy can also shape the BRICS
agenda remains unclear, although both are still lacking a well-articulated
project. In its approach to BRICS, Bolivia is still prioritizing its anti-
neoliberal position and the value of becoming a global player as a swing
state, rather than other consequences that could be derived from these
negotiations, such as the shift towards a new energy paradigm, or the
increasing influence of China.
G-77 + China
The Group of 77 was created within the UN and is an intergovernmen-
tal organization of developing countries which meet to articulate and
promote their common interests. The relevance of the G-77 + China

consists, on the one hand, in being the largest coalition of countries
from the global South which can promote major South–South coop-
eration and, on the other, in the membership of four of the BRICS
countries: China (as a special invitee), India, Brazil and South Africa
(hosting the summit of the group in 2015). In 2014, Evo Morales
assumed the presidency of the group, after being explicitly supported
by UNASUR, and the summit took place in Santa Cruz. The Bolivian
minister of the Presidency, Carlos Romero, highlighted the importance
of regional cooperation and its global projection in organizations such
as the G-77:
It somehow foresees as well the shaping of blocs, that are natu-

ral within spaces of integration, such as the blocs of Petrocaribe,
Mercosur, Unasur; all these blocs become intertwined, start to pre-
pare, and raise the expectations, the prominence, the importance of
an event as significant as the G77.
(Cambio, 2014)
Together with its recognition of the importance of regional cooperation

to the organization of global cooperation, Bolivia took the opportunity
to emphasize the values shared by the community of global South coun-
tries, but also to try to influence it. This intention remains clear from
the election of the topic of the summit: “New world order for living
well”. Bolivia selected one of the principles which have defined gov-
ernmental actions since Evo Morales became president: the living well,
which implies respect for Mother Nature (and more responsible environ-
mental policies), and an alternative model of development and growth.
The idea derives from indigenous tradition and was assumed as part
of the national values and the political framework. It implies that all
people have the opportunity of improving their living conditions and
access to basic services (such as education and health), which must be
a human right and an obligation for the state (Cabrera, 2014). The Dec-
laration of Santa Cruz, approved at the summit, includes these values
as collective values and questions the existing model of international
relations, arguing that it must be replaced by a multipolar order (Peña,
2014).
This positioning was also found in the context of the UN when, as
mentioned above, Morales proposed the dissolution of the UN Security
Council. Morales underlined the inability of the Council to guarantee
peace and the way in which it promotes war by preserving imperial
interests. The reform of the UN Security Council was, indeed, one of the
demands made by the BRICS as a prerequisite for including the repre-
sentation of developing countries and involving them in global politics.
A consensus exists in global South countries that the Council must be
reformed, and this adds more legitimacy to the G-77 + China when
talking about global governance and pushing for a social agenda.
As Katu Arkonada (2014) points out, Bolivia succeeded in embracing
two topics: institutional reform through the abolishment of the Security
Council, and the replacement of the Millennium Goals by a develop-
mental paradigm based on living well, together with the achievement
of closer cooperation among global South countries, as contestation
against imperialism. In both cases, Bolivia embedded its values and
norms within the global agenda of the G-77 and contributed to a mod-
erate opposition against the interests of the North, particularly the USA,
by fostering the need for more institutionalization of organizations
which represent the values of the community of the South.
Conclusions
Bolivia can be characterized as a swing state which is gaining influence

in the global context of interdependent hegemony through political
alliances and through regional and international cooperation. This is
a process characterized by a dual dynamic in which norms and values
are being created and shaped in interaction between Bolivian national
interests and spaces of regional and international cooperation. Regional
influence is used as a stepping stone towards gaining a position in
a global context; thus, Bolivian integration in ALBA and UNASUR is
linked to its role in the global order.
I analyzed these processes on the basis of a theoretical framework con-
stituted by the notions of institutionalization, positionality and flexible
logic of appropriateness. The current process of institutionalization (in
which US hegemony is declining and the BRICS are attempting to fos-
ter an alternative) makes room for negotiation of norms and legitimacy.
Hegemony is contested through new political, international alliances
made up of actors, with different positionalities, who mutually influence
each other. This means that identities and interests are being shaped
through interactions between the national, the regional and the global
level, in which the latter is characterized by multi-polarity. Thus, Bolivia
is adapting to political communities at the regional level as well as to
the BRICS, while simultaneously making attempts to introduce its own
values and agendas within these communities. It is taking advantage
of the openness of negotiation, which is characteristic of the current

stage of the institutionalization of a new hegemony. This interaction
between different political communities at the regional and global lev-
els and Bolivia as a swing state takes place in accordance with and in
negotiation with a flexible logic of appropriateness.
These dynamics are visible in the analysis of Bolivia as a swing state,
inasmuch as the collective identity at the regional level is constituted
around anti-imperialism (as a counter-hegemony) and resistance against
US hegemonic power, as well as Latin American identity and alternatives
to free trade policies. In this respect, Bolivia is assuming the values of
ALBA, while contributing to their negotiation through the introduction
of Bolivian features, i.e. indigenous values and the importance of popu-
lar forces. At the global level, the institutionalization of BRICS and the
multilateral order are paving the way for extended South–South cooper-
ation, which is opening up opportunities for swing states such as Bolivia
to position themselves and engage in political alliances with key global
players. The sense of political community is weaker at this level, but
mutual dynamics of norm adoption (from the global to the national
level) and attempts at diffusing norms related to indigenous values
within the global South community are nevertheless being developed.
In other words, Bolivian interests are being shaped by, and are making
attempts at shaping, global policies in the context of interdependent
hegemony.
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Part III
Europe
9
A Small State Maneuvering in the
Changing World Order: Denmark’s
“Creative Agency” Approach to
Engagement with the BRICs
Camilla T. N. Sørensen
In the beginning of the 21st century, Denmark faces new oppor-

tunities and challenges on the international scene. Through
pursuing a new active foreign policy that has a European, a
transatlantic and a global dimension, all closely integrated,
we will be able to promote Danish interests and values in a
changing world1
How are small states managing the shift under way in the global eco-
nomic and political order from the USA and Europe towards other
regions, especially Asia? In the International Relations literature, there
is a tendency to focus on the great powers – they set the scene, and the
small states have to adjust, and therefore their different national politi-
cal characteristics, values and preferences are not seen as having a strong
influence. Being small is seen as an inherent disadvantage in interna-
tional politics, but are there also advantages? Analyzing how Danish
foreign policy, especially the Danish approach to the BRICs, has devel-
oped in recent years, I show how Denmark – a small state – is trying
to maneuver in the changing world order through a “creative agency”
approach.2
For several years, different Danish governments have acknowledged
that a shift is under way in the global economic and political order.
This was most clearly stated in a speech given by then Danish Minis-
ter of Foreign Affairs Lene Espersen on November 23, 2010 when she
launched the ministry’s paper for a new long-term strategy “On Course
for 2020: Danish Foreign Policy in New Waters”.3 Among other things,
211
212 Europe
she stated that “We are witnessing a dramatic shift of political and eco-
nomic power away from the United States and Europe towards China,
India and Brazil”. And further “This entails that within ten years, the
United States will cease to be the absolutely dominating great power we
used to know, and become just one – although the decisive one – among
several key global actors” (Espersen, 2010, p. 1). In the newly launched
vision paper from the Ministry of Foreign Affairs “More Denmark in the
World”, the shift of political and economic power towards Asia, Latin
America and Africa is again emphasized (MFA, 2014).
The key argument in both the speech and the strategy papers is that
the increased diffusion of economic and political power at the global
level requires changes and adjustments to be made in the Danish foreign
policy in order to continue to ensure and further promote Danish eco-
nomic, political and security interests, as well as Danish values. Danish
security, wealth and values are listed as the three decisive elements to
aim for when defining Danish foreign policy (Knudsen, 2014; MFA,
2014, p. 4).
On the overall question of how to fit Denmark into the ongoing trans-
formation with new emerging economic and political power centers,
the strategy paper from 2010 recommends maintaining the strategic
relationship with the USA, but then goes on to insist that Denmark
“must develop links to the new agenda-setting actors. Above all the
BRIC-powers” (MFA, 2010, p. 21). This phase represents a quiet revo-
lution within Danish foreign policy thinking, in which the previously
rather unknown BRICs bloc is declared a key target for Danish diplo-
macy (Skak, 2013, pp. 78–79). This new focus on the BRICs bloc and
other emerging markets has been reiterated in the program and strat-
egy of the subsequent government, as the newly launched vision paper
“More Denmark in the World” (MFA, 2014) illustrates.
Denmark has therefore adjusted existing strategies and drafted new
strategies in order to better manage and take advantage of the new
and complex situation in relation to the global economic and politi-
cal order. Since 2010, ensuring good political relations with the BRICs –
Brazil, Russia, India and China – has been a declared target for Danish
diplomacy.
However, the quiet revolution and the move away from the strong
reliance and focus in Danish foreign policy on the strategic partner-
ship with the USA have not taken place. The close strategic relationship
with the USA remains and continues to be a key priority; from a gen-
eral perspective, the Danish strategies targeted at the BRICs may be
described as series of commercial strategies under the umbrella of the
Camilla T. N. Sørensen 213
government’s “Growth Markets Strategy” (2012), also following from

the increased Danish emphasis on “economic diplomacy”.4 As regards
the high-politics issues and world order questions inherent in the rise
of the BRICs, the strategies remain rather mute, seemingly revealing the
limits in the Danish approach to and embrace of the rise of the BRICs.
This underlines the dilemma of, on the one hand, ensuring Danish
economic interests, which especially link up with the new emerging
power centers, and, on the other hand, promoting Danish values, which
are closely linked to the existing Western liberal world order. As I will
demonstrate, this dilemma is most evident in the case of Denmark’s
strategy and policy towards China. Strengthening bilateral economic
and commercial relations is one thing; taking a position and playing
a role in relation to the deeper high-politics issues and world order
questions also in play is a different matter.
Actually, such a low profile goes somewhat against the overall charac-
teristic of Danish foreign policy since the end of the Cold War. Denmark
is typically portrayed as an activist proponent of the Western liberal
world order and has played an active role – often in close coopera-
tion with the USA – promoting Western liberal values, especially by
engaging in several military missions that have not been directly related
to the defense of narrow Danish security interests (e.g. Larsen, 2009).
Interesting questions have therefore started to emerge regarding the
further development in Danish foreign policy in the changing world
order. One is the question of how to maintain the centrality of the
strategic partnership with the USA as new patterns of relations are
emerging in Danish foreign policy and Danish trade and commercial
relations, and in international politics and economics in general. How
to navigate in this? How can Danish value-based activism operate in
a changing and more multipolar world order and as Danish economic
and commercial interests in the emerging markets and new economic
power centers are increasing? Can Denmark play a new role in its
activist foreign policy as a kind of mediator in relations between the
traditional powers and the new emerging powers, promoting dialogue,
inclusion and responsibility in global governance and the changing
world order?
The aim of this chapter is to show how Denmark is trying to maneuver
between the traditional great powers and the new emerging pow-
ers. What are the opportunities and the challenges for Denmark – a
small state – in the changing world order? Focusing in particular on
the development in Denmark’s relations with China in recent years,
I demonstrate how the emergence of new powers is gradually affecting
214 Europe
Denmark’s foreign policy priorities and its “policy profile”. More specif-
ically, I argue in favor of the development of what I term Denmark’s
“creative agency” approach to engagement with the BRICs, which is
characterized by pragmatic low-profile activism. In doing so, I focus on
a characterization of Danish foreign policy reactions to the changing
world order and the opportunities as well as the challenges involved,
rather than on specific Danish foreign policy actions or decisions.5
Firstly, I present the theoretical approach, i.e. neoclassical realism,
and the analytical strategy that follows for analyzing the Danish for-
eign policy reactions to the changing world order. Secondly, I present
the analysis, where I begin by examining the overall characteristics of
the development in Danish foreign policy since the end of the Cold War.
This provides a basis for the next part of the analysis, in which I examine
Danish strategies and policy reactions in relation to the BRICs in gen-
eral and China, in particular. The conclusion follows in the third part,
outlining the opportunities and the challenges for Denmark – a small
state – in the world re-ordering.
Making sense of small state foreign policy in the changing

world order
In terms of theory, the chapter adopts a neoclassical realist approach.

The term “neoclassical realism” defines a broad group of realist stud-
ies which share the aim of developing a realist foreign policy analysis
taking their point of departure in neorealism (Rose, 1998; Wohlforth,
2008). The “black box” of the state known from neorealism is opened,
and emphasis is placed on combining neorealism’s focus on systemic
factors with unit-level factors in order to explain the foreign policy of
states. Consequently, when applying a neoclassical realist approach, it
is not necessary to choose between theories of international relations
explaining the sameness of states’ foreign policy by structural variables
and theories of foreign policy analysis (FPA) explaining the uniqueness
of states’ foreign policy by domestic variables (Mouritzen, 1998, p. 82;
Wivel, 2013, p. 302).
When analyzing how a small state such as Denmark navigates
in the changing world order, the analytical strategy following
from neoclassical realism seems very promising. Following the core
neoclassical realist argument, systemic factors establish a certain room
for maneuver for states when determining their foreign policy. This
seems to be the case for small states in particular, since these are not
able to influence the structure of the international system themselves.
They have to adapt and adjust. However, in order to analyze how the
small states adapt and adjust, and hence conduct more specific analyses
of their foreign policy reactions, a neoclassical realist will look into the
state and seek to identify the main domestic factors influencing their
foreign policy reactions. It is important to note that there is no single
neoclassical realist theory of foreign policy but, rather, a diversity of
neoclassical realist theoretical models and arguments which examine a
wide variety of domestic factors.6 Also, it should be clear that the aim is
not the construction and testing of theory but, rather, the provision of
an analytical template for structuring the analysis presented of Danish
foreign policy reactions to the changing world order.
Adjusting Danish foreign policy activism to the changing

conditions
The overall characteristics of the development in Danish foreign

policy since the end of the Cold War
Recent reviews of the literature on small states in international relations
point out how small states typically keep a low profile in international
relations regarding their level of activity and their policy positions,
and how small states prefer diplomatic foreign policy instruments to
military activism and tend to rely on multilateral cooperation and insti-
tutions (e.g. Elman, 1995; Hey, 2003; Larsen, 2005). The development in
Danish foreign policy since the end of the Cold War, however, presents
a different picture.
Danish foreign policy analysts generally agree on a transformative
shift in Danish foreign policy from a rather pragmatic and reactive
policy during World War II and the Cold War towards a value-based
activism after the end of the Cold War (e.g. Holm, 1997, 2002; Pedersen,
2012). While disagreement exists about the specific starting point and
origins of Danish foreign policy activism and its effects, it is possible
to identify at least three fundamental characteristics upon which the
Danish activist foreign policy rests. All of these characteristics have been
accentuated since the end of the Cold War.7
Firstly, Danish activist foreign policy has continuously sought to pro-
mote a set of liberal and egalitarian values, e.g. democracy, human rights
and free trade, as well as economic, social and sustainable development.
These values have served as the ideational baseline for Danish foreign
policy since the end of the Cold War, although their relative weight has
changed over the years and with different Danish governments. In par-
ticular, Danish Prime Minister Anders Fogh Rasmussen from the Liberal
216 Europe
Party, serving from 2001 until 2009, gave Danish foreign policy activism
a more explicit ideological underpinning, in that he framed it as a liberal
defense against authoritarian forces associated with repressive regimes
around the world in general and the terror bombing of September 11, in
particular. Fogh Rasmussen also saw it as an ideological encounter with
what he considered the passive, and even cowardly, Danish foreign pol-
icy during World War II. He even presented it as a moral obligation and
duty (Rasmussen, 2003, 2006).
Secondly, Danish activist foreign policy has become internationalized,
in the sense that policy options have come to be viewed in a European
and global context. During the first few years following the Cold War,
the overall aim was to stabilize Denmark’s geopolitical neighborhood.
An example of this was that, as an early sign of its growing foreign policy
activism, Denmark was among the first states to give formal recognition
to the independence of the Baltic States from the Soviet Union. During
the 1990s, the Danish geopolitical focus broadened to Europe in general,
where stabilization and integration became core Danish foreign pol-
icy priorities, especially through the enlargement of the EU and NATO.
Increasingly, and in particular after September 11, the geopolitical focus
of Danish foreign policy activism expanded to a global scale, associating
Danish foreign policy strategies and goals closely with their American
counterparts (Holm, 2004).
Thirdly, Danish activist foreign policy has become increasingly mil-
itarized, in that military means have come to be seen as legitimate
foreign policy instruments. Furthermore, militarization has developed
from being primarily focused on using military means to ensure and
promote peace and development in Europe. This has been achieved
in close cooperation with international multilateral organizations. This
is no longer the case. Denmark has become increasingly prepared to
accept, and even support, the use of military means outside Europe
without necessarily demanding that military actions or interventions
are embedded in international multilateral organizations. Denmark has
thus supported the USA in a number of high-profile and often contro-
versial military campaigns, including the strikes against Iraq in 1998;
the war in Kosovo in 1999, without a clear mandate from the UN
Security Council; the military mission in Afghanistan from 2002; and,
more controversially, the invasion of Iraq in 2003 and the ensuing
American efforts to fight the Iraqi insurgents (e.g. Larsen, 2009). Regard-
ing the legitimacy of military means, successive Danish governments
have emphasized the importance of approval from the UN Security
Council, but this has become a less prominent demand. Moreover,
as a consequence of the expanding geopolitical focus, Danish foreign

