Peaceful Development or War Economies?

Abstract

Each of the major dramas in the twenty-first century was foreseeable and has left a significant mark on the reality around us and strongly affected the future. What is happening now is a resetting of the world (dis)order that emerged after the end of the Cold War, which has also seen the rise of China, which is weakening the large and wealthy countries of the West, including the USA, which does not want to accept it. Instead of confrontation Euro-Atlantic and Euro-Asian mega-systems should compete peacefully and cooperate without reaching for “military levers,” but by strengthening of transnational economic, cultural, and diplomatic levers. The EU, as part of both blocs, does not have to take sides and should also play a key role.

For the fourth time in the twenty-first century, we are being told that the world as we know it has come to an end that nothing will be as it was before anymore. Such opinions prevailed not only in the media and political circles but also in numerous social scientific studies. This was the case after the terrorist attack by Islamic fundamentalists on the World Trade Center in New York on September 11, 2001. After the global financial and economic crisis of 2008–2010, the world was supposed to be very different from before. The same was said in the context of the devastating COVID-19 pandemic. This is also the case, even more pronounced, now in the face of Russia’s aggression against Ukraine. Undoubtedly, each of these dramas—which despite all the differences between them, were foreseeable, especially the crises at the turn of the first and second decades of the century—have left a significant mark on the reality around us and strongly affected the future. Therefore, let me reiterate from the start, that this world of ours has fallen into a trap, but it can make its way out.

The Second Cold War is a World War

So, what is this all about? What is happening in our world and how have we fallen into this trap? There is a saying that if we do not know what the reason is, then the reason is money. To some, this seems obvious, but it is more complicated and games are played at different levels. At the lowest level, they are often about individual safety, survival, and having a roof over one’s head. At the highest level, they are about prestige, power, and domination. While some are struggling to make ends meet, others struggle for multi-billion dollar profits. Some people just want to live with dignity, while others just want to rule. This is certainly not about official proclamations by politicians and media in the countries involved in the Ukrainian crisis. In fact, only what Ukrainians say when they claim to be fighting for sovereignty and defending the territorial integrity of their homeland, which has been unexpectedly and brutally attacked by a larger and stronger neighbor, can be unequivocally accepted as truth. It would be naive to give credence to others who constantly preach the beauties of democracy and human rights, of freedom and justice.

Essentially, it is about resetting the world (dis)order that emerged after the end of the Cold War, which lasted from 1947 to 1991. Its culmination was facilitated by the collapse of the Soviet Union, but—as it turns out—it was also a seed of later conflict, of which, so far, the drama unfolding around Ukraine is by far the most serious. This is only so far—and let us hope it stays like that, although it very well may not. The great achievement of the dismantling of the USSR was that it was carried out essentially peacefully, owing to the fact that it was principally accepted at the time that all fifteen new post-Soviet republics were enclosed within the borders of the former socialist Soviet republics. And these borders were drawn in a different reality, in the times of the tsarist empire and the Soviet Union, which, after all, was to last forever...

In the Soviet era, it was rather unimportant to whom Crimea or Karakalpakstan, currently an autonomous republic in Uzbekistan, which theoretically has the right to self-determination, was assigned. Part of the road from Tashkent to Samarkand goes through Kazakhstan, because that was the way it was laid out within the integrated state of the USSR, but now it may cause problems. There are many examples of this, as Georgia experienced with regard to Abkhazia and South Ossetia, and even earlier about another territory, Transnistria, recently recalled more often due to its location at the interface between Moldova and Ukraine.

The same three decades have seen the rise of the power of China, which is reshaping the world order, while relatively weakening the large and wealthy countries of the West, including the USA, which does not want to accept it. Although it has been more than three decades, China rise is still a shock from which Americans find difficult to accept. Along the way, several former Third World countries have emancipated themselves. Many of them do not want to forget the humiliation of the colonial era and now refuse to be subjugated by other countries, especially by former imperial metropolises. In this context, the world was in a far-reaching state of geopolitical imbalance and now the great upheaval caused by the Kremlin’s regrettable behavior, has provoked various demons to leap out from nooks and crannies. Just as opportunity attracts thieves, a major geopolitical crisis can create the chance to pull ahead. Therefore, some are pulling ahead, saying they are all about peace and tranquility.

