Commentary on Political Economy

Wednesday 19 July 2023


 It is easy to forget that early in Joe Biden’s presidency he made a bridge-building overture to Vladimir Putin. During the 2020 campaign, Biden barely mentioned Russia as a geopolitical rival to the US. China hogged all the attention. At the Geneva summit with his Russian counterpart in June 2021, the US president went to great lengths to massage Putin’s ego, even calling Russia a great power. A few weeks later, Biden withdrew America’s remaining forces from Afghanistan in a debacle that threatened to define his presidency. In retrospect, it is clear that the two seemingly unrelated events — Biden’s positive mood music towards Russia and his Afghanistan pullout — reinforced Putin’s decision to invade Ukraine. The west, in Putin’s view, was unlikely to react any more decisively to his planned annexation of Ukraine than it had to Crimea in 2014. Such misunderstandings have characterised geopolitics through the ages. In this case, the consequences of Russia’s blunder in Ukraine — and the west’s unexpectedly unified response — are likely to reverberate for years, if not decades. Sixteen months into Russia’s “special military operation”, the world is at greater risk of great power conflict than since the most dangerous points of the cold war. Recommended Martin Wolf The west must recognise its hypocrisy Talk of reviving the liberal international order — a state of global being that was never quite what its nostalgists hold it up to have been — sounds increasingly quixotic. The world is moving into a new type of great power rivalry. But comparisons with its 19th century precursor are at best misleading. That long period of so-called Pax Britannica ended in the tragedy of the first world war. Today’s world cannot afford a direct conflict between the US and China, its two competing giants. The challenge facing the US and its western allies is threefold. The first is in maintaining western unity against Putin. This is brought into sharpest relief by next year’s US election. Rarely has a US presidential election contained such divergent possible outcomes for the state of the world. If Biden were re-elected, the world could expect some continuity in US foreign policy until 2028. If Donald Trump, the likely Republican nominee, were to return to power in 2025 it could destroy western unity. Trump has promised to end the war in Ukraine within 24 hours of resuming office. That prospect, and that alone, is sufficient motivation for Putin to sustain his war on Ukraine for the next 18 months in the hope that Trump will ride to his rescue. It is almost impossible for America’s European allies to hedge against that spectre. Their fate — and Ukraine’s — lies in the hands of US voters. The second challenge for the west is in forging a common front on China without it spilling over into direct confrontation. Unlike the war in Ukraine, which must eventually reach some kind of messy conclusion, the rivalry between the US and China is a project without end. For the purposes of strategic planners, it offers no natural conclusion. This is where history ceases to offer much guidance. Short of Armageddon, there is no scenario in which either the US or China will emerge as the world’s sole hegemon. Recommended US-China relations Yellen says ‘ample room’ for greater US-China trade despite geopolitical tensions This presents a novel challenge to a west that has been schooled in Manichean conflicts that result in one or the other side claiming victory. It will require unusual strategic patience and skill. To paraphrase China’s former paramount leader Deng Xiaoping, the west will have to cross the river by feeling the stones, except that the far bank of the river will never be fully visible. This year, president Xi Jinping accused the US of trying to “suppress, contain and encircle” China. Biden insists that his aim remains to co-operate with Beijing where possible, compete where necessary, and confront if left with no other choice. Managing the China threat is a gargantuan challenge. It is evident that a Trump victory next year could throw Biden’s complicated US-China balancing act into disarray. The west’s third challenge is to find solutions to the existential threats facing humanity, starting with global warming. Even without the revenge of geopolitics, this would be a steep climb. But war in Ukraine and growing tension with China have made it far more complicated. Recommended Alec Russell This is the hour of the global south The global south is a key zone of competition for influence between the US and China. It is also the chief victim of the fallout from Russia’s full-scale invasion of Ukraine. The energy and food price inflation triggered by the war and the west’s subsequent sanctions on Russia have combined with rising US interest rates to bring the global south to the brink of a new debt crisis. Taken together, these challenges might seem insuperable. But the west can do well by doing good. The more relief that it can offer to the global south — in the form of green energy financing, debt relief, and pandemic resistance — the better the west will fare on the geopolitical front. The so-called new great game with China is a zero-sum contest. The best way to limit China’s reach is for the west to offer solutions to the mounting problems facing the rest. On paper, the path of choice seems obvious. In practice, is the west capable of taking it?

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