Marco Consolo –
The world is changing at unprecedented speed towards a new and accelerating multipolar reorganisation.
There is no doubt that the phase beginning with the implosion of the USSR and the fall of the Berlin Wall is rapidly coming to an end. In this high-speed transition, the phase in which the United States was the sole world superpower, with an indisputable planetary hegemony, is coming to an end. But as Antonio Gramsci recalled, ‘The crisis consists precisely in the fact that the old dies and the new cannot arise; in this interregnum, the most diverse morbid phenomena occur‘ [1] and in this chiaroscuro transition, monsters are born. The crisis of planetary governance is unfolding before our eyes.
The transition the world is facing contains differences with the past, regarding crises in the economy, the environment and food production. It is a long-standing crisis, greatly aggravated firstly by the pandemic and then by the war in Ukraine.
No country is left unscathed, and the Latin American continent is among the most exposed, for various reasons. The United Nations Economic Commission for Latin America and the Caribbean (CEPAL) forecast a growth rate of just 1% in 2023. Against a backdrop of highly regressive tax laws and the absence of profound reforms of the tax system, the available resources (and room for manoeuvre) for public policies capable of reducing the social gap are therefore severely reduced.
The centre of gravity of geo-politics is inexorably shifting towards the Asian continent.
Fascism and war
As in the case of the 1929 crisis, capital seeks to overcome its crises by means of two complementary instruments: fascism (which today is resurgent albeit with different characteristics from the past) and war. Both appear as the monsters of today (and of the immediate future).
War is present on almost every continent and, after the war in the former Yugoslavia, the war in Ukraine in the heart of Europe is another important part of this global upheaval. The Western narrative is no longer hegemonic concerning the causes and responsibilities of the war. Instead, a perspective is emerging of a US and NATO war on Russia (and Europe?), as is clear in the statements by these same political leaders who, since before the outbreak of the conflict, have been declaring their objectives to be the fall of the Putin government. Moreover, the failure of the Ukrainian counteroffensive against Russia represents a significant defeat of NATO strategy, which has been involved in this war since before it began.
As I write this piece, on the shores of the Mediterranean, yet another massacre is taking place against the Palestinian people, an attempt of ‘ethnic cleansing’ by the government of Israel. A situation that cannot be defined as war, given the disproportion of forces on the field. And even in this case, the Western narrative in defence of Israel loses strength and hegemony in the face of the genocide taking place in Gaza.
In the United States (even if a war in support of Israel has greater consensus than the Ukrainian one), a prospect of a long presidential election campaign with two open conflicts raging is certainly not the best option, neither for Biden, nor for the Democratic Party. The careful diplomacy engaged in by Washington to create alliances between Israel, Saudi Arabia and other Arab countries (with the so-called ‘Abraham Agreements’), has dissolved like snow in the sun. Sentiment against the US, seen as Israel’s protectors, has re-emerged strongly in Muslim countries.
In the meantime, in the Asia-Pacific quadrant and its important sea corridors, tension grows, and the United States experiments ballon d’essai to prepare the conflict with the pretext of Taiwan.
This underlying tendency towards war (and thus instability), driven primarily by NATO is strongly intertwined with the crisis in the planetary balance of power that emerged from World War II and with the attempt by the global West to maintain that status quo.
From the fall of the Berlin Wall to the present day, neo-liberal globalisation has extended capitalist socio-economic relations on a planetary scale and accentuated the dominance of Western countries and the United States in particular. While the Trump presidency witnessed a certain ‘deglobalizing’ retreat inward, conversely, the Biden administration has re-proposed the central and hegemonic role of the United States on the global chessboard. At the same time, it has increased the system of so-called ‘sanctions’ (more correctly ‘unilateral coercive measures’ outside the UN system), including those against Russia in the context of the war in Ukraine.
