The past year has been filled with tumultuous events--the Arab Spring, the euro-zone crisis. But the most striking trend of 2011, one that will persist in 2012, was one that got little notice: the emerging powers that weren't.
By now everyone knows that a new and rising group of nations, including China, India, Brazil and Russia, are reshaping the globe. Yet if 2011 demonstrated anything, it was the inability of these countries to have much influence beyond their borders. They continue to grow their economies, but they all face internal and external challenges that make them less interested and less capable of exercising power on an international or even regional scale.
Let's start with China. Chinese growth continues to be robust, though clearly the government is worried about the inflationary effects of the massive stimulus program it implemented after the financial crisis, which has created a boom-bust cycle and inflationary pressures across the country. The regime, however, is expert at dealing with economic challenges; political ones are harder. China faces a transfer of power in 2012 that is unprecedented. About 70% of the country's senior leadership-- the top 200 or so members of the Central Committee--will be replaced by autumn. The new leaders--Xi Jinping and Li Keqiang--are the first generation that was not personally blessed and selected by Deng Xiaoping, the architect of modern China. Perhaps as a result, we are beginning to see factions develop within the Chinese Communist Party along regional, functional and ideological lines. The change comes at a delicate moment. Beijing's foreign policy assertiveness over the past two years on the South China Sea and related territorial issues has provoked other Asian powers to stand up to China, band together more closely and ask openly for American involvement in the Pacific. The result is that Beijing is now quieter on the regional stage. Global leadership is unthinkable. No Chinese leader today has the authority or the inclination to make big, bold decisions that would involve, say, shoring up the euro or initiating a new East-West climate compact.
India is even more obsessed with domestic affairs than China is. With a bewildering array of local and regional pulls on it, the central government has had little scope for foreign policy--or indeed any policy. Facing opposition on every front, with state and national elections looming, the coalition government of Manmohan Singh is like a patient on life support grabbing for the oxygen mask, simply trying to survive.
Goldman Sachs' Jim O'Neill noted in late December, on the 10th anniversary of his coining the term BRIC, that the greatest disappointment among those emerging stars has been India. Indian growth rates are declining, its currency is the worst performer in all of Asia, foreign investment is slowing, and government policy has alternated between populism and paralysis. In this context, foreign policy has been almost entirely secondary, confined to regional issues like Pakistan and Afghanistan, and even in those showing little in the way of leadership.