TRISTEN TAYLOR: A new world order on the broken power of the West
As the power of the West wanes world trade will increasingly happen in currencies other than dollars and euros
In 1913 the social order of Europe and its colonies was set. A stable world of empires and subjects. No major European war had been fought for the past 100 years and universal suffrage was just a mirage. Then came four years of global carnage: somewhere around 1-million African soldiers, labourers and civilians died. The war in East Africa alone killed about 365,000 civilians.
Ludwig Deppe, a German officer serving in Portuguese East Africa, wrote in his memoir that, “Behind us we leave destroyed fields, ransacked magazines and, for the immediate future, starvation.”
World War 1 and its aftermath changed the global order. Great powers disappeared: the Ottoman, German and Austro-Hungarian empires all fell. Communism became real with the Bolshevik Revolution in 1917. The British and French empires were fatally weakened. The cataclysm of blood and fire marked the beginning of the end of colonialism. Italian political thinkers dreamt up fascism, the only political theory native to the 20th century, during the war.
Moments come in history when geopolitical hegemony ruptures and power shifts. We could just be in one of those times. The power of the West might be broken within a year or two, far quicker than was remotely conceivable in January.
Th year 1492 is a reasonable date to mark the West’s rise. After 781 years of fighting, Christian forces kicked the last of the Muslim rulers out of Spain and “discovered” the Americas. About 100-million people, about a fifth of humanity at the time, lived there. The subsequent conquest of the Aztecs and Incas brought vast amounts of wealth, in particular, silver, to the Spanish empire. For the people of the Americas it was the apocalypse. By 1600, smallpox and measles had killed about half the population.
Another reasonable date is 1712, when Thomas Newcomen, a Baptist lay minister and ironmonger, invented the steam engine. The Industrial Revolution was born, unleashing a technological and economic force that swept away everything that lay before it. Coal, capitalism and the ruthless application of superior military technology underlay the British Empire. In 1913 the empire covered about 26-million square kilometres and held dominion over 400-million people, 22% of the world’s population.
While Britain was on the winning side of World War 2, it lost its empire. Not that the collective power of the West was dented. The real victor of the war, the Americans, took over the mantle using the same nexus of hegemony: industrialisation, economic dominance and superior military power. Western Europe was rebuilt with US money and entered decades of wealth, secure under the American nuclear umbrella. After the Berlin wall fell the US was the only superpower left, free to install Pax Americana one cruise missile at a time.
Then China experienced economic lift-off. Using GDP at purchasing price parity (PPP), China’s economy grew from $3.68-trillion in 2000 to $27.31-trillion in 2021. It is now the world’s largest economy. Accounting firm PwC estimates that in 2050 the top five economies will, in descending order, be China, India, the US, Indonesia and Brazil. The EU’s share of the global economy will drop from 16.6% today to less than 10% in 2050: China and India will account for 35%. Welcome to Asia’s century.
In response to Russia’s unjustifiable and completely immoral invasion of Ukraine, the West has made an impressive display of its economic might. Its attempt to cut Russia out of the global economy has been so ferocious and wide-ranging that it has basically run out of ways to sanction the country. While the Ukrainians would surely like more, the West continues to provide stacks of weapons, ammunition, training and intelligence. The combination of economic warfare and being Ukraine’s quartermaster means the West has in effect entered into conflict with Russia.
Despite predictions to the contrary, Russia’s economy has held. Money continues to flow in from energy and other commodity exports, partly because oil, gas and coal prices have risen substantially as a result of the sanctions and partly because Russia has reorientated its trade towards BRIC (Brazil, Russia, India and China) bloc countries. SA doesn’t feature: our economy is too depressing to even type about.
Put another way, while the EU has made the decision to boycott 90% of Russian oil imports, Russia has found alternative buyers, mostly in Asia, and its export earnings are 65% higher than in 2021. Russian oil is discounted at $35 a barrel or so, essentially the 2021 price of Brent crude.
India, for example, imported 30,000 barrels of oil a day from Russia before the invasion. Now it is averaging about 1-million barrels a day. Indian refiners are turning the oil into petrol and the like and then selling it on the global market, including to the US and Europe. China has increased purchases of Russian exports considerably and Brazil recently signed a big fertiliser deal. And these trades are happening in yuan, rupees and other currencies; a separate non-dollar denominated financial system is developing.
Due to the Kremlin’s shift to the East and because many non-Western countries aren’t following the West, Russia’s economy will survive, albeit with a fair amount of pain. Mexico and Brazil have rejected sanctions, Iran and Argentina have applied to become members of Brics. The prevailing mood in most of the world seems to be that an immediate peace is imminently desirable.
Then comes the battlefield, swirling in propaganda and wishful thinking from all sides. Not much can be said with any certainty other than that Russia controls about 20% of Ukraine, it remains on the attack and both sides are suffering horrific casualties. Will Western arms help Ukraine to win? Maybe. Maybe not.
If Russian President Vladimir Putin scrapes out a frozen conflict or a victory, whatever they look like, the West’s power to order the world as it wishes will snap. Its grip on industrialisation has already disappeared. All sorts of countries are developing new technologies. World trade will increasingly happen in currencies other than dollars and euros. Western military technology wasn’t enough to defeat Putin.
That’s the gamble the West has taken on, probably without realising it. Just like Europe’s monarchies in 1913, the West can’t really conceive of a world in which its wealth and might does not rule. Hubris comes before the fall.
• Taylor, a research fellow in environmental ethics at Stellenbosch University, is a freelance journalist and photographer.
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