Small States and Regional Economic Integrations in the Multi-Polar World: Regional Differences in the Levels of Integration and Patterns of Small States' Vulnerability

• DOI: https://doi.org/10.13169/worlrevipoliecon.8.3.0317
• Pages: 317-348
• Published date: 01 October 2017
• Date: 01 October 2017
• Author: Petar Kurecic
• Subject Matter: small states,multi-polar world,regional economic integrations,the European Union

World revieW of Political economy vol. 8 no. 3 fall 2017

SMALL STATES AND REGIONAL ECONOMIC

INTEGRATIONS IN THE MULTI-POLAR WORLD

Regional Differences in the Levels of Integration and

Patterns of Small States’ Vulnerability

Petar Kurecic

Petar Kurecic works as assistant professor at the University North, Croatia. He is

the author of one scientific book and the author or co-author of 12 WoS, Scopus or

CC papers as well as numerous other papers. He has delivered 40 presentations at

scientific conferences. His research interests are geopolitics, geoeconomics, political

economy, and small states. Before becoming a university professor, he worked for

the Social-Democratic Party of Croatia and for the Party’s Parliamentary club, was

a Representative at the City Assembly of Zagreb, Croatia, and a Dean of the Zagreb

School of Business. He holds the scientific titles of senior research fellow in political

science and research fellow in geography. Email: petar.kurecic@unin.hr

Abstract: The contemporary world is a world of multi-polarity, signifying that US

attempts to achieve hegemony have failed and there are no signs that this is likely to

change in the near future. What about the position of small states, which by most of

the widely accepted criteria comprise at between half and two thirds of all the world’s

states? Small states, because of their constraints, such as the size of population and/or

economy are often considered more vulnerable to external pressures than mid-size or

especially large states. What strategies should then small states pursue to assure their

survival and increase their economic development and political influence? The responses

of small states to multi-polarity in different regions of the world are different. In Europe,

economic integration along with certain forms of political integration has been going

on for more than six decades. In other parts of the world, in most cases, the integration

has not developed beyond the level of free-trade area. It is the intention of this article to

study the differences in small states’ relation towards regional economic integrations in

various regions of the world. The thesis that deeper economic integration contains the

influence of large states (albeit only outside the integration itself) is then tested through

comparative analysis of regional economic integrations’ effects on small states in the

various regions of the world.

Key words: small states; multi-polar world; regional economic integrations; the European

Union

318 PETAR KURECIC

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Introduction

Multi-polarity, as an evolving condition, indicates that here are more power cen-

tres than before and that this trend will very likely continue. Among the several

theories that explain the contemporary world political economy, the theory of

uneven and combined development (UCD) about the dominant and contender

states’ struggle is considered most suitable for explaining the patterns of domi-

nance and challenging that same dominance in the world economy (see Desai

2013, 2–3, 10–11). It frames our understanding of the reactions of small states to

the dominant and contender states distributed across the world’s regions in our

multi-polar world.

After the bipolarity of the Cold War era and its geostrategically constrained alli-

ances, and the perceived unipolarity of the post–Cold War era, which briefly lent

credibility to visions of the unipolar world and the “benevolent hegemony” of the

United States (“the unipolar moment” of C. Krauthammer and neoconservatives),

we are now living in the age of multi-polarity. It can be studied through the frame-

work of geopolitical economy, as the discipline of multi-polarity (Desai 2015, 2–3).

The term geopolitical economy signifies the full integration of economic, political,

and military dynamics between states in ways that elude not only international rela-

tions but also international political economy to generate a more accurate under-

standing of multi-polarity and its history. In this understanding of international

affairs, the dynamic interaction of chief dominant and contender states would pro-

vide the framework for the understanding of other international interactions.

The contemporary world is a world of multiple powerful actors on the global

level, as well as on the regional level, with conflicting interests, economic difficul-

ties of large number of economies, and the inability of “international community”

to “manage” the world’s most intense conflicts or rivalries.

While the term superpower was current during the Cold War, this category is los-

ing its only remaining member, as the United States declines and the emerging pow-

ers rise into the great power category. The likely candidates for places at the high

table are obvious: the United States, China, India, Japan, Russia, and the EU make up

roughly half the world’s people, account for 75% of GDP and 80% of global defence

spending (Stockholm International Peace Research Institute 2008). Then there are

Brazil and Germany of course, as contenders as well, as SIPRI Yearbook 2008 men-

tions. The meaning of the dominant and contender states in this report is not the same

as in geopolitical economy, which designates the United States as the dominant state,

and China, Russia, India, and Brazil as the (main) contenders.

The National Intelligence Council Report, Global Trends 2030: Alternative

Worlds,1 points out that by 2030, no country—whether the United States, China,

or any other large country—will be a hegemonic power. The empowerment of

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SMALL STATES AND REGIONAL ECONOMIC INTEGRATIONS 319

World revieW of Political economy vol. 8 no. 3 fall 2017

individuals and diffusion of power among states and from states to informal net-

works will have a dramatic impact, largely reversing the historic rise of the West

since 1750.

This does not mean that the rise of one or the other is inevitable; one or more of

these may prove unable or unwilling to act as a great power (Toje 2010, 4).

According to Wallerstein,

We are at the stage where all the centers are seeking to maintain relatively good

relations with all the other centers. This is of course impossible in any medium

term, but this is a fair description of the current policies of the multiple eight to

ten centers. In addition, none of these centers is internally unified in a very stable

fashion. (Wallerstein 2010, 191–92)

For example, in South America, Brazil promotes regional integration through

Mercosur and Unasur. China is also broadening its relations with the states of

Southeast Asia through regional initiatives such as ASEAN+1, which has suc-

ceeded in establishing a free-trade zone between China and the ASEAN states.

These regional integration efforts all exhibit some striking similarities, suggesting

that leaders in Moscow, Beijing, and Brasilia see regional integration as a strategy

for preparing for a more uncertain and volatile future (Krickovic 2014, 505) and

reinforcing the argument that regionalism is among the dominant trend in the geo-

political economy of recent decades (Hirst, Thompson, and Bromley 2009).

Multi-polarity is clearly not welcomed in Washington. Neoconservatives and

the hard-line realists in the first G. W. Bush Administration sought to reverse it in

the post–Cold War era (see Kurecic 2011) and the US administrations since have

followed suit, creating the conditions for great power rivalry, hence the elites of

the primary contender states, China and Russia, prefer some form of multi-polar-

ity. For example, China regards participation in multilateralism as a useful means

to push for a more equitable and fair international political and economic order

and ultimately to strive for a larger share of decision-making power in various

international institutions, especially in the economic and financial institutions (the

World Bank and the International Monetary Fund), and boost its international

influence (Li 2011, 335).

For the elites of the dominant states, under the influence of liberal internation-

alism, making the world outside the Lockean heartland divided into many, for-

mally sovereign and equal smaller units would become a prerequisite for the easier

supremacy over that same world (see van der Pijl 2014, 24).

The conduct of the dominant and contender states generates the dominant

dynamics of the international system of our time, and these are usually beyond the

capabilities of small states. Therefore, the world can be studied as a system in