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한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском “This article was originally published here by the International Crisis Group”Tensions between China and the Philippines are increasing the risk of armed conflict in the South China Sea. In this excerpt from the Watch List 2024 – Spring Update, Crisis Group looks at how the EU can support regional diplomacy to mitigate maritime disputes. Rising maritime tensions between China and the Philippines have highlighted the risk of armed conflict in the South China Sea and the dangers it would pose to global trade. Several countries are implicated in the set of complex sovereignty disputes in the sea, which stem from rival claims to various features and the maritime entitlements they generate, but recent incidents involving Beijing and Manila have triggered the greatest concern. The Philippines controls nine outposts in the Spratlys, a contested group of land and maritime features at the heart of the South China Sea. A submerged reef known as Second Thomas Shoal has become a dangerous flashpoint, with Chinese boats continually trying to block Manila’s efforts to resupply the BRP Sierra Madre, a rusting ship housing a handful of soldiers that a former Philippine government purposely grounded in 1999 in a bid to assert sovereignty over the atoll. China, which also claims the shoal, first started interfering with these missions in 2014, but relations between the two countries in the maritime domain have never been as volatile as during the last seven months. Chinese boats have regularly rammed the Philippine supply vessels or doused them with water cannons, occasionally wounding the sailors on board. Manila has a Mutual Defence Treaty with Washington, making this burgeoning maritime dispute part of the geopolitical competition between the U.S and China. In effect, the South China Sea has become a zone where conflict risks are rife – and where Washington and Beijing could be drawn into direct confrontation. Considering these developments, the EU and its member states should: • Seek greater diplomatic engagement with both Beijing and Manila to keep tensions in check. They should also expand their diplomatic presence across South East Asia and, where relevant, establish reliable channels through which they could communicate with high-level authorities in China and other claimant states should disputes at sea escalate; • Work to promote respect for international law, particularly the law of the sea, as a source of neutral rules for dispute resolution and conflict prevention, for example by organising public events, roundtables and dialogues in Manila and elsewhere. While this measure may not bridge the divides between Manila and Beijing, it could at least help establish a level of mutual support and understanding among the other South China Sea claimant states; and • Strengthen coast guard cooperation with the Philippines, focusing on building capacity in areas such as environmental protection, safety and search-and-rescue procedures. Troubled Waters The sovereignty disputes that underpin the tensions between China and the Philippines in the South China Sea go back decades. But it was Beijing’s manoeuvres to take control of Mischief Reef (in the east of the Spratlys) from Manila in 1995 that altered the perceived balance of power between the two states and in the region, setting off the territorial dispute that has now taken a turn for the worse. China’s assertiveness in the sea has grown in the past few years, along with its military capabilities. The brewing territorial dispute made headlines in 2012 when Beijing in effect took control of Scarborough Shoal, an atoll 220km west of the Philippine mainland but within Manila’s exclusive economic zone (EEZ), after a maritime altercation. The incident prompted then-President Benigno Aquino to file a case challenging China’s territorial claims under the UN Convention on the Law of the Sea (UNCLOS). On 12 July 2016, the presiding arbitral tribunal ruled in favour of Manila, dismissing China’s claim to all the waters within its “nine-dash line”, which constitute almost the entire South China Sea. But it was a Pyrrhic victory. Beijing not only rejected the adjudication and the subsequent ruling, but it had also already undercut efforts to settle the dispute through legal channels by building and fortifying seven artificial islands in the Spratlys while the case was winding its way through the system. This move fundamentally changed the status quo, enabling Beijing to post permanent garrisons in the area for the first time. By many accounts, China has thus ensured itself control of the sea in any situation below the threshold of armed conflict. A short lull in the maritime dispute appeared to follow. After coming to power in 2016, Aquino’s successor, Rodrigo Duterte, pursued a pragmatic policy toward Beijing. Duterte downplayed the tribunal’s decision and cast sovereignty issues aside, hoping to benefit from Beijing’s economic largesse in exchange. Yet his ambitious gambit did not pay off. Tensions at sea continued in the form of regular standoffs between the country’s coast guard and Chinese vessels. Filipino fisherfolk struggled to reach their traditional fishing grounds, and Manila could not exploit the precious oil and gas reserves within its EEZ to which it is entitled under international law. In March 2021, Chinese ships massed around Whitsun Reef, an unoccupied feature in the sea, ringing alarm bells in Manila, where senior officials voiced public criticism of China’s behaviour for the first time in years. By the end of the Duterte administration, the Philippines had revived its ties with the U.S. and become more assertive still, filing several diplomatic protests with the Chinese government. Elected in 2022, President Ferdinand Marcos, Jr., Duterte’s successor, was initially disposed toward friendly relations with Beijing, but the relationship soured only a few months into his presidency. Although China remains the Philippines’ top trading partner, Marcos, Jr.’s meetings with President Xi Jinping did not achieve the desired results: Beijing neither agreed to make major new investments nor curtailed its “grey zone” tactics in the South China Sea, understood as coercive actions that remain below the threshold of armed conflict. These rebuffs have helped push Marcos, Jr. toward strengthening ties with Washington, and the Biden administration has, on several occasions, publicly committed that the countries’ Mutual Defence Treaty would be deemed triggered in the event of an armed attack on Philippine warships, aircraft or public vessels. In perhaps the most significant recent development, after a series of high-level visits by U.S. officials to Manila, the two countries agreed to scale up implementation of their Enhanced Defense Cooperation Agreement, which gives U.S. troops rotational expanded access to Philippine military bases, and which China perceives as a provocation, especially given these bases’ proximity not just to the South China Sea but also to Taiwan. Manila has also received defence and diplomatic support from a host of other countries, particularly Japan and Australia. Despite the dispute it has with Vietnam over parts of the South China Sea, it has engaged, more quietly, with Hanoi, and acquired maritime defence equipment from India, thus expanding its circle of partners. Joint naval exercises with various countries have included large-scale ones with the U.S. in April, which involved the deployment of missiles that can reach targets almost 1,600km away – something that was sure to draw Beijing’s attention – and took place just after Manila wound up its first-ever trilateral presidential summit with Washington and Tokyo. In the meantime, the Marcos, Jr. administration has pursued what it calls a “transparency initiative”, publicising information about maritime incidents by inviting journalists to join its coast guard ships or posting video recordings of events almost as they are happening. Dramatic footage of Chinese vessels blocking, ramming or attacking its resupply missions to Second Thomas Shoal with water cannons has generated widespread condemnation in the Philippines and abroad. Many consider these tactics to be bullying. For its part, and despite the 2016 ruling, Beijing asserts that Manila is intruding into its waters and maintains that it is demonstrating maximum restraint. China has also recently referred to a so-called gentleman’s agreement under former President Duterte that it says foresaw preserving a status quo in the South China Sea, with Manila ostensibly agreeing to supply only humanitarian goods and no construction materials to the BRP Sierra Madre; Manila denies that there was any such arrangement. Given the Philippines’ determination to continue resupplying its troops on the BRP Sierra Madre, Second Thomas Shoal will likely remain a flashpoint. Due to the constraints imposed at sea by the Chinese maritime militia and coast guard, Manila is starting to look into other means of provisioning its outpost, some of which are likely to irk Beijing even more, such as airdrops or closer U.S. naval escorts. In September 2023, a U.S. plane was in the shoal’s vicinity during a resupply mission, while a U.S. warship passed through waters nearby in December. But the shoal is not the only possible source of tension. Chinese vessels, both official and non-official, sail through many areas where Philippine fisherfolk traditionally work, while other features, such as Scarborough Shoal, are also points of friction. A large-scale encounter or accident at sea could be especially dangerous. Should a Filipino or Chinese national die during such a confrontation, it could stir nationalist sentiments in Manila and Beijing and heighten threat perceptions on both sides. In case of loss of life on the Philippine side, Manila would expect its U.S. ally to assist under the Mutual Defence Treaty, especially given the recent exchanges with Washington on that topic, although the U.S. has not said precisely how it would come to the Philippines’ aid. How such a dangerous situation would evolve depends in large part on Manila’s political decision to invoke the treaty and the choices Washington makes about how to fulfill its commitments. In principle, Beijing and Manila remain open to negotiations. But the bilateral consultative mechanism, a confidence-building measure designed in 2017 to manage maritime issues between the two countries, among other things, has generated no results of note. Meanwhile, efforts to create a Code of Conduct, which aims to reduce tensions at sea by setting up norms and rules between claimants and has been under discussion between China and the Association of Southeast Asian Nations (ASEAN) for over two decades, have stagnated. Why the Sea Matters The South China Sea is a vital waterway through which around one third of global shipping passes. Peace and stability in the sea are a prerequisite for safe trade and are demonstrably in the interest of the EU and its member states. At over 40 per cent, the share of the EU’s trade with the rest of the world transiting the sea is even higher than the global average. Instability in the area would deal a major blow to the European economy; even a slight disturbance of shipping