There are also controversial views suggesting that the West not only wants to slow down the rise of China as a superpower, which seems impossible to stop now, and to marginalize Russia on the global stage, it is also playing a game in which Western powers strengthen the influence of some at the expense of others. This is particularly true of the USA and the UK, especially after Brexit when they turned their backs on the European Union. Under the slogans of confronting Russia and countering China’s alleged threats to the stability of international relations, they are seeking to reduce the relative economic weight of the European Union, especially its regional powers—Germany and France. Anti-Russian sanctions—especially cutting off imports of oil and gas from Russia to the West—are very easy for the Americans and the British, as they import very minor amounts of energy resources from Russia¹; meanwhile this is also used by the USA to increase Europe’s economic dependence on them by selling raw materials at exorbitant prices from US suppliers. Such views are hardly convincing, but it would be naive to assume that the US energy lobby and politicians are not exploiting the situation for their own vested interests at the expense of their European allies and partners.

This has resulted in a Second Cold War gaining momentum with only a few instances of hot wars. I have been describing the state of tension in international relations as a Second Cold War for some time. By 2014, international relations, especially between the West and the East, had deteriorated enough to have people recall a war that started 100 years ago. It lasted almost four and a half years and millions of people were killed. In the beginning, no one knew it would be a world war, but it quickly took such a character. In the 1920s and 1930s, it was called the Great War. It was only 25 years later when a second war had broken out that the Great War became the First World War. Shortly after the end of the Second World War, which lasted between 1939 and 45, the Cold War started. It was unleashed by the West against the East, which was then defeated after a couple of decades. After this, it even happened that “the end of history” was announced after 1989. How fast things go...only two generations of peace and we were in a Second Cold War. In the future, the confrontation of the years 1946–89 will be called the First Cold War by historians, and this time it will not be won by the party that has started it (the West) and it won’t be won by the East; the winner will be China, which is taking care of its business and consistently reforming and developing the economy, which strengthens China’s global position every year. After a dozen more years—when foolish Second Cold War hawks become tired, both in the USA and its allies, as well as in Russia, China will be even a greater power. The position of other countries, including the emancipating economies, which are smart enough not the get involved in the winds of next cold war, will also be much better.² These are phrases were written nine years ago, but I am convinced that they retain their validity. However, I now believe that it may well be that China will not so much “win” this Cold War as emerge from it less battered, i.e., in a relatively more favorable shape relative to other “frontline” countries.

2014 was an important year, perhaps even a watershed year due to Ukraine’s anti-Russian turn following the Maidan protests, which were described by some as a revolution, and Russia’s annexation of Crimea. However, the reasons not so much for the outbreak as for the gradual spawning of the new Cold War have their origins a full decade earlier. The American invasion of Iraq—albeit with US allies involved—marked the beginning of a breakdown in Russia’s relations with the West, especially Russia–USA relations, as Russia remained friendly with Germany because they did not join the UN unsanctioned invasion of Iraq. This was when the process of reviewing Russia’s position began, leading to a shift away from cooperation with the West to “getting up from its knees,” to which Russia was supposedly thrown after the liquidation of the USSR during the years of Boris Yeltsin’s presidency. This was fostered by the de facto failure of US policy in the Middle East. From the Kremlin’s perspective, the importance of the White House had diminished, so why not take advantage of such a situation? The reasoning was that the weaker the partner or adversary, the stronger I am, which influenced many aspects of Russian policy. This is similar to the current anti-Russian and even more so anti-China policy in the USA.

In the rich West, especially on both sides of the North Atlantic and on the western shore of the North Pacific, an increasingly powerful China, due to its economic development, is seen as a threat to their interests and therefore a threat to a stable world order. If the solution to such a threat, whether real or imagined, is not wasting resources on increased military spending, but on economic programs that compete with Chinese initiatives, then fine. According to rough calculations, during the ten years (2013–2022) of the Belt and Road Initiative, China committed more than USD 900 billion to the project. And it was only after these ten years that wealthy, large countries agreed to mobilize USD 600 billion (USD 200 billion by the US) over the next five years at the G7 summit at the end of June 2022, from private and public sources for investment in underdeveloped countries. Called the Partnership for Global Infrastructure and Investment, PGII, according to statements by G7 officials, is not meant to be a rival to the BRI, but in a way complement it by directing money both to hard infrastructure such as roads and bridges, ports, and airports, as in the Chinese initiative, and to climate projects as well as energy security, digital connectivity, health, and women’s equality. In some of these domains, the Chinese have already been active in many countries for several years, so it remains to be seen how competitive the PGII will be in relation to the BRI, and how much both initiatives will unanimously support the economic development of the lagging countries.

