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Military Power and Geoeconomics

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Military Power and Geoeconomics

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Written by Sergei Karaganov; Originally appeared at RG, tranlsated by AlexD exclusively for SouthFront

What changes await the world in the coming decade

The underlying, through almost never mentioned, reason for the unprecedented rapid shift in the global balance of power, including the economy, from the West and from Europe to China and Asia is a fundamental change in the military and political foundation on which the world order is ultimately based on.

The world was “multipolar” until the XVI century, when Europe gained military superiority, which served as the basis of its territorial, political, economic and cultural expansion, the ability to pump the world’s GDP in its favour, to collect a kind of “military rent”. The situation began to change after the acquisition of nuclear weapons by the USSR, later by China, which increasingly began to deprive the West of the opportunity to impose its interests by military force. Russia, insuring the fundamental interest of its security, has become the “midwife of history”, in many ways provided the basis for the current historical shift.

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Five centuries ago, Europe began to gain military superiority over other countries and civilisations. Before that, most of the world’s GDP was produced outside the European subcontinent. There, in China, in Central Asia, in the Arab world, in what is now India was the main source of innovation, scientific and technological progress. Gunpowder is known to have been invented in China. Guns too, but the Europeans were more successful in their use. Constant internecine warfare on the crowded subcontinent has forged both the best military technology and the best military organisation.

Military superiority allowed not only to capture, but also to impose favourable political orders, rules of trade, cultural stereotypes. And the flow of resources that went to Europe, then to the United States contributed to the development of science, education, culture, and consolidating dominance in the world system.

At first, the expansion of Europe based on military superiority was simply plunder, then the exploitation of colonies, then the imposition of obviously unfavourable conditions of commodity exchange on the dependent. Later there was “free trade”, beneficial primarily to Great Britain, which had naval superiority and systematically blocked the rival countries. In the mid-twentieth century, the Bretton Woods System was created with the dominance of the dollar in the non-socialist part of the world and Washington’s ability to cover its own budget deficit with the help of the printing press. At the end of the twentieth century, after the collapse of the USSR, this system spread to the whole world. It seemed for perpetuity.

The new military power of Russia did not allow even thinking about direct threats. Hysteria and sanctions went into effect

Military superiority, military force has been and remains a highly profitable investment in purely economic terms. Unless, of course, you start investing excessively in it. This repeatedly ruined countries. The last time, it was the USSR.

Military weakness is almost always ruinous, although defence savings initially appear to be economically viable. Disunity and military weakness of ancient Russia allowed the Mongols for two and a half centuries to put it in a semi-colonial position, sucking resources.

Another example. The Chinese Empire, after absorbing and integrating or displaced by the XV-XVI century the Mongols who conquered them in the XIII century, having defeated the tribes that attacked it from the north-west and calmed down the domination of the Middle Kingdom in East Asia, ceased to pay serious attention to its armed forces. The saying or ancient wisdom “A good man will not go into soldiers” became a national policy. And China paid the price in the XVIII-XIX centuries, when small fleets of Western powers easily smashed weak and poorly organised Chinese troops, imposed unprofitable trade agreements, predatory trade in opium produced in colonial India, mass drug addition.

In the late 1940s, the USSR and later China created nuclear weapons. Big wars became impossible to win. So, it has become impossible to threaten them, including the escalation of conflicts. The era of the end of the military superiority of the West began.

And the USA did not dare to use nuclear weapons in the Korean and Vietnam Wars. Behind Kim Il-Sung’s troops was not only China with the ability to throw hundreds of thousands of soldiers into battle, but also the USSR, whose nuclear power the Americans, fortunately, exaggerated.

Vietnam was backed and helped by two nuclear powers.

The emergence of a balancing factor in the international system has increased the freedom of manoeuvre for many countries. The collapse of colonial empires accelerated. The non-aligned movement was formed.

The reaction to the Vietnam debacle, compounded by the emboldened Arab oil embargo of the 1970s, was Reagan’s policy. Its key component was an attempt not only to restore the American economy, weakened by excessive foreign involvement, but also military superiority, to make the threat of the use of military force to maintain positions in other areas more credible.

It was probably impossible to regain military superiority. But at the historical moment it seemed achievable.

The USSR’s withdrawal from the confrontation, and then its collapse, not only stopped the degradation of the West’s positions, but also allowed it to achieve, as it seemed, the final “victory”.

The dominance of the West in the 1990s and 2000s allowed the huge flow of GDP and other resources from Russia and the countries of the former socialist camp. Taking advantage of Russia’s weakness, it was imposed (and part of its elite agreed with this) unfavourable terms of trade, rigidly forced out of the markets. It came to curious incidents – they tried to dictate domestic gasoline prices to further reduce the competitiveness of Russian products. Already in the 2000s, the EU imposed exports of round timber on Russia, trying to support its timber processing industry and limit the development of the Russian one.

Weakened by the 1991 revolution and demoralised, Russia politically ceased to restrain and balance Western military power. In an effort to demonstrate and consolidate it, the West went to a series of interventions and aggressions – in Yugoslavia, Iraq, Afghanistan, Libya.

