In this piece, we will discuss how the multipolar world is emanating out of the US-led unipolar world in the 2020s and where this multi-polar world is heading to. We will use past experiences and present economic, military and political conditions to understand where a multipolar world will end up.
Today’s Multi-Polar Reality
Fall of USA & Rise of China: Today global geopolitics is deeply multipolar and US-led unipolarity is gone. US share in global GDP (in terms of Purchasing Power Parity, PPP i.e. in-kind) has reduced from 50% in 1950 to 35% in 1970 to a mere 15% in 2020. The Chinese share of global GDP (in PPP) has risen from 2% in 1970 to 19% in 2020. This dramatic story of the fall of the USA and the rise of China can be seen not only in the economy but also in the military and geopolitics. China is tearing apart US-led security in the South China Sea and Taiwan repeatedly since 2013. Chinese aircraft are regularly flying over Taiwan while Chinese ships are regularly violating water claimed by the Philippines and Vietnam. Since 2017, the Chinese have begun to raise military assets on the Himalayan border with India. Chinese financed Belt Road Initiative is signed by most of the world even though the USA is dead against it. Chinese importance in the global commodity market is resulting in the fact that many Third World politicians and businessmen are allying with China replacing the USA. Chinese influence in global institutions like World Trade Organization (WTO), World Health Organization (WHO), and United Nations Organization (UNO) can no longer be ignored.
Rise of Opportunist Powers: Sensing the weakness of the USA, several countries like Russia, Iran, and Turkey has begun to carve out their own zone of influence. Russia, Iran, and Turkey worked together to oust the USA from Syria. In Africa, Russia and Turkey are collaborating to counter US ally France. Iran’s shite influence proved to be too much for the USA in Iraq. In Afghanistan, the US army had to face shameful defeat due to Pakistan’s influence over Afghans. As the USA loses influence in West Asia, its old allies like Saudi Arabia and Israel are no longer ready to put all eggs in the US basket. They are trying to woo China and Russia. Turkey recently projected its power in East Mediterranean enraging Greece and France.
Rise of Latin American Socialists: Even in the USA’s own backyard, Latin American socialists are continuously spreading their power. The US-inspired coup failed in Cuba, Nicaragua, Venezuela, and Bolivia while Mexico, Uruguay, Argentina, Peru witnessed the rise of socialists to power. Chile may be next on the list. China, Russia, Iran, and Turkey can flare up the situation further by asking Argentina to reclaim the Falkland Islands from the US ally UK.
Weak Allies of the USA: More pressing problem for the USA is that all its allies are proving to be weak in this multi-polar world. Its oldest allies UK and France are economically stagnant and militarily not at par with rising China or opportunist Russia and Turkey. Israel or Saudi cannot take on Iran easily on their own and will try either diplomatic solution involving the USA, China, and Russia or will drag the USA directly to war with Iran. US alliance with India proved to be too ineffective to even continue. India benefitted greatly from the US war in Afghanistan but India refused to give military help to the USA inside Afghanistan. India also has a weak navy that cannot help the USA much in its oceanic struggle against China. Instead, India can drag down the USA to war in the Himalayas where China is intensifying pressure. Japan is economically stagnant and lacks a strong military ever since being defeated in World War 2. Australia is too small for China. Germany is a half-hearted ally of the USA who can join the opportunist camp at any time strengthening its position in Europe and Euro currency’s position in the global economy. Russia and China are continuously trying to woo Germany.
From British Pound to US Dollar
Rule of British Pound: Since Napoleon was finally defeated in 1815 all Western European powers France, Netherlands, Belgium, Portugal and Spain were seldom ready to contradict the British. Thus British ruled the globe militarily and after the fall of Qing China in the Opium War of the 1840s, the British economic might was supreme as well. With control over most of the globe both economically and militarily, the British created a Pound-dominated international payment system. But soon British had to face the rise of the USA as an economic power.
The USA took control of its backyard: By the 1880s, the GDP of the USA went above that of Britain when measured in PPP. As the US economy grew, the US army became powerful as well. In the 1890s USA went to dominate the seas in its own backyard. The USA successfully challenged the moribund Spanish Empire and took Cuba and the Philippines from the latter. British could not do much to support its Spanish allies simply because the former knew that though the British navy was number one US navy was too powerful in its own backyard. So domination of the backyard was the first step that the USA took to challenge the UK-dominated world.