routes could result in higher transport costs, shipping delays and acute product shortages. Should there be an escalation that pits China against the U.S. in a direct conflict, the consequences could be catastrophic and global. European positions toward South China Sea disputes have traditionally highlighted the importance of all parties respecting international law and the need for peaceful resolution, while being careful not to take sides. But over the last few years, China’s assertiveness and expanding military capabilities have driven a greater sense of urgency and something of a shift in European thinking. First, the EU and several of its member states have developed “Indo-Pacific” strategies, designed to guide and promote cooperation with countries throughout the region. Secondly, Brussels has increased its diplomatic support for the Philippine position following maritime altercations, offering supportive statements in December 2023 and March 2024. Brussels and several European capitals now back Manila in regularly underlining the importance of UNCLOS and maritime law in the South China Sea context. Meanwhile, Europe’s presence in the region is growing, if slowly and in part symbolically. In 2021, the EU appointed a special envoy for the Indo-Pacific for the first time, while European Commission President Ursula Von der Leyen visited Manila in July 2023, the first trip to the Philippines by someone holding that office and an opportunity to express, at the highest level, the EU’s readiness to strengthen cooperation with the government in maritime security, among other areas. A German frigate entered the South China Sea in 2021, and French and Italian ships made port calls in Manila in 2023. In March 2024, the EU and the Philippines agreed to resume negotiations over a free trade agreement, while a month later France announced talks regarding a Visiting Forces Agreement with the Philippines. While EU interest in the region is rising, European stances on the South China Sea are complex, with member states harbouring different views on maritime disputes in the region and, more broadly, on big-power competition. Some, such as France – which is the only EU member state to have overseas territories in the region (and which has significant EEZ interests there) – see themselves as having stakes higher than others and are keen to participate in the region’s discussions on security. Others, such as Greece and Hungary, are less concerned with maritime flare-ups so far away and tend to ascribe greater importance to maintaining good relations with Beijing. What the EU and Its Member States Can Do As the EU and its most powerful member states are drawn deeper into the South China Sea, they should raise their diplomatic game in the region – both to ensure awareness of mounting tensions and to look for ways to manage corresponding risks. As a practical matter, Brussels could leverage its status as an ASEAN Strategic Partner to seek more participation in that bloc’s security mechanisms and regional forums; the EU and member states could seek higher levels of engagement with regional powers such as Japan, Australia, and South Korea on matters concerning the South China Sea; and Europe could post more diplomats to the region, including permanent defence attachés who speak the language of naval diplomacy. Of particular importance will be maintaining strong lines of communication with Beijing, where Europe is seen as still having some distance from the U.S.-China strategic rivalry, which works to its diplomatic advantage. While to some extent this communication will be traditional bilateral statecraft, it may also mean looking for new opportunities and new channels for dialogue. For example, some member states could also seek to follow the precedent set by France and China in establishing a coordination and deconfliction mechanism between their militaries. Brussels should also continue raising the South China Sea in its engagement with Beijing as it did during the EU-China summit in 2023. Maintaining these channels will become both more difficult and more important if and when the EU and member states expand their operational presence in the region – for example, if they decide to establish a calibrated maritime presence in the South China Sea, as proposed by the EU envoy to the Indo-Pacific. Such a move is still deemed unlikely for now. As for public diplomacy, Brussels and EU member states should consider practical ways to promote principles of the law of the sea in the region, making the case that broader regional support for and adherence to these principles would provide neutral ground for peacefully avoiding and resolving disputes. While it is hard to see this approach appealing to Beijing, which has rebuffed the UNCLOS tribunal’s decision, there could still be benefits in forging closer cooperation among other claimant states. Convenings in Manila and other regional capitals could cover topics related to the continuing disputes but also to cross-cutting themes of regional interest such as fisheries. With negotiations over a regional Code of Conduct stuck, like-minded countries in the region could use these occasions to at least develop common positions on discrete issues that might be addressed by the Code or that could foster regional confidence-building in the South China Sea. Finally, in the realm of capacity building, European governments should continue to strengthen coast guard cooperation with South China Sea claimant states, helping them develop tools and protocols that might be used where appropriate to avoid confrontation and conflict. Since Aquino’s administration, Manila has tried to boost its coast guard capabilities. Given that many of the other claimant states’ vessels in the South China Sea are coast guard ships, and find themselves embroiled in maritime confrontations, a common approach on rules of engagement could help avoid misunderstandings at sea. Building on the EU’s integrated coast guard system, the EU could host or sponsor joint workshops to develop operating principles for the region’s law enforcement vessels and exchange best practices with Philippine authorities. Brussels could also fund agencies such as the UN Office on Drugs and Crime to strengthen coast guard expertise on issues such as environmental protection, safety and search-and-rescue procedures. European member states could also participate in joint activities with the Philippine and other ASEAN coast guards to strengthen fisheries control and maritime border protection and deter piracy or smuggling.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском Why Australia, Japan, and South Korea Have Other Concerns While heated debates in Europe have focused on how to respond if Donald J. Trump is re-elected to the White House, discussions in Australia, Japan, and South Korea reveal a greater sense of confidence in Washington’s commitments. The fear that the United States would withdraw its nuclear assurances is much less pronounced in the Indo-Pacific than in Europe. This serenity appears primarily grounded in a shared understanding that a bipartisan consensus is driving the US commitment to contain China’s rise – a goal that requires reliable allies across the Pacific. At the same time, US allies want to maintain the regional status quo and are willing to support Washing­ton’s efforts. Trump’s potential return does little to change these structural incen­tives. Instead, Pacific allies fear challenges to the East Asian regional order, challenges that are also relevant for Europe’s security and prosperity. European and Pacific US allies share similar concerns about a potential second Trump administration: allies everywhere fear that Trump would once again pursue a trans­actional approach to US foreign policy. Disputes between allies would play out in public, unsettling domestic populations, delighting adversaries, and endangering the perceived credibility of the common defence policy. Given Trump’s penchant for cosying up to autocrats, both European and Pacific allies worry that Washington will either trade away key shared interests to extract questionable concessions from dictators or, if negotiations fail (again), that Trump will drag them into unwanted conflicts. However, beyond these shared concerns, policymakers in Canberra, Seoul, and Tokyo seem to be more confident. They believe they know how to manage Trump’s ego and can offer him lucrative deals. Furthermore, they assume that a second Trump adminis­tration will remain engaged in the Western Pacific, necessitating the presence of reli­able partners to maintain influence and contain China. These assumptions do not lead to fewer concerns, but to less fundamental concerns in trans-Pacific relations. However, European allies express fear that Trump may seek to undermine or even ter­minate NATO, which would result in the withdrawal of US nuclear assurances. Even in South Korea, public debate about its own nuclear weapons is primarily focused on the perceived threat from North Korea, rather than on concerns within the alliance. It is primarily the changed regional bal­ance of power and China’s ambitions that worry the trans-Pacific allies. On the one hand, the extensive competition between the US and China gives rise to the expectation that Washington will remain engaged and that the security relationship and extended nuclear deterrent in the Pacific will remain stable. On the other hand, this com­petition demonstrates to Pacific allies that the actions of the current and subsequent US administrations will have a decisive impact on the evolution of the balance of power and the regional constellation in the decades to come. There is therefore concern that a transactional second Trump adminis­tration could undermine protracted joint efforts to maintain order, laying the ground­work for eventual Chinese dominance in this strategically important region. A changing military balance of power Regional and global economic, political, and technological developments are shift­ing the balance of power in the Asia-Pacific region in very different ways than in Europe. After all, the starting position is completely different: Russia’s economy is only one-tenth the size of the EU’s, and Europe lacks political resolve and operational military capabilities rather than resources per se. The critical questions are whether the United States would defend Europe in a geographically limited crisis, whether the Western European nations would go to war for their Eastern European allies, and whether the current forces are adequate to deter or repel Russian aggression. In contrast, China’s economy is almost two and a half times larger than the com­bined economies of Australia, Japan, and South Korea – a difference that roughly mirrors the disparity in military spending. While Europeans have consciously delegated their security to Washington, US allies in the Western Pacific have limited options for developing their own conventional capa­bilities to counterbalance China. Hence, the US allies are primarily concerned with China’s determination to re­shape regional dynamics. Under Xi Jinping, Beijing has pursued a more confrontational foreign policy designed to advance China’s regional interests and diminish, if not eliminate, US influence across the Pacific. China has proved willing