Western Hubris

This precise moment of maximum Western hubris coincided with the engines revving up in the rest of the world, particularly in China and India. China got going first, with Deng Xiaoping’s breathtaking launch of the Four Modernizations in 1978. But Tiananmen in 1989 reinforced Western blindness. It strengthened Western governments’ conviction that only their societies had found the magical formula for economic growth and political stability. Similarly, when senior Indian figures like Manmohan Singh and Montek Singh Ahluwalia went with their begging bowls to the IMF in 1990–91 to seek Western assistance in resolving a major financial crunch in India, the West’s dominance seemed obvious.

Another event around the same time that prevented the West from changing course was the Asian Financial Crisis of 1997–8. In the mid-1990s, some in the West began to notice that a major Asian economic resurgence was happening. The desire to engage with Asia grew. I experienced this at first hand when I visited several European capitals to promote Singapore’s idea of having the first Asia-Europe (ASEM) Leaders Meeting. The first ASEM Summit was held in Bangkok with great fanfare on 1–2 March 1996. However, a year later, as soon as a string of Asian economies – including Indonesia, Malaysia, Thailand and South Korea – suffered in the Asian Financial Crisis, Europe once again lost interest in Asia. Western condescension returned with a vengeance.

In short, the two critical decades that saw the return of China and India, the 1990s and the 2000s, coincided with a period of maximum insularity and self-congratulation. Western leaders didn’t notice – or ignored – some significant milestones. In 2014, measuring GDP in purchasing power parity terms (PPP), India surpassed Japan to become the world’s third largest economy. China made even more impressive strides. In 2000, US GDP in nominal terms was nine times that of China. Owing to China’s rapid growth in the ensuing decade, by 2010, US GDP was just 2.5 times that of China.46 But in PPP terms, China emerged as the world’s largest economy in 2014, even though it had been 10 per cent the size of the American economy in 1980.⁴⁷