The consequences of the ukrainian war: the end of an era

12 mins read
CREDITS: Il Messaggero https://www.ilmessaggero.it/mondo/sco_uzbekistan-6932479.html

The clash in Ukraine is not a mere regional conflict with; it marks a historical turning point, both in international relations and socio-economic balances. In this structure, new alliances and cooperations emerge in the East, while the West attempts not to loose its primary role. Is this the beginning of the so called Multipolar world or is an Iron Curtain descending upon us?

THE OLD WORLD CRUMBLES

Following the Ukrainian crisis, in the previous months we have faced several topics regarding the  consequences of this war. In the First part we covered the geopolitical impact among nations in the global balance. In the Second one we have attempted to outline the effect on several industrial sectors due to the lack of raw materials, along with the disruption of supply chains. Finally, in the Third part we described the possible incoming economic difficulties that soon world will face.

In the last two months general situation seems destined to worsen for the West and in particular for Europe, not only due to the increase in energy costs, inflation and the lack of raw materials, but also due to a possible future shortage of food. Despite the wheat export agreement reached in Turkey, food and energy crisis is set to last until 2024, according to the World Bank. If an exit strategy is not found, Brussels could soon face food shortages due to a lack of agricultural products. A situation, caused by the blocks of grain exports, which could generate famines in Africa, as occurred in Chad, thus fueling local internal tensions, that would eventually lead to mass migrations towards EU. 

Furthermore, a process of de-industrialisation of some key sectors, such as steel, fertilizers, chemicals or batteries, has begun in the recent months. According to the Wall Street Journal, European companies are gradually moving their operations overseas because of high energy costs. It is therefore no coincidence that several nitrogen fertilizer factories, like Groupa Azoty, have temporarily stopped production. Also the disruptions in trade of several European economies, such as Germany, is forcing Brussels to look for alternative sources to Russian gas and raw materials.

This has pushed Europe to strengthen cooperation with countries with which pipelines were already shared, like Norway and Azerbaijan. Or to rely on routes from different and distant  suppliers such as America, thus heralding a crisis which could reveal catastrophic, for the entire Union. Yet the western states are planning to proceed steadily on the path of self-sufficiency and autonomy, through new agreements and projects to remove the historical dependence on Eurasia.

THE EURASIATIC BLOC

In opposition to these European plans to isolate Russia, a new bloc emerges from East. Moscow and its international partners are looking for alternative paths, in which Washington and Europe might become the peripheries of a new geopolitical balance. The prerequisites for these new partnerships consist of a greater effort to economic, political and military support among Eurasian countries.

An example, despite Washington’s pressure on Beijing, is a deepening connection between Russia and China through cooperation on military technology, energy and space. In April, according to Bloomberg, the deliveries of energy resources from Siberia to Beijing have increased by three quarters. An effort noted also in a greater military cooperation between, like the recent joint patrols of strategic bombers and ships occurred in the skies and waters of the Asia-Pacific region. 

Further elements of this renewed desire for Eurasian cooperation are also found in countries such as Iran and India. The first has recently approved new oil route with Russia, through Arzerbaijan and the Caspian Sea, allowing to bypass the long transport around Europe. India Instead, despite being considered am ally by the West and a member of the QUAD, it has continued to deepen its economic and diplomatic exchanges with Moscow thanks to the purchase of raw materials

If this new international framework takes shape, in the future the world will witness the formation of an axis stretching from the Baltic and White Sea till the Indo-Pacific. Yet, this seems to be just the beginning of a larger geopolitical revolution led by Eurasia, which seems to be determined to follow its own historical path through a deepening of economic and diplomatic relations, involving as many nation as possible in order to create an alternative to the western monopoly.

THE NEW STRUCTURE
The basis of this emerging “multipolar coalition” would see BRICS and SCO countries, already comprising roughly 40% of world population, as new geopolitical centers, from which it would be possible to develop alternative trades, like the Chinese OBOR, through Central Asia and regional cooperation among its members, other countries or potential candidates even outside Eurasia. 

In may ministers from Saudi Arabia, Egypt, Indonesia, Nigeria and Senegal have attended the XIV BRICS meeting, with the clear intention of deepening the cooperation in the near future, while Argentina and Iran have announced their possible entry, submitting a formal membership request. This growing interest also of countries, once historically aligned with America (E.g. Turkey), to join the BRICS and/or the SCO represents a rift in the current order of international relations. 

However, this is only the tip of a much broader transformation, which has begun to take shape with the summit in Samarkand, where SCO leaders met in order to discuss security policy, economics and humanities, multipolar development. The goal, according to the Chinese president, is to play a leading role in order to direct the world on a trajectory of sustainable and positive development.


The goal would be a “sovereignizaion” of any national financial system in order to create international reserve currency based on a basket of  state currencies. This idea is part of the so-called R5 initiative, an acronym of the five BRICS currencies (Real, Ruble, Rupee, Renminbi and Rand), aims at a progressive de-dollarization in order to develop a system for the multilateralization of payments thus completely bypassing any Western financial institutions. 

THE NEW WORLD

In the face of these irreversible and tangible changes it is clear that world is moving towards a new phase of human history. According to the British economist Liam Halligan, two opposed economic blocs will take place in the near future. The recent events and the incoming crisis in Europe will lead to a deep tectonic shift between West and East, thus bringing back the concept of spheres of influence among  great powers and  putting an end to the era of globalization as we knew.

This is going to lead likely a new round of confrontation not only between Moscow and Washington, but this time also among the Eurasiatic Heartland and the Peripheral areas of the globe, while the so called “Rimland” will be the final prize of this new Cold War. In fact, it seems that future alliances will follow the dynamics described in the previous months. On the one hand, the United States along with NATO alliance, united in the crusade against Russia and ultimately China; on the other, Moscow together with its geopolitical partners, seeking new cooperation and trades.

However, the big difference from the Cold War is that the US and the EU may eventually no longer be in a position of geopolitical advantage, particularly now that the Nord Stream pipelines will not be usable for years or even forever. Yet, although production will move to America, it will only be for a very short time as most of the previous US export market in Europe will collapse in the next few years since Europeans will have much less purchasing power.

Basically, while in the East a new dynamic economy is trying to arise, the only strategy for Europe, and ultimately for the USA, will be a self-isolation and the imposition of more expensive products on its inhabitants. This will likely be followed by accelerated investment policies in the alternative energies in order to find a sort of independence, pushing eventually more economic chaos for the West and leading to the dissolution of institutions such as the European Union.

In the end, the war In Ukraine, which rapidly turned into an economic and energy conflict between Europe and Russia,  seems mostly a repetition of what happened in the 1920s, which led to the Great Depression. However this time it will be the collective West that will suffer mainly the final effects, and unless the conflict escalates rapidly to nuclear confrontation between Moscow and NATO, the BRICS+  along with SCO will lead the world into the new “Euroasiatic Century”.

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