In poor countries, China is looked upon with the hope of helping them develop, but there is also plenty of concern that cooperation with such a large and powerful partner will be unbalanced and not based on partnership. While some put high hopes on China—with its hybrid political-economic system, which I call Chinism³ that skillfully combines the power of the invisible hand of the market with the visible hand of the state and the rule of meritocracy—others fear and warn against it. Such Sino-skepticism, or even Sino-phobia, is bad for globalization because it depresses an already immature political globalization. While the West’s more than restrained attitude toward China during Maoism could be understood, it is difficult to applaud it in the times of Chinism, which is not the same as the past export of the revolution. Unless one considers as a symptom of such a similarity the possibility of spreading of Chinism in certain regions of the world due to its economic attractiveness and in view of the disillusionment experienced by the people of many poor countries in the face of the economic flaws of democracy, as recently felt in countries as diverse as Bangladesh and Chile, Sri Lanka and Tunisia, South Africa and Haiti.

Maoism had practically nothing of creative value to offer,⁴ whereas Chinism can be associated with capital accumulation, technology transfer or human capital training.⁵ If a trend toward anarchy continues in the wake of various economic and political crises, if neo-nationalism grows, and if resentment for a strong-arm rule grows, could there be a spillover of Chinism? This is something that some in the West may fear and are therefore inclined to confront China about in advance. This dissonance is yet another factor contributing to the current move toward a Cold War.

Opposite Ideas and Conflicting Interests

The Second Cold War is also a world war because, although only a few dozen countries are actively involved, it passively affects everyone, not only due to the rising prices of food and raw materials, especially energy, but also because, in the existing global (dis)order, everyone has to take a position regarding the war in Ukraine. It is impossible not to have an opinion on this matter. It is significant that the issue of Ukraine being militarily attacked by Russia—a permanent member of the Security Council—quickly got into the forum of the UN General Assembly. What also matters is the outcome of the vote on the resolution condemning Russia’s regrettable act. In the West, it was rightly exposed that as many as 141 countries have condemned Russia. The fact that as many as 52 countries did not support the resolution was highlighted by Russia itself—and in a few other specific places around the world.⁶ Only five opposed it, the others abstained from taking a position—notably China, which remained neutral while showing slight pro-Russian inclinations, and India, also taking a basically neutral position, but with slight Russo-skeptic inclinations. Israel, Saudi Arabia, and Turkey voted in favor of the resolution but did not join the sanctions. Iran abstained, but still supplied Russia with EagleEye drones, which can be tested in confrontation with the drones sent to Ukraine by Turkey. Yemen’s Houthi rebels attacking targets in Saudi Arabia were already using Iranian ones.

We should have no illusions that while taking official positions both at the UN and other platforms, in addition to important ideas that receive a great deal of attention, there are even more important interests that don’t receive as much attention. In seeking an answer to the big question “What is it all about?” one must not lose sight of the two “I’s”—Ideas and Interests—for the contradictions between one and the other are at stake here.

If politics is a game—or, as others want to call it, the art of seizing opportunities—then surely developing countries will want to use the occasion of the current major conflict—the Second Cold War—to their advantage. They did not cause it, but since it is there, it is important to adapt to it in the best possible way. By developing countries, I mean countries that are not considered the rich West, including Japan, South Korea, and Singapore, as well as the antipodes, Australia and New Zealand. They are home to a total of seven of the globe’s eight billion people. Leaving aside China and India, which play their own global game, and Russia, they make about 30% of global production. The World Bank ranks economies into four income groups based on the yearly value of per capita gross national income (GNI) calculated in current dollars. These groups are low-income, medium-low, medium-high, and high-income economies. The criteria are updated annually on 1 July. Thus, as of the summer of 2022, low-income countries cover countries with extreme poverty with no more than USD 1085 per capita, the range for medium-low is USD 1086–4255, medium-high USD 4256–13,205, and high is over USD 13,205.⁷