The current ruling elites in the US and its satellites are the main beneficiaries of their global strategy of destabilisation. They are the tail twists of an empire in commercial, economic, and political decline, that will do the impossible not to lose its privileges as a global superpower. The United States is unwilling to accept this and instead seeks to preserve and extend its dominance, because it believes that this chaos will help it contain and destabilise its geopolitical rivals, i.e. the new poles of global growth, supplemented by independent sovereign countries no longer willing to kneel before their colonial masters.
At the same time, the irresistible rise of China (first economically, now increasingly politically and to some extent militarily), the paradoxical strengthening of Russia and its new prominence, the emergence of various international bodies based on these two countries, such as the Shanghai Cooperation Organisation (SCO) [2] and above all the BRICS+ (with the entry of other important countries) are helping to challenge the hegemony of the USA, and to create a strong counterweight that has been absent for decades, with a profound change in the world power relations.
A spectre is haunting the world: the Brics+
The West has flaunted a series of successes, such as the enlargement of NATO in Europe (en in Latin America with Colombia as a ‘strategic ally’) and the supposed isolation of Russia on the world chessboard. However, the reality of the conflict in Ukraine has reinforced multi-polarism and the growth of several international actors not in line with the Western narrative.
In this new transitional framework. a spectre is haunting the world: the alliance of Brics countries. A new economic and political bloc, alternative to the ‘European garden’ (Josep Borrell dixit) and the West, in search of a new world order and greater economic and geo-political balance. On the non-Western side, it is the most solid reality.
The BRIC alliance, formed in 2009 (initially by Brazil, Russia, India, China), expanded with South Africa in 2010, taking the name BRICS. At their last summit in Johannesburg (August 2023), the Brics decided to expand further with the entry of Saudi Arabia, Iran, Ethiopia, Egypt, Argentina [3] and the United Arab Emirates, starting in January 2024 (creating Brics+). A ‘historic event’ according to Chinese President Xi Jinping, which comes as the culmination of a process that has matured slowly, but which paradoxically the war in Ukraine has accelerated and expanded, with the presence of more than 60 invited countries.
The BRICS+ are an alliance of the major non-Western economic powers and the main oil-producing countries of the Middle East, thus redesigning planetary power relations. As Brazilian President Lula da Silva recalled, “they represent 36% of the world’s GDP and 47% of the population of the entire planet”. And to this first phase will be added another one of further enlargement’ towards a new world order that appears to be increasingly freed from the United States and NATO. Today, more than 20 countries are knocking at the door of Brics+ interested in joining an organisation led by China (a strategic adversary of the United States and NATO) and of which Russia will hold the presidency in 2024.
As is abundantly clear, Brics+ is made up of very different countries, but united by the common goal of economic cooperation and hostility to unilateralism. Far from being a weakness (as its detractors vociferate), the political heterogeneity of its governments represents its intrinsic strength, which is not based on ideological harmony. An important component of the “global South” countries is no longer willing to be impoverished by the West and the leonine conditions of its institutions (starting with the International Monetary Fund, the World Bank and the Paris Club). These countries believe that their economic and social development cannot depend primarily (or almost exclusively) on their relationship with the West and propose a concrete policy of global cooperation as an alternative to US- and Western-driven globalisation.
At the same time, Brics appeal to the UN for political reforms and more dialogue, while advocating a redistribution of power in global governance, monetary and political, so that the global South is equally represented.
The political role of Brics (and Brics+) is subject to internal debate. At the moment, the prevailing view is that of a non-aligned bloc to further the economic interests of developing countries, rather than a political alliance to openly challenge the West. China itself continues to have a cautious and pragmatic attitude, while working tirelessly to strengthen it. Despite this, the Brics+ have a good chance of changing the direction of history and are already an active part of a new political, economic, and financial architecture that is still taking its first steps, but which is trying to close the phase of the US-driven unipolar world. The aim is to advance towards a multipolar world, which is by its very nature obliged to dialogue.
