November opens with geopolitics being complicated by ideology and the self-interest of nations. The protracted war in Ukraine and two years of the Covid-19 pandemic are compelling an unprecedented churn in which alliances are being tested and new alignments surfacing.
The 17th G-20 summit of the most powerful nations is due in Bali on November 15-16. Chinese President Xi Jinping arrives after securing a third term and installing his handpicked aides in the CPC’s politburo and its seven-member standing committee, which helps him to run China.
The Western nations have urged host Indonesia to avoid inviting Russian President Vladimir Putin. US President Joe Biden will attend after the crucial mid-term elections to all 435 seats of the House of Representatives, and one-third of the Senate’s 100 members. The President’s party, the Democrats, is expected to lose control over one or both the Houses. Recent polls indicate that opinion is shifting towards the Republicans due to economic issues affecting the working and middle classes. The US released on October 27 its 80-page National Defence Strategy 2022. It recommends “promoting global security, seizing new strategic opportunities and to realising and defending our democratic values”. While it warns against threats from Russia, North Korea, Iran, violent extremist organisations and climate change, China is seen as the principal strategic competitor and “pacing challenge”.
Against this backdrop, a number of developments are complicating an already messy global scenario. Iran, unable so far to defuse the popular protests by women and youth seeking political change and freedom from the hijab, has widened its confrontation with the US and Europe. It is supplying Russia with drones, missiles and even military advisers in Ukraine to train Russian soldiers to handle them. In Syria, the Iranian military has taken the lag created by the downsizing of Russian military personnel due to demand for the Ukraine operations. Thus, a military alliance between Russia and Iran is shaping up. This obviously stymies the talks to resurrect the 2015 nuclear deal between the P5+1 and Iran.
As the Russian military faces increasing pressure around the crucial southern Ukrainian town of Kherson, Russia has rapidly deployed the newly-drafted soldiers, besides obfuscating over use of “dirty bombs” or even nuclear weapons. Nato’s gamble is to support Ukraine militarily without direct involvement hoping that either Vladimir Putin will sue for peace or get replaced by his peers. Contrariwise, President Putin hopes that with the onset of winter, the European nations will split over energy shortages and inflation.
Neither side’s gamble has worked so far. But two developments show the difficulty of using sanctions to squeeze Russia financially or “decouple” it from China. The first was demonstrated when the OPEC-Plus, which includes Russia and Saudi Arabia, announced a two million barrels per day oil production cut. It created a public spat between the United States and the Saudis. The US alleged betrayal while the Saudis claimed the US sought postponement of any production-cut till after the US mid-term elections. An embarrassed President Biden has been threatening retaliatory punishment against Saudi Arabia and perhaps even the UAE, which is in the Financial Action Task Force’s grey list. The European Commission is about to add the UAE to the list of countries whose tax practices pose a money-laundering risk. Other actions can include the withdrawal of missile defence systems and spares for US-supplied equipment. The Saudis maintain that the production-cut move is based on the anticipated global economic slowdown and reduced demand for oil. This may be partially correct as most OPEC members were pumping oil below their assigned quotas.
Now Germany has suddenly broken ranks with the European Union over dealings with China. Despite a growing European consensus that dependence on Russia or China can lead to strategic blackmail, Germans sold to Chinese major Cosco a 24.9 per cent stake in Hamburg port. Under the pressure of alliance partners, this was below the earlier speculated sale of 35 per cent. On top of this, German Chancellor Olaf Scholz is visiting China along with a high-level business delegation on November 3-4. Doing this just 10 days before the G-20 meeting in Bali, where he would have anyway met Chinese President Xi Jinping, raised eyebrows. The French have made it known they would have preferred a European delegation to convey solidarity when the US and Europe are “decoupling” from China, economically and technologically. Noticeably Mercedes Benz, Deutsche Bank and SAP declined to join the group, in view of their businesses elsewhere.
Exports are now 47.5 per cent of Germany’s GDP, varying between that figure and 40 per cent over the last decade. Nearly a million jobs depend on business with China. Nearly half of European investment in China is German. Since China bought Germany’s largest robotics company Kuka in 2016 and Chinese global ambitions became obvious, warning bells have been ringing in Europe that China was using investment to suck out technology. Despite that, Chancellor Scholz’s outreach immediately after Mr Xi has consolidated power and secured another term is optically undesirable. Although former German Chancellor Angela Merkel visited China 12 times in her 16-year rule, in today’s context the visit shows cracks in the wall that the US and Europe are raising to contain China.
In Brazil, the largest Latin American democracy, the presidential election on October 30 saw left-of-centre former President Luiz Inacio Lula da Silva beat Jair Bolsonaro by 50.9 per cent to 49.1 per cent votes. This is a significant victory as Mr Bolsonaro is a Donald Trump right-wing clone who has undermined democratic institutions, decried fairness of elections and eased restrictions on environmental protection, including denuding the Amazon rainforest. This is significant on the eve of the US mid-term elections and Trumpian boasts of a return to the White House.
The world is thus transitioning through a period when major nations are seeing a tussle for supremacy between democracy and veiled or blatant right-wing autocracy. Similarly, the geopolitical contest is between the autocratic regimes of China and Russia against established Western democracies, some of which like Hungary, Italy and Sweden are slipping under the control of neo-fascist or extreme right-wing parties/coalitions. Those on the right, ranging from former US President Donald Trump to Italian PM Giorgia Meloni, have a soft corner for Russian President Vladimir Putin.
Is decoupling from China or Russia even sustainable due to economic or ideological interests dividing the Western powers? India is navigating this complex quagmire by old-fashioned non-aligned fence-sitting, despite India’s rulers detesting that term. Some analysts are describing even Germany by the same label. Alternatively, the world has entered a phase of partial or floating alignments, popularly described as a multi-polar world.
