Eighty years ago, Winston Churchill called to build an iron curtain to defend the democratic states from the evil soviet expansion. Hence, the trial of democracy began around the globe. It was the beginning of Cold War, which had divided the world into major blocs: Capitalists and Communists.
With the beginning of the Cold War, the preparation for the forthcoming conflicts became the pivotal feature of the leading societies of the world. Though, the war was won by the capitalist bloc by dismembering the Soviet Union, but since then, the omnipotence of democratic victory is suffering from the moral guilt. Although, the amelioration of the authoritarian victims began around the world, more and more states joined the path to democracy—what Huntington called “The Third Wave”. But the question that took the headlines globally was—Did the cold war really end?
It has been more than two decades; the world has been enchanting the victory of liberal democratic order but with a new narrative of revisionism in the East. According to various historians of the cold war, the major reason behind the victory of west against the Soviet Union was its economic victory.
Today, the democratic tides of the Western world are turning towards apocalyptic paradox. Because, the rise of China in the East as an economic power house after 2008, has further inflamed the narrative of global political revisionism calling it the beginning of cold war 2.0. In 2008, Chinese economy was smaller than Japan but now, china’s economy is equal to the combine economy of the 19-euro zone countries. Moreover, the overall GDP of China in terms of purchasing power is $21 trillion, which is far greater than the United States.
On the contrary, the global political economy is in record decline, while China is the only country which is benefiting a lot from the global recession. Though, in the post-world war II era, western nations have extracted themselves from epidemic and wrenching poverty, but the crisis have much deepened in the modern times. And, the United States have failed to provide alternative to the crisis of global economy such as falling growth rate and rising income inequality.
The global democracies are really suffering from the Moral guilt because they are in complete retreat due to rise of revisionist powers such as China and Russia. With rapid development and economic progress, China has given an alternative to the western multi-party democracy and free market capitalism. The Chinese model is very simple: managed capitalism and limited market reforms alongside socialist ideals. In the recent years, this model has profoundly inspired and attracted various states in Asia and Africa. Especially, in Africa the Chinese model has become avaricious desire of the African leaders, who want to stay in power for a longer period.
Currently, the world is suffering from the epidemic of profound polarization at socio-political and economic level. In addition, the people around the world have become disenchanted with Capitalist democracy and are searching for new direction that could take them out of the crisis. The major motive behind this disenchantment is the fear of the forthcoming political crisis and economic recession.
At political level, the resurgence of populism is threatening the pluralistic politics of the West democracies. According to some Europeans, China’s growing engagement with Europe will one day undermine the European democracy and the frightening Europeans are suggesting that Europe must think about itself with collective approach because a divided Europe cannot stand longer before the bigger China. But, with unity and collective approach Europe can face China’s growing influence for decades to come by safeguarding the democratic ideals.
On the contrary, it is an established fact that, when the downturn comes toxic politics and economic war begins—Europe has a very good experience of such dips. This time, America seems less interested to recue Europe from economic recession because the focus is centered on domestic economy under the administration of Donald Trump. His recent tax cuts and protectionist policies has lifted the American economy with annual growth of 4%. Yet, according to IMF, the growth will face decline in every big advanced economy and the emerging markets will face financial wobble. It is because of the economic diversion that would lead big economies towards the crisis of monetary policy. The Fed Reserve has increased the interest rate by 8% since 2015, that has doubled the value of dollar, sending out shock waves to the global stock markets. Amidst of the American tight monetary policy, China has loosened its monetary policy to stabilize its economic growth. In addition, the rise of dollar has already thrown turkey, Argentina and Pakistan into economic turmoil. And, it seems vivid that the sudden American economic thrive with tariffs and rising interest rates could bring a shallow recession in the global economy.
In contrast, China is not going to be affected directly from this recession because of the presence of large foreign exchange reserves at its disposal. And, China will continue to export its economic model to friendly countries, which in one way or another embrace the economic prosperity of China.
Consequently, in this shallow conflict, the loser would be “democracy”, whose bigger size is shrinking from within leading it towards systematic paradox—which means this time, it is too big to hail.
*Shahzada Rahim is a postgraduate student of Politics and International studies with keen interest of writing on History, current affairs, geopolitics and international political economy.