to underpin its combative diplomacy through both costly economic measures and the rapid modernisation of its armed forces. It is still assumed that the US will continue to play the lead­ing military role for the time being, as Washington retains superiority in conventional and nuclear capabilities as well as in many other areas. However, China is rapidly catching up and asserting its regional claims, making it increasingly difficult for the United States to effectively project power so far from its own shores. This is why allies fear that China could dominate the Asia-Pacific region in future. Against this backdrop, many see Taiwan’s future as the harbinger of the region’s pos­sible development. If Beijing were to con­trol this central component of the first island chain, it would gain both military and political leverage over the East and South China Seas – both of which are stra­tegically important. To signal its resolve, Beijing frequently conducts demonstrations of military power such as in the airspace separating the mainland from Taiwan. The trans-Pacific allies suspect that China could (soon) leverage both conventional and nuclear capabilities to present them with a fait accompli, thus gaining control over Taipei before the US could intervene. This would also damage Washington’s credibility as the guardian of regional order. Whether Beijing would indeed wage war against the United States over Taiwan, or whether it merely seeks to alter the military balance of power by exposing Washington, Taipei, and regional US allies to unacceptable escala­tion risks remains unclear – but the very fact that China keeps its intentions ambigu­ous raises worst-case fears. Nuclear threats In recent years, Beijing has been engaged in a major expansion of its nuclear arsenal. According to US forecasts, China could double the number of its nuclear warheads from the current estimate of 500 nuclear warheads by 2030. While Russia and the United States would still dwarf China’s nuclear forces numerically, Beijing appears to be aiming for the same qualitative league of strategic nuclear weapons systems as possessed by Washington and Moscow. The exact motives behind China’s nuclear build-up remain controversial. Yet the types of weapons and the pace of their development suggest that Beijing would at least like to weaken Washington’s escalation dominance in a crisis. Such developments could theo­retically strengthen the mutual nuclear deterrent between China and the US. On the one hand, it could reduce the risk of a global war. On the other hand, for Washing­ton’s Pacific allies this means that their protective power could no longer credibly threaten nuclear escalation and effectively deter Beijing. As a result, they would be outgunned in a conventional war with China. North Korea’s foreign policy, coupled with its nuclear build-up is a further cause for concern. According to estimates, Pyong­yang could currently have 90 nuclear war­heads at most at its disposal. However, it has significantly diversified its delivery systems. North Korea emphasizes a nuclear doctrine with which it could drive a wedge between the Pacific allies by threatening South Korea with tactical nuclear strikes and the US with strategic nuclear strikes. In addition, Washington and its allies perceive North Korea’s threshold for using nuclear weapons to be very low, as they assume that Pyongyang is also trying to deter con­ventional attacks in this way. Finally, the policy changes Moscow has implemented are intensifying regional con­cerns with respect to the future behaviour of China and North Korea. Russia maintains important military facilities in North-East Asia, militarises the Kuril Islands, and con­ducts strategic air and naval patrols with China across the Western Pacific. Moscow’s focus, however, is clearly on Europe. Never­theless, Australia, Japan, and South Korea fear the concrete consequences of Russia’s cooperation with Beijing and Pyongyang. It is clear that this cooperation fuels Moscow’s war in Ukraine. In the worst-case scenario, closer military cooperation could result in more coordination and opportunistic be­haviour to exploit each other’s conflicts or challenge the US and its allies with addi­tional crises. What is more likely, however, is not a trilateral front, but a triangular dy­namic that remains susceptible to mistrust, power calculations, and priority setting by the respective rulers – and which can none­theless boost existing challenges to regional security and non-proliferation. Moreover, the outcome of Moscow’s on­going war of aggression in Ukraine could set risky precedents for revisionist agendas in East Asia. At this point, China and North Korea could learn from Russia’s nuclear rhetoric how allies can be unsettled and deterred from going “too far” in supporting Ukraine. Converging interests and (radical) alternatives The challenges in the Asia-Pacific region could have a more serious impact on the regional and global order than the conflicts in Europe. They are therefore already influ­encing the balance of interests and thus the room for manoeuvre of the actors involved. First, there is a bipartisan consensus in Washington that American influence in the Pacific must be preserved. Most see the larger Indo-Pacific as the strategic centre of gravity, perceive US influence in the region as key to sustaining America’s preeminent position in international relations, and conclude that containing China is a must. Thus, even in a highly partisan political environment, the status of Taiwan and its treaty alliances with Australia, Japan, and South Korea remain essentially of unques­tioned importance to the United States. Second, Washington needs its allies in the Western Pacific. As the military gap with China narrows, the US military must rely on the critical bases, logistical support, and complementary capabilities of regional allies. Consequently, Australia, Japan and South Korea host significant US military forces, facilitating rapid deployment and sustained operations in the region. The US is not only seeking to strengthen bilateral security cooperation and can also work with Australia and Japan as indispensable partners for regional formats – such as the Quad that includes India – to pool resources to contain Beijing’s ambitions. Conversely, given China’s considerable economic power, any attempt to constrain its technological or financial capabilities requires wide-ranging cooperation. It is thus unsurprising that the Biden adminis­tration has actively sought to garner sup­port across the Indo-Pacific region to foster economic partnerships, supply chain resili­ence, technology transfers and research collaborations. Third, allies in the Western Pacific are prepared to contribute to more effective military action. Many European govern­ments, on the other hand, take US security measures for granted and are reluctant to divert funds from social and other purposes to their armed forces. Australia, Japan, and South Korea each have extensive trade rela­tions with China, having tied their prosper­ity to Beijing. To ensure that this beneficial balance can be maintained, Canberra, Tokyo, and Seoul have reliably invested in allied deterrence and defence. Australia and South Korea have done and continue to do so, even under governments that are more sceptical about relations with Washington. Fourth, although US allies in the Western Pacific greatly benefit from the current strategic arrangements, they have alter­native (even if not attractive) options avail­able – and Washington is acutely aware of this reality. On the one hand, policymakers in Washington suspect that if mistrust of US commitment were to reach an intoler­able level, its Pacific allies might decide to bandwagon with China. As Australia has no territorial dispute with Beijing, and Japan and South Korea have only one limited territorial dispute respectively with China, their concerns are more economic and po­liti­cal in nature. A different regional archi­tecture, though significantly less attractive, would not directly threaten their funda­mental interests and, therefore, would probably be tolerable. On the other hand, Japan and South Korea have the technical capabilities and sufficiently limited regional institutional ties – in Seoul also significant domestic political support – to constrain China’s coercive capabilities by acquiring their own nuclear weapons. In the absence of US reassurance, they could combine the two alternatives and side with Beijing from behind their own nuclear shield. Given these four fundamentals, there is relative confidence in Canberra, Tokyo, and Seoul that the US will continue with its secu­rity architecture in – and therefore with its extended nuclear deterrent for – the Western Pacific, whether or not Donald Trump wins the 2024 presidential election. Moreover, both Trump and his supporters have repeatedly struck a confrontational tone toward China, emphasising their wil­lingness to increase US power projection through military means. Counter-balancing by the United States and its allies Amid a shifting politico-military landscape and aligned US and allied interests in pre­serving the status quo, a concerted effort to counterbalance China’s military expansion is evident. These efforts are extremely ex­pensive. The sunk costs of this effort strongly suggest to all concerned that, regardless of who occupies the White House, the major strategic question facing the future admin­is­tration will likely be how to effectively con­tain China while both maintaining stra­tegic deterrence against Russia and avoiding the escalation of potential crises. For now, the United States seems to pursue a four-pronged strategy that involves developing additional nuclear capabilities, building up conventional options, enhancing allies’ capabilities, and expanding security co­operation. First, planners and pundits in Washington are assessing how to make better use of US nuclear options. While a major nuclear modernisation effort is underway, a grow­ing number of experts and politicians have concluded that the US arsenal needs to be expanded. In addition, the legislative branch has been pushing the Pentagon to pursue additional nuclear options, such as a nuclear-armed cruise missile (SLCM-N). The Trump administration already called for this in 2018 and would likely continue to pursue it, if it returns to power. More­over, some in the hawkish Republican camp are even calling for the first use of such low-yield nuclear weapons to be con­sidered in order to offset China’s operational advantages and prevent an invasion of Taiwan – but it is unclear how much weight such voices could carry in a second Trump term. Second, and more importantly, the US government is building up its conventional capabilities. Although many Democrats criticised the Trump administration’s 2019 decision to abandon the legal prohibition on deploying intermediate-range missiles, the Biden administration has pursued this same course. As a result, US armed forces will soon be deploying such missile systems to their European and Pacific bases; a planned relocation to the US base in Wies­baden was recently announced. For Asia, it has already been announced that the Dark Eagle hypersonic system will be fielded on Guam. In order to equalise the conventional balance of power with