policy activism has evolved from a multilaterally inspired activism in
the 1990s to an Atlantic-centered activism during the 2000s (Pedersen,
2012, pp. 339–341). It is also noteworthy that Denmark’s objective in
military operations after the Cold War has more often been to pro-
mote values and ideas, rather than to defend narrow Danish security
interests.
What might explain the transformation in the Danish foreign policy
profile after the end of the Cold War? Following the neoclassical realist
core argument, focus should be on the interaction of changing systemic
and domestic conditions. As for the systemic – i.e. structural – condi-
tions, the general neorealist assumption is that the anarchic structure
of the international system leads all states to base their foreign policies
primarily on power calculations; they do so in order to maximize their
chances of security and survival (Waltz, 1979). In other words, in the
international anarchy, the balance of power is the most important sys-
temic factor affecting the opportunities and the challenges that states
are facing. Consequently, when the balance of power changes, as was
the case with the end of the Cold War and the shift from the bipolar
structure to the unipolar structure, the incentive structure for Danish
foreign policy decision-makers also changes. Arguably, the collapse of
the Soviet Union broadened the room and the demand for Danish for-
eign policy activism in different ways. Firstly, there was no longer a
strong Soviet threat against Danish national security, and the primary
concern of Danish foreign policy decision-makers could shift from exis-
tential issues of survival and national security to other issues, e.g. value
promotion. Denmark’s location as a frontline state during the Cold War
played an important role in this context (Wivel, 2013, p. 306). That is,
with little or no threat to national security, domestic ideas about democ-
racy and liberal values in general could have a strong impact on Danish
foreign policy. During the Cold War, Denmark also promoted liberal val-
ues, but this was clearly less in focus and primarily took place in Nordic
and UN settings, or as part of Danish development policy and aid pro-
grams from the 1960s (Wivel, 2013, p. 307). Secondly, there were no
longer two strong competing belief systems in the international system.
Now there was only one, and Denmark allied closely with the basic val-
ues of the unipole, the USA. Denmark had adhered to a strong Atlantic
tradition since the Cold War, as well as to a compatible belief system,
sharing a set of values with the USA (Mouritzen, 2007). With the Soviet
Union gone, Denmark no longer needed to worry about provoking the
closest great power neighbor by promoting values seen as the values of
218 Europe
the “other bloc”. Thirdly, the international demand for countries that
were willing and able to contribute to international peacekeeping oper-
ations increased. Generally, after the end of the Cold War, the number
and complexity of peacekeeping operations has increased. Previously,
focus was on the defensive goal of protecting populations against civil
war whereas, now, a combination of protection and more offensive goals
such as the promotion of liberal values is more common (Wivel, 2013,
p. 311).
Hence, viewed through the lens of neoclassical realism, the changing
incentive structure provides information about the room for maneu-
ver and the demand for Danish foreign policy activism after the end
of the Cold War. However, as regards the supply – i.e. the factors
affecting Danish foreign policy decision-makers’ choice between differ-
ent available policy options – the domestic context and the changes
that have taken place must be included. Firstly, Danish state identity
is dominated by a so-called “libertarian ideology of solidarity”, mix-
ing classical liberal values – e.g. civil liberty and free trade – with
strong notions of egalitarianism (Østergaard, 2000, p. 161). Originat-
ing in peasant movements and their organizational structures, it was
at the same time inspired by, and closely coupled to, the protestant –
the so-called “Grundtvigian” – conception of enlightenment and uni-
versal brotherhood. In combination, Nordic romanticism, protestant
“Grundtvigianism” and the experience of organizing production and
decision-making in the peasant movements served as the ideational base
for an approach which combined classical liberalism and egalitarianism
(Wivel, 2013, pp. 304–305). Denmark’s defeat by the Prussian army in
1864 – resulting in the loss of the duchies of Schleswig, Holstein and
Lauenburg – strongly influenced the way in which this ideational base
was expressed internationally (Petersen, 2005). Military means were to
be avoided, as the Danish historical lesson was that engaging in mil-
itary conflict would have devastating consequences for small states.
Diplomatic solutions to conflicts should be aimed for, and a pragmatic
diplomatic approach was to be stressed (Knudsen, 2006, p. 128; Wivel,
2013, pp. 304–305). As mentioned, value promotion was also part of
Danish foreign policy during the Cold War; this took place primarily
through the Nordic Council and though Denmark’s membership of the
Nordic bloc in the UN. NATO was central for Denmark in order to ensure
national security and survival, whereas the strengthening of European
integration was central to ensuring Danish economic interests. There-
fore, Danish values did not develop or change with the end of the Cold
War; rather, the end of the Cold War made it easier for Danish decision-
makers to promote these values in all foreign policy arenas in which
Denmark was present. Also, with the collapse of the Soviet Union, the
domestic debate – and the domestic opponents and critics of the lib-
eral values – was weakened. A strong alternative to the liberal values no
longer existed. After the end of the Cold War, a consensus soon emerged
in Danish foreign policy elites that Europe’s new security order should
be seen as “a unique window of opportunity”, which allowed a new
foreign policy based on so-called “active internationalism” to develop
(Holm, 2002, pp. 22–23). Hence, Denmark reacted more rapidly and
radically than most of the other European states to the new European
reality following the revolutions of Central and Eastern Europe (Elbjørn
and Wivel, 2006). Moreover, the foreign policy activism only esca-
lated under Danish Prime Minister Anders Fogh Rasmussen, as has
been stressed. Pedersen (2012, p. 331) specifically points to the Lib-
eral Party’s dominant position in Danish domestic politics in the 2000s
as a main driving force behind the transformation in Danish foreign
policy activism from a multilateral-inspired activism to an Atlantic-
centered activism based on Danish willingness to participate actively
in flexible military coalitions led by the USA. This also caused a grad-
ual transformation in the Danish defense; it was professionalized and
internationalized in the order for it to play a bigger role in international
peacekeeping, peace-building and peacemaking operations.
Consequently, Denmark’s closest partner in value promotion after the
end of the Cold War has been the USA. Generally, the main political
parties in Denmark continue to see close coordination and cooperation
with the USA as the key to Danish foreign policy (Wivel, 2013, p. 314).
Another important point is that even though the liberal values have
come to play a bigger role in Danish foreign policy than previously, egal-
itarianism and pragmatism continue to constitute important elements
of the Danish foreign policy profile.
From the analysis thus far, it may be concluded that the end of the
Cold War – and, thus, the development from a bipolar to a unipolar
world order – clearly increased the room for maneuver for Danish
activist foreign policy and Denmark’s promotion of liberal values. There-
fore, it is reasonable to expect that the gradual weakening of the
unipolar world order and the emergence of new great powers are likely
to affect the demand and the room of maneuver for Danish activist
foreign policy. Alternative belief systems will increase in strength, as
will the opposition to and the criticism of liberal values as universal
values. Consequently, as the post-Cold War world order is changing,
220 Europe
new opportunities and challenges for Danish activist foreign policy and
Denmark’s close strategic alignment and cooperation with the USA are
developing.
Denmark and the rise of the BRICs

Denmark will take the lead and seek to influence the many discus-
sions taking place these years on values and ideas in the international
system . . . focus on how best to promote our values . . . democracy, rule
of law principles, international law and open markets . . . we think
they are universal values.8
As a small state, Denmark must again adapt and adjust to the chang-
ing world order. The Danish emphasis clearly is on maintaining strong
value-based activism in its foreign policy, but a growing challenge is how
to combine this with the promotion of strong and positive economic
and political relations with new emerging powers which do not share
the same values. This calls for Denmark to take an even more pragmatic
attitude.9 Moreover, it implies that greater emphasis should be placed
on the egalitarian aspects of the Danish value promotion in the coun-
try’s relations with the new emerging powers. Another aspect of what
I term Denmark’s “creative agency” approach to engagement with the
BRICs is the avoidance of direct criticism of, e.g. human rights viola-
tions. Instead, Denmark is increasingly seeking to engage and influence
behind the scenes and through institutionalizing exchange and discus-
sion, setting up regular meetings with new emerging powers as seen with
so-called “critical dialogues”. This means a more quiet Danish value pro-
motion style, or what might be termed Danish “low-profile activism”.
It is clear that the challenges for Danish value promotion vary, depend-
ing on the BRICs with which Denmark is building relations. Denmark’s
relationship with China clearly presents the biggest challenge, to which
I will return later. Direct and outspoken Danish criticism has also been
observed, especially due to domestic considerations and debates. This
happened in 1997, for instance, when Denmark sponsored a resolu-
tion condemning China for its human rights situation at the UNHRC
in Geneva, resulting in a serious crisis in Danish–Chinese bilateral rela-
tions (Østergaard, 2011, p. 60). This could be termed Danish “selective
activism”. In the remaining part of the chapter, I will elaborate fur-
ther on the characteristics of the Danish “creative agency” approach to
engagement with the BRICs; firstly, in general terms, and subsequently
with specific reference to Denmark’s efforts in managing and engaging
in the rise of China.
As mentioned in the opening to this chapter, increased priority from

around 2010 onwards of ensuring strong and positive political rela-
tions with the BRICs bloc represents a quiet revolution within Danish
foreign policy thinking. In 2011, Denmark drafted new strategies tar-
geted at the BRICs, the “BRICs strategies”, and, in 2012 and 2013,
these were followed by strategies for the “second wave countries”, e.g.
Indonesia, Mexico, South Africa, Turkey and Vietnam.10 The driving
motivation presented in the strategies was to secure growing Danish
exports, as well as foreign direct investments (FDI) in Denmark. As a
small open economy with a limited national market, Denmark relies
heavily on international trade and investments; exports correspond to
about 50 percent of Denmark’s GDP and form the basis of around
700,000 Danish jobs (MFA, 2012, p. 9). The strategies therefore set
out specific targets for export and investment promotion activities in
the period 2012–2016, including specific initiatives marketing “Danish
strongholds” in, for instance, clean-tech energy technology, health and
welfare solutions and food, and the creative industry sector (MFA, 2012,
pp. 5–6, 15).
These strategies may be described in overall terms as a series of com-
mercial strategies under the umbrella of the government’s “Growth
Markets Strategy” (MFA, 2012), which also followed from the increased
Danish emphasis on “economic diplomacy”. An important objective
listed in the “Growth Markets Strategy” is to achieve an increase of
more than 50 percent in Danish commodity exports to the BRICs bloc
and the second wave countries during the strategy period (MFA, 2012,
p. 5). As regards the high-politics issues and world order questions
inherent in the rise of the BRICs, the strategies mention comprehen-
sive political dialogues concerning all issues to be an important element
“indirectly affecting the opportunities to further develop commercial
ties” (MFA, 2012, p. 7). Again, the overall focus is on developing com-
mercial ties and, apart from this brief mention, the strategies remain
rather silent, seemingly revealing a certain superficiality and limits
in the Danish approach to and embrace of the rise of the BRICs.
This underlines the dilemma of ensuring Danish economic interests
which especially link up with the new emerging power centers, on
the one hand, and, on the other hand, the promotion of Danish
values which are closely linked to the existing Western liberal world
order (Skak, 2013, pp. 78–80). This dilemma has not really been elab-
orated upon by any key Danish foreign policy decision-makers either.
However, a closer study of how Denmark is trying to maneuver in
the changing world order reveals that the Danish approach actually
222 Europe
reflects creativity and activism, albeit a somewhat “adjusted” type of

activism.
How is Denmark trying to maneuver in this complex situation?
An important new Danish foreign policy instrument – developed for
the specific purpose of engaging with the new emerging powers and
the dilemmas this raises as regards the promotion of both Danish
economic interests and liberal values – is to focus on “government-to-
government cooperation” (“myndighedssamarbejde”) as a central element
in Denmark’s bilateral relationships with these powers. The idea is to
establish concrete bilateral cooperation between government author-
ities in Denmark – e.g. ministries, and their counterpart government
authorities in the emerging economies – and, thereby, also seek to influ-
ence the way in which the political systems and societies, as well as the
relations between the two, develop (MFA, 2014, p. 11). The emphasis
is on how much Denmark has to contribute. The Danish state–society
model, with high levels of trust and transparency, and the Danish wel-
fare system are seen as ideals for many other countries, and Denmark is
also well-known for its high standards in, for instance, food security
and environment protection. Danish efforts to export “Danish solu-
tions” to manage domestic socio-economic challenges in these emerging
powers are therefore presented as representing a win–win situation.
At the same time, Denmark is strengthening Danish exports and the
internationalization of Danish companies and, in the process, is also
helping emerging powers to manage a range of fundamental strategic
choices with regard to their further domestic economic and societal
development. Structuring Danish cooperation with the BRICs and other
emerging economies in this way – i.e. focusing on lower levels, and
on concrete policy areas and issues – is a pragmatic way of gradually
strengthening relations and making Denmark a valuable partner. Simul-
taneously, it is a means by which to influence the political and economic
choices in these countries, or promote a development that is in line
with not only Danish export interests, but also Danish views, solutions
and values. Hence, this is an instrument for promoting both Danish
economic interests and Danish values. Moreover, the Danish govern-
ment is strongly encouraging the Danish business sector to comply
with international guidelines and standards – e.g. within environment
projection, corruption, and employee and human rights – when oper-
ating in these emerging markets, c.f. the government’s “Responsible
Growth” action plan (EVM, 2012). In this way, the Danish government
is also urging Danish businesses to set up good examples and influence
socio-economic developments within these emerging markets.
Generally, Danish strategies point to the strong role of the gov-

