First Issue

The Middle East Must Look East

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Though the trends have been appearing since the beginning of the 21st century, 2013 may well be looked upon by future historians as the date that definitely marked the demise of the West-dominated global order and, specifically, that of the United States. The apparent tepid American economic recovery notwithstanding, the Lehman crisis of 2008 heralded the end of American power especially in the sense of the American model or dream. The Washington consensus is dead. 2013 with the debacle over Syria arguably puts the nail in the coffin of the US’ role as global policeman and arbiter. This is not to say, I hasten to add, that America is heading for absolute decline and disappearance. It will remain a mighty power, but it is no longer the global hegemon: it is one of a rising cacophonic chorus of powers.

2013 also marks a tectonic shift – from Europe to Asia. “A European could survey the world in 1913”, writes Charles Emmerson in the first paragraph of the first chapter of his excellent book, 1913: The World Before the Great War, “as the Greek gods might have surveyed it from the snowy heights of Mount Olympus: themselves above, the teeming earth below”. A century ago Europe was, in the words of the title of the first chapter of Emmerson’s book, the centre of the universe. For roughly a century, since the end of the Napoleonic wars, Europe had been in the ascendant in economic, institutional, military and political terms. When Japan sought modernisation by engaging in the European-dominated globalisation of the time, in 1885 its leading intellectual and reformer Yukichi Fukuzawa wrote a pamphlet entitled Datsu-A/Nyû-O, which can be translated as “exiting Asia/entering Europe”.

While Europe’s ascendancy resulted in causing considerable havoc in the rest of the world – from the Opium Wars in China to the Sykes-Picot Agreement in the Middle East – and, arguably nowhere more so that in the Middle East, it was also the global reference. Two “world” wars later, Europe destroyed itself, though salvaged by the United States and absorbed into what came to be referred to as “the West”, encompassing both economics and geopolitics, the order of which prevailed for ensuing decades, until now.

The demise of the West is clear; what is much less clear, indeed full of confusion and uncertainty is what the new order – indeed if there is to be an “order” or whether “disorder” is more likely to prevail – will be. In the meantime, one of the trends that caused the turbulence in the Western order, namely the resurgence of a number of Asian economies, should continue. In 1820, at the dawn of what would become the European-dominated global order, Asia corresponded to 60% of world GDP. By 1913, a century ago, it had dwindled to 20%. For the last couple of decades there is a new narrative: that of the inexorable rise of emerging East Asian economic powers.

Fifty years ago East Asia seemed hopeless, mired in poverty and conflicts, including wars, foreign and civil, revolutions, insurrections, and so forth. The great achievement of the ensuing decades was to transform the region from a battlefield to a market place. Much to the surprise of economists and officials from institutions such as the World Bank, East Asian economies came to achieve the world’s highest growth rates and in so doing to define a new economic model. A country such as South Korea, which when I first visited in 1966 was one of the world’s poorest countries – more so than all the countries of the Middle East – has achieved remarkable national prosperity and global economic leadership with firms such as Samsung, Hyundai, LG and POSCO. The Southeast Asian countries have not achieved quite the level of Korea’s laurels, yet there is an economic successful narrative that applies to most of them and to the region which has significantly increased intra-regional trade and investment.

The term “miracle” has been applied, not least by the World Bank, to the East Asian region. The term would hardly apply to the Middle East, where the economic performances of the individual countries and the degree of intra-regional economic integration have greatly left to be desired. But that was then and now.

There is no reason why in a few years’ time one might not be speaking of the economic miracle in the Middle East. For it to be achieved, however, one key measure would be for Middle East policy makers, business leaders and academics to study assiduously the East Asian “models” and identify the lessons that might be applied to the region.

The concepts of growth and development are elusive. Economists do not really understand them and have often proved wrong. One key factor that would appear indisputable, however, is that societies and economies that succeed are those that are open. Open here does not necessarily refer to physical borders or to, say, tariffs on trade. It refers to mindsets and attitudes: emphatically the willingness to learn. In fact, South Korea for long remained one of the world’s most closed markets to imports, but most open to learning from best practices.

There is no single prescription of the “Far East” to apply to the “Middle East”; different lessons may be derived from different East Asian economies and applied to different Middle Eastern countries. What is crucial is to recognise the importance, the imperative, indeed the urgency of learning and that in the 21st century it is to the East, rather than to the West, that the Middle East should turn for guidance and inspiration.

Jean-Pierre Lehmann, Emeritus Professor, IMD, Founder, The Evian Group, Visiting Professor, Hong Kong University.

Lausanne, 15 September 2013.

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