Given the overall economic, industrial, and technological power of this alliance and the immense natural resources at its disposal, the emergence of the BRICS+ marks the acceleration of the decline of US unipolarity, promotes the transition to a multipolar world order and accelerates the process of de-dollarisation.
Decoupling from the dollar
The excesses of Western power, and more recently its wars, have forced these countries to create a diversified network of relationships, reinforcing the development of alternative ways of trading without the US currency and increasing the possibility of the latter losing its position as an international trading and reserve currency.
Indeed, it is worth remembering that from the Bretton Woods agreements of 1944 to the present day, the dollar has been by far the most widely used currency in international trade. Its dominant role has been reinforced by having also served as an international reserve currency. This dominance increased after 1971, when Richard Nixon’s US administration abolished the convertibility (and redeemability) of the dollar into gold (the so-called “Gold standard”) according to a fixed exchange rate. In other words, since 1971 this has meant an advantageous rent position in which the US was free to print the currency used worldwide without guarantee, i.e. without the obligation to own an amount of gold equal to the circulating greenbacks and without having to answer for it. It was an exclusive privilege that allowed the US to buy (and consume) goods produced elsewhere without being answerable for its debts, but simply printing dollars, and flooding the world with them, as needed.
On the monetary side, although to date the Brics do not have their own currency, there is a growing desire in the bloc for a gradual decoupling from the dollar, with the use of local currencies, monetary units of account, and compensatory measures. As South African President Cyril Ramaphosa said in Johannesburg, the Brics governments ‘have instructed their finance ministers and central bank governors to consider the issue of local currencies, payment instruments and platforms and to report back to the Brics leaders themselves at the next summit’.
Meanwhile, the governments of Brics countries have not been idle and have been trading in currencies other than the dollar for some years now.
It is no wonder then, that since the beginning of this path, the Western media have minimised the impact on the greenback monopoly. But, contrary to what they claim, the launch of a common currency by the Brics+ could mean the end of dollar hegemony and a global earthquake, with repercussions first and foremost in the United States.
As will be recalled, it was the umpteenth refusal of the United States to cede some power in the management of the International Monetary Fund (IMF) that caused the pot to overflow and in 2014 the Brics decided to create their own bank, the New Development Bank, autonomous and alternative to the IMF. At its head today is Dilma Roussef, former President of Brazil. In other words, since that date the Brics have worked to build a concrete alternative to the international economic institutions, run by Washington and its Western allies, also in the financial field, of exclusive Anglo-American dominance since the end of World War II.
From Marco Polo to the New Silk Road
In 2023, the initiative of the People’s Republic of China, launched by Xi Jinping, known as One Belt, One Road Initiative, or also as the ‘New Silk Road’, turned ten years old.
It is aimed at improving existing international trade corridors and creating new ones. It encompasses several areas such as the Silk Road Economic Belt and the Maritime Silk Road, among others. Its initial objective was to build infrastructure and connect Eurasian countries, but its most recent goal has also been to ensure security and stability on the continent.
The Belt and Road journey began with the first International Cooperation Forum held in Beijing in May 2017. The second Forum was held in the Chinese capital two years later (April 2019), with a crescendo of attendance by heads of state and government. After the obligatory pause of the Covid19 pandemic, the third Belt and Road Forum met again in Beijing (17-18 October 2023). On this last occasion, delegations from over 140 countries and more than 30 international organisations attended, and the number of participants exceeded 4,000 [4].
Achievements of the Chinese Initiative
The State Council of the People’s Republic of China recently published a ‘White Paper on the Implementation of the New Silk Road Initiative’ [5].
According to the White Paper, the initiative has attracted nearly USD 1 trillion in investment over the past 10 years and has resulted in more than 3,000 joint cooperation projects. Moreover, it has created 420,000 jobs in Chinese companies in countries along the Belt and Road. A total of more than 150 countries and more than 30 international organisations are involved in the initiative, and China has signed around 200 cooperation agreements, as well as 28 ‘Free Trade Treaties’ between China and as many countries and regions.