ernments in the BRICs and highlight the importance of a significant
official Danish presence in these countries, partly through visits by the
Danish royal family and Danish ministers, and partly through the per-
manent presence of Danish representations geographically distributed
to ensure access, contacts and favorable conditions for Danish busi-
nesses and other players (MFA, 2014, p. 7). Therefore, a main element
in the Danish approach to the rise of the BRICs has been to increase
the Danish presence, both in terms of visits and as regards the perma-
nent Danish presence at embassies, consulates, and so on. As for visits,
Denmark has adopted a “strategic approach” in order to ensure that
visits contribute to specific results for Danish stakeholders, e.g. export
promotion led by the royal family profiling Danish competences. Fur-
thermore, the Danish government has prioritized the signing of strategic
partnership agreements at ministerial level with the BRICs. These have
been supplemented with sector-specific agreements between ministries
and governmental institutions also establishing, for some of the BRICs,
specific collaboration forums under the direct supervision of the minis-
ters in order to expand relations and to be able to respond quickly to
specific problems (MFA, 2012, p. 7).
As mentioned, the Danish BRICs strategies do not say much about
high-level political issues. However, the newly launched strategy paper
“More Denmark in the World” mentions that the emerging powers
are increasingly challenging the fundamental values and norms in the
international system, and that there are real risks of retrogression. The
strategy paper continues to underline that Denmark wants to work
actively in order to avoid this and to ensure that the dominant interna-
tional values and norms continue to be in line with Danish values and
interests (MFA, 2014, p. 21). This is to be done through active Danish
diplomacy which seeks to influence the thinking in these emerging pow-
ers and encourage them to take global responsibility. Such diplomacy,
of course, takes a point of departure from Danish interests and values
(MFA, 2014, p. 11). On a more humble note, the strategy paper proceeds
to point out that Denmark should be ready to take the critical dialogues
but should also be pragmatic and have a long-term perspective. It is
underlined that the critical dialogues sometimes work best behind the
scenes (MFA, 2014, p. 22). This last point seems to be directed at reduc-
ing the domestic expectations for a strong value-based Danish activism
and at countering the domestic criticism of Denmark selling out its val-
ues in order to ensure its economic interests in the emerging economies.
Apart from this section, there are no concrete details on Danish “world
224 Europe
order diplomacy”. It is pointed out that, in the years to come, NATO and
the relationship with the USA will continue to form the cornerstones in
Danish security policy (MFA, 2014, pp. 12–13).
Arguably, the close Danish coordination and cooperation with the
USA on security matters – i.e. following the USA in different mili-
tary coalitions, and so on – could increasingly distance Denmark from
the emerging powers, especially if current developments with increas-
ing tension and conflict continue, e.g. between the USA and Russia,
and between the USA and China. Moreover, if China, together with
other emerging powers such as the BRICs bloc, becomes more active
in setting the formal and informal rules and principles in the interna-
tional economic and political system, how would Denmark respond?
A developing case is the Chinese-led and highly promoted Asian Infras-
tructure Investment Bank (AIIB), which is seen as Beijing’s initiative to
counter the American dominance in other international multilateral
financial institutions such as the World Bank and the Asian Develop-
ment Bank. The USA has openly and strongly discouraged other states
from engaging in the AIIB. However, in mid-March 2015, Great Britain,
Germany, Italy and France decided to join as prospective founding
members of the AIIB, which caused strong American criticism (Financial
Times, 2015a). Seemingly, no serious efforts were made to coordinate
their position on the AIIB among the EU member states, and the deci-
sions of these states to join clearly started an urgent debate in the
other Western governments on how to manage the Chinese invita-
tion to join the AIIB as prospective founding members, on the one
hand, and the American pressure not to do so, on the other (Guardian,
2015). Time was scarce, and there was no public awareness or debate
before Denmark decided to join, together with the Netherlands and
Australia, just two days before the deadline set by China for prospective
founding membership statements. Russia and Brazil announced their
decision to join just the day before. The argument from the Danish
Minister of Trade and Development, Mogens Jensen, when announc-
ing the decision was that “Since many Danish trade interests as well
as development cooperation interests will be at stake in AIIB, there
are many reasons to engage in and influence AIIB’s investment deci-
sions from its beginning” (Daily Mail, 2015). So, a strong focus was
once more on commercial and economic interests in the Danish gov-
ernment. It does not seem like there were any careful considerations
about the more strategic implications of joining an institution seen
to be enhancing China’s regional and global influence. Also, no con-
sideration appeared to have been given to the implications that this
might have on the serious efforts made by the USA – Denmark’s clos-
est strategic partner – to balance China’s growing and more assertive
role in the Asia-Pacific region and, in the long term, for the liberal
world order. The AIIB is still in its early phase, and it is impossible
to assess the importance of the role it will come to play in the evolv-
ing world order. The critical point here, however, is that Denmark will
only be facing more similarly difficult foreign policy choices in the
future.11
Denmark’s comprehensive strategic partnership with China

The development in Denmark’s policy towards China since 2008 has
been a good illustration of how, with the “creative agency” approach,
Denmark is trying to maneuver in the changing world order and to
manage the opportunities and challenges that follow.
The political relations today between Denmark and China are at an
all-time high. Never before has the political relationship been as com-
prehensive and wide-ranging; never before have there been so many
high-level visits and dialogues on a broad range of political and strate-
gic issues as is the case today. In April 2014, Her Majesty the Queen
completed a very successful, and the biggest ever, state visit to China,
accompanied by a group of Danish ministers and business executives.
She met with President Xi Jinping, who agreed to send two pandas to
Copenhagen Zoo as proof of the strong political relationship between
Denmark and China. The state visit was followed in September 2014
by a visit to China by Danish Prime Minister Helle Thorning Smith.
This was her second visit to China in two years. She met with both
President Xi Jinping and Prime Minister Li Keqiang, with the overall
aim of setting up new goals for “the comprehensive strategic part-
nership” between Denmark and China that has been in place since
October 2008. A large number of visits have also been made by high-
level Chinese party and government leaders to Denmark in recent
years, the state visit by then Chinese President Hu Jintao in June
2012 being the most prominent. Since June 2012, the Danish govern-
ment has met with all the current members of the Politburo Standing
Committee.
How has the small state of Denmark managed to build such strong
political relations – the “comprehensive strategic partnership” – with
China? Only six other European countries have managed to establish
a comprehensive strategic partnership with China. Firstly, Denmark
had already got off to a good start with Communist China in 1950,
when only about three months after Mao Zedong had proclaimed
226 Europe
the establishment of the People’s Republic of China, Denmark was

one of the first countries to recognize it and support its claim for
UN membership (Odgaard, 2000). For 15 years, Denmark had the
highest level of representation in China compared with any other
Western country. It was also the only NATO country with an ambas-
sador in China and, in 1974, Danish Prime Minister Poul Hartling was
the first Western state leader to be received by Zhou Enlai and Mao
Zedong (Østergaard, 2011, pp. 54–55). For these reasons, the “histor-
ical friend” Denmark continues to enjoy a large amount of good-will
in China. This is also an effect of the importance of the Danish
fairytales author Hans Christian Andersen, who is well-known by all
Chinese (Østergaard, 2011, p. 68). Secondly, Denmark has generally
managed to analyze and to adapt swiftly to the “new China” – espe-
cially to the implications of Deng Xiaoping’s economic reforms and
opening-up policies in the late 1970s for developments in China –
and relate these to possible Danish contributions and expertise. In this
way, Denmark became interesting and valuable to Chinese leaders.
This was already the case in the early rebuilding and modernization
phase in China, but even more so since 2008 when strong Danish
efforts were made to export “Danish solutions”. Also, the sector focus
and the “government-to-government cooperation” (“myndighedssamar-
bejde”) are central elements behind the success, with Danish–Chinese
cooperation expanding at all levels and on many policy issues, such as
education, welfare issues, public administration, legal affairs and cul-
ture. New Danish institutions have become established in China, e.g.
the Danish Cultural Institute opened in Beijing in 2005. An ambitious
Sino-Danish University Centre for Research and Education has been set
up in Beijing and had the first group of Danish and Chinese students
enrolling in 2012; in this initiative, which continues to expand, an
active driving role is being played by the Danish Ministry of Science,
Innovation and Higher Education, working in close cooperation with
its Chinese counterpart. The China National Renewable Energy Center
(CNREC) – a Chinese renewable energy think-thank established in coop-
eration with Danish energy authorities and, initially, partly financed
by Denmark – is also an example of ongoing sector-based cooperation.
Even in the areas of foreign policy and military aspects, an increase
is seen in Danish–Chinese cooperation; for instance, both Denmark
and China recently participated in the operation to have chemical
weapons transported out of Syria and, for many years, Denmark and
China have worked together in anti-piracy efforts off the coast of West
Africa. As in the other BRICs, the state plays a decisive role in the
Chinese economy, and therefore the Danish government argues that

stronger Danish–Chinese political relations, dialogues and agreements
in all areas also provide Danish businesses with a stronger platform
for dealing with China, which will give them a better standing in
competition with companies from other countries. And there seem to
be economic pay-offs. In recent years, Danish exports to China have
increased significantly, and the first major Chinese investments into
Denmark have also taken place. China is Denmark’s biggest trading
partner outside the EU, and around 500 Danish companies operate in
China today. Thirdly, a broad political will and effort have been present
to engage with China politically and on a long-term basis, as illus-
trated in the “Denmark-China action plan” from 2008 (MFA, 2008).
Generally, there has been a long-term trend of continuity in Denmark’s
policy towards China and in Danish–Chinese political relations (Øster-
gaard, 2011, p. 68). Important lessons have been learnt by Danish
governments as regards Danish value promotion and China, e.g. the
Danish-sponsored UNHRC resolution in 1997, which resulted in the
cancellation of high-level visits and declining Danish exports to China.
Also, the meeting in 2009 between Danish Prime Minister Lars Løkke
Rasmussen and the Dalai Lama resulted in a costly six-month freeze
in Danish–Chinese relations that only ended in December 2009, when
Denmark issued a verbal note restating the Danish “One China” pol-
icy and confirming all the positive aspects of Danish–Chinese relations
(Østergaard, 2011, p. 60, 67).12 The argument of the Danish govern-
ment today is that improvements in human rights in China are best
promoted by engaging the Chinese leadership and working on a long-
term basis with Chinese counterparts on concrete projects instead of
“standing outside and screaming with a megaphone”, as Danish Minis-
ter of Foreign Affairs Martin Lidegaard responded when he was criticized
in February 2015 for not meeting with the visiting Dalai Lama (Politiken,
2015). It could therefore be argued that the quiet diplomacy and criti-
cal dialogue are results of Denmark having realized that great powers
such as China do not make internal changes, e.g. on human rights,
because other countries desire them to do so; they only do this out
of self-interest or because of domestic pressures and dynamics. For this
reason, Denmark best promotes human rights in China by working
in China with the groups and forces that can push for such domestic
changes over time. This is, for example, the argument and approach
behind the work of the government-sponsored Danish Human Rights
Center, which has been active in China since 1999, working in close
cooperation with Chinese partners in the state sector, academia and
228 Europe
society for the purpose of promoting improvements in human rights

regarding, for instance, the criminal justice system, abolishment of cap-
ital punishment, the rights of migrant workers, human rights education
and legal aid.
A general broad consensus on Denmark’s policy regarding China has
developed in Danish foreign policy elites. However, the Danish public
are still rather critical, but generally seem to have accepted the gov-
ernment’s argument that, in order to promote Danish exports, attracts
Chinese investments and ensures Danish jobs, as well as to have any real
influence as a small state in China, Denmark must follow a pragmatic
low-profile activism strategy. Domestic criticism of the Danish govern-
ment’s failure openly to criticize the Chinese leaders or meet the Dalai
Lama has been much less outspoken in recent years. However, no intel-
ligent political and public debate has been conducted on the trade-offs,
costs and contradictions in finding an optimum Danish policy towards
China in this changing world order (Østergaard, 2011, pp. 50–51).
Danish diplomats working with China often highlight Denmark’s
ability to do things that other countries cannot do in and with China.
An example highlighted is the Danish “ombudsman-project” in China,
where the Danish ombudsman – a person appointed by the Danish
Parliament to investigate complaints over Danish public administra-
tion – has engaged in cooperation with two Chinese ministries since
June 2013 in order to improve Chinese public administration – for
instance, on issues of anti-corruption, and increasing accountability and
transparency; these are very sensitive and critical issues for the Chinese
leaders (Altinget, 2013). When asked, Danish diplomats generally reject
the argument that Denmark faces any problem in relations with China
because of the close strategic partnership with the USA. However, they
tend to agree that, if the strategic competition and mistrust between
the USA and China increase further, it would become more challenging
for Denmark to navigate. The USA and concerns about Danish relations
with the USA continue to play an important role in Denmark’s policy
towards China, and some even point to a “transatlantic” group among
Danish foreign policy elites who looks to the USA for guidance and sup-
port (Østergaard, 2011, p. 49). In a situation of growing rivalry between
the USA and China, more pressure from the USA on Denmark’s pol-
icy regarding China is to be expected. The USA has generally preferred
a situation in which the relation with Washington is much stronger
and more significant to both China and Europe than their mutual rela-
tions (Østergaard, 2011, p. 66). Especially since the Bush administration
in office from 2001 until 2009, the USA has worked hard to increase
transatlantic convergence and to keep its European allies from becom-

ing too closely affiliated with China. Washington reacted very strongly
in 2004, for instance, when the EU and China set out to strengthen
their relations with more long-term cooperation, possibly including a
military aspect with high-level military-to-military exchange. And when
French President Chirac and German Chancellor Schroeder began to
work actively in favor of lifting the EU arms embargo on China, the USA
exercised what amounted to “hegemonic veto power”, with the result
that a divided Europe, including Denmark, succumbed to American
pressure (Østergaard, 2011, p. 64). As seen since March 2015 with the
split between the USA and several of its otherwise close partners and
allies over the Chinese-led and highly promoted Asian Infrastructure
Investment Bank (AIIB), China is now becoming successful in using its
economic strength and the attractiveness of the Chinese market as a
diplomatic instrument, and this is clearly frustrating Washington.
So far, it has been possible for Denmark to strengthen its political
relationship with China while maintaining the close strategic partner-
ship with the USA. The question is, however, whether Denmark can
continue along this route, or whether the “standing on two boats”
dilemma mentioned in Introduction to this volume will become more
intense for Denmark and hence make it more complex and difficult to
adjust and position itself in relation to the “United States/established
power/strategic partner” and “China/emerging power/economic part-
ner” nexus. The USA and China both have their own interests guiding
their relations with Denmark.
The region in which Denmark could especially experience this chal-
lenge unfolding is the Arctic region, where all the great powers meet,
and Denmark is an Arctic state, due to its association with Greenland.
If great power relations and great power strategic competition start
to have more influence on developments in and around the Arctic
region, it might become more difficult for Denmark to isolate its polit-
ical relationship with China from its strategic partnership with the
USA (Sørensen, 2014). This calls for careful consideration and a strate-
gic dimension of high-politics to Denmark’s already very successful
low-politics diplomacy towards China.
Conclusion
So far, Denmark has responded to the global re-ordering in the typical

pragmatic, but also creative, Danish way of navigating and positioning
itself in order to ensure Danish security, wealth and values. Low-profile
230 Europe
activism and a focus on low-politics issues characterize Danish foreign

policy reactions. The Danish “BRICs strategies” actually reflect the high-
politics agenda resulting from the changing world order, but Denmark’s
answer – i.e. the “BRICs strategies” – adheres to this low-politics pro-
file of stressing Danish economic and commercial interests. Arguably,
in the years to come, careful reflection will be necessary among the
Danish foreign policy elites on the specific challenges at the level of
high-politics represented by the rise of China and, generally, by the
rise of the BRICs, i.e. the BRICs and liberal world order nexus (Skak,
2013, p. 97). It is very likely that, as a small state in a changing world
order, Denmark will need to reduce its value-based activism and will
best ensure its interests by quiet “behind-the-scenes” diplomacy and
low-profile activism. However, in a situation with growing tension and
strategic competition between the USA and the emerging powers, it
will become more difficult for Denmark to maneuver in this complex
situation.
As to whether Denmark can play a new role in its activist foreign pol-
icy as a kind of mediator in relations between the traditional powers and
the new emerging powers, promoting dialogue, inclusion and responsi-
bility in global governance and the changing world order, there is little
to support this in the analysis above. Even though Denmark seeks to
strengthen cooperation with the emerging powers in security matters –
e.g. in UN peacekeeping operations – Danish values and national secu-
rity concerns are too closely tied up with the USA. It would be difficult,
if not impossible, for Denmark to stay neutral if strategic competition
between the USA and the emerging powers continues to grow.
Denmark, as a small state, again has to adjust and adapt its foreign
policy in a more unsettled world order. With more great powers on the
scene, the room for Danish value promotion is again becoming reduced,
and the focus on national security interests is increasing. The recent
crisis with Russia over Ukraine has once more underlined the Danish
vulnerability as a frontline state, which became very clear for all Danes
in mid-March 2015, when the Russian ambassador to Denmark, Mikhail
Vanin, stated in a commentary in a Danish newspaper that Danish war-
ships could end up as targets for Russian nuclear missiles if Denmark
joins the NATO missile defense shield (Jyllandsposten, 2015).
Notes
1. From the Danish Ministry of Foreign Affairs homepage, available at http://
um.dk/en/foreign-policy/ (accessed March 18, 2015).
2. In Danish foreign policy strategies, the focus has been on the BRICs-
countries, i.e. Brazil, Russia, India and China; see, e.g., the “Growth Markets
Strategy” (MFA, 2012). Therefore, the acronym BRICs, not BRICS (which
includes South Africa), is used in this chapter.
3. All quotations from the Danish strategy papers and speeches are translated
by the author.
4. Increasingly, concerns about ensuring Danish economic growth through the
promotion of Danish export, attracting FDI to Denmark, and so on, are
included in Danish foreign and development policies. This goes under the
term “economic diplomacy” – cf., e.g., Marcussen and Ronit (2014).
5. Cf. Mouritzen and Wivel (2012, p. 20), who define the “policy profile” as
general trends characterizing foreign policy.
6. The range of intervening domestic variables addressed by neoclassical realists
is detailed in Taliaferro et al. (2009).
7. The following section is especially based on Wivel (2013) and Pedersen
(2012).
8. Excerpts from the newly launched vision paper from the Ministry of Foreign
Affairs “More Denmark in the World” (MFA, 2014).
9. As Wivel (2013, p. 317) argues, the intensity of Danish value promotion has
always been tempered by a pragmatic approach to policy-making.
10. For the strategies, see http://um.dk/da/eksportraadet/markeder/vaekststra
tegier (accessed March 19, 2015). Only the “umbrella strategy”, i.e. the
“Growth Markets Strategy” (MFA, 2012), is in English.
11. Australia – also a close strategic partner of the USA, with a rapidly grow-
ing economic relationship with China – will come to face some of the same
difficult choices. Hugh White, an internationally well-known professor of
strategic studies at Australian National University, argues that Australia’s
volte-face decision to join the AIIB “marks a very sobering moment for
Australia as until now we have subcontracted to the US our policy in relation
to how to respond to China’s rise”. He continues, “this gives real for pause
for thought in how Australia positions itself for the future” (Financial Times,
2015b).
12. The verbal note was supported by the government and the important
opposition parties, but it has caused much domestic debate and raised
criticism of Denmark going too far to please the Chinese leaders and pro-
tect Danish economic interests in China. The most controversial sentence
in the verbal note is “Denmark recognizes China’s sovereignty over Tibet
and accordingly opposes the independence of Tibet”. The verbal note is
available at http://www.ft.dk/samling/20091/almdel/upn/bilag/24/772818/
index.html (accessed March 23, 2015).
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10
New Tourists at Old Destinations:
Chinese Tourists in Europe
Karina Madsen Smed and Ane Bislev
Introduction
The tourism sector has become one of the most important economic
sectors in the world. The United Nations World Tourism Organiza-
tion (UNWTO) estimates that tourism-related activities account for
about 9 percent of the world’s total GDP. Despite the global finan-
cial crisis, international tourism has experienced continued growth,
expanding by 5 percent worldwide in 2013 (UNWTO, 2014, p. 3).
The fastest growth happened in the Asia-Pacific region fueled by the
growing disposable incomes of the newly emerging middle classes, but
even traditional destinations such as Europe experienced a growth in
arrivals of more than 5 percent in 2013. UNWTO expects this growth
to continue at an average rate of about 3.3 percent per year for the
next 15–20 years. For destinations interested in benefitting from this
prospective growth, China has become an object of special interest.
While China has long been one of the most popular destinations for
international travelers, the country has only recently emerged as the
largest source of international travelers. In an overturning of the tra-
ditional division of labor within the tourism sector, where developing
nations have long been important destinations for international trav-
elers, the wanderlust of China’s emerging middle class now extends
from regional destinations such as Hong Kong and Japan to classic
European destinations, with France and Italy as the preferred holiday
spots in Europe (Timemetric, 2014). However, other European desti-
nations also see enormous potential in attracting the high-spending
Chinese tourists. This is reflected in many of the strategies, campaigns
and market analyses that these European destinations have developed
235
236 Europe
and implemented. For example, the national destination management

