The presentation was divided into four parts, where I have started by giving a brief definition and outline of our presentation. Subparts covered history, development rate, specialisation and current position of three emerging markets and then compared to the US and Europe, from which a conclusion was reached.
The current global position of the United States still remains strong, as in 2016 America’s GDP was around $18.57trillion, while GDP per capita was $57,500(Trading Economist,2017)and growth rate was expected to be 3% but increased to 3.1%(CNBC,2017), which shows healthy and competitive economy. To outline the origins of the US development, the presentation referred to the history of the U.S.Constitution(1787), which established free trade and open economy, where federal government could regulate commerce with foreign nations and among the states, form bankruptcy laws, create money and regulate its value, fix standards of weights and measures. In the twenty-first century, Europe and US are still a world leaders in service industries, which are key to economic productivity and wealth generations, while emerging markets are experiencing difficulties with replicating hegemony states(Bremmer,2009). However, recently the US and EU markets became more dependent on exports to China and other emerging markets, as it drives their own marginal growth rates. Therefore, recent scholars began to advocate that emerging markets were becoming very powerful due to globalisation and other factors, which changes balance of power in the international political economic system.
Many scholars today claim that due to the globalisation phenomena, global hegemony states should change their strategies in corporation with «the others» to maintain power. Goldman Sachs, on the other hand, predicted that: “emerging superstars most likely to dominate 21st century globalised economy”(Bremmer,2009). According to Forbes, currently the GDP value of the United States represents only 29.95% of the world economy, while in 1960 US GDP represented 40% of global GDP, which shows decline in America’s economic contribution(Niblett,2012). Also, according to BBC(2017), scholars predict that the dollar would lose its status as an international currency, because of rising national debt. In early 2011, public debt in the United States reached $14 trillion, which is over 90% of GDP(Kupchan,2012). Meanwhile, China became the leading foreign purchaser of American treasuries, holding $1.2trillion in US debt by the end of 2010, which shows China’s rapid increase in influence and power globally. Also, Europe’s capacity to project hard power internationally was limited due to the decline in the defence budget being below 2% of GDP(Erlanger,2013). In comparison to China’s defence budget of $215.7billion(BBC,2017), clearly illustrate that . Therefore, one may argue that balance of power is changing in global political economy, due to the rapid economic growth and available funds of emerging markets(Kottasova,2017). However, the West’s influence is also declining due to failure of the world’s major international institutions, as China, India, Brazil and other emerging powers increasingly ignore the norms, rules and institutional arrangements. For example, Russia and China have vetoed a UN resolution to impose sanctions on Syria over the alleged use of chemical weapons(The Guardian,2017). Also, Doha trade round seems weak and unstable, since the breakdown of negotiations in 2008(WTO,no date), there have been repeated attempts to revive the talks, but so far it has been unsuccessful.Therefore, emerging powers are constantly acquiring greater political power and promoting their interests within institutions. A a result, this changes balance of power, making world’s most US and Europe manage their interdependence through international political negotiation.
However, some would argue that emerging markets are emerging markets threaten US and European markets, those states still have constraints in development. For example, although in Brazil inflation is a major issue for the economy due to rising food and energy costs, domestic supply constraints and growing stratification between poor uneducated people and the wealthy cosmopolitan class, despite being the worlds one of the dominant food exports(Khalid,no date). India still struggles to overcome the burden of high levels of illiteracy and poverty, corruption, inflation, as the country’s higher levels of economic growth expose shortages of skilled labour and restrict in power generation and infrastructure(Khalid,no date). Therefore, arguably for US and EU – China, India and Brazil are all becoming increasingly important investors in order to grow market share. Instead of launching a zero-sum competition for economic supremacy with the West, the rise of the emerging powers is increases their levels of interdependence with the West and so changes balance of power internationally.
In conclusion we reached a consensus that emerging markets such as Brazil, India, and China are changing the economic order and balances of power due to their rapid economic development through high levels of efficiency in trade and production, government’s friendly policies towards businesses. However, considering the fact that the US is still the global hub for technological innovation, when innovation is currently is a central driver of international competitiveness due to its advanced education system and deep domestic capital markets(Bremmer,2009). Scholars suggest that rather than simply shifting power from West to East, these developments unite West and East, making North and South ever closer together(Niblett,2012). This happens due to the process of globalisation that bring high levels of interconnectivity and dependency amongst the states, as well as making MNC’s global actors that influence global political economy(Levy,2003). For example, MNC’s like Apple have revenue estimated at $229.2billion(Statista,2017), while Mozambique’s GDP is only $11.06 billion(Trading Economics,2017). In the next twenty years, emerging markets are projected to grow and expand its influence further and so competing as global actors in the international political economic system, which will undoubtably lead to a shift of balance of power.