They shook up the Russian elite, many of whom believed that Western democracies were more just and peaceful.

Vladimir Putin, who came to power at the turn of the century, still tried to negotiate, manoeuvre, even offered friendship – he was the first to declare his readiness to come to the aid of the United States after the tragic events of September 2001. But the Russian elite was convinced that the United States military superiority is unacceptable, directly threatens the security of the country and the world as a whole. Russia was still poor. But after 2002, when the United States withdrew from the ABM Treaty, thus demonstrating its desire to regain military superiority, a series of decisions were adopted, which, after a decade and a half, led to the establishment of a number of systems designed to end this aspiration. From 2007-2008, a successful military reform was launched.

In 2014, Russia reunited with Crimea and supporting the rebels in the Donbas, put an end to NATO’s expansion to its neighbouring countries. This caused an explosion of hatred in the West. But Russia’s new military power did not allow even thinking about direct threats. Information hysteria and sanctions have gone into play. The west no longer had the opportunity for a tough confrontation.

Another blow to the idea of its omnipotence came after 2015, when Russia pursued by the desire to stop the terrorist threat as far as possible from its borders, to demonstrate its new military power and train its military, came to the aid of the legitimate regime in Syria and helped it survive. At the same time, there was a limit to another type of Western expansion – “colour revolutions”. The Western model of development, geopolitical and geo-economic alignment to it no longer looked as the only option.

Moscow did not pursue directly all these changes. The main goal was to ensure the security and sovereignty of Russia itself, its favourable position in the international system.

But, objectively, with its military, political and moral revival, it has qualitatively changed the balance of power in the world, providing dozens of countries with more favourable conditions for free development, including the use of their competitive advantages, to increase their share of the world GDP. The “rent” provide by military superiority was done away with.

This freedom is the underlying cause of the rage of some Western elites against our country.

It is unlikely that the trend towards degradation, especially noticeable in Europe, will be able to stop the Trump “counter-revolution”. The power wing of the American elite has been trying to repeat Reagan’s “success” since the time of Barack Obama. He, as the Americans have convinced themselves, through tough pressure and the threat of an arms race and the achievement of strategic superiority through the creation of a global missile defence system, “Star Wars”, destroyed the Soviet Union.

Russia’s situation is better now. The people in comparison with the last century are satisfied; the place of the extinct Communist ideology begins to take a more capable state nationalism.

Apparently, it will not be possible to repeat with China the Japanese experience of the 1980s and 1990s, when Japan, taking advantage of its military and political dependence, imposed a revaluation of the yen, quotas in trade and, as a result, stagnation for 30 years. China is independent in military and political terms, can rely on the strategic power of Russia, and it is unlikely that a trade war waged against it (and at the same time against the old liberal trade and economic system as a whole) can qualitatively slow down its development.

The tough Russian policy has begun to yield positive results. But military strengthening needs to be supported by economic growth

Creating a new global order will take time. Until a new foundation is created – it is the military force balance. Until the West adapts to the new state of affairs, and the resurgent powers and civilisations, including Russia, it will not develop – along with the same West – the habits and tools of responsible global governance in the new conditions.

This adjustment has already begun. There are even discussions about the desirability of inviting Russia back to the long-unnecessary “big seven”, talk about the resumption of movement to a common European space from Lisbon to Vladivostok. Russia’s tough policy, which has spurred global macro trends in recent years, has begun to yield positive results. But military strengthening needs to be supported by economic growth. Otherwise, we will be able to “snatch defeat from the hands of victory”, which worked for several generations of Russians, Soviet people, who built a defence shield, then restored the country in the 2000-2010s, and which provides freedom of choice and sovereignty for dozens of formerly dependent countries. And most importantly, peace.

And the common space should be built, of course, but taking into account the past changes already in the Eurasian framework. And on an equal basis, without reliance on military superiority. And the rules for it will be written not in Washington or Brussels, but in Moscow, Beijing, Delhi, Tokyo, Seoul, Jakarta, in the capitals of the leading European states.

Meanwhile

NATO is no longer able to function effectively due to the lack of coordination on strategic decisions between the US and its allies. According to French President Emmanuel Macron’s assessment, which he voiced to The Economist magazine, because of this, the North Atlantic alliance “is now experiencing brain death”.

Washington’s relations with Ankara complicate the situation in the block, which was manifested during the recent Turkish military operation in north-eastern Syria.

According to Macron, Europe “stands on the edge of an abyss”, and therefore, “it is time to wake up” and not rely on Washington, which often behaves rudely on defence issues.

The French leader reminded that America, unlike European countries, is far from Russia. Therefore, Macron advised the countries of the Old World to reconsider relations with Russia. In his opinion, building a constructive dialogue with Moscow will help establish peace in Europe and bring back its strategic independence.

 “We have the right to be autonomous, not to repeat US sanctions, to rethink strategic relations with Russia without any naivety”, Macron concluded.

Sergei Karaganov (Research supervisor – Dean of the Faculty of World Economy and World Politics, National Research University Higher School of Economics)

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