organizations (DMOs) for Denmark, the Netherlands, Sweden and the
UK have all implemented China as a focal point for future touristic activ-
ities, which has come to be known as “getting China-ready” in popular
discourse (Jørgensen and Ren, 2015).
Chinese tourists tend to show up in the headlines of European
newspapers more and more often. The articles can normally be divided
into two categories: headlines on the potential of making money from
the influx of Chinese tourists (see, e.g., Berlingske, 2014); and head-
lines on the bad behavior of the uncouth Chinese tourists (see, e.g.,
Daily Mail, 2015). Chinese tourists seem to have occupied the slot as
the problematic golden goose formerly belonging, first, to American,
then Japanese and, most recently, Russian tourists – generally known
in tourism academia as turistus vulgaris: the vulgar tourist. The head-
lines in the popular press reflect the current debate in the tourism
industry concerning how to attract Chinese tourists and to accom-
modate their needs. We argue that many of the challenges associated
with the Chinese market segment are actually caused by the specific
composition of the outbound Chinese tourist market and the ways
in which the European destinations approach this market. In this
chapter, we will present a number of theoretical perspectives that
will inform the discussion of the encounter between “old” destina-
tions and “new” tourists and the potential paradoxes that this may
entail.
This chapter will discuss how European destinations apply themselves
to attract and manage the growing Chinese market segment. We will
begin by suggesting various theoretical perspectives as frames of under-
standing for the encounter between Chinese tourists and European
destinations and the shifting division of labor in the global tourism
industry. We will then provide an overview of the outbound Chinese
tourist market in order to establish the foundation for understand-
ing this newly emerged travel activity, which implicitly affects how
the Chinese tourists approach and encounter the European destina-
tions. Next, we will identify national strategies, campaigns and market
analyses within a select number of European destinations with differ-
ent positions in European tourism in order to understand the extent
to which these destinations find it relevant to approach the Chinese
market, and in order to explore how they have then chosen to do
so. Finally, we discuss knowledge gaps in this particular encounter
that will play an ever-increasing role in European tourism in the years
to come.
Karina Madsen Smed and Ane Bislev 237
Understanding the encounter between European

destinations and Chinese tourists
The encounter between tourists and destinations can be viewed from

a number of perspectives, a selection of which are presented here as
they exist in tourism literature and offer valuable insights into poten-
tial relationships between Chinese tourists and European destinations.
A classical perspective from which to explore this encounter is the
so-called “host/guest” relationship (Smith, 1977, 1989) that reflects a
service encounter in the field of hospitality, but has become a general
notion of explaining the relationship that tends to form in a tourism
environment involving a service encounter. This concept characterizes
a somewhat unequal relationship in which one is a receiving host, wel-
coming and accommodating to the guest, and one is a visiting guest,
serviced by the host catering to every need of the guest. Traditionally,
the flow of tourists has been from north to south and from west to
east in terms of which regions of the world are generating tourists, and
which regions of the world are receiving tourists, which means that a
certain world order has been dominant (Smed, 2011). This also means
that host and guest roles have largely been defined by this particular
order. Due to the new emerging markets, this order seems to be chang-
ing and reversed roles are emerging. This may also be a reason to look
into this reversed relationship and ways in which it may complicate the
encounter between the European destinations that are now “hosting”
and the incoming Chinese tourists that are now visiting guests.
One of the challenges involved in exploring this reversal of host and
guest roles lies in the lack of qualitative knowledge about the “new
guests”: the Chinese tourists. There is a high level of interest in the
market potential generated by the blooming Chinese economy, and the
tourism industry is no exception. It is widely acknowledged that the
mere number of potential Chinese tourists will impact the international
tourism industry (Mok and Defranco, 2000; Chow and Murphy, 2008;
Ooi, 2008). Therefore, it is also inevitable that a great deal of atten-
tion will be paid to this particular market of Chinese tourists, which
is demonstrated by the national China strategies in the tourism sector
addressed later on in this chapter. However, some challenges seem to
emerge due to perceptions of this new market and existing markets in
the European tourism context. The actual potential that the Chinese
tourists present is rather unclear at the moment, and so is the actual
difference between this new market and older, more traditional markets
to European destinations, even though it is discursively positioned as
238 Europe
new and different. It is quite evident that there is an implicit under-

standing of the Chinese tourists as inherently different from existing
markets (Ooi, 2008) but, at the same time, there is very little knowledge
of what this perceived difference entails and how this should be han-
dled in practice. It is also very obvious that the various sub-segments
of the Chinese tourists are somewhat ignored by the tourism industry,
and that this market is largely viewed as a relatively homogenous entity
(Chow and Murphy, 2008), despite the focus on large-scale tourism
numbers. Hence, the qualitative knowledge of Chinese tourists behav-
ior is relatively limited (Jørgensen and Ren, 2015), as is knowledge of
the cultural implications in catering to the Chinese tourism market
(Mok and Defranco, 2000). Therefore, it is worthwhile pointing out this
potential challenge that requires more qualitative knowledge in order to
inform this new order in European tourism.
The encounter between Chinese tourists and European destinations
can also be viewed from a destination perspective. One consideration is
what the Chinese tourists bring to this encounter; another, how the des-
tinations operate and face changes and new market potentials. Butler’s
tourist area life cycle (TALC) model (Butler, 1980) is one of the most
widely used for explaining tourism development within a destination
and its implications for tourism management. The model stipulates that
areas go through specific phases over time and according to the num-
ber of tourists that are present. The phases in the development towards
becoming fully established tourist destinations go from exploration and
involvement, through development and consolidation, to stagnation.
With stagnation comes the possibility of escaping stagnation through
rejuvenation, or the threat of decline (Butler, 2006). Each phase entails
specific implications for management and, although this sequence of
development phases has been heavily criticized for overly simplifying
destination development, and as a consequence has been modified over
the years, it is also widely accepted that this may be one of several pos-
sible ways of explaining a general “ideal type” of development (Weaver,
2000). Its usage in this context is merely that of illustrating the idea
that destinations go through different stages that affect how they are
managed. Europe, as a whole, presents some of the world’s most vis-
ited and well-established tourist destinations in terms of the number
of arrivals. For example, Europe as a region is by far the most visited
of all tourism regions, according to the UNWTO, with 588.4 million
international arrivals in 2014, and Asia and the Pacific coming in sec-
ond with less than half – 263 million international arrivals in 2014
(UNWTO, 2015). This logically entails that tourism management is
relatively organized and established practices prevail, which also affects

ways in which Chinese tourists are viewed and approached in this con-
text – as with any other market, or as something new? That being said,
the European tourism region is, of course, composed of a large num-
ber of separate countries, and some of these are less developed and
internationally recognized as tourism destinations than others, thereby
representing different phases of Butler’s TALC model. The details of
these different phases are beyond the scope of this chapter, but there
are also no signs in the national China strategies that the established
destinations generally address the Chinese market any differently than
the less established destinations (see the section on national China
strategies, pp. 248–251). Nevertheless, it is noted that, although the
Chinese market is articulated as distinctly different – e.g. by the use
of the term “getting China-ready” – the identified approaches to the
Chinese tourists are quite similar to those of other markets in European
tourism.
Just as destinations develop, the individual tourists’ approaches to
travel also tend to follow a certain trajectory. Pearce’s travel career
concept entails the idea that tourists are at different touristic levels
according to their past experiences (Pearce and Caltabiano, 1983; Pearce
and Lee, 2005). A travel career is directly linked to the number of times a
tourist has traveled and their level of their experience, in that this affects
the motivations and subsequent demands of the tourist. The logic is that
the more experienced a tourist is, the more diverse and distinctive their
motivations become, due to awareness of possibilities as well as needs
that have already been satisfied. It is therefore the contention that a
tourist’s motivations and needs change with the advancement into a
travel career. The idea of the travel career may therefore serve a purpose
of informing an understanding of the Chinese tourists as a group and
function as a means to segment this large group of tourists that is, so far,
treated as a rather uniform group. Since the Chinese tourists as a group
are considered a new and emerging market, they are often considered
as just beginning their travel careers, and thus a profile of motivations
and needs is rather basic at the moment, often not segmenting the
Chinese tourists (see, e.g., Hotels.com, 2014). However, this would also
overlook the fact that there are various levels of experience among the
Chinese tourists, i.e. sub-segments do exist (Chow and Murphy, 2008).
The application of the travel career concept to the Chinese tourist mar-
ket could be used to investigate, while also adding qualitative knowledge
to the characteristics of these tourists and the diversity that they also
represent.
240 Europe
When combining the two perspectives of Butler’s TALC model and

Pearce’s travel career, it becomes clear that a potential mismatch exists
in the encounter between these well-established European tourist des-
tinations and their ways of approaching this new market – as reflected
in the national China strategies, and the Chinese tourists – which as a
group could be assumed to be very new to the experience of traveling.
It is also indicated in the national China strategies that the variation in
approaches to the Chinese market is similar to that of any other mar-
ket, old or new, that the destinations would target. In order for these
perspectives to unfold, a closer look at the more specific knowledge in
relation to the encounter between European destinations and Chinese
tourists will be undertaken. Specifically, Chinese outbound tourists, pre-
conditions for Chinese mass tourism and travel motivations among
Chinese tourists will be addressed. Lastly, the national China strategies
for a select number of European destinations will be presented and, sub-
sequently, conclusions will be drawn in order to address the potential
challenges that this seemingly opportune encounter is facing.
The development in Chinese outbound tourism
Until recently, the largest body of literature on Chinese tourism dealt

with domestic tourism within China and the potential inherent in local
destination development (Arlt, 2006). But the rise of China’s outbound
tourism market has led to an increased body of literature on China’s
outbound tourist. The staggering figures on Chinese outbound travel
showing 109 million outbound trips in 2014 and $165 billion spent
(Curran, 2015), as well as the enormous potential for future growth –
as only 5 percent of Chinese nationals currently hold passports – have
caught the attention of both policy-makers and the tourism industry in
Europe. However impressive these figures may sound, it is vital to under-
stand the background for the impressive numbers in order to understand
just how relevant Chinese tourists are to the European tourism sector.
A discussion follows on the development and current status of Chinese
outbound tourism, with a focus on the implications for the tourism
industry in Europe.
Leisure travel is a relatively new mass phenomenon in China, as per-
sonal mobility was restricted during the Mao era. Historically, elite travel
was quite common in pre-revolutionary China as in many European
countries but, after the 1949 revolution, travel was mostly restricted
to official purposes. Mass tourism only rose after the beginning of the
reform era when tourism came to be viewed as quite instrumental in
both strengthening ties with the Chinese diaspora and creating eco-
nomic development (Arlt, 2006). Beginning in 1983, the Chinese gov-
ernment allowed organized group tours to visit Hong Kong and, later,
Macau to encourage family reunions and to strengthen ties between the
mainland and the Chinese diaspora. In 1990, the government added
leisure travel to the list of legal purposes for travel and, in 1995, the
system of Approved Destination Status (ADS) was finally formalized,
thus allowing Chinese travel agents to apply for group visas and thereby
lowering the cost and bureaucratic hassle of leisure travel. The first EU
country to receive this status was Germany in 2003, with many of the
other EU member states following suit in 2004 and 2005 (Arita et al.,
2012). As discretionary incomes rose, first, domestic travel and, later,
international travel also became important to the emerging Chinese
middle class. This marks the beginning of mass outbound travel from
China.
There are two major challenges when dealing with Chinese tourism
statistics. The first challenge is the unprecedented speed with which the
growth in Chinese tourism has happened. In 2003, UNWTO predicted
that the volume of outbound Chinese travelers would reach 100 mil-
lion in 2020 (Sparks and Pan, 2009). This figure, which was considered
staggering at the time, had already been exceeded in 2014 and current
predictions have doubled the figure, expecting the number of inter-
national Chinese travelers to reach 200 million in 2020. The second
challenge is the lack of transparent and comparable data concerning
Chinese tourists. The figures published by the China National Tourism
Administration (CNTA) measures the number of separate border crossings
by Chinese individuals and includes daytrips to Hong Kong and Macau,
as well as the frequent border crossings – e.g. by peddlers going back
and forth between China and Russia. Therefore, the impressive figure
of 109 million international travelers in 2014 actually includes a large
number of “repeat travelers” and does not indicate that 109 million
separate individuals traveled outside China for leisure purposes. The
opaque nature of these statistics is also complicated by the Schengen
Visa. For instance, the CNTA figures have the number of Chinese travel-
ers to France at 470,000 in 2013 (CNTA, 2014), while the French Tourism
board reports 900,000 Chinese visitors to Paris alone and 1.7 million
visitors to all of France in the same year (Nussbaum, 2014). This is, of
course, a result of Chinese tourists visiting more than one country on
a trip to Europe; but it also reflects, for instance, Chinese exchange stu-
dents taking advantage of their time abroad to go sightseeing in other
parts of Europe.
242 Europe
Our interest in this chapter is not to analyze these statistics and assess
their reliability but, rather, to look at the figures relevant to the actual
impact of Chinese tourists in Europe – not an easy task due to the diffi-
culties described, as there is an inherent risk of trying to compare apples
with oranges. According to the CNTA, the number of Chinese outbound
travelers reached 98 million in 2013, making China the largest source
market of international tourists. However, when we look at where the
Chinese travelers went (Table 10.1), it becomes apparent that only a rel-
atively small percentage of outbound travelers actually reach Europe.
As Table 10.1 shows, of the top 25 destinations for Chinese travelers in
2013, only four were in Europe1 (the UK, Italy, France and Germany2 ).
In terms of the number of visits, these four destinations together
Table 10.1 Chinese outbound tourists, 2013
Rank Country No. of outbound Increase

travelers (first compared
stop) (millions) to 2012 (%)
1 Hong Kong 40.30 15.3

2 Macau 25.24 17.4
3 South Korea 4.25 42.0
4 Thailand 4.01 78.7
5 Taiwan 2.92 11.0
6 The US 1.97 14.2
7 Japan 1.83 −6.5
8 Vietnam 1.77 32.3
9 Cambodia 1.69 −8.4
10 Malaysia 1.35 −1.5
11 Singapore 1.32 13.4
12 Guinea-Bissau 1.14 216.0
13 Russia 0.92 5.3
14 Indonesia 0.88 23.2
15 Australia 0.82 12.8
16 Burma/Myanmar 0.56 2.8
17 Canada 0.50 19.1
18 The UK 0.49 20.8
19 Italy 0.47 10.3
20 The Philippines 0.45 64.0
21 France 0.42 14.2
22 Germany 0.41 10.2
23 The Maldives 0.30 45.1
24 United Arab Emirates 0.26 11.6
25 Mongolia 0.24 −27.3
Source CNTA (2014).

