An Indian perspective on the liberal international order
Neelam Deo and Aditya Phatak of the Indian think tank Gateway House ICGR have written a response to my essay “What is the Liberal International Order?”, which was published a week ago. My essay cited their piece on the “geopolitical Bretton Woods”, published last year.
Here are their thoughts on why the liberal international order needs to be reformed:
The challenges to the liberal international order include the United Nations community, the Bretton Woods Conference-inspired financial institutions, such as the IMF and World Bank. These World War-II inspired institutions that are still controlled by the victors have had positive trickle-down effects around the world — primarily due to the absence of conflict between the big powers after 1945. But proxy wars, fought in Asia and Africa, have caused grievous suffering, and deepened contradictions at the heart of the continuing conflict within many developing countries, such as in West Asia. The United Nations Security Council and its permanent members pay only lip service to reform, while NATO and US special forces operate in many countries. The inability to address the crisis triggered by the civil war in Syria is emblematic of such ossification in the UN.
The Bretton Woods institutions are also still run on the power equations of the World War II era.
The Bretton Woods institutions are also still run on the power equations of the World War II era. On the economic front, the fact is that developing economies were damaged by the cure: the structural adjustment programmes that the International Monetary Fund (IMF) and the World Bank promoted globally. Moreover, the contrast between the paltry sums extended to South East Asian countries contingent on painful structural reforms — Thailand (around $6.7 billion; with 49 million population back in the 1980s), and South Korea ($21 billion; 39 million population) — and the munificence shown to western countries, like Greece (more than $30 billion for a population of 9.8 million) or Portugal ($23 billion; population about 10 million), is astounding on a per capita basis.
What is ironic is that IMF’s benevolence apparently costs Greece almost 800 million euros annually, delaying its emergence from the debt crisis. Credit rating agencies have been restored to the top perch in capital and corporate finance, despite their complicity in the 2008 global financial crisis that caused untold value destruction all over the world, requiring developing countries to pay higher rates of interest for securing capital.
As for human rights, the hypocrisy of the LIO is too obvious to merit mention: horrendous suffering is wreaked on populations even as regime change is rooted in ideological preference rather than any rational assessment of outcomes. Examples of Iraq and Libya spring to mind. It is this context against which we hope the current international order undergoes deep and genuine reform.
