The changing world order – No predictions

The pandemic has caused unprecedented havoc in the world. The recovery is going to take years to get back on track. In fact, the world is still suffering from attacks by new virus variants. Add to this the crisis brought about by the Russia-Ukraine war.

Joe Biden had said very recently that a new world order is emerging and it will be led by America. But that may not be the case. If the order is changing, then, it will be difficult to predict which countries will emerge as the new leaders. Of course, whatever the order, the USA may be included somewhere in the pecking order, given its size and strength. However that is not guaranteed.

The sanctions on Russia are not working. This is forcing the West to put evermore strict restrictions on that country. Local currency trade has already started between Russia and India and China. There is also talk of trying to find a way to circumvent the SWIFT system for currency transactions. Both these actions will undermine the importance of the dollar.

Nobody is willing to put boots on the ground in Ukraine as it might provoke an escalation.   

Military and economic strengths will remain important for countries for the foreseeable future. However, prevailing circumstances will decide what freedom countries will have to take actions on others. Today countries like India are not towing the western line on the Russia – Ukraine war as regards purchase of oil. Countries like India can have their way because they are a bulwark against China which The US and Europe view as the next major enemy. Russia is viewed as a declining power as of now.

National interest will be paramount in the new order. This was a prerogative of the West. However, many countries have now begun to prioritize their national interest even if it means going against the dictates of the powerful nations.  

Geopolitics will become more complex as national interests of countries clash and overlap at the same time.

Though predicting anything here would be hazardous, a few indications can be read and interpreted. The West has begun to wean itself away from China. China may not remain the factory of the world in the near future. Supply chains are being diversified. Some countries like Germany, Italy were reluctant to delink from China. But the Russia -Ukraine war has changed that. China gas a debt crisis starting with its real estate sector which could cause an economic meltdown. Moreover, its zero covid policy is playing havoc with the economy.

All countries are manipulating and adjusting to the new challenges being thrown up by the events on a daily basis. Russia's Gazprom has shut down the Nord Stream one gas pipeline which supplies gas to Germany- the largest consumer- for maintenance. But  no one knows if Russia will start gas supplies any time soon. Hungary has already declared a gas emergency.

Globalization will continue, because it provides economies of scale, making products cheaper and providing jobs across the world. The geopolitical and economic pointers indicate that some of the developing countries in the world will gain ascendency in the scheme of things. If that happens, we will see a very different world in the not too distant future.