accounted only for 1.8 million tourists out of a total of 98 million

outbound Chinese tourists in that year. In comparison, Hong Kong and
Macau alone received almost 66 million Chinese travelers, while other
Asian destinations hosted 22 million tourists from China. This means
that the segment of Chinese travelers actually reaching Europe is still
a very small percentage of the actual number of outbound travelers.
Europe therefore retains its status as an exclusive destination to the
Chinese.
In terms of growth rates, the average annual growth in Chinese
outbound travelers reached 18 percent in 2013 (CNTA, 2014), which
means that only the UK with a 20 percent increase actually matched the
average increase, while the rest of the major European destinations were
lagging behind with growth rates of between 10 percent and 13 percent
(see Table 10.1 Chinese outbound tourists 2013). Before being over-
whelmed by the staggering number of 108 million outbound Chinese
tourists in 2014, it is therefore important to remember only a very
small percentage of the huge outbound market is actually headed for
European destinations. If we look at the Chinese tourist market share in
Europe, the discrepancy between the actual numbers of Chinese tourists
and the interest in them is just as striking. It is almost impossible to find
reliable figures for the annual number of Chinese visits to Europe, due
to the difficulties outlined. However, it is possible to look at national
data to get an idea of the size of the Chinese market share. The numbers
from France from 2012 show us a total of 83 million foreign tourists,
of which 1.5 million (slightly less than 2 percent) were Chinese (France
Diplomatie, 2013).
A slightly different picture of the volume of Chinese tourists in Europe
emerges when looking at UNWTO data. These statistics are based on the
number of arrivals in a given country, which means that the numbers
are significantly higher than the numbers from the CNTA. For instance,
a tourist visiting four countries on a trip to Europe would figure in each
of these countries’ statistics, as opposed to the CNTA data, where only
first stops are included.
As Table 10.2 demonstrates, even using data based on national
arrivals, the actual numbers of Chinese tourists remain rather limited
but the growth rates are very impressive, even in destinations such as
Bulgaria and Italy, which do not have national DMOs targeting Chinese
visitors, as we will show later. The outline demonstrates that, though
the official figures for the annual number of outbound Chinese tourists
is enormous and expanding rapidly, the number of Chinese visitors to
Europe is still relatively limited. The enormous interest in the Chinese
244 Europe
Table 10.2 Chinese tourist arrivals at selected European destinations
2009 2010 2011 2012 2013 % Change

2013–2012
Austria 155,179 182,282 259,944 354,657 408,509 15.18

Belgium 75,219 79,908 101,448 122,054 149,399 22.40
Bulgaria 3,865 3,873 5,446 9,235 10,784 16.77
Croatia 7,534 13,195 22,459 43,249 41,129 −4.90
Czech Republic 61,798 79,186 108,629 152,866 174,263 14.00
Denmark 30,228 39,638 31.13
Estonia 2,058 2,823 5,549 5,934 7,806 31.55
Finland 32,603 39,217 50,280 59,491 79,379 33.43
France 740,000 909,631 1,129,872 1,394,165 1,720,404 23.40
Germany 384,576 510,611 637,362 757,290 870,748 14.98
Greece 7,793 13,620 15,838 12,203 28,328 132.14
Italy 138,210 136,780 209,651 231,022 289,682 25.39
Poland 20,033 26,578 33,182 35,547 38,490 8.28
Portugal 21,929 29,424 37,587 51,932 73,639 41.80
Sweden 42,486 49,096 64,559 71,379 83,554 17.06
Switzerland 187,138 286,420 452,724 575,326 704,945 22.53
United Kingdom 89,187 109,000 149,000 178,700 196,000 9.68
Source: UNWTO (2015c).
tourists is, to a large extent, based on the expected continued growth

of the Chinese market segment and the potential for a significant
increase of the Chinese market share in the future. In order to further
explore this potential, we will look at the preconditions for Chinese
mass tourism, before exploring the various national strategies addressing
Chinese tourists in Europe.
Preconditions for mass tourism
Mass tourism is a relatively modern phenomenon in most parts of the

world, but especially so in China where the necessary preconditions for
the development of mass tourism have only recently come into exis-
tence. Firstly, structural barriers that posed challenges for a large number
of tourists had to be addressed. In China, this meant creating adequate
infrastructure for dealing with the potentially large numbers of interna-
tional travelers. This is clearly visible in the focus on creating a sufficient
domestic infrastructure to deal with the huge number of domestic as
well as international tourists. For instance, the Capital Airport in Beijing
has been expanded several times since the 1990s. The latest expansion
was designed to cater for the influx of visitors for the Beijing Olympics
in 2008. At the moment, it is already the second busiest airport in the
Table 10.3 Choice of European DMOs
Destination Organization Website
Bulgaria Bulgarian Tourist Board Bulgariantouristboard.com/

bulgariatravel.org
Croatia Croatian National Tourist Croatia.hr
Board
Denmark Visitdenmark Visitdenmark.dk
France Atout France Atout-rance.fr/rendezvousen
france.com
Germany German National Tourist Germany.travel/btw.de
Board
Great Britain Visitbritain Visitbritain.org/visitbritain.com
Greece Visitgreece/Greece National Visitgreece.com.cn
Tourist Organization
Hungary Go To Hungary Gotohungary.com
Italy Tourism in Italy Italia.it
Netherlands Netherlands Board of Nbtc.nl/Holland.com
Tourism & Conventions
Norway Visitnorway Visitnorway.com/norway.cn/travel
Poland Poland National Tourist Poland.travel/pot.gov.pl
Office
Spain Turespaña Tourspain.es/spain.info
Sweden Visitsweden Visitsweden.com
Switzerland Switzerland Tourism Myswitzerland.com
world, just behind Atlanta (Airport Council International, 2014), and

is currently operating at full capacity, which has led to plans for the
construction of a new airport in the southern part of the city. Apart from
changes to the physical infrastructure, political barriers to travel must be
removed both by the Chinese government and by the receiving destina-
tions. The ADS system marked the beginning of Chinese government
efforts to streamline outbound tourism. Concurrently, visa regulations
for Chinese nationals have been eased by many potential destinations
as they have become aware of the Chinese tourists as a potential source
of income (Sausmarez et al., 2012). In a European context, this has been
especially relevant to the UK, as they are not part of the Schengen Visa
and therefore lagged behind other European countries when it came
to attracting Chinese tourists. This has meant that the British govern-
ment has streamlined visa application procedures for Chinese nationals
to match the Schengen area in order to attract a share of the lucrative
market (Reuters, 2014).
Apart from the structural limitations on traveling, there are also socio-
economic factors to be considered when looking at the development
246 Europe
of the Chinese outbound travel to Europe. Most importantly, potential

tourists need to be in possession of sufficient leisure time and suffi-
cient discretionary income to be able to travel abroad. Holiday time in
China is limited to ten paid holidays per year centering on the Golden
Week around the Chinese National Day on October 1, the Spring Festi-
val (Chinese New Year), and May Day (May 1) (Arlt, 2013). This has an
enormous impact on domestic travel in China since the tourism infras-
tructure can hardly accommodate the huge number of domestic trips
made during these holidays. It could also explain the bias towards visit-
ing Asian destinations, as a trip to Europe involves longer traveling time
and is difficult to manage during the relatively short vacations.
In terms of income, while the Chinese middle class has grown and
mean incomes in China have risen during the reform period, the aver-
age income of the Chinese middle class is still lower than their European
counterparts, making international travel a luxury. The average monthly
income of the outbound Chinese tourist in 2013 was 11,512 yuan
(Ipsos, 2014), again demonstrating that the cost of travel to Europe is
restrictively high to a large segment of the outbound tourists. Chinese
tourists also have slightly different spending patterns when compared,
for instance, to European tourists, as the Chinese tourists tend to spend
more on shopping and less on transportation, accommodation and
food during the trip (EU SME Centre, 2014). In sum, due to the rel-
atively high cost of traveling and longer time required for a trip to
Europe “Outbound tourists are likely to be relatively wealthy middle-
class Chinese with higher than average education, from tier-1 cities
(mostly from eastern provinces) and relatively young” (EU SME Centre,
2014).
Apart from the economic and temporal barriers to selecting Europe
as a holiday destination, the selection of a holiday destination is a con-
sumption decision on par with buying a new car or selecting furniture
for your house. It is therefore also a topic of more subjective constraints,
e.g. peer group attitudes and positive social sanction towards investing
time and money in traveling. It is therefore quite important to under-
stand the underlying motivations for making the decision to spend time
and money on international travel.
Travel motivations and expectations

Most studies dealing with the travel motivations of Chinese tourists are
based on relatively limited surveys of more or less representative groups
of Chinese tourists (see, e.g., Li et al., 2011; Li et al., 2013; Xiang, 2013).
As Arlt (2006) points out, surveys can only be used to access certain
aspects of tourists’ motivations, while the implicit/latent aspects such

as peer group attitudes and social status are less likely to be expressed
openly in survey answers. In other words, the results discussed below
reflect the dominant discourse on travel motivations in China, while
it would take an in-depth qualitative approach to catch the more sub-
tle nuances. The surveys do, however, provide some indications of the
expectations of the Chinese travelers.
In a study of 1600 outbound tourists from three major Chinese cities,
Li et al. (2013) classify Chinese tourists into three overlapping segments
based on their travel motivations: entertainment/adventure seeking, life
experience/culture explorers, and relaxation/knowledge seeking. These
categories resemble general theory on tourist typologies (e.g. Cohen,
1974; Plog, 1977; Smith, 1977), but also fall short in providing details
and complex explanations of actual behavior. The study by Li et al.
(2013) does not specifically address the linkage between travel motiva-
tions and behavior – e.g. choice of destinations; rather, it demonstrates
how push and pull factors intermingle in the expressed travel motiva-
tions. In a study of Chinese tourists in Italy, Corigliano (2011) demon-
strates how price and easily accessible information in Chinese (and
preferably from web-based sources) play a large role in deciding holi-
day destinations. Her study also indicates that the high cost of airfares is
cited as a reason to visit more than one destination in a trip to Europe.
Another study based on focus groups in Shanghai (Li et al., 2011)
makes the important point that, while many of the Chinese outbound
tourists’ expectations and motivations match those of tourists from
other nations, the fact that the Chinese outbound tourists are relatively
inexperienced international travelers, even though they occupy a high
social position in China, means that their expectations of the attributes
at their chosen destination in terms of service and accommodation are
relatively high. This is supported by a study of Chinese tourists to the
UK, where hotel standards create problems since Chinese tourist expec-
tations are of modern, American-style hotels with a high level of comfort
and spacious rooms, which are not found in budget accommodation in
London and other British cities (Sausmarez et al., 2012). British tour
operators consequently found that cultural difficulties abound in deal-
ing with their Chinese counterparts and that the potential profit does
not always match the practical difficulties (Sausmarez et al., 2012).
One of the most important developments in Chinese outbound
tourism is the movement away from organized tour groups towards
self-organized tours and the “second generation” of Chinese tourists.
Current estimates suggest that as many as 40 percent of Chinese tourists
248 Europe
are traveling without the security of a tour group (Arlt, 2013). This
is a recent development that will have a very significant impact on
the expectations and motivations of Europe-bound Chinese tourists.
It reflects the fact that the Chinese are becoming more seasoned tourists
who feel comfortable organizing their own travel experience, and that
they are consequently likely to be more demanding not just of hotel
standards and the accessibility of Chinese food, but also of the actual
on-site experience and the information available for pre-trip planning.
A study of Chinese tourists to Milan supports this, and finds that indi-
vidual travelers are actually less likely to be satisfied with their on-site
experience in Milan when compared with Chinese tour groups (Pearce
et al., 2013). More self-organized tourists will also increase the impor-
tance of targeting national tourism strategies specifically towards the
Chinese market, as these tourists will be looking online for informa-
tion on hotels, transportation and attractions, and will be more likely to
select destinations where this type of information is easily accessible in
Chinese.
This overview of the Chinese outbound tourists’ motivations and
expectations raises the question of the extent to which these differ from
those of other nationalities, and therefore necessitates specific efforts
directed towards the Chinese market. In terms of travel motivations,
the Chinese market segment resembles other tourist groups. There may
be slight differences in the priorities, but as Pearce and Lee (2005) have
demonstrated, tourists’ motivations tend to change with time and expe-
rience. Many of the other perceived differences between Chinese and
Western tourists can also be seen as a result of the different travel careers
of the two segments and of the fact that a large proportion of the
Chinese visitors to Europe will be part of the upper-middle class. Conse-
quently, their expectations towards the service industry in Europe will
not always be met by the level of service at popular tourist destinations.
It is therefore of vital importance that the national strategies reflect the
increased diversification of the Chinese tourist market.
National China strategies
The European tourist destinations are well aware of the upcoming

Chinese market, and the tourism industry has paid a lot of attention
to the importance of the BRICs in the market dynamics of the near
future (Mariana et al., 2014). The approaches to this Chinese market
across a broad spectrum of European DMOs reflect that China, in par-
ticular, presents new opportunities for incoming markets which is, to a
great extent, viewed as a new market in a European context. The idea

of “getting China-ready” – which is a widely used term – indicates the
expectation of something new and different to tourism in Europe. It is,
however, somewhat less explicit when exploring the actual strategies
for approaching the Chinese market. Throughout this study, a num-
ber of national DMOs have been investigated in order to explore a
European approach to Chinese tourists. Table 10.2 shows the DMOs
investigated. As tourism is organized differently at different destina-
tions, there is some variety in the organizations and websites used as
a basis for this study, mainly because some websites offer underlying
strategies and marketing efforts to the public, whereas others do not.
Additionally, some offer information in different languages, whereas
others only carry information in the national language, which presents
a challenge to an investigation such as this. Therefore, both commer-
cial websites addressing tourists and business websites addressing the
tourism industry have been incorporated in order to explore ways in
which the Chinese tourists are approached. Furthermore, the choice of
DMOs is based on an aim to include various geographical regions of
Europe: North, South, East and West, which have been selected to rep-
resent different statuses in European tourism in regard to development
stages and size.
An exploration of these DMOs and their approach to the Chinese
tourists shows that four types of approaches dominate:
Approach 1 is perhaps the most tangible, due to the fact that it is based
on relatively solid statistics, market research and strategic choices that
are voiced in different ways.
Approach 2 entails providing basic statistics on Chinese tourist behav-
ior, such as the number of overnight stays, length of stay, spending and
so on. The difference to the first approach is that the intentions are less
clear and direct, and it seems that statistics, to a large extent, stand alone
as basic information.
Approach 3 has less to do with visible signs and articulation of
approaching the Chinese tourists, and more to do with apparent behav-
ior – e.g. in terms of websites translated into Chinese or representative
offices in China.
Approach 4 is a non-approach, in that no apparent approach to these
Chinese tourists is evident.
This last approach was included in order to illustrate that, although
the Chinese market has been paid considerable attention, there are still
destinations that are not visibly targeting these tourists. The reasons
why some follow this trend and others do not are not addressed here
250 Europe
Table 10.4 DMO approaches to the Chinese tourists
DMO Approach 1: Approach Approach 3: Approach 4:

tangible, detailed 2: basic translation non-approach
market research statistics and/or
and initiatives representation
Bulgaria X
Croatia X
Denmark X X X
France X
Germany X X
Great Britain X X X
Greece X
Hungary X X
Italy X
Netherlands X X X
Norway X
Poland X X
Spain X X
Sweden X X
Switzerland X
Total 4/15 7/15 12/15 3/15
because it is not the object of this study. However, indications that polit-
ical reasons may have something to do with this can be found outside a
direct tourism context. Some of these approaches can overlap, and there-
fore the Table 10.4 illustrates the presence of each approach according
to DMOs.
This overview of the 15 European DMOs’ approaches to the Chinese
tourists presents various indications. Firstly, most of the destinations
surveyed are paying attention to this new market, one way or another.
Secondly, the vast majority of the DMOs have recognized a need for
translations into Chinese, or representations in China, or, ideally, both.
There are also many DMOs that have a level of statistics and mar-
ket analyses to support their strategic choices. However, when taking a
closer look at these, it is very evident that many markets are approached
much in the same way with a few exceptions where specific differences
from other markets are addressed, e.g. in terms of specific tips to address
Chinese tourists. In addition, related activities on a broader national
scale addressing the Chinese market can be detected in some cases,
which have been noted here but otherwise left out of this overview.
Lastly, it is necessary to point out that, as mentioned earlier, quantitative
knowledge of Chinese tourists as a generic, homogenous group was
very evident whereas more qualitative data and knowledge was harder
to detect, which underlines the lack of more in-depth studies of these