The White Paper argues that the Belt and Road Initiative makes participating countries more attractive for investment by large global corporations. For example, cross-border direct investment flows in South-East Asia, Central Asia and other regions, where most states have joined the Chinese initiative, are steadily increasing. In 2022, foreign direct investment in Southeast Asia accounted for 17.2 % of the global total, up 9 % from 2013.
Also according to Beijing, trade between participating countries is growing: from 2013 to 2022, the total value of imports and exports between China and other participating countries reached USD 19.1 trillion, with an average annual growth rate of 6.4 % [6].
And according to the State Council of the People’s Republic of China, the ‘Silk Road Fund’, which is in charge of implementing the initiative, has signed agreements on 75 projects.
One of the concrete results achieved over the years was the launch of the China-Europe container train, with a route connecting more than 20 countries [7].
What prospects?
We are therefore faced with an international situation that forces us to rethink global and regional partnership strategies and to attach greater importance to South-South ties in trade, Foreign Direct Investment (FDI) and cooperation.
The importance of China for the global economy is clear. The Asian giant has become the world’s leading exporter and second largest importer. According to the World Bank, despite its strict policies, the Chinese economy is quite open to foreign trade, a sector that has accounted for around 35% of its Gross Domestic Product in recent years, and its main trading partners are currently the US, Hong Kong, Japan, South Korea, Vietnam, Australia and Germany. Its main export products include electrical and electronic equipment, various machinery, nuclear reactors, solar panel production, prefabricated buildings, plastics, ready-made textiles, technical and medical instruments, and vehicles.
Imports include electrical and electronic equipment, fuels, minerals, oils, and distillation products.
China’s growing presence in the world economy and its rise as a global power continue to generate various concerns and more than one tension in trade relations with the US and other Western economies.
Indeed, the strengthening of the Chinese presence increasingly represents a challenge to the international status quo and the existing hegemonic powers in controlling important areas of the world. The territorial claim over islands in the South China Sea and the use of old and new trade routes via the ‘New Silk Road’ are ‘unspoken’ challenges to this world order and part of the current tensions with the United States.
As far as purely economic and commercial aspects are concerned, the evolution of China’s production apparatus in recent years has enabled its companies to enter the various global production chains. Thus, they have gone from an initial low value-added production to successfully competing in the most sophisticated and technology-intensive sectors. It is in this process that China has become a rival economy for the United States and the European Union, thus starting the different chapters of a trade war [8]. As Broggi (2021) states [9], the data are conclusive: “in the last decade, China has replaced the United States as the main supplier in most countries in Asia, Africa, Europe and South America”. It seems clear that, sooner rather than later, a new international order will have to adapt to this new reality.
Although today we are far from the period of double-digit growth, China’s position as a global economic power has continued to consolidate. This is despite the setback represented by the pandemic and the policies of severe restrictions and ‘Covid zero’ that Xi Jinping’s government has applied, closing entire provinces that are important economic centres, such as Shanghai, Shenzhen, and Chengdu.
In this complex picture, we must also consider the economic impacts of the war in Ukraine, which has strengthened relations with Putin’s Russia.
The result for 2022 saw the Chinese economy growing by 3 %, one of the lowest figures in decades, while growth in 2023 is expected to be between 5 and 6 % [10]. These projections are based on the recovery of domestic consumption, credit growth, infrastructure investments and various fiscal stimuli. However, it will be necessary to monitor Covid’s development and the Chinese government’s response to any recovery.
On the external front, in addition to a complicated scenario in which its main trading partners will continue to slow down their economies with demand contraction policies, China will continue to face a US-led trade war, characterised by severe restrictions on access to technology and various protection mechanisms. But despite this scenario, it is clear that China’s expansion strategy will continue to enjoy considerable state financial support that will ensure considerable autonomy.