China, however, the various other US medium-range systems would have to be stationed on allies’ terri­tory. Given the high probability that Beijing would respond with harsh economic retalia­tion, it remains unclear whether – or under what conditions – Canberra, Tokyo, or Seoul would agree to such deployments. Third, the US government has been work­ing with its allies in the region to im­prove their own military capabilities. First, Australia, Japan, and South Korea continue to develop their national capabilities, par­ticularly where long-range strike capabilities and strategic naval assets are concerned. Sec­ond, the US government seeks to strengthen its allies’ early warning and missile defence capabilities. It is especially relevant that Washington appears to have shifted its posi­tion to weigh deterrence challenges more heavily than proliferation concerns. Indicative of this is the unprecedented technology transfer involved in providing Australia with stealthy nuclear-powered submarines. This transfer requires an un­paralleled level of verification to make it transparent that Canberra does not divert some of the highly enriched uranium needed for submarine propulsion to build its own nuclear weapons. Another example is the US decision from 2021 to lift all restrictions that had long been placed on South Korea’s missile development programs. Equally important is the widespread sale of Toma­hawk cruise missiles in recent years, includ­ing to Australia and Japan. Finally, while bilateral alliances with Washington continue to be characterised by patron-client relationships, Washington appears committed to empowering regional powers not only by helping enhance their capabilities, but also by expanding security cooperation and allies’ roles therein. For instance, the Biden administration wants Japanese shipyards to regularly overhaul US warships, which allows for their constant presence in East Asia. It also upgraded bi­lateral consultations which carve out a South Korean role in US nuclear operations. Further, it is pursuing technology transfers in advanced military capabilities that will buttress Australia’s strategic reach. Although these alliance initiatives bear the hall­marks of the Biden administration, they fit the “burden-sharing while preserving influ­ence” mantra. This tactic characterised Trump’s term in office and is currently aspired to by broad segments of the Repub­lican Party. Thus, while officials and experts in Australia, Japan, and South Korea expect communication and coordination mishaps, procedural quibbles, funding challenges, and implementation delays, these individ­uals strongly believe that bipartisan US sup­port for these measures will remain strong. Nevertheless, concerns abound Although some of Trump’s domestic sup­porters would welcome any reduction in US commitments abroad, a second adminis­tration would have to face the reality that abandoning extended nuclear deterrence remains fundamentally at odds with its primary goals. Abandoned by their long-time protector and facing massive threats, former allies would likely seek to appease China, and could acquire nuclear arsenals independently. Such developments would run counter to the interests of any US ad­ministration, including a Trump White House. Fears of nuclear abandonment are therefore not the dominant concern, leav­ing plenty of room for allies’ other worries. The Pacific allies invest relatively heavily in national and joint deterrence, and defence. But they are also worried about Trump’s penchant for pressuring allies to make con­cessions. Most in Seoul, for example, expect at least a repeat of the tough cost-sharing negotiations of the first term. Trump and his supporters have been vocal about demand­ing increased financial contributions from Seoul for the US troops stationed on the Korean Peninsula, frequently coupled with threats to withdraw some or all of those forces, references to the trade imbalance, and downplaying the threats posed by North Korea. Congressional support ensures the presence of US soldiers, but the White House has considerable leeway in determin­ing the size and mandate of these deployments – and many expect Trump to use security commitments to extract economic concessions from allies. Conversely, some in Canberra and Tokyo worry that a Trump administration would seek to renegotiate various military procurement agreements to shore up US financial gains – but few believe that existing agreements would be revoked in the course of such disputes. Another fear in Australia, Japan, and South Korea is that a second Trump admin­istration will reduce or abandon the Biden White House’s various regional security cooperation initiatives and want all rela­tions to again go through Washington first. On the one hand, Trump and his advisers may be pleased with the burden-sharing benefits associated with these new forms of cooperation and continue to pursue them. On the other hand, a GOP-led administration might seek a return to the traditional centralising “hub-and-spokes” system in order to exert more control over allies. The allies therefore fear that without US leader­ship, these intergovernmental initiatives are likely to stagnate, and competition among protégés for the attention of the common patron will be reignited. This might apply particularly to the very practical, but politi­cally sensitive, trilateral partnership be­tween Japan, South Korea and the United States. Less pronounced than the aforemen­tioned fears are concerns about Trump’s “deal-making” tendencies, such as being abandoned in a costly crisis or entangled in a regional conflict. Ambiguity surrounding Trump’s policies vis-à-vis China, North Korea and Russia reflect general uncertainties about future developments in Europe and East Asia as well as Trump-specific inconsistencies. With regard to China, most expect confrontational security and eco­nomic policies, while a few fear that Trump will seek a grand bargain with Xi. Trump has kept his stance on the status of Taiwan ambiguous: he could either reject all sup­port for Taiwan or, if faced with Chinese intransigence, decide to explicitly commit to defending Taipei. While the former would expose US allies to potential Chinese coercion, the latter could lead to an open military conflict with Beijing – and many allies do not trust Trump’s resolve in such a crisis. Regarding North Korea, most hope that Trump’s failed summitry with Kim Jong Un served as a sufficient lesson. How­ever, some worry he may seek to prove that personal relationships facilitate agreements that would otherwise be difficult to achieve. For example, he could again try to persuade Kim Jong Un to stop his nuclear build-up by offering economic incentives (thus effec­tively breaking sanctions). As a quid pro quo for Seoul, Trump could go so far as to quietly accept South Korean nuclear pro­liferation. Finally, concerning Russia, many fear that Trump might propose a deal to Putin to freeze the conflict in Ukraine, an approach from which Xi could draw con­clusions for revisionism in East Asia. Implications for Europe As Trump is prone to miscalculations and erratic behaviour, caution is required when trying to predict his future policy after re-election. Nevertheless, it is important to understand why Australia, Japan, and South Korea are less concerned about US nuclear assurances. Three conclusions can be drawn from this analysis for Europe. First, even if Trump is re-elected, fundamental changes in Washington’s relations with its Pacific allies are unlikely – which is good news for Europe. For one thing, European economic success depends on the absence of open conflict between China and the US. For another, stable relations in the Asia-Pacific are indirectly a boon to NATO, since US security provision in Europe is heavily dependent upon the success of its more important commitments across the Pacific. Nevertheless, considerable uncertainties remain due to structural challenges as well as Trump’s political agenda and per­sonal idiosyncrasies. However, the pressure from Washington on Europe to adapt its China policy is likely to increase under a second Trump administration, especially as it is likely to be almost exclusively com­posed of China hardliners (China hawks). Second, in the face of these risks, Europeans should recognise that Washington and the Pacific allies will expect economic-political rather than military contributions from Europe. It would therefore be advan­tageous if European governments could use their weight within the global economic system to support the US in containing China’s military expansion. If Europe now helps to influence Beijing’s technological and financial capabilities, it could imply European willingness to impose sanctions on China in the event of war. This would also send a strong signal against revisionism in East Asia. Given Trump’s unpredictability, steps that seem costly today may prove worthwhile in retrospect if regional stability in Asia is severely damaged. Last but not least, one valuable lesson can be gleaned from understanding why US allies in Asia hold more optimistic expec­tations about a potential second Trump administration. Ultimately, the source of their optimism lies in Washington’s depend­ence on its allies and their readiness to take on greater responsibility. Arguably, this particular equation is primarily a result of exogenous factors – such as the region’s strategic importance und China’s ambitions. But it should also now be clear to Europe’s decision-makers, experts and public that the more they invest in their own capabil­ities to influence regional security policy, the less they will have to worry about Washington’s vacillations. Dr Liviu Horovitz and Elisabeth Suh are researchers in the International Security Research Division. This paper is published as part of the Strategic Threat Analysis and Nuclear (Dis-)Order (STAND) project.