Chinese tourists.
The survey of various DMO approaches to the Chinese market seg-
ment presented presents several interesting trends when seen in the
light of Butler’s TALC model, presented at the beginning of this chapter,
and combined with statistics of the actual number of Chinese visi-
tors to the various destinations. Firstly, the four countries listed under
“Approach 1” in Table 10.4 with comparably comprehensive strate-
gies for attracting and managing Chinese tourists are relatively well-
established destinations in terms of regular international tourism, but
relative new-comers to the Chinese scene. The UK has historically
received relatively few Chinese tourists because of its separate visa reg-
ulations; Sweden and Denmark have only recently begun a concerted
effort to attract Chinese visitors, lack the sort of “must-see” attractions
that are very important to first-time visitors to Europe and are geograph-
ically placed on the northern edge of Europe, making travel slightly less
convenient than in southern and central Europe.
The three countries without an identifiable DMO strategy for the
Chinese market represent very different cases. Italy is one of the most
popular destinations for Chinese tourists and demonstrates a solid
yearly growth (see Table 10.2), while Bulgaria has a very limited num-
ber of Chinese visitors. Croatia, on the other hand, has a number of
Chinese visitors comparable to the Scandinavian countries, but is the
only country in our survey to experience a negative growth in the num-
ber of Chinese visitors. In the two middle categories (Approaches 2 and
3), representing a somewhat limited China-oriented strategy, we find
both very popular and well-established destinations such as France and
Switzerland, as well as rising markets such as Poland, which only show
limited numbers of Chinese visitors, as well as limited growth. The pic-
ture that emerges when looking at the numbers of Chinese tourists
arriving at a giving destination and the efforts made by the local DMOs
to accommodate these tourists is very mixed. Chinese tourists prefer the
classic destinations, that are relatively easy to reach on a tour of Europe,
and which represent well-established destinations from a TALC perspec-
tive. However, the growth that we see in some of the less well-established
destinations could be due to the increasing segmentation of the Chinese
travel market.
Conclusion
The most important conclusion to be drawn from our study of outbound

Chinese tourists is that there is an enormous amount of attention being
252 Europe
paid to the potential of Chinese tourists as a new market. The growth in

outbound Chinese tourism coincided with the financial crisis in Europe,
and the Chinese tourists have consequently contributed to the con-
tinued growth in the tourism sector despite the general downturn in
the European economies. As regards outbound tourism from China, one
might argue that, even though the Chinese economic growth seems to
be stagnating, tourism has become a matter of prestige, which is very
important for the middle class. Consequently, the wheels will keep on
turning when it comes to tourism. At the same time, whether or not the
potential future income from the Chinese market that is expected and
very explicitly articulated in national China strategies will eventually
be realized in full is argued to be less clear when looking at the exist-
ing statistics on Chinese tourists in Europe. This suggests that perhaps
the potential is not endless; neither is it to be taken for granted in any
destination in Europe. Competitive advantages in the light of qualitative
knowledge of the Chinese tourist need to be identified for European des-
tinations, both overall and separately, in order to approach the Chinese
market much more directly. As most Chinese tourists visit more than
one European country in one trip, cooperation between the different
DMOs is crucial – as exemplified by the Scandinavian Chinavia project.
Also, the second-generation Chinese tourist is less likely simply to visit
the Mona Lisa and Big Ben, but will be more open to new destinations
and individual experiences.
It is therefore clear that there is a knowledge gap between the per-
ceived potential of these new Chinese tourists and the practical efforts
made towards realizing this potential. At the moment, this is made
most evident by the fact that knowledge of these tourists is very gen-
eral and mostly quantitative. The European DMOs rely to a great extent
on very basic research that does not address more qualitative types
of knowledge that would provide a greater insight and understand-
ing of the way Chinese tourists differ from existing market segments
in European tourism. Qualitative knowledge could be utilized at each
destination wishing to attract Chinese tourists. Moreover, the under-
standing of the Chinese tourists as a more diverse, heterogeneous group
would be increased if details were brought to light. Potentially, differ-
ent European destinations would be found to be attractive to different
sub-segments, rather than all destinations approaching Chinese tourists
in much the same way. As has happened with the previous specimens
of turistus vulgaris, the current turistus vulgaris sinensis will eventually
be deconstructed into smaller segments and replaced by a new favorite
scapegoat in media headlines.
Keeping in mind that there is still only a perceived potential that has
yet to play out in practice, there is some existing knowledge that could
possibly inform these discussions and provide more details to existing
knowledge of the Chinese tourists. This chapter suggests that a com-
bination of a destination development perspective and a tourist travel
career perspective could help fuse particular European destinations with
various segments of Chinese tourists with different travel experiences,
demands and needs. Moreover, an understanding of the reversal of the
host/guest relationship and the impacts it could have on this encounter
may also be useful in this context of defining the new order not only in
European but also in global tourism flows.
Notes
1. Though Russia is technically also part of Europe, I exclude it here as it is
simultaneously a neighboring state and therefore often visited on day trips
by small-time traders.
2. These statistics are based on the first stop on the tourist itineraries. As Chinese
nationals traveling in Europe typically visit more than one country, the actual
number of visitors to a given country will be higher than is reflected in this
statistic. Also, it is worth noting that Hong Kong and Macau are consid-
ered as international destinations, accounting for more than two-thirds of all
outbound trips from China.
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Conclusion
11
Emerging Powers, Emerging
Markets, Emerging Societies:
Global Responses
In Chapter 1, we presented our understanding of the “great transforma-

tions” taking place in international relations and in the international
political economy. These transformations are also creating responses
at national level in terms of economic/market orientation, political
alliance, development strategy, and so on. One of the book’s key objec-
tives is to provide a good framework for understanding the relationship
between the rise of emerging powers and the existing world order, with
an empirical focus on worldwide responses.
The questions which were raised in Chapter 1 were designed with the
aim of looking for answers as to the “global impact” of the rise of emerg-
ing powers and the “responses” from different countries and regions.
But we also are aware of the interconnectedness, complexity, multi-
plicity and dialectics of development in the world order (Figure 11.1).
Therefore, if we are making an attempt to offer some conclusions, there
is no doubt that these are open-ended conclusions. Here are some key
conclusive findings offered by this book.
Firstly, in an era of global capitalism it is impossible for the emerg-
ing powers to establish an alternative independent hegemony; rather,
the world is witnessing a new era of “interdependent hegemony” (or
“intertwined hegemony”), in which both the existing hegemons and
the emerging powers are engaged in a constant process of shaping and
reshaping the world order in the nexus of national priority, regional ori-
entation, market interests, political support and potential conflicts (Li,
2014; Li and Agustín, 2014). This conclusion is supported by the chapter
contributions (chapters 4 and 5) in which global responses are character-
ized by or embedded within ongoing interactions of order-shaping and
259
260 Conclusion
Figure 11.1 The ongoing transformations in the world order
reshaping activities. We understand the term “intertwined hegemony”

to reflect the interactions and competitions for shaping and reshaping
regional and global orders, not only between the emerging powers and
the existing powers, but also between the emerging powers themselves,
such as between India and China, and Brazil and China.
For example, India is collaborating with different partners, such as the
USA, China and the other BRICS. Its foreign policy is highly complex,
and its relations with the USA include a strategy of bandwagoning in
the pursuit of a policy of being a responsible atomic power. At the same
time, India is seeking to balance US power and interests through the
BRICS and IBSA coalition, which is also serving as a tool for promoting
India’s rise in the global hierarchy. India’s relations with China show
similar contradictions – or, rather, complexities – as India is experiencing
a great deal of anxiety towards China as a competitor in global trade, as
well as in the security dimension in India’s regional neighborhood. India
is, in a sense, trying to be friends with all but an ally with none.
Brazil is in a somewhat similar situation to that of India, in the
sense that it is pursuing coalitions with emerging powers such as China,
India and South Africa through the BRICS, in an attempt to gain more
influence in the global system. However, Brazil is not an actual ally of
these countries in general terms. They are collaborating on issues or
areas of shared interests and identity, i.e. the areas in which Brazil has
historically been excluded from the hierarchy of power in the global
system. In other areas, though, these countries are also rivals. However,
in its relations with the USA, Brazil has not pursued a bandwagoning
strategy in recent years, while its relations with China are also show-
ing contradictory aspects. China has been a central ally – particularly
since 2003 and especially in the area of global economic governance –
but, at the same time, China is a powerful competitor of Brazil in inter-
national trade. Although the two countries often take similar views in
the security dimension, they are not generally allies in terms of security
matters.
India and Brazil, as well as the other BRICS, are all going about their
common relations in a largely instrumental way of promoting their own
interests, and it is not clear whether the geopolitical alignment of recent
years will be maintained; a self-interest strategy may not necessarily con-
tinue to be seen to be in their common economic and security interests.
This creates a certain level of indeterminacy. Might this be considered
to be just a temporary situation that is likely to subside once the BRICS
alliance is no longer deemed to be instrumental in promoting the aims
of the members of the coalition? This would not be a surprise from
a realist perspective that sees coalition-building as temporary fledging
driven by a self-interested instrumental view. The BRICS countries share
a common identity of having been marginalized from the governance
level of the global system and of having suffered under the hegemony of
the traditional dominant powers. In this context, they have historically
pursued policies aimed at defending their autonomy, or sovereignty,
from external imposition. In the recent context of the rise of the emerg-
ing powers, their newfound power has caused them to become more
ambitious, and they are now seeking to promote a multi-polar world
order in which they would be able to gain more centrality in the hier-
archy of the international system, and to manage global affairs through
different governance mechanisms in different domains. The ambition
has been to promote an order that would be more inclusive, seen from
their perspective. It is also typically claimed in official rhetoric in Brazil,
India, China and South Africa that they are defending a more socially
balanced and inclusive world.
In the case of the strategic partnership between China and Brazil,
bilateral relations are becoming increasingly asymmetrical; Brazil is fac-
ing economic difficulties as a consequence of falling commodity prices
after the outbreak of the international financial crisis, whereas China is
in a different situation, having specialized in manufacturing production
262 Conclusion
and exports. It is not clear, therefore, if the two countries will continue
to find broad areas of shared interests and shared identity in the future,
since the relative power gap (or aggregate power gap) between them is
widening.
Secondly, it is also interesting to note (Chapter 8) that some coun-
tries, such as Bolivia, have seen the rise of the BRICS – and, particularly,
of China and the regional power, Brazil – as an opportunity to pur-
sue collaborative relations with these countries in a strategy countering
US hegemony in the Latin American region. Similarly, Bolivia has
sought to engage in the regional institutions ALBA and UNASUR, as
well as to cooperate with the BRICS and others in a strategic man-
ner – thus promoting their own interests, as well as more ideological
visions, such as the indigenous culture’s idea of “living well” as an alter-
native to a market- and competition-based order. This idea has been
advanced by popular non-elite groups and social movements, some of
which are ethnically and culturally based. Here, we can speak of “rising
societies” that are seeking to take advantage of the improved room for
maneuver offered by the rise of new global and regional powers after
the many crises of neoliberalism in Latin America. This gave way to a
new golden era of rising commodity prices and new state-driven devel-
opment strategies that are departing from the orthodox and neoliberal
reform strategies of the 1990s, when the USA was seen as a dominant
rule-making power. In the 1990s, many Latin American societies and
economies were experiencing high levels of external vulnerability in
the aftermath of the “lost decade”; Latin American development in
the 1980s was provoked by high levels of foreign indebtedness, which
left many countries largely defenseless with a low degree of auton-
omy to pursue independent foreign policies and development strategies.
In many ways, they have to face policy intervention by the dominant
countries and the Western-based financial institutions.
Thirdly, the world order is displaying a unique characteristic of mul-
tifaceted phenomena in which the world order is simultaneously dis-
playing three-fold features: world disorder, world new order and world
re-order (Chapter 1). Although the existing order has been suffering
crises in four major areas, the core foundation of the capitalist world
system remains unchallenged. If any challenge is being posed by the
emerging powers, this is at the “functional” rather than the “structural”
level. Many countries and regions are taking advantage of economic
relations with the emerging powers, while maintaining defense and
political alliances with the traditional powers. Seen from this perspec-
tive, the Gulf region is of particular focus in this book (Chapter 6).
A dramatic change is taking place in the trade patterns of the Gulf coun-
tries as they are increasingly directing their exports and trade towards
the BRICS, which are developing into bigger export markets than the
USA. This can be related to the changes of balance amongst global
economic powers and of the international division of labor that has
caused an increase in the resource appetite of the BRICS to support their
industrial development.
However, it must be noted that this story is not one of the BRICS, as
such. China and India are dominating the headlines, while Brazil is also
somewhat relevant. Thus, the BRICS should not be seen as a solid “his-
torical bloc”; instead, it is necessary to identify the differences between
the member countries. They are developing in different fashions, which
may affect their roles and influence their interests in time to come.
Despite their growing market relations with the BRICS countries, the
Gulf countries are maintaining their security alliance with the USA and
its traditional Western allies. They are seeking to maintain the exist-
ing political and security orders. This stands in stark contrast to what is
happening in Latin America, where the tendency has been towards the
construction of new regional institutions such as the ALBA, UNASUR
and CELAC, which are seeking to promote their own institutions to
guarantee regional security in a conscious effort to exclude the regional
hegemon – the USA.
At the same time, Latin American countries are largely following het-
erogeneous foreign and development policy patterns, and are not really
teaming up behind the same regional leader. A level of disorder is obvi-
ous in the centrifugal tendencies of regional arrangements in the Latin
American region. With the increasing economic challenges of countries
such as Venezuela and Brazil, regional leaders may not currently be able
to maintain the capacity to define a direction to the region, which is
now standing between the USA and Europe, on the one hand, and China
(and Asia), on the other. Will Brazil be able to retain its position as an
emerging power with great influence in the region, and will Venezuela
retain its ability to promote alternatives to neoliberal capitalism based
on socialist ideology and oil wealth? How will China and the USA face
this situation? After the financial crisis, María Regina Soares de Lima
and Ricardo Castelán (2013) pointed out that the world was facing an
increasingly interesting situation of imbalance between the distribution
of power and the existing world order. This idea was based on the rise of
emerging powers such as the BRICS and the crisis of traditional powers.
At the time, around the close of the first decade of the 21st century, this
264 Conclusion
was also reflected in the leading roles of Brazil and Venezuela in Latin
America.
The idea at this point is that a likely scenario would be the re-ordering
of the global order, as the BRICS are gaining relative power. Accordingly,
a likely consequence would be greater multi-polarity and inclusion of
the emerging powers in the international hierarchy of states. Maybe the
world is now experiencing a situation with two superpowers: the USA
and China. This is also why it is interesting not just to consider the
BRICS in terms of their coalition, but also to consider how the other
BRICS countries respond to an increasingly powerful China. This also
applies to other countries, as well as to different world regions. In the
case of Latin America, recent volatility in commodity prices is provok-
ing political and economic instabilities in several countries, including
Brazil and Venezuela. This situation is potentially challenging their rise
as regional powers, whereas China’s influence in the region is growing,
and the influence of the USA may or may not be on the rebound.
Fourthly, it is obviously true that the BRICS, in general, and China,
in particular, are exhibiting a dialectic “challenge-integration” duality:
challenge in line with realist pessimism, and integration along the lines
of neoliberal optimism. This duality corresponds to one of the core
objectives of the book – “global responses”, which are also displaying a
strong characteristic of duality. The book describes the duality as “stand-
ing on two boats” (chapters 1 and 2). In this understanding, national
interest priorities are making it imperative for the global South and mid-
dle powers to adjust and position themselves to both the existing and
the emerging powers. Some are standing more on the left boat, while
others more on the right. Some responses are market-driven, while some
are motivated by a “balancing” strategy (gaining benefits from both
sides at the same time). Even in Europe, a developed region, we find
that the rise of the emerging markets, such as the soaring tourism mar-
ket from China (Chapter 10), has led to a new global market situation
and a new distribution of economic power globally. European actors are
responding to the double-digit percentage increase in Chinese tourist
numbers in Europe by proactively responding to the market power of
Chinese tourists. This dynamic is witnessed throughout the world as a
general feature and, of course, not only in the tourism sector, but also
in most other economic sectors. Economic priority is the basis of global
interest in China, as this is further strengthening China’s potential for
rising in the world power hierarchy. Consequently, China’s rise is an
imperative challenger to US hegemony – not only economically, but
also politically. If this were to play out to China’s advantage, the world
would have experienced a hegemonic cycle theorized by world system