For the rich West, not only all economies with incomes below “high” are thus defined, while some with “high” incomes are so-called emerging markets. According to the nomenclature used by the International Monetary Fund (IMF), Indonesia, Mexico, Brazil, and Pakistan are emerging countries, but so are Poland, Chile, Hungary, and Turkey. I find this term—emerging economies—to be instrumental, if not downright nonchalant, as such a view treats states and their societies and economies not as a subject of development, but as an object on which the mighty of this world can make money. This may be because opportunities to invest and profit—often from financial speculation in now accessible markets—are “emerging,” whereas previously such opportunities were either non-existent or severely limited for political and institutional reasons. This is why, for several years now, I have been talking about emancipating economies and societies.⁸ For this is what it is all about—to emancipate ourselves culturally, politically, and especially economically, in the midst of imperfect but irreversible globalization. People in still developing countries not only want to be freed from poverty, sometimes absolute and sometimes only relative, but also to enjoy the benefits of socio-economic development, which narrows the gap between themselves and those living in wealthy countries.

The Second Cold War, escalating in the wake of the war in Ukraine, puts emancipating economies in different circumstances. Specifically, they are embroiled in a clash between the West (or the USA) and China, and now they want to lose as little as possible from this and, when possible, gain as much as possible. These economies that seek emancipation are by no means interested in increasing international tensions by threatening security, while for their political and business leaders, new challenges, and therefore both threats and opportunities, are emerging. By taking advantage of these disparate opportunities on their march forward, they are playing off the penetration into their affairs by world powers, especially the powers in conflict USA and China, as well as Russia, and courting them. Economies and societies that desire emancipation are therefore concerned with something quite different from Western powers and states that are unequivocally taking the anti-Russian side. The war in eastern Ukraine is very far away for them, while their own problems are very close. It is worth bearing this in mind and not being fooled by an exclusively Euro-American point of view.

President Putin’s aim was to strengthen Russia’s status in the world and, above all, his position in his own country. As for the former, he miscalculated at the very beginning, almost at hour zero. As for the latter, time will tell just how incredibly mistaken he was. Yet, much is lost—and even more will be lost—by the Russian people who are in most cases innocent of the whole row. They lose economically and politically, socially and morally. Today, they can no longer be proud of their country, and they will have to wait a long time—and the lives of many will not be long enough—to find a reason to be proud again. They owe this to their “sage man” from the Kremlin and it will remain a stigma for years to come, even after they forget there was a shortage of fries in the restaurants taken over from McDonald’s.

President Putin has surprisingly done a great service to Moscow’s enemies—both those with their motives and those tainted by Russophobia. Now both have hard anti-Russian arguments. Such opportunities are not wasted; they will be exploited mercilessly and for a long time. In particular, even better times will come for those for whom a limited armed conflict far from their borders is profitable, as it further fuels the already escalating arms spiral. The military-industrial complex and its supporters in politics and the media are having an exceptionally good time; it has not been this good for decades.

Euro-Atlantic and Euro-Asian Mega-systems Can Peacefully Compete and Cooperate

While Russia’s international role is by no means doomed to be marginalized, although it will certainly be severely diminished, following its historical mistake, China has even more serious assets than before to further consolidate its position. One of the key factors in the evolution of future global geopolitical and economic mega-systems are the interrelationships of large countries and their implications for global relations. There are many opinions on these issues, all the more reason to cite at least one coming this time from the East–from China.

According to an expert at the Beijing Center for International Security and Strategy based at renowned Tsinghua University, “In recent months speculation abounded that Beijing and Moscow’s ‘unlimited’ partnership—announced during Mr. Putin’s visit to China in February for the Winter Olympics—might usher in a military alliance. But the war in Ukraine has inadvertently proved that Beijing and Moscow’s rapprochement is not an alliance. China didn’t provide military assistance to Russia. Instead, it provided humanitarian aid and money to Ukraine (…) and has pledged to continue to ‘play a constructive role’. One reason behind the Sino-Russian non-alliance is that it allows a comfortable flexibility between two partners. And in spite of the fact that China and Russia both call for a multipolar world, a non-alliance suits them because they see such a world differently. (…) Russia sees itself as a victim of the existing international order. By contrast, China is the largest beneficiary of the rules and regulations of global commerce and finance made by the West after the Second World War. China has a huge stake in safeguarding the existing international order. This is why, despite ideological differences and even tensions sometimes, China has at least maintained robust economic ties with the West. Neither side wishes to sever them.”⁹