한국어로 읽기Leer en españolIn Deutsch lesen Gap اقرأ بالعربيةLire en françaisЧитать на русском The concept of a multipolar (or polycentric) world order [1] was first coined by Academician Yevgeny Primakov in 1996 [Primakov 1996]. Like everything new, it was not immediately accepted, but ultimately became a significant contribution to both domestic and world theory of international relations, offering a compelling alternative to Western approaches, particularly the one proposed in Samuel Huntington’s The Clash of Civilizations [Huntington 1993]. It informed the idea of trilateral cooperation between Russia, China and India, implemented by Primakov and later embodied in the BRICS group. By now, the idea of multipolarity has been recognized in global political science, has entered the conceptual framework and the language of international diplomacy and is used in Russia’s doctrinal documents. In 2015, we proposed the scenario of a new bipolarity [2] as one of the possible trajectories for global development. Today, many scholars, both Chinese and American, [3] suggest that China-centric and U.S.-centric poles are emerging. This article discusses the “multipolarity — new bipolarity” dichotomy. Long Global Macro-Transformations World history shows that a new world order typically emerges after the end of a major war (see Table 1). Table 1. International system (world order)    Source: systematized by A.A. Dynkin, IMEMO RAS Europe was usually the “kitchen” where the world order was cooked. Take the last 200 years. After the end of the Napoleonic Wars, the Concert of Europe emerged and lasted for 100 years. The century-long stability of that system could be explained by the homogeneity of the political organization of its guarantor states. All members of the Concert of Europe were monarchies. World War I produced the Versailles system, which lasted only 20 years. One of the reasons for its short life was the exclusion of the Soviet Union, Germany and China. The Yalta-Potsdam system was formed by the victors in World War II. Its guarantors were the “Big Three” powers—the Soviet Union, the U.S. and the UK—along with France and China. The three defeated powers—Germany, Japan and Italy—were discriminated and disenfranchised. This system existed for 45 years and was initially thought to be polycentric, but quickly degenerated into a bipolar order, and the Cold War commenced. With the collapse of the Soviet Union and dissolution of the Warsaw Pact, the system became unipolar, dominated by the West, primarily the U.S. It disregarded Russia’s interests and, from 2018 onward, began discriminating against China as well. February 2022 can be considered the formal date of the unipolar world’s demise. However, today’s predictions suggest it will take at least 10 years before the new post-unipolar system becomes stable. The economic center of gravity is a spatial indicator of the economic strength of states, borrowed from physics. To put it simply, this is a geographical point of equilibrium for GDP, trade and investment flows of different countries. Figure 1 shows a map of how the world’s economic center of gravity shifted for over a thousand years. It appeared in Central Asia, on the territory of the Ghaznavid Empire (modern-day Afghanistan). The center then migrated northwest, while the devastation in post-war Europe forcefully pushed it (within just 10 years) to the West, toward Greenland. Then it turned east again. The sharpest shift, to the southeast, occurred in 2000–2010 and is associated with the rise of China. The economic center of gravity has almost returned to the same meridian but remained more than 2,000 km north of the starting point, which indicates a return to the millennial balance of economic power between the West and the East. Figure 1. “Journey” of the three-dimensional economic center of gravity    Source: Dobbs R., Remes J., Manyika J. et al. Urban world: Cities and the rise of the consuming class. McKinsey Global Institute, 2012. https://www.mckinsey.com/featured-insights/urbanization/urban-world-cities-and-the-rise-of-the-consuming-class. Statistic calculations by IMEMO RAS for 60 years of peace (1960–2021) indicate the stability of the center’s latitudinal (horizontal) position. This suggests a relatively consistent proportion of GDP production by the countries in the Global South and Global North, under the economic leadership of the Northern Hemisphere. The shift to the East has also been clearly confirmed. According to our projections up to 2050, the future position of the globe’s center of economic activity will lie on the border of India and China. This method of analysis reveals a high level of inertia in time and geographic monotonicity of changes in the balance of economic power of states. It also shows that wars can drastically disrupt the natural course of events. The center of gravity method can also be applied to the arsenals of strategic and tactical weapons (see Figure 2). For example, during the Cuban Missile Crisis, the U.S. had a huge advantage, but then there was a clear pivot to the northeast—the creation of superior nuclear capabilities in the Soviet Union. With the onset of arms control in 1993, a reversing loop emerged, heading southwest. This was followed by a curve to the east with an implied southward inclination, which reflects the growing nuclear stockpiles of India, Pakistan, North Korea, and the rapid buildup of strategic and tactical nuclear forces in China. The military center of gravity follows its economic peer with a lag of 20 years, reflecting the geopolitical ambitions of Asian powers. These interpretations also clearly demonstrate the end of unipolarity and point to the rise of multipolarity. Figure 2. Movement of the nuclear center of gravity Source: calculations by K.V. Bogdanov, Center for International Security at IMEMO RAS, based on the data from the Bulletin of the Atomic Scientists. https://thebulletin.org/nuclear-notebook/. Technology. Politicians tend to be techno-optimists. Barack Obama predicted that 3D printing would transform the entire world. [4] George W. Bush promised that decoding the human genome would revolutionize medicine. [5] All false starts. Economists traditionally measure the rate of technological progress (TP) using the total factor productivity (TFP) index. To put it simply, this is the part of economic growth driven not by an increase in inputs—labor and capital—but rather by improvements in the efficiency of their use. Technological progress means not only the generation of new scientific and technological ideas but also their mass replication. Without economic validation of the impact of wide dissemination of innovations, scientific or technological achievements remain in history as brilliant breakthroughs with only local economic effects, giving rise to journalistic generalizations at best, such as the “Fourth Industrial Revolution” or “the sixth techno-economic paradigm.” Statistical metrics rely on data of technologically advanced nations, while catching-up countries have room for growth by approaching the TP frontier, i.e. adopting and improving existing ideas and technologies. Technological leaders spend more resources pushing the TP frontier, while those catching up can accelerate at lower costs, effectively staying in the “wind shadow” of the leaders. The TFP index growth rate has been steadily declining in developed countries for many years, but this has been especially conspicuous since the mid-2000s. Today, the growth is below 1.5% and even 1% per year (see Figure 3). Figure 3. Average annual growth of total factor productivity, % Source: calculations by IMEMO RAS based on the data from the International Productivity Monitor. No. 38, Spring 2020. http://www.csls.ca/ipm/ipm38.asp#:~:text=Martin%20Neil%20Baily%2C%20Barry%20P.%20Bosworth%20and %20Siddhi%20Doshi%0ALessons%20from%20Productivity%20Comparisons%20 of%20Germany%2C%20Japan%2C%20and%20the%20United%20States%C2%A0; Innovative China: New Drivers of Growth. World Bank Group, and the Development Research Center of the State Council, P.R. China. 2019. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-1335-1. License: Creative Commons Attribution CC BY 3.0. https://documents1.worldbank.org/curated/en/833871568732137448/pdf/Innovative-China-New-Drivers-of-Growth.pdf. A similar pattern of dramatic TFP deceleration was observed in China. The consensus interpretation of these figures is that the main effects of the Third Industrial (i.e., computer) Revolution have largely been exhausted, and no new general-purpose breakthrough technologies (such as electricity, internal combustion engines, or computers and mobile communications) have emerged. However, it seems that the intellectualization of technologies and approaches to project management, as well as informatization, simply do not fit into the traditional factor-based view of progress that was established many years ago. The scale of knowledge is growing, new professions are springing up, the role of emotional intelligence and cognitive functions is increasing. All this dramatically changes the structure of capital assets (see Figure 4). From the beginning of the 21st century and until the 2008 crisis (2000–2007), equipment accounted for over 50% of the increase in capital’s contribution (investment) to output growth, whereas in 2019–2021, almost 63% of this increase was attributable to intellectual property assets. This result of our research suggests a refocusing of technological progress from final products to intellectual technologies, enabling the production of a range of innovative goods and services tailored to highly segmented demand. Figure 4. Transformation of the capital structure in the U.S. private sector Source: Total Factor Productivity for Major Industries—2022. U.S. Bureau of Labor Statistics. https://www.bls.gov/news.release/archives/prod3_03232023.htm. There are now hopes that the pace of technological progress may accelerate due to the development of artificial intelligence (AI) technologies, which will spark a new industrial revolution. An indirect sign of its imminence is the sharp rise in the rate of business births and deaths in the U.S. economy in 2020–2022. [6] The spillover of labor from companies that are losing efficiency to corporations with increasing market shares has also accelerated. These are some sort of leading indicators that suggest the structural results of TP are approaching. Similar developments occurred 30 years ago, on the cusp of the computer revolution. The above-mentioned intellectualization of fi ed capital, where trusted AI will be applied, adds credibility to these hopes. In addition, AI is one of the critical areas of technological sovereignty. It is no coincidence that Vladimir Putin described AI as “crosscutting, universal and essentially revolutionary technology.” [7] The Russian President announced the preparation of a new edition of the National AI Development Strategy and a respective decree. I believe that this prioritization is justified. China’s experience in the semiconductor race is a good model to be emulated (see Figure 5). Its distinguishing feature is the focus on companies as drivers of development, with massive, cumulatively growing state support. Figure 5. Focusing on China’s priorities (nanometer chip race) Source: Systematized by I.V. Danilin, IMEMO RAS The U.S. strategy of curbing technological development of Russia (in all areas) and China (in semiconductors, artificial intelligence and quantum computing and electric cars) leads to stiff competition in high technology, which is fraught with fragmentation, diversification of technical standards, legal norms and rules. And this is another argument in favor of a new bipolarity. Demographic processes. According to UN projections, by the middle of the 21st century, Russia will drop from its current 9th place to 14th in terms of population, while remaining the most populous country in Europe. [8] A more significant problem for Russia is population aging. The proportion of elderly people, who are typically not part of the labor force, is increasing. Japan, Spain and Italy are leading this process today, but neither China nor India will be spared. Nigeria appears to be the only major country where population and the share of young people will continue to grow until the end of the 21st century. As of December 2023, one in 10 people worldwide was aged 65 or over, with health spending taking up 10% of global GDP. [9] In this context, the importance of medical technologies cannot be overstated, as they can extend not only people’s life expectancy but also the duration of their healthy and socially active life, thereby easing labor market pressures. Needs always steer technological progress toward overcoming