theory.
Understanding this change of global power balance, most countries
are choosing to adapt their foreign policies and development strate-
gies accordingly. The case of Denmark (Chapter 9) indicates that Danish
foreign policy in general is less likely to prioritize value and norm pro-
motion, focusing more on national security interests. Denmark is trying
to play a new role in its activist foreign policy as a type of broker in
relations between the traditional powers and the new emerging pow-
ers, promoting dialogue, inclusion and responsibility, especially in the
issues related to global governance and the changing world order. In this
aspect, Denmark is also standing on “two boats”, i.e. strengthening
cooperation with the emerging powers in economic and governance
matters, while maintaining strong ties with the USA on value and secu-
rity issues. However, keeping such a balance is not an easy task for
Denmark, or for many other countries.
Finally, some scholars are not convinced by the so-called “transfor-
mation” in the world order. Rather, they (chapters 3 and 7) see the
emerging powers as latecomers who are joining the club of the exist-
ing core countries and thereby becoming new members that support
the foundations of the neoliberal world order dominated by a global
elite class. Despite global responses and reorientations, the success of
the BRICS powers can be conceptualized as part of the Gramscian
“passive revolution” phenomenon in the current world order. Elites
of the BRICS joined the global capitalist class as junior partners, and
their inclusion was in line with the interest of the existing neoliberal
order led by elites of the traditional powers. The “passive revolution”
analysis sees the inclusion of the BRICS in the neoliberal order as a
negative scenario for Africa, which is expected to be facing contin-
ued exploitation (Chapter 7). The exploiters today are not just the old
colonialists, but a wider group of “neo-imperialists” or “neo-colonial
powers”, including the emerging powers that are strong followers of
the neoliberal world order, which is manifested by unequal exchange,
capital expansion and market shares. However, not everybody agrees
with this analysis. As mentioned, the BRICS themselves are celebrat-
ing a narrative that sees them as guarantors of a more socially balanced
order, a narrative that fits well with the Bolivian “living well” ideology
(Chapter 8).
The geographical and thematic scope of the book is deliberately aimed
to be broad and comprehensive. The substantial focus is on responses
by countries from different world regions (Africa, Gulf countries, Latin
266 Conclusion
America and Europe) to the changes taking place in the world order in
a multi-polar context. Reflecting the theoretical discussions introduced
in Chapter 1, the book concludes that global responses to the rise of
emerging powers are expressed in different ways, hand-in-hand with
the emergence of multi-polarity and multilateralism. The emergence of
a multi-polar system has implications for the behavior of states and
other actors in the international system, creating both opportunities
and constraints. For realists, multi-polarity is believed to create com-
petition, uncertainty and conflict; for liberalists, multi-polarity creates
new dynamics for interstate economic relations. Many states respond
to the transformations by attempting to strike a balance between bene-
fitting from the market share with the emerging powers, while taking
advantage of the security umbrella provided by the existing powers.
Some states are also endeavoring to maintain their autonomy through
borrowing strength by linking with the emerging powers.
However, the rise of the emerging powers, seen from the world system
perspectives, does not reflect any fundamental change of the capitalist
world system, a change that is governed by the drive for the end-
less accumulation of capital – the law of value. Accordingly, the rise
of the emerging powers, together with global responses, is seen to be
further confirming the “passive revolution” capacity of the capitalist
world system by successively incorporating new states into its division
of labor and turning them into an “exploiting class” in terms of unequal
exchange with periphery countries.
The editors of the volume see theoretical pluralism and eclecticism
applied in the book to be constructive in an attempt to outline a research
agenda on the transformations of the world order and the international
system. A holistic perspective is useful and heuristic when attempting to
grasp ongoing global and regional transformations and responses at the
national level within the dimensions of markets, states and social actors.
Theoretical pluralism is justified, because it allows for a more inter-
esting and dynamic analysis and a more comprehensive depiction of
the ongoing interlinked transformations in the world order. And it also
corresponds to, or reflects, different empirical dimensions covered by
the book: economics, politics, peace, security, resources, environment,
norms, values and institutions, amongst others, focusing on Africa,
Latin America, Europe and the Gulf region.
The editors of the volume expect that the world order will remain in a
process of transition and transformation (chapters 1 and 2). We believe
that the nature of the future world order will be shaped by the type
of relationship between the rise of emerging powers and the existing

order. This type of relationship is understood to be governed by dialectic
dynamics in the form of a waxing and waning cycle; and the interaction
embedded in this relationship will remain in a state of flux, rather than
transfer to a purposeful forward (integration and accommodation) or a
backward (conflict and war) movement, as anticipated by deterministic
ideologies. When taking into consideration the global responses to the
waxing–waning cycle and the state of flux, we will see a more horizontal
world order, rather than the conventional vertical order that embraces a
variety of actors, a variety of systems and a variety of norms, values and
ideologies’ spaces for interaction and competition (Pu, 2012; Kavalski,
2013).
The editors of this volume expect that future volumes on this theme
will have a stronger regional focus. This would be very useful in order
to develop a detailed and comprehensive understanding of transforma-
tions in the global system at the regional level. It would be advisable
that such analyses maintain the comprehensive thematic scope with a
variety of theoretical perspectives found in this volume, because this will
allow openness to different analyses, interpretations and conclusions.
References
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Li, X. and Agustín, Ó. G., 2014. “Constructing and Conceptualizing ‘Interdepen-
dent Hegemony’ in an Era of the Rise of the BRICS and Beyond.” In Li Xing
(ed.) The BRICS and beyond: The Political Economy of the Emergence of a New World
Order. Farnham, UK: Ashgate, pp. 53–74
Lima, M. R. S. D. and Castelán, R., 2013. “O Brasil, os BRICS e a institucioal-
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Brasil, os BRICS e a agenda internacional. Brasília: Fundação Alexandre Gusmão,
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Kavalski, E., 2013. “The Struggle for Recognition of Normative Powers: Norma-
tive Power Europe and Normative Power China in Context.” Cooperation and
Conflict, 48(2), pp. 247–267.
Pu, X. Y., 2012. “Socialisation as a Two-way Process: Emerging Powers and the
Diffusion of International Norms.” Chinese Journal of International Politics, 5,
pp. 341–367.
Index
accumulation model, 6 Asian Infrastructure Investment Bank

active internationalism, 219 (AIIB), 35, 224–5, 229
adaptation, 9–10, 12 Asia Pacific Economic Cooperation
ADS, see Approved Destination Status (APEC) summit, 36
(ADS) Astorga, Luis, 187
Africa Atlantic-centered activism, 219
BRICS in, 162–3; “Africa Rising,” authority
167–9; Plus ça change, 175–7; crisis of, 7
saviors, 169–75; state–society dominant systems of, 192
complex in, 163–7 autonomist perspective, 21–3
developing nations in, 113 autonomist theory, 21
economic growth, 175 autonomy, 21
economies, external domination of, principle of, 22
166–7
emerging economies in, 163 Bahrain, 132, 135, 139–41, 146, 148
GDP growth, 167–8 oil prices, 134
international relations, 164 Bangladesh, 58, 112, 147–8
manufacturing growth, 168 belief systems, 217
modes of governance in, 165–6 alternative, 219
“non-traditional” actors in, 169 Beyond Hegemony (1984), 14
political culture, 165 Bharatiya Janata Party, 116
post-colonial nationalism in, 163–4 BICs, see Brazil, India, China (BICs)
relations with BRICS, 163 Bolivia
underdevelopment, 166 foreign policies, 25
African Development Bank, 174–5 ideological proximity of, 196
AIIB, see Asian Infrastructure relations with BRICS, 185–7, 200–2;
Investment Bank (AIIB) ALBA, 195–7; budget surplus,
ALBA, see Alliance for the Peoples of 193–4; crisis in 2008, 199; as
our America (ALBA) global player, 200; Group of 77,
Alliance for the Peoples of our 202–4; political alliances and
America (ALBA), 194–7 changing positionalities, 193–4;
ideological content of, 196 as regional player, 194–5;
alternative belief systems, 219 sociological institutionalism,
American hegemony, see US 190–3; states and
hegemony interdependent hegemony,
APEC summit, see Asia Pacific 187–90; UNASUR, 197–9
Economic Cooperation (APEC) Brazil, 10, 15, 195
summit bilateral trade, 89
Approved Destination Status (ADS), and China relations, 87–8; analysis,
241 88–92; relations 2003–2008,
system, 245 92–7; relations 2008–2015,
Arkonada , Katu, 204 97–104
Asian Development Bank, 124, 224 Chinese FDI in, 97–8
268
Index 269
export markets, 94 BRICS Summit in Brazil, 48

export prices in commodities, burden-sharing process, 72–3
100 Bush, George W., 63
financial and economic crisis, 90
foreign policy, 91 capital accumulation, 16–18, 40, 55,
policy of alignment, 88–9 75, 136, 139, 152, 162
relations, 12; with GCC, 146; with process of, 18
United States, 91 capitalism
Brazil, India, China (BICs) global spatio-temporal restructuring
economic and cultural exchange of, 75
with, 149 political and economic norms of, 9
economies, 133 capitalist investment, 56
and GCC relations, see GCC-BICs
capitalist world system, 18
relations
Cardoso, Fernando Henrique, 90–2
GDP growth in, 134
CELAC, see Community of Latin
Brazil, Russia, India, China and South
American and Caribbean States
Africa (BRICS) countries, 8, 21–5
(CELAC)
concept of, 56, 63
Chávez, Hugo, 197
crystallization of, 65
China, 36
direct investment from, 73
bilateral economic relations with,
emergence of, 61
97
and emerging powers, 40, 49
bilateral trade with, 90
general indicators of, 169–70
Brazilian exports to, 90
hegemony in, 7
competitive pressures from, 94
India’s participation in, 124–5
comprehensive strategic partnership
institutionalization of, 200–1
with, 225
intermediate powers, 77–81
international trade rules, 20 Danish “ombudsman-project” in,
and legitimacy, 81–2 228
middlepowermanship, 77–81 development model, 89–90, 92
military alliance, 103 diplomatic recognition of, 89
motivations for membership of, economic reforms, 89–90
66 exports commodities to, 100
outward FDI flows, 73–4 “free-riding” behavior of, 13
principle of autonomy/sovereignty, global vision, 91
22 human rights in, 227
rise of, 10, 12, 19 and India, 172
and rising powers, 34 integration into global economy, 93
role of governments in, 223 products, 99
success and development of, 47 regional and global influence, 224–5
summit, 54, 201–2 relations of, 12; Denmark, 225
theorizing, 60–7 rise of, 3–5, 8–9, 12
trading partners of, 48 and Russia, 202
BRIC group of large emerging social position in, 247
economies (BRICS), 54 tourist markets, 236
BRICS countries, see Brazil, Russia, China–Brazil Earth Resources Satellite
India, China and South Africa Program, 89
(BRICS) countries China National Renewable Energy
BRICS Summit (2014), 102 Center (CNREC), 226
270 Index
China National Tourism crisis of authority, 7

Administration (CNTA), 241 crisis of legitimacy, 6
Chinese communism, 33 crisis of scope, 6
Chinese diaspora, 240–1 critical dialogues, 220
Chinese economy, 237 cultural leadership, 31
Chinese financial order, 35 cyber security sectors in India, 135
Chinese outbound tourism, 239, 247 cyclical rhythms, 17
motivations and expectations, 248 Wallerstein’s idea of, 17–18
Chinese tourism, 241
Chinese tourists, 246 Danish activism, value-based, 223
vs. Western tourists, 248
Danish–Chinese bilateral relations,
Chinese tourists in Europe, 235–6,
220
242–4
Danish–Chinese political relations,
development in, 240–4
227
national China strategies, 248–51
Danish Cultural Institute, 226
preconditions for mass tourism,
Danish foreign policy, 212–13, 215–20
244–6
characteristics of developments in,
travel career concept to, 239
215–20
travel motivations and
Cold War, 218–19
expectations, 246–8
demand for, 218
understanding, 237–40
geopolitical focus, 216
Chinese travel agents, 241
international multilateral
Chinese travelers, 242
organizations, 216
segment of, 243
transformation in, 217, 219
Clinton, Bill, 116
CNREC, see China National Renewable transformative shift in, 215
Energy Center (CNREC) United States role in, 228
CNTA, see China National Tourism Danish Human Rights Center, 227
Administration (CNTA) Danish national security, 217
coalition formation, 96 Danish ombudsman-project in China,
Cold War, 21, 34, 89, 112, 114, 115, 228
164, 213–19 “decentralized globalism,” 8
collective international identities, 190 decision-making power, 7, 49
collective security, 32 political and economic, 9
colonialism, 163, 173–4 Declaration of Santa Cruz, 203
communism, Soviet and Chinese, 33 de-industrialization, 151–2
Community of Latin American and demography, trends in, 55
Caribbean States (CELAC), 194 Denmark, 211–14
comprehensive strategic partnership, and China, 225
225 commercial and economic interests
Comprehensive Test Ban Treaty, 119 in, 224–5
conditional sovereignty, 21 comprehensive strategic partnership
Contingency Reserve Arrangement with China, 225–9
(CRA), 200 coordination and cooperation with
contradictory fusion, 75 United States, 224
corruption, 166, 222, 228 DMOs for, 236
CRA, see Contingency Reserve domestic criticism of, 228
Arrangement (CRA) foreign direct investments (FDI) in,
creative agency approach, 214, 220 221
Index 271
foreign policy activism, 212–13, World Bank, 56–7

215–20 emerging powers, 171
global economic and political order, ability of, 76
211–12 and existing powers, 37
policy regarding China, 228 vs. existing world order, 4
promotion of liberal values, 219 global crisis and, 67–70
and rise of BRICs, 213, 220–5 new relationships with, 11–12
state foreign policy, 214–15 rise of, 5, 8–9, 69
trade and commercial relations, 213 theoretical reflections on challenge
Denmark-China action plan, 227 by, 34–7
destination management The End of History and the Last Man
organizations (DMOs), 236 (Fukuyama, 1992), 8
approach to Chinese tourists, energy interdependence, 146
249–50 Enlai, Zhou, 226
European, 245 EU, see European Union (EU)
national, 249 Europe
developing countries, 3, 8, 31, 47, 48, Chinese tourists in, 242–4, see
57, 91, 92, 96, 98, 101, 149–51, Chinese tourists in Europe
202 DMOs, 245
decision-making “autonomy” of, 22 as holiday destination, 246
dialectic mode of thinking., 39 holiday spots in, 235
diffuse reciprocity, 15 European destinations
DMOs, see destination management and Chinese tourists, 237–40
organizations (DMOs)
traditional markets to, 237–8
Doha Round, 96
European tourism sector, 240
dominant economic activities, 151
European Union (EU), 196–7
Dubai, 137, 148
existing powers, 38, 45
free trade zones, 135
emerging powers and, 37
existing world order, hegemony of,
Economic Commission for Africa, 163,
5–8
168, 174
export-based economies, 75
economy
export earnings, 133
development, 92, 97, 104, 122,
export of Danish companies, 222
150–1, 166, 222, 241
diversification, 133, 135, 136
export-based, 75 financial architecture, 201
growth, 132; rates, 113 financial order, Chinese, 35
international political, 3 Finnemore, Martha, 190–1
leadership, 31 foreign currency reserves, 40–1
order, 32 foreign policy
policy, 152 Bolivia, 25
Ecuador, 193, 196, 197, 201 Brazil, 91
emerging economies, 152–3 Danish, see Danish foreign policy
in Africa, 163, 173 Denmark, 212–13, 215–20
centrality of, 9 India, 111–12, 125–7
rise of, 147 foreign policy analysis (FPA),
emerging markets, 56, 137, 162 structural variables and theories
concept of, 57 of, 214
countries, 58 FPA, see foreign policy analysis (FPA)
272 Index
Framework Agreement on Economic global relationships, patterns of, 34–5