We have experience from the previous Cold War. It was absolutely too early to talk about peaceful coexistence and pragmatic cooperation during the Korean War in 1950–1953 or the Cuban Missile Crisis in 1962. It would also have been too early to talk about it (one can always think) when “fraternal socialist aid” was given to Czechoslovakia in 1968. Nevertheless, as early as in the summer of 1975, it was possible to conclude the Conference on Security and Cooperation in Europe, CSCE, with the “Final Act.”¹⁰

The conference, held between 1973 and 1975, was a series of meetings held at various levels, substantive discussions, diplomatic disagreements, tough negotiations and, most importantly, compromise decisions resolving tensions between the East, led by the Soviet Union, and the West, led by the USA. During the CSCE, the Vietnam War also continued. The Americans fled Saigon only three months before the “Final Act” was agreed in Helsinki. It was signed by 35 signatories—all European countries except Maoist Albania, along with the USA and Canada.

The CSCE applied to the whole of the Euro-Atlantic bloc and only to the northern part of the Euro-Asian bloc, on the Asian continent covering only its Russian part and the current post-Soviet republics. In China, which at that time did not matter much on the economic map of the world, it was only then that the reformist Deng Xiaoping took over the reins of power after the death of the orthodox Mao Zedong, while the so-called Third World, not only in Asia, was still getting back on its feet after liberating itself from colonialism. By the way, the support provided back then, in the 1950s, 1960s and 1970s, by the socialist states, especially the Soviet Union, and by China on a smaller scale, to national liberation movements echoes still today since historical memory persists, both about the colonial oppressors and those who helped in the struggle to eradicate the colonialism of the time. This factor still explains a lot today when it comes to, for example, the attitude of South Africa or Ethiopia toward Russia or Burkina Faso (Upper Volta in the colonial era) or Pakistan toward China.

In Conclusion

My peaceful plan to end the war in Ukraine seems simple, although it is highly complicated, given the diametrically opposed—and indeed stubborn and hostile—positions of the opposing sides. Firstly, a ceasefire on the Russian-Ukrainian front must be announced urgently so that people are not killed. Secondly, the ceasefire must be effectively monitored by a commission specially appointed for this purpose by the Conference on Security and Cooperation in Europe. Thirdly, Russia and Ukraine must accept the ceasefire without preconditions. Fourthly, third countries, through the United Nations system, are to ensure that they will honor the Ukrainian-Russian agreement. Fifthly, Ukraine must obtain security guarantees confirmed by a group of states appointed for this purpose by the UN Security Council. Sixthly, the international community supporting Ukraine in its fight against the aggressor must launch a multi-year economic aid program to co-finance the costs of post-war reconstruction of Ukraine.

Such a plan should be seen in the broader context of the 12-point peace plan proposed in February 2023 by Chinese President Xi Jinping. This bold plan should be a platform for a comprehensive international, if not global, dialogue on war avoidance and peaceful cooperation between countries with different ideological backgrounds and often-conflicting economic interests. The contrary nature of these interests by no means precludes the search for ways to make economic globalization more inclusive, or—as the Chinese leader and social scholars prefer to put it—win-win globalization—and it certainly does not have to lead to a wartime catastrophe. Conflict is avoidable, and consensus is possible.¹¹

The Economist Intelligence Unit, an influential British-American think tank, suggests that “In the long term, one Western-bashing bloc (led by China and Russia) and one Western-leaning bloc (led by the USA and the EU) will cement themselves into the geopolitical landscape and use economic and military levers to court countries that are not aligned with either side. We expect this competition for influence to expand rapidly beyond Asia and into Africa, the Middle East and Latin America.”¹² Unfortunately, things have been going this way for some time now, and the reactions to the shock of Russia’s invasion of Ukraine are catalyzing this further.¹³ This does not bode well. Instead of a confrontation along such a line, the Euro-Atlantic and Euro-Asian mega-systems can compete peacefully and cooperate without reaching for “military levers.” Moreover, the strengthening of transnational economic, cultural, and diplomatic levers may render the military ones useless; everywhere, also in the Pacific-Indian Oceans region. In both blocs, a key role should be played by the European Union, which, given its location, belongs to each of them and which does not have to take sides in the USA–China rivalry and disputes.

Unfortunately, the anti-Chinese rhetoric of the West, especially the Cold War hawks of the USA and UK, has been increasing instead of diminishing. This must change, in which intellectuals and diplomacy, and especially sensible politicians on both sides of the conflicting parties, have a special role to play.