economic growth constraints tied to the scarcest resource in any given historical period. A serious risk associated with the problem of aging is a slowdown in innovation, since it is people under 40—the age group that will shrink throughout the 21st century—who are the primary drivers and consumers of innovation. So far, this risk has been mitigated by the large youth cohorts in China and India. This is why these two nations are experiencing almost exponential growth in patenting, massive reengineering and, consequently, in middle-class numbers. Demographics give India an edge until around 2060, which is already evident in the growth rates of Indian economy. Combined with the influx of hi-tech investments and the contribution of the Indian diaspora, India has good prospects, making its position crucial to the future architecture of the world order, regardless of how it evolves. The U.S. understands this and has been figuratively “clinging” to this nation for the past 20 years. I believe that the Russian Academy of Sciences should significantly bolster scientific and educational ties with India and its dynamically developing neighbors in Southeast Asia—Vietnam, Malaysia and Indonesia. The anticipated tension in the global market of new generations of innovators aggravates inter-country competition for this scarcest resource. I think that the international reputation of the Russian Academy of Sciences is a powerful tool to attract and retain young people and foster their creative motivation. We should reassert this as we celebrate the 300th anniversary of the Academy of Sciences. Ideology. Dirigisme [10], or statism, is the main trend in both economic theory and economic policy of the West. A pivot to a more state-controlled economy began with the disappointing outcomes of the Washington Consensus, which aimed to guide post-socialist countries from planned to market economies. The 2008–2009 financial crisis cemented the trend toward statism, and the COVID-19 pandemic elevated it to unprecedented proportions. In the U.S., Democrats are among the most vocal proponents of greater government intervention in all spheres of life, but they are not alone. Republicans are also actively advocating industrial policy, repudiation of free trade, as well as strict control over Big Tech, among other measures. The popularity of the so-called cultural Marxism is on the rise. [11] Its origins go back to the critical theory of the Frankfurt School (H. Marcuse, E. Fromm and others). These ideas are moving from the realm of ideological and theoretical confrontations into political activism. For example, the leaders of the BLM movement publicly self-identify as “trained Marxist organizers.” The essence of the strategy inspired by “cultural Marxism” is the rejection of direct political struggle on the barricades, since the proletariat has been “bought off by the bourgeoisie and is no longer capable of anything,” and the ranks of the classic proletariat are rapidly thinning. The direction of social change is set, on the one hand, by intellectuals with personal power and, on the other hand, by marginalized groups seeking to assert their “right to identity.” The strategy of activists who form this paradoxical combination of intellectuals and marginalized individuals is the creeping takeover of the main institutions of power and society by planting “correct” ideas in the mass consciousness. In the U.S., the fighters for political correctness have already hijaked the school system, university campuses, major media outlets and the entertainment industry (Hollywood). Civil servants are forced to take courses in critical race theory, which postulates not only the socially constructed nature of race and the recognition of systemic racism [Delgado, Stefancic 2017: 45] but also a sense of guilt in one part of society toward another. This, in turn, allegedly requires addressing moral and material injustices by organizing public life in line with such an ideology. Similar concepts are being pushed into public discourse as well. It is already dominated by the ideas of radical feminism, cancel culture, anti-systemic racism and postcolonialism, the fight against global warming and the green agenda, which claims to be universal and non-negotiable. As a result, the energy transition is motivated more by ideology than by the comparative market efficiency of energy supplies. Different environmental-political discourses—eco-nationalism, eco-imperialism and green growth—are competing in shaping the green agenda, eroding the attractiveness of the dominant sustainable development model. Another universal weapon in fighting any dissent is political correctness. Large corporations, government agencies and universities are developing and implementing strategies to promote DEI (Diversity, Equity, and Inclusion) principles, which are nothing but tools of ideological control over employees. Universities are required to fi reports on their compliance with such principles and efforts to promote them, which causes mounting criticism as they violate academic freedom and cultivate ideological conformity. [12] However, ideological censorship has already taken deep root in various spheres of public life, and questioning its compatibility with democracy is deemed politically incorrect. Revising cultural norms has become a cultural norm in and of itself, deepening divisions in modern polarized societies, primarily in the U.S., but also in Old Europe [Semenenko 2023: 27-35]. Another curious phenomenon is associated with the new agenda. In the 20th century, the left championed progress, advocating faster economic growth, rapid technological advancement and better social welfare. Now the ideas of zero or even negative growth and post-growth are popular among them. [Buchs, Koch 2017: 218]. Such ideological narratives exacerbate the question of how to treat the poor countries of the South, but also their own poor: the welfare state for all no longer fit into this agenda. On the contrary, it becomes a selective tool of backing the “right” minorities. This creates a breeding ground for stronger positions of populist forces. Such contradictory internal political processes distort public consciousness as well as domestic and foreign policy decision-making. The new elites are extremely ideologized. The U.S. political system is becoming less effective at regulating the economy. Two rating agencies, Standard & Poor’s and Fitch Ratings, have downgraded the U.S. credit rating to AA+ from the top mark of AAA. In November 2023, Moody’s lowered its outlook on the U.S. credit rating to “negative” from “stable.” All three agencies agree on the main reason for the downgrade: the growing dysfunctionality of the political system. In foreign policy, the U.S. has withdrawn from 16 major international treaties and agreements on arms control, global trade, climate and the Arctic since the beginning of the century [Dynkin 2020]. In other words, the unipolar world order with its unbridled appetite for expansion has brought the world into a zone of extra-high risks. And the paradigms that are dominant in the West have proven incompatible with either Russian or Chinese value-oriented political projects. Therefore, the ideological sphere will inevitably see increased confrontation, marking another step toward bipolarity. IMEMO RAS researchers have repeatedly warned about the West’s miscalculated strategic hopes: 1) that Russia would face an economic catastrophe because of an unprecedented sanctions war in modern history; 2) that the unipolar world order would remain unchallenged; 3) that a global blockade of Russia’s export-oriented economy would be feasible. And we were not the only ones who made these warnings. In response, we only heard propagandistic clichés like “a gas station masquerading as a country,” “a regional power” and “Russia is isolated with its economy in tatters”. This kind of “expertise” led the Washington establishment to believe that Russia is a “declining power” whose strategic interests could be safely neglected. This “strategic lunacy” is a consequence of a universalist mindset—a product of the West’s political experience and culture, which tends to elevate Anglo-Saxon and European historical tradition to absolutes—and of a failure to understand the shifts in the balance of power in the 21st century. Today, Russia is the world’s fourth-largest economy by purchasing power parity (PPP), while the top fi e global economic powers include three BRICS nations and none from the blooming “garden” of Josep Borrell, the EU foreign policy chief who has recently been fired. Now a new narrative has been launched into the propaganda orbit: “Russia is about to attack Eastern Europe.” The logical gap between the image of a declining power and that of an “aggressive bear” is conveniently ignored. This primitive, one-dimensional perception of complex non-linear processes can only lead to disappointment—just as it did when the West lulled itself into believing that Chinese reforms would eventually lead to political pluralism. As a result, the West has an inexhaustible stream of surprises. It appears that their experts are increasingly out of touch with Russian (and any other non-Western) realities. Figuratively speaking, they are staring into a distorting rearview mirror constructed by their own rhetoric and propaganda. But the main real surprise was the fantastic resilience of the Russian economy. I dare say that no other economy in the world, not even China’s, could withstand such aggressive pressure. The high resistance of the Russian economy to external shocks can be explained by three fundamental reasons. First, it is the result of difficult, sometimes agonizing institutional and structural reforms. These efforts have ultimately produced a self-sufficient, adaptive and highly diversified market economy. Second, the crisis of 2022 was the fifth (!) in the history of post-Soviet Russia. The government, federal regulators and the Bank of Russia have accumulated hard-earned professional experience in crisis management and counter-cyclical strategies. The same can be said about business. Our economic entities have demonstrated time and again that there are always more effective solutions than there are problems. Finally, the West miscalculated its ability to isolate our economy. The dual containment of Russia and China, in fact, only strengthens ties between the BRICS member states. Transformations of the 2020s. The first half of the 2020s has fi y buried what was once known as “European security.” It is impossible to glue this “broken cup” back together without Russia. The unwillingness of the Ukrainian side and the West to stop the armed conflict at its very beginning, the dangerous escalation, NATO’s constant violation of its own “red lines” and the accession of Sweden and Finland to the North Atlantic Alliance are all symptoms of the European security system transforming into a transatlantic one. Meanwhile, the Eurasian security system is taking shape. The outcomes of Russian President Vladimir Putin’s visit to China hint that the “political East” is starting to form, if not as an alternative to the long-standing “political West,” then at least as an equal partner. Without considering its interests, any debate about “rules-based” global security will be mere