Cooperation, 144 global re-ordering process, 11
free market, 62 global swing states, 188
philosophy, 67 global system, 63
Free Trade Area of the Americas global trade regime, 32, 33, 90
(FTAA), 92, 195, 196 global trader profile, 92
free trade zones in Dubai, 135 global value system, 32
FTAA, see Free Trade Area of the G-8 nations, 76
Americas (FTAA) G-20 nations, 76
functionality, crisis of, 6 Goldman Sachs Asset Management, 67
governance, political and economic
G-20, 96–7 norms of, 9
GCC, see Gulf Cooperation Council government-to-government
(GCC) cooperation, 222, 226
GCC–BICs relations, 132–3 Gramscian political theory of
changing of guard, 137–40 hegemony, 30
faux shift, 148–53 gross domestic product (GDP), 59
Gulf in geo-economic trends, 133–9 Gross National Product, 163
shifting patterns in trade and labor, Group of 77, 113
140–8 Growth Markets Strategy, 221
G-77 + China, 202–4 Guimarães, Samuel Pinheiro, 95–6
GDP, see gross domestic product (GDP) Gulf
geo-economic trends, Gulf in, 133–9 domestic economies, 148
global affairs, 70
economic environment, 150
global capitalism, 43–4
GDP growth and wealth in, 133–4
fundamental restructuring of, 75
in geo-economic trends, 133–9
global capitalist restructuring, 75
reliance of, 136
global community, 116
sovereign wealth funds in global
global crisis and emerging powers,
ranking, 137, 138
67–70
Gulf Cooperation Council (GCC), 133
global economy, 25, 55, 60, 61, 67, 73,
Brazilian relations with, 146
93, 153, 171
centricity to commodity markets,
China integration into, 93
135
power of, 9–10
exports and imports, 141–3
global financial crisis, 6, 235
financial power of, 137
global governance, 76–7
institutions of, 69–70 GDP growth in, 134
stability in, 79–80 oil and gas as a percentage of
global hegemony, 16, 187 national imports, 144
globalization in trade negotiations, 144
transformational power of, 136 Gulf economies, 132
and transnational capitalism, 3, 7–8 labor attractors in, 135
global media, 9
global order, definition, 189 Hartling, Poul, 226
global political economy, 163 Heavily Indebted Poor Countries
global poverty, alleviation of, 6 Initiative (HIPC), 168–9
global ranking, sovereign wealth hegemon, concept of, 13–14
funds in, 137, 138 hegemonic stability, 13, 30
global/regional political alliance, 32 hegemonic structures, 21
Index 273
hegemony foreign trade relations, 113

achieving, 31 global economic relations, 122
aspects and components of, 40–1 in IT and cyber security sectors, 135
in BRICS, 7 managing and sustaining, 118–25
concept of, 16, 30, 31 multidimensional crisis and
conceptual understanding of, 30–2 consequences, 114–16
crisis of, 16 and Pakistan, 116
critical perspectives in relations of, 12
conceptualizing, 16–21 rise of, 111, 116–17
of existing order, 5–8, 32 status as nuclear power, 119
global, 187 traditional foreign policy
Gramscian notion of, 30 orientation, 112–14
interdependent, see interdependent Indian Ocean community, 115
hegemony institutionalisation, 72
legitimacy of, 31 institutionalism
motivations, 14 sociological, 190–3
neo-Marxist-inspired critical institutionalization
approaches to, 16 of BRICS, 200–1
power centers, 9 process of, 191–2
producing and reproducing of, 34 interdependent hegemony, 40–2
US, 7 conceptualized, 42–6
hegemony of United States, 186 context of, 191, 194
HIPC, see Heavily Indebted Poor core concept of, 43
Countries Initiative (HIPC) emergence of, 49–50
historical structures, 31 emerging powers, 45
home-grown capital, 75 era of, 44
Hu Jintao, 225 existing vs. emerging powers, 46–50
human rights, 21, 23, 44, 150, 215, global capitalism, 43–4
220, 222, 227, 228 notion of, 43
in China, 227 swing states and, 187–90
intermediate powers, 77–81
IBSA Dialogue Forum, 96 role of, 79–80
ideological proximity of Bolivia with international alliances, 186
Venezuela, 196 International Atomic Energy Agency,
IFC, see International Finance 119
Corporation (IFC) international brands, agency licenses
IFIs, see international financial for, 134
institutions (IFIs) international economic order, 88
IMF, 102, 201, see International international economic policy, 135
Monetary Fund (IMF) International Finance Corporation
India, 36, 110–12, 148 (IFC), 56–7
challenges of, 117–18 international financial crisis, 97
China and, 172 international financial institutions
classical balancing policy towards (IFIs)
USA, 122 Structural Adjustment Programmes
complexity and contradictions of, of, 75
118 international financial system, 185
development strategy of, 112 internationalization, 63, 96
foreign policy, 111–12, 125–7 of Danish companies, 222
274 Index
international liberal order, 15 Libya, 103, 146, 150

International Monetary Fund (IMF), 6 policy towards NATO, 102
international order, 7, 70, 188 Lidegaard, Martin, 227
international peacekeeping, 219 Li Keqiang, 225
international political alliances, 190 logic of appropriateness, 191, 192
international political economies Look East policy, 115
(IPE), 3, 9
international politics, double Maduro, Nicolás, 197
standards and contradictory Maritime Military Strategy in 2007,
behavior, 126 120
international relations (IR), 3, 9, 49 mass tourism, 240–1
mainstream schools of, 37 development of, 244
notion of hegemony in, 39 preconditions for, 244–6
world politics and, 30 material basis, 32
international society, 7 Medvedev, Dmitry, 65
international tourism, 235, 237 middlepowermanship, 77–81
international travelers, 235 Cox’s notion of, 79
IPE, see international political Modi, Narendra, 110–11
economies (IPE) Morales, Evo, 193, 203
IR, see international relations (IR) Multilateral Debt Relief Initiative, 169
Iran, 58, 102, 137, 139, 140 multilateral developmental purposes,
economic sanctions against, 102 150
Islamist-inspired terrorism, 122 multilateralism, 61, 80
National Security Council (NSC), 33

Japan, 44, 59, 102, 111, 116, 119, 124,
national sovereignty, 194
141, 145, 171
and regionalism, 194
Jensen, Mogens, 224
NATO, 102–3, 218–19
Jintao, Hu, 98
policy towards Libya, 102
Joint Action Plan, 98
neoclassical realism, definition of, 214
neo-Gramscian approach, 19
Khanna, Parag, 187 neo-liberal capitalist paradigm, 64
Kindleberger, Charles, 13 “neoliberal institutionalism,” 15
Kliman, Daniel, 188 neoliberalism, 19
technologies and logic of, 136
labor, trade and, 140–8 neo-liberalism, 75
Lavrov, Sergei, 185 Netto, Antônio Delfim, 97
leader, Kindleberger’s concept of, New Development Bank, 125, 200
13–14 New Economic Policy of 1991, 114
leadership, economic, political and Nixon, Richard, 88
cultural, 31 Non-Proliferation Treaty, 116, 119
legitimacy, BRICS and, 81–2 norm diffusion, 190
legitimation crisis, 6 NSC, see National Security Council
leisure travel, 240 (NSC)
liberal internationalism, 35
liberalism, 35 Obama, Barack, 63
realism and, 36 oil prices
liberal school envisions, 37 Bahrain, 134
liberal world economy, 14 Oman, 134
Index 275
Oman Rousseff, Dilma, 99

oil prices, 134 Russia, 49, 55, 64–6, 77, 80, 82, 101,
private sector labor, 147 103, 110, 119, 121, 162
ombudsman-project in China, 228 China and, 202
organizational behavior, Russian tourists, 236
supraterritoriality of, 136
Sachs, Goldman, 54
Pakistan, 58, 81, 112, 116, 117, 122 concept, 55
India and, 116 economic and political capital, 56
Panetta, Leon, 80 operations in the BRICS countries,
passive revolution, neo-Gramscian 65
concept of, 19 reports, 67
patterns of global relationships, 34–5 Saudi Arabia, 135–45, 151
peaceful nuclear test, 116
traditional function, 139
People’s Trade Treaty (TCP), 196
scope, crisis of, 6
peripheral realist, 21–3
Second World, 9
pluralism, 13
securitization approach, 50
plurality of theoretical perspectives, 13
selective activism, 220
political alliances, Bolivia, 193–4
September 11, 117
political centrality, 59
terror bombing of, 216
political economy, 3, 188
Sikkink, Kathryn, 190–1
political institutionalization, 192
Singapore, 115
political leadership, 31
positionality, 192 small and medium-sized enterprises
postwar world order, 34 (SMEs), 135
American hegemony, 32–4 SMEs, see small and medium-sized
poverty, global, 6 enterprises (SMEs)
power Smith, Helle Thorning, 225
decision-making, 9 Socialist Modernization, 59
global balance of, 6 social order, 31
global redistribution of, 9 collective images of, 71
PPP, see purchasing power parity (PPP) sociological institutionalism, 190–3
preconditions for mass tourism, 244–6 South America, 78, 91, 95, 104, 194,
problem-solving approach, 67 195
purchasing power parity (PPP), 59 economy in, 194
Putin, Vladimir, 185 South American Defense Council, 195
sovereignty, principle of, 22
Rasmussen, Anders Fogh, 215–16, 219 Sovereign Wealth Funds (SWFs), 137
rationality, 61 Soviet communism, 33
realism and liberalism, 36 Soviet Union, 33, 66, 88, 115, 116,
realist-oriented alliance theory, 186 217, 219
regionalism, 136 spatio-temporal transpositions, 75
national sovereignty and, 194 strange non-death of neo-liberalism,
reordering, 214, 230, 264 68
changing process of, 5 strategic partnerships, 146
process, global, 11 strategic thinking, 62–3
resilience, capacity for, 5 Structural Adjustment Programmes of
Responsible Growth action plan, 222 IFIs, 75
Romero, Carlos, 203 structural power characteristics, 40
276 Index
SWFs, see Sovereign Wealth Funds 92, 95, 97, 99, 100, 102–4, 172,
(SWFs) 186, 211–13, 216
swing states China’s prioritization of relations
characteristics of, 188 with, 102
and interdependent hegemony, hegemony of, 186
187–90 UN Security Council, 102, 203,
Khanna’s conception of, 190 216
Khanna’s understanding of, 188 UNWTO, see United Nations World
Syrian crisis, 103 Tourism Organization (UNWTO)
USCENTCOM, see US Central
TALC model, see tourist area life cycle Command (USCENTCOM)
(TALC) model US Central Command
TCP, see People’s Trade Treaty (TCP) (USCENTCOM), 139
theoretical eclecticism, 13 US hegemony, 7, 103
theoretical interpretation, 20 capacity and sustainability of, 32
theoretical perspectives, plurality of, continuity/discontinuity of, 7
13 crisis of, 16
theorization on world order, 13 and postwar world order, 32–4
tourism management, 238–9
tourism sector, 235 varieties of capitalisms, 18
tourist area life cycle (TALC) model, Velloso, Joao Paulo dos Reis, 94
238, 240, 251 Venezuela, 78, 193, 195–7, 199, 263,
phases of, 239 264
trade and labor, 140–8 ideological proximity of, 196
transformismo process, 5 very large ore carrier (VLOC) ships,
transnational capitalism, 136 146
globalization and, 3, 7–8 veto-player, 123
travel career concept, 239, 240 violence, NATO’s strategy of, 22
traveling, structural limitations on, VLOC ships, see very large ore carrier
245 (VLOC) ships
UAE, see United Arab Emirates (UAE) Warren, Bill, 170

UN, see United Nations (UN) World Bank, 56–7, 124, 201
UNASUR, 195, 197–200, see Union of World Bank Group, 200
South American Nations world disorder, 4
(UNASUR) world economic system, 3, 32
UN Development Policy and Analysis world economy, liberal, 14
Division, 175 world new order, 4–5
Union of South American Nations world order, 70–7
(UNASUR), 194 American hegemony in, 32–3
United Arab Emirates (UAE), 135 aspects and components of
United Nations (UN), 6, 22, 185 hegemony in, 41
United Nations Economic bipolar to unipolar, 219
Commission for Africa, 163, 174 conceptual understanding of,
United Nations Security Council, 92 30–2
United Nations World Tourism Cox’s conceptualization of, 71–2
Organization (UNWTO), 235 critical perspectives in
United States, 7, 8, 10, 15, 16, 18, 21, conceptualizing, 16–21
33–5, 54, 59, 70, 79–80, 88–9, 91, cyclical rhythms, 17
Index 277
dialectic nexus in, 39 world politics and international

emerging powers vs., 4 relations (IR), 30
global responses and adaptations to world re-order, 5
changing, 9–10 emergence of, 38–9
history of, 31 world-system analysis, 16
neo-Marxist-inspired critical world-system theory, 3
approaches to, 16 systemic-structural morphology of,
postwar, 34, see postwar world order 17
realist and liberal theoretical World Trade Center, 117
traditions on, 13–16 World Trade Organization, 22
scenarios of, 5
theorization on, 13 Xi Jinping, 225
worldwide adaptation to changing,
10 Zedong, Mao, 225–6

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International Political Economy Series

Series Editor: Timothy M. Shaw, Visiting Professor, University of Massachusetts,

International Political Economy Series

Steen Fryba Christensen

List of Figures and Tables ix

List of Abbreviations xii

Part I Introduction and Theoretical Discussion

2 From “Hegemony and World Order” to “Interdependent

3 BRICS and Capitalist Hegemony: Passive Revolution in

Part II The Global South

5 India as an Emerging Power in the Global Order:

6 Situating the Gulf States in the Global Economic

7 BRICS in Africa and Underdevelopment: How Different? 162

8 Reconﬁguring Political Alliances and the Role of Swing

Part III Europe

10 New Tourists at Old Destinations: Chinese Tourists in

1.1 The nexus between the scenarios of world orders and

1.1 Selective worldwide adaptation to the changing world

10.2 Chinese tourist arrivals at selected European

Ane Bislev is an assistant professor at the Research Center on Devel-

Steen Fryba Christensen is an associate professor and senior researcher

Crystal Ann Ennis is an assistant professor at the Institute for Area

Óscar García Agustín is an associate professor and senior researcher

Jørgen Dige Pedersen is an associate professor and senior researcher at

Karina Madsen Smed is an associate professor at the Tourism Research

Camilla Tenna Nørup Sørensen is an assistant professor at the Depart-

Ian Taylor is a professor at the Department of International Relations,

Li Xing is a professor and Director of the Research Centre on Devel-

ADS Approved Destination Status

TALC Tourist Area Life Cycle

Introduction: World order scenarios and ongoing

editors of this book have been engaging in studies of the relationship

In Schweller’s heuristic formulation, it is “the age of entropy” in which

Process 1: The crises of the hegemony of the existing world order

interpreted from different perspectives and in different ways. Some aca-

towards diversiﬁcation and differentiation in the sources and exercise

Process 2: The rise of China and other emerging powers

to global governance and by shaping new global economic and political

Process 3: Global responses and adaptations to the changing world

Table 1.1 Selective worldwide adaptation to the changing world order –

Established/ Global South and Emerging powers

USA Australia China

The objective of the book

Through presenting the multiple transformations taking place in the

as a signiﬁcant novelty in the global political economy. In other words,

(1) Are new patterns of international economic and political relations

The book, the chapters of which present a variety of perspectives,

which countries are trying to increase their synergies and opportunities,

Competing theories and paradigms

Following the initial presentation of the current state of world order,

Firstly, theoretical eclecticism or pluralism is employed due to the broad

Realist and liberal theoretical traditions on world order

way to deal conceptually with Ikenberry’s understanding of the current

Critical perspectives in conceptualizing world order and hegemony

long cycles, the so-called “Kondratieff cycles”. In an analysis under-

suggest (see Chapter 3 by Ian Taylor), or is neoliberalism actually dis-

transnational capitalist class” that is increasingly disconnected from

as representatives of the developing world, and their aim is seen to be

The peripheral realist or autonomist perspective

coordinating system of the state, economic security, and the primacy

After this introductory chapter, Chapter 2 by Li Xing contributes a theo-

moving towards Asia. However, this has no impact on the security

in particular, with the new emerging power centers, while promoting