The road to multipolarity One of the notable sub-trends of globalization has been a much better distribution of the world’s economic output, led by what were once regarded as overly populous, third world countries such as India and China. This has fueled multipolarity – the rise of regions that are now distinct in terms of their economic size, political power, approaches to democracy and liberty, and their cultural norms.
Getting over Globalization_17We see multipolarity evolving in other ways, notably in the areas of military power, political and cyber freedom, technological sophistication, financial sec-tor growth and in a greater sense of cultural prerog-ative and confidence. Many of these variables are not as easily measured as economic multipolarity, but some clear strands are emerging. There are three significant and easily identifiable poles emerging: the USA or perhaps more broadly the Americas, Europe and then China-centric Asia. Latin America should, given its population and geo-graphic size, constitute some form of pole. But, in the areas of foreign policy, military power, financial sector mass and ability to innovate, it falls behind other regions. Also to a large extent with the rise in the Hispanic population in the USA, the détente between the USA and Cuba and the primacy of the dollar, Latin America remains part of the satellite region of the US pole. Mapping our different poles Our analysis of globalization and multipolarity has emphasized the changing dynamics of world order – steadily moving away from European-US hegem-ony to a more regional power-play story. While some countries like the USA have managed to hold a spot in the list of “influential poles” over time, there has undoubtedly been tough competition with expected alterations in the distribution of power. In keeping with the multi-dimensional nature of our analysis thus far, we further try to quantitatively capture the relative strength of ten select countries and two groups of countries – a representative euro area (made up of Germany, France, Italy and Spain) and a set of selected small developed coun-tries – which we believe qualify to be termed as “poles.” Figure 1 From concentration to multipolarity (top 30 countries) Plotting Index values Trade (concentration index)Gross Domestic Product (concentration index)Population (concentration index)Foreign direct investment (concentration index)Source: Credit Suisse 708090100110120130196019651970197519801985199019952000200520102015Trade concentration5060708090100110196019651970197519801985199019952000200520102015GDP concentration959799101103105196019651970197519801985199019952000200520102015Population concentration40608010012014016019801985199019952000200520102015FDI concentration
18_Getting over GlobalizationWe score our selected countries on a 5-point scale to display their relative strength as an influencer or pole based on five broad criteria: Economic size – measured by GDP, GDP per capita and the depth of financial markets measured by the credit to GDP and market capitalization of listed companies to GDP ratios.