fantasy. Indian Prime Minister Narendra Modi’s first visit to Moscow after his recent reelection is in the same vein. Of course, geography cannot be changed, and Russia has been and will remain a European power. However, it is also the geographic center of Eurasia, providing the infrastructure backbone for the Eurasian partnership—from the Northern Sea Route and up to the Trans-Siberian Railway, Baikal–Amur Mainline, Trans-Asian Highway and cross-continental pipelines. The “post-Ukrainian” world seems to be moving toward a new, indivisible Eurasian security architecture, relying on existing institutions: the Union State, CSTO, EAEU, CIS, BRICS, SCO and ASEAN. Minsk has put forward an initiative to develop a Eurasian Charter for Diversity and Multipolarity—a strategic vision for a new system of international relations to replace the “rules-based” world order. An important event of 2024 in this context is the expansion of the BRICS club (see Figure 6). Its combined economic power could potentially reach $67 trillion, surpassing the total GDP of the G7 countries. Figure 6. Economic potential of BRICS countries Source: calculations by A.A. Dynkin, IMEMO RAS, based on the data from the IMF, Food and Agriculture Organization, World Steel Association, Energy Transition Institute, Statistical Review of World Energy 2023, International Energy Agency. And there are still 28 more countries on the “waiting list”. In several important markets such as metals, automotive industry, oil and mineral fertilizers, BRICS already matches or exceeds the potential of the G7 nations. Russia, which took over the BRICS rotating presidency in 2024, faces the task of energizing the harmonized economic and technological policies of the members. This approach is the institutional cornerstone of the future polycentric world. What will the coming world order look like? It is difficult to say which of the two trends—bipolarity or polycentrism—will prevail in the end. It is more likely that they will coexist: for example, rigid bipolarity in the Global North and polycentrism in the Global South. Signs of military, economic and technological bipolarity are already visible in the North. Interestingly, New Delhi tends to categorize China as a country of the North [Jaishankar 2020: 240]. This viewpoint has substance, as China is far ahead of other countries of the Global South in terms of GDP per capita ($12,541). For comparison, India’s GDP per capita is $2,612. [13] The decoupling of the U.S. and Chinese economies has not affected trade flows yet, but only technology and investment. In 2023, China saw a reversal of foreign direct investment inflows, with funds previously invested being withdrawn. Negative trends took hold, and the outflow approached negative $1.5 trillion (see Figure 7). Meanwhile, the Asia-Pacific macro-region is gaining greater internal dynamics, unlike Europe or North America. Figure 7. U.S.–China Economic Decoupling Source: UN Comtrade Database. https://comtradeplus.un.org/; State Administration of Foreign Exchange (SAFE) of the People’s Republic of China. https://www.safe.gov.cn/en/. Meanwhile, the trend toward political polycentricity persists. For example, New Delhi and Ankara were initially poles apart on the Palestinian–Israeli conflict. This is also the dawning of post-unipolarity, where the new centers of power are increasingly guided by their own interests in decision-making rather than by any “rules” or advice from Washington, Beijing or Moscow. It would be unrealistic to expect that the future world order will be free of conflict. The world will retain its diversity, with different potentials of countries and their competition. It is crucial that, despite their differences, the interests of larger and smaller nations are respected, and problems are solved through constructive dialogue. Russia was the first to challenge the notorious unipolar world order. Today we can state that most countries in the Global South have responded to this challenge and refused to subscribe to the Western interpretation of the conflict in Ukraine . The future world order is taking shape right before our eyes. I am sure that a multipolar world is preferable for Russia as a developed, self-sufficient and sovereign nation. But this world also requires a new system of global governance, development and strengthening of its institutions, such as BRICS, G20, SCO and EAEU. For instance, the EAEU member states (Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan) are faring much better than the five other post-Soviet countries. In 2022, GDP per capita in the countries of the Eurasian Economic Union was 3.5 times higher than the average for the fi e other CIS states that are not part of the EAEU (Azerbaijan, Moldova, Tajikistan, Turkmenistan, Uzbekistan) (see Figure 8). Our strategy in these organizations requires a solid approach and “stereoscopic” vision from socio-economic, scientific, technological and political perspectives. Here, the Russian Academy of Sciences should play a major role as a leader of scientific and expert community. Figure 8. Economic trends of EAEU and CIS countries Source: EEC. https://eec.eaeunion.org/?ysclid=lr7rtdg7np631919243; IMF. https://www.imf.org/; World Bank. https://www.worldbank.org/.  Conclusion In conclusion, there are compelling arguments both for multipolarity and for a new bipolarity. Leading U.S. experts are asking similar questions: “What order will replace the crumbling US-led system is far from certain. Will China push aside the United States as the global hegemon to lead a world according to rules written in Chinese characters? Will the world become bipolar, divided between two more or less rigidly defined blocs led by the United States and China? Will a genuinely multipolar world emerge based on several states or coalitions of more or less equal strength?” [Graham 2023: 272]. These questions are yet to be answered, and definitive conclusions in this case are premature. Given this high uncertainty, one should be prepared for any scenario. The essential prerequisite for such readiness is Russia’s strategic autonomy based on military-strategic parity with the U.S. The fundamental question to which the author has no answer today is: how likely is the emergence of a new world order without a major war? In 2024, presidential or parliamentary elections will take place (or have already taken place) in 50 countries, which account for more than 45% of the world’s GDP and population. Perhaps their results will clarify our vision of the near future. Dynkin A.A. (2024). World order transformation: economy, ideology, technology. Polis. Political Studies, 5, 8-23. https://doi.org/10.17976/jpps/2024.05.02 This article was prepared with the support of a grant from the Ministry of Science and Higher Education of the Russian Federation for major scientific projects in priority areas of scientific and technological development No. 075-15-2024-551 “Global and regional centers of power in the emerging world order”. The author expresses gratitude to his colleagues at IMEMO RAS R.I. Kapelyushnikov, V.D. Milovidov, I.S. Semenenko, I.V. Danilin, S.V. Zhukov, K.V. Bogdanov, A.P. Guchanova for consultations and assistance in preparing this article. References Büchs, M., & Koch, M. (2017). Critiques of growth. In M. Büchs, & M. Koch. Postgrowth and Wellbeing: Challenges to Sustainable Welfare (pp. 39-56). London: Palgrave Macmillan. https://doi.org/10.1007/978-3319-59903-8_4 Delgado, R.,& Stefancic, J. (2017). Critical race theory. Anintroduction. New York: New York University Press. Graham, T. (2023). Getting Russia right. 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Donald Trump’s return to the White House in January 2025, combined with a Republican-led US Senate, was widely feared among international allies and will be cheered by some of America’s foes. While the former put on a brave face, the latter are finding it hard to hide their glee.  On the war in Ukraine, Trump is likely to try to force Kyiv and Moscow into at least a ceasefire along the current front lines. This could possibly involve a permanent settlement that would acknowledge Russia’s territorial gains, including the annexation of Crimea in 2014 and the territories occupied since the full-scale invasion of Ukraine in February 2022.  It is also likely that Trump would accept demands by the Russian president, Vladimir Putin, to prevent a future Ukrainian Nato membership. Given Trump’s well-known animosity to Nato, this would also be an important pressure on Kyiv’s European allies. Trump could, once again, threaten to abandon the alliance in order to get Europeans to sign up to a deal with Putin over Ukraine.  When it comes to the Middle East, Trump has been a staunch supporter of Israel and Saudi Arabia in the past. He is likely to double down on this, including by taking an even tougher line on Iran. This aligns well with Israeli prime minister Benjamin Netanyahu’s current priorities.  Netanyahu seems determined to destroy Iran’s proxies Hamas, Hezbollah and the Houthis in Yemen and severely degrade Iranian capabilities. By dismissing his defence minister, Yoav Gallant, a critic of his conduct of the offensive in Gaza, Netanyahu has laid the ground for a continuation of the conflict there.  It also prepares for a widening of the offensive in Lebanon and a potentially devastating strike against Iran in response to any further Iranian attack on Israel.  Trump’s election will embolden Netanyahu to act. And this in turn would also strengthen Trump’s position towards Putin, who has come to depend on Iranian support for his war in Ukraine. Trump could offer to restrain Netanyahu in the future as a bargaining chip with Putin in his gamble to secure a deal on Ukraine.  Pivot to China  While Ukraine and the Middle East are two areas in which change looms, relations with China will most likely be characterised more by continuity than by change. With Chinese relations being perhaps the key strategic foreign policy challenge for the US, the Biden administration continued many of the policies Trump adopted in his first term – and Trump is likely to double down on them in a second term.  A Trump White House is likely to increase import tariffs, and he has talked a great deal about using them to target China. But Trump is also just as likely to be open to pragmatic, transactional deals with Chinese president Xi Jinping. Just like in relations with his European allies in Nato, a serious question mark hangs over Trump’s commitment to the defence of Taiwan and other treaty allies in Asia, including the Philippines, South Korea, and potentially Japan. Trump is at best lukewarm on US security guarantees.  But as his on-and-off relationship with North Korea in his first term demonstrated, Trump is, at times, willing to push the envelope dangerously close to war. This happened in 2017 in response to a North Korean test of intercontinental ballistic missiles.  The unpredictability of the regime in Pyongyang makes another close brush of this kind as likely as Trump’s unpredictability makes it conceivable that he would accept a nuclear-armed North Korea as part of a broader deal with Russia, which has developed increasingly close relations with Kim Jong-un’s regime.  Doing so would give Trump additional leverage over China, which has been worried over growing ties between Russia and North Korea.  