In this general context, like it or not, the world economy will continue to depend heavily on the Chinese economic engine.
What about Europe?
For Europe, the future is uncertain, weak and full of shadows, insofar as it is at the mercy of the superpowers and their allied governments.
The war in Ukraine, the economic ‘sanctions’, the rupture of trade relations between the European Union and Russia, together with the ad hoc attack on the North Stream gas pipeline, have heavily penalised the European economy, and particularly the German economy, which had based one of the elements of its competitiveness on the supply of cheap raw materials. But also in the ‘Belpaese’, Italian companies suffered heavy losses, particularly with regard to Italian exports of chemicals, foodstuffs, machinery, clothing and furniture, with heavy falls in revenue [11].
Instead of following the pragmatic path of Euro-Asian integration and strengthening mutually beneficial economic ties with Russia and China, the EU embarked on a suicide mission on behalf of its (bankrupt?) curators in Washington in a doomed attempt to weaken Russia and contain China. Today, the EU finds itself economically weakened, without a strong centre of government, more divided than in the past and more subservient to the will of the US.
After having been condemned to political irrelevance on the world chessboard, European countries are being called upon to foot the bill for the imperial ambitions of the United States and to provide military assistance, given that Washington’s military strategy does not have sufficient means to take it upon itself [12]. And the European Union’s ‘defence and security policies’ are increasingly a photocopy of those of NATO (of which it is now an appendix), which lobbies to allocate at least 2% of the various countries’ GDP to military spending.
Far from being an independent geo-political actor or a ‘geo-political power’ (despite the omnipotent delirium of Ms. Von der Leyen and Mr. Borrell), the current EU has meant the reduction of the member states’ power by the erosion of their national sovereignties, so as not to pose a challenge to US interests and power.
The signs of a deep crisis in the European integration project have multiplied and Brexit was only the most obvious one. The potential for economic growth seems exhausted (at least at this stage) and the majority of the bloc’s members have chronic budget deficits and excessive debt. The living standards (and purchasing power) of the populations continue to fall, while the promises of prosperity and welfare of the ‘European garden’ are something of the past. Disillusionment and discontent among the population is growing.
And in the deep crisis of European identity, in the insecurity and fear of the present, in the uncertainty of the future, the neo-fascism of the 21st century is also growing, with different characteristics from the past. A phenomenon that transcends European borders and which the horizon of Utopia will have to tackle.
[1] A. Gramsci, Quaderni dal carcere (Q 3, §34, p. 311)
[3] In the case of Argentina, entry into the BRICS had been decided by the government of Alberto Fernandez. But the victory in November 2023 of Javier Milei, strongly opposed to it, marked a setback. On the other hand, Brazil, China and India account for almost 30% of Argentina’s total exports.
[4] https://sputniknews.lat/20231017/las-claves-del-tercer-foro-de-cooperacion-internacional-de-la-franja-y-la-ruta-en-pekin-1144799870.html
[5] https://english.www.gov.cn/archive/whitepaper/202310/10/content_WS6524b55fc6d0868f4e8e014c.html
[6] Ibidem
[7] https://it.euronews.com/2022/07/31/treno-merci-cina-europa-primo-viaggio-hefei-budapest
[8] In 2018, the administration of US President Donald Trump imposed tariffs on several Chinese products.
[9] Brasó Broggi, Carles (2021): Algunas causas de la guerra comercial entre China y Los Estados Unidos. Universitá Oberta de Catalunya. Barcelona.
[10] https://www.worldbank.org/en/news/press-release/2023/06/14/priority-reforms-key-for-sustaining-growth-and-achieving-china-s-long-term-goals-world-bank-report
[11] https://www.infomercatiesteri.it/scambi_commerciali.php?id_paesi=88#
[12] https://www.rand.org/pubs/commentary/2023/11/inflection-point-how-to-reverse-the-erosion-of-us-and.html
