Parag Khanna's "Second World": competition for influence among superpowers

¶ … Second World by Parag Khanna

Book Review of Second World

The author Parag Khanna takes on an ambitious journey in researching and writing the book the Second World: Empires and Influence in the New Global World by visiting dozens of countries and both observing and interviewing globalization experts to complete this book. His is a writing style comparable to Thomas Friedman; Mr. Khanna uses both personal stories and broader, more long-range economic viewpoints to make his points in this book. As a result, the book is very readable and entertaining while also informing the reader and educating them. Mr. Khanna's main point in writing the book is to explain how the three superpowers, or sometimes have been called hyper powers of the China, the United States and the European Union are completely changing how natural resources of many third world nations are going to be used. He mentions that from "Eastern Europe to Central Asia, from South America across the Arab world and into Southeast Asia, the race to win the second world is on." Mr. Khanna sees time as one of this very important resources that the three hyper powers need to be very careful of spending as each works to create the best possible relationships with those nations that form the second world. Mr. Khanna uses this as the main idea of his book, showing that the race is on between the three super powers or as he at times calls them in his writings, the hyper powers, to become more supportive and important to the nations that form the second world as he calls them. His book is a journey to these countries that form the second world and through both story telling and insight from his years of being involved in international relations study and policy work.

The Second World Summary

The basis of this book is the race that the tree superpowers are now involved in to grab as much of the world's resources as they possibly can before they are all gone. He does this by showing how the threats of terrorism after the terrorist attacks in the United States created an entirely new way of looking at the world and its resources for these three superpowers. Partly driven by fear and the need to go after terrorists and destroy them before they did any more damage in westernized countries, the super powers also began looking at the countries that make up the second world as also very important for their natural resources, human resources in terms of lower-priced labor, and areas of the world where their forms of government needed to become more dominant. These three areas of terrorism, the rush to get more resources for their own economies, and the wanting to push their own forms of government on these smaller countries, the second world or set of smaller nations suddenly went from being not very important in the world to being very important. The most interesting parts of this book are in the specific approaches or as he calls them, the specific strategies for creating coalitions, that each fol the super powers rely on for trying to build partnerships with these second world nations. The author also thankfully does not paint a negative or end-of-the-world picture of these relationships and competitions between super powers for the resources in the second world countries. Rather, Mr. Khanna says that all these efforts to create coalitions and partnerships actually will lead to a more balanced and peaceful world political system and more reliance than ever between countries. He specifically shows that the United States, in trying to get other second world nations to adopt democracy, are being much more effective in spreading capitalism instead. One of the parts of the book I liked the best was when the author questions if the United States' chief expert from a beliefs standpoint isn't democracy but a specific brand of capitalism. Mr. Khanna also discussed how the European Union continues growing as a world superpower, through its use of trading tariffs and trading restrictions. He continues with an analysis of the industries in this collection of industries and shows through examples how the EU is begin very successful in spreading their own approaches to creating international business and spreading their own form of capitalism as well. Most interesting however are the insights Mr. Khanna has from his many visits to China and his belief in how powerful China will be in the coming decade. The author points to how aggressively the Chinese are supporting the Venezuelan economy, one that is very anti-American today to the point of refusing to sell oil to the Americans. The author contends that the support of the Venezuelan economy by the Chinese government, which according to Mr. Khanna's analysis, is the largest single source of Direct Foreign Investment (FDI) in the country today, including investments in a fiber-optic network to connect the many areas of the country with each other. China also sees the growing conflict and tension between Venezuela and the U.S. And is trying to make the most of that, and gain access to all the Venezuelan oil as well. This conflict further shows a key point of this book, which is the fact that the super powers will no longer look to each other for partnerships or alliances, but rather to these second world nations instead. He continues on with his analysis of China by showing how this superpower is also working with Egypt to create a stronger partnership too. China is investing in making the Suez Canal more efficient including offering to pay to upgrade the canal lock systems. In addition, China is paying for the construction of new cement factories, new electronics companies, and new convention centers, all to increase their influence in Egypt. China is continuing to be very aggressive about supporting smaller nations in the Middle East by building four new dams in Jordan which will give many more people in that country electricity, while also providing for more farmland.

China, according to Mr. Khanna, is in the lead across all three superpowers in terms of its winning new partners in these second world countries. The author also points to how China has no free press, no government oversight or laws against bribery, no compliance legislation like the United States and the Sarbanes-Oxley Act of 2002 because of this, the author states, China has been able to bribe government officials in these second world nations including Indonesia, Thailand, Vietnam and throughout the Middle East and Africa to get the best projects available and further their own national interests. What is also very interesting about the book is how the author compared the growth of China's own brand of capitalism and attempts to connect this to their political system. The author does not do this very well and after reading the sections on China it's easy to come to the conclusion that Chinese companies have free reign to do just about anything necessary to win business or gain a new competitive advantage. Their government, as the author shows, is more interested in national pride of a Chinese company dominating a market than they are in checking to make sure their companies obey all laws. For the Chinese, growth by any means is good, regardless of the ethics involved. Due to this fact the author shows the country as being very aggressive and willing to do whatever it takes to get what they want.

Of the three superpowers Mr. Khanna gives the most praise to the EU and its many development programs, all initially altruistic but very effective in spreading a combined message of economy system values and also political values too. He mentions that the European Union invests heavily in the many programs to bring social change to these countries, often picking the most poor and difficult areas of these countries to bring aid to. The author does say he wonders if this aid is so the European Union can feel good about themselves being such generous helpers of less advantaged areas of the world, yet the point is made that the EU is by far the most altruistic and free-spending of the superpowers and for that the author heaps on the praise.

Implications of the Book on International Business

There are major implications for international business from this book. First, there is the challenge to companies operating in each of the three super powers on how to expand into second world nations where other super powers are already competing for resources. An example of this would be an American company trying to get into Venezuela for example. There are also the implications from this book of how much more difficult it will be to compete with the Chinese companies, as they are not facing any regulations at all and freely bribe government officials to get contracts and also to use up resources before other nations can get to them. The competition between the super powers is going to get even more intense as the resources become fewer and fewer.

Personal Assessment and Insights

This book is one of the best ones I've read on globalization and the impact of economics on politics. The most interesting aspect of this book is the fascinating areas of how nations are already quickly moving to make those areas of their own weaknesses stronger. China is doing this very aggressively, as the book illustrations. The EU and their approach to creating more altruistic and philanthropic work is very much like their own approaches to doing business. In many ways the EU's portrayal in this book, which is very positive, also looks a little like a socialist view of how to create partnerships with other countries. Finally the view of the U.S. And its many financial problems right now also shows how important it is for any super power to think more about how to strengthen itself with alliances very early and not wait until it is too late. The U.S. financial crisis is evidence of how much the author of this book was right in saying that second world countries are more important than ever to the worldwide economy growing.