Preparing for a Trump White House  Friends and foes alike are going to use the remaining months before Trump returns to the White House to try to improve their positions and get things done that would be more difficult to do once he is in office.  An expectation of a Trump push for an end to the wars in Ukraine and the Middle East is likely to lead to an intensification of the fighting there to create what the different parties think might be a more acceptable status quo for them. This does not bode well for the humanitarian crises already brewing in both regions.  Increasing tensions in and around the Korean peninsula are also conceivable. Pyongyang is likely to want to boost its credentials with yet more missile – and potentially nuclear – tests.  A ratcheting-up of the fighting in Europe and the Middle East and of tensions in Asia is also likely to strain relations between the US and its allies in all three regions. In Europe, the fear is that Trump may make deals with Russia over the head of its EU and Nato allies and threaten them with abandonment.  This would undermine the longevity of any Ukrainian (or broader European) deal with Moscow. The relatively dismal state of European defence capabilities and the diminishing credibility of the US nuclear umbrella would not but help to encourage Putin to push his imperial ambitions further once he has secured a deal with Trump.  In the Middle East, Netanyahu would be completely unrestrained. And yet while some Arab regimes might cheer Israel striking Iran and Iranian proxies, they will worry about backlash over the plight of Palestinians. Without resolving this perennial issue, stability in the region, let alone peace, will be all but impossible.  In Asia, the challenges are different. Here the problem is less US withdrawal and more an unpredictable and potentially unmanageable escalation. Under Trump, it is much more likely that the US and China will find it hard to escape the so-called Thucydides trap – the inevitability of war between a dominant but declining power and its rising challenger.  This then raises the question of whether US alliances in the region are safe in the long term or whether some of its partners, like Indonesia or India, will consider realigning themselves with China.  At best, all of this spells greater uncertainty and instability – not only after Trump’s inauguration but also in the months until then.  At worst, it will prove the undoing of Trump’s self-proclaimed infallibility. But by the time he and his team come to realise that geopolitics is a more complicated affair than real estate, they may have ushered in the very chaos that they have accused Biden and Harris of. 

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The world economy is underperforming as a result of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainty around the US election. An escalation of conflict in the Middle East could increase uncertainties, harming inflation reduction efforts and hurting growth. It has been over a year since the Hamas-led attack on Israel. Israel’s response in Gaza has resulted in widespread destruction and significant loss of life. The conflict has since expanded beyond Gaza, involving the Houthis in Yemen, Hezbollah in Lebanon and Iranian strikes targeting Israel. In addition to the awful humanitarian cost of the conflicts, the war and the possibility of its further expansion pose significant repercussions for the global economy. This article discusses three potential ways in which the current conflict and a wider conflict in the Middle East could affect the global economy. Increased geopolitical uncertainties First and foremost, an escalation of the Middle East conflict could lead to greater geopolitical uncertainties. Figure 1 shows the evolution of the geopolitical risk (GPR) and geopolitical acts (GPRA) indices (Caldara and Iacoviello, 2022) – these are text-based measures of heightened uncertainties due to adverse geopolitical events such as wars, terrorism and international tensions. (See this article for more discussion about these measures.) Following the Hamas-led attack on 7 October 2023, both the overall GPR index and its ‘war and terror acts’ component spiked strongly, to a level higher than that seen during the ISIS attack in Paris in November 2015. Both indices eased significantly in the months following October 2023 despite the continuation of the conflict. But they jumped again following Israel’s attack on southern Lebanon in September 2024. As of mid-October 2024, the GPR and GPRA remain, respectively, 21% and 35% higher than their historical averages.   What might be the consequences of such elevated levels of risk? Research tells us that higher geopolitical risk raises oil prices (Mignon and Saadaoui, 2024). It also reduces global investment and increases inflation (Caldara et al, 2022). Greater geopolitical risk has a significantly negative impact on business and consumer confidence in several advanced economies (de Wet, 2023). This is because consumers typically cut non-essential spending and businesses postpone investment decisions during turbulent times. This reduces firm-level investment, particularly for businesses with higher initial investment costs and greater market power (Wang et al, 2023). Higher geopolitical risks also reduce global trade and financial flows, causing greater volatility in capital flows in emerging markets (Kaya and Erden, 2023). Oil production cuts and higher energy prices The second way in which the Middle East conflict could affect the global economy is its impact on energy prices, both directly through production cuts and indirectly through greater uncertainties. In response to Israel’s actions against its neighbours, the Organization of the Petroleum Exporting Countries (OPEC) could reduce oil production to penalise countries supporting Israel. A similar action in the 1970s led to a significant jump in oil prices, which contributed to years of stagflation, with higher global inflation and recessions in major economies. Before Israel's attack on Lebanon at the end of September, oil prices had been declining due to falling demand, particularly from China. On the supply side, oil production had increased in Canada and the United States, countering the production cuts by OPEC, and Saudi Arabia was expected to increase oil production from December. But the situation quickly reversed following Israel’s attack on Lebanon. Oil prices jumped by nearly $10 per barrel within a week, before easing by around $5 per barrel. While the immediate oil price impact of Israel’s attack has mostly faded, the potential for higher oil (and other energy) prices still poses a risk to global inflation and economic activity (Liadze et al, 2022). To provide further context for the potential scale of this impact, we can show what would happen if oil and gas prices were to remain $10 higher for two years than the baseline levels projected in the Summer Global Economic Outlook from the National Institute of Economic and Social Research (NIESR), using NIESR’s Global Macroeconometric Model (NiGEM). The results demonstrate that the $10 rise in oil and gas prices increases inflation by around 0.7 percentage points in major economies in the first year (see Figure 2). The impact is higher in China, where the economy relies relatively more on oil imports for its strong manufacturing industries. The inflationary pressures persist for two years despite central banks’ efforts to curb inflation by increasing interest rates.   The effect of higher oil and gas prices on real GDP is shown in Figure 3. In the scenario described above, GDP would fall by 0.1-0.2% in major economies immediately. Partly due to higher interest rates, real GDP would continue to weaken for three years following the shock. After this, economic activity would start to return to base levels as oil and gas prices revert to their levels in the baseline forecast.   Increased shipping costs and supply chain disruptions A wider conflict in the Middle East could also affect the economy through higher shipping costs and supply chain disruptions. Houthi attacks on commercial ships in the Red Sea in late 2023 showed that such disruptions can have a huge impact on global trade through shipping, which comprises 80% of world trade volume. Following the rocket attacks by the Houthi rebels, some commercial shipping re-routed from the Red Sea to the Cape of Good Hope, leading to significant delays in travel times and increased freight costs. As a result, the Shanghai Containerized Freight Index – a measure of sea freight rates – rose by around 260% in the second quarter of 2024 with additional disruptions to supply chains. Our analysis shows that an increase of 10 percentage points in shipping cost inflation can lead to import prices rising by up to around 1% and consumer inflation increasing by around 0.5% in OECD countries. As Figure 4 shows, the impact of shipping costs on inflation shows its full effects over six quarters. This means that inflationary concerns could be with us for the next year and a half as a result of higher shipping costs that may emerge from any possible escalation of the Middle East conflict.   Wider economic implications and policy responses While rising geopolitical risk and increased oil and shipping costs can each individually exert upward pressure on inflation and may slow down economic activity in the global economy, the combined impacts are likely to be greater. Countries with stronger trade and financial ties to the Middle East and those that rely heavily on oil imports as an input for domestic production would be most affected. On the monetary policy front, central banks may have to take a more hawkish stance in response to rising inflationary pressures from the Middle East conflict. This could lead to higher interest rates, which would further dampen economic activity, particularly in an environment where there are already recessionary concerns in some major economies. Beyond its immediate economic implications, an escalation of the Middle East conflict could trigger large-scale displacement of people, which would increase economic and social pressures on neighbouring countries. Many countries may also have to increase their military spending in response to growing regional tensions. Given that public debt levels are already elevated in many countries due to successive shocks to the global economy over the past decade, any additional defence spending could come at the expense of public infrastructure investments that would otherwise boost productivity growth. Overall, the global economy is already underperforming as a result of the lagged effects of tight monetary policies, weaker global trade, a slowing Chinese economy and uncertainties surrounding the upcoming US election and possible changes to US trade policy. A potential escalation of conflict in the Middle East could exacerbate the situation by increasing uncertainties, harming efforts to bring down inflation and reducing global GDP growth. Over the medium and long term, it could further damage the global economy, with the possibility of refugee crises as well as increased defence spending, making the effects more complex and longer lasting. This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.