Rise of Multi-Currency System: By the 1890s, Germany too went ahead of Britain in terms of GDP measured in PPP. The rise of Germany put more important British allies like France, the Netherlands, Belgium in deep danger. So the British had to take action to stop Germany and could defeat the latter only by allying with the USA and French simultaneously. So though Germany got defeated in World War 1, the British had to give in to a multi currency-dominated international payment system where the US Dollar and French currency Franc would have their own sphere of influence besides the British Pound.
US Dollar became the most important global currency: World War 1 gave opportunities to many new political powers. Communists took over Russia and the former Soviet Union which industrialized very fast and its GDP crossed British GDP in PPP by the 1930s. Nazis took control of Germany and soon they rebuilt German defenses which the British had to tolerate to checkmate the Soviet Union. Moreover, Japan rose in the Pacific region, and the British thought it would be wise to support Japan to counter the USA. Soon Germany and Japan too began to carve out their own currency zones at the cost of the British Pound. After the Nazis were defeated in World War 2, US Dollar established itself as the most important global currency surpassing British Pound in the Bretton woods Agreement, 1944. The British were indebted to the USA and US GDP became almost 50% of the global GDP. British GDP was by then mere one-fifth of US GDP and so the former had to give in.
What will Future Look Like
Let us now compare today’s conditions with conditions of the past when US Dollar was gradually replacing the British Pound. We must first take into account that today’s growth and spread of technologies are much faster than in the past. Moreover, today’s weapons are much more deadly than those of the past. Above all, today powerful countries are much more economically integrated with each other than in past. So changes will be faster today and chances of direct wars among powerful countries will be far less.
Chinese takeover of own backyard will be tolerated by the USA: Rising USA first took control of its own backyard. China is showing similar tendencies and so is raising military assets in South China Sea and Himalayas. Just like the British tolerated the US takeover of their own backyard in the 1890s, China taking control of its own backyard will be tolerated by the USA too. Firstly, the Chinese military will be overwhelmingly superior in its own backyard and secondly, China’s military takeover will be followed by an appreciation of the Chinese Yuan’s value which will help China to import more products and capital generating positive momentum in the global economy benefitting the USA no less than China. Former US Secretary of State, Henry Kissinger has already said that China is not just technological and military power but a great economic power as well unlike the Soviet Union and so Cold War against China is too costly to be waged. He requested both China and the USA to create red lines which both will agree. Recent US declaration of QUAD as a nonmilitary alliance, formation of AUKUS reducing the role of India, the release of Huawei’s CFO Meng Wanzhou, and Biden’s confirmation of “One China Policy” even after 77 Chinese aircraft flew inside Taiwan’s sky show that the USA is working just as Kissinger has advised. This takeover of its own backyard by China can happen as early as 2025.
India in 2020s will be the Spanish Empire of 1890s: Just like Britain tolerated the USA at the coast of Spain in the 1890s, this time the USA will tolerate China at the cost of India. India can be a future powerhouse in the Chinese backyard if its huge manpower is fully used. No power tolerates another power in its own backyard. So China is likely to target India when it is still weak. India is very diverse linguistically, religiously, geographically and hence has a divided population often quarreling and fighting on religious and linguistic lines. India is militarily weaker compared to China and it has a conflict with several of its neighbors. So China is likely to confront India as war with India is manageable at present and necessary for the future.
Multi-Currency System is Coming: As Chinese GDP is surpassing US GDP, the Chinese Yuan needs to play an important in the global economy. So in the future US Dollar, Euro, and Chinese Yuan will be used in some pre-determined proportions with each having its own sphere of influence. As China starts dominating its own backyard this multi-currency reality will emerge next most likely by 2030.
Will Chinese Yuan Dominated Global Economy Emerge?: Opportunist powers like Russia, Iran, and Turkey will carve out their own geopolitical sphere of influence which will be tolerated and wooed by both China and the USA. This can result in rising of new powers in the future equivalent to the Soviets and Nazis of the 1930s. Like East Europeans can rebel against Russian influence and Arabs can rebel against Iran-Turkey influence. Similarly, the new economic miracle can rise in South Asia or Africa. When China will start dominating the South China Sea and the Himalayas, South Asian geopolitics will be greatly shaken. Political ideology in South Asia, South-East Asia, and Central Asia will start changing as well to fit into Chinese domination. Relation between Latin America and the USA will also become very important in shaping mankind’s future. All these contradictions will entail whether a Chinese Yuan-dominated global economy will emerge or a multi-currency-dominated global economy to continue.
The USA has little reason to counter China’s rise in the Chinese backyard i.e. nine-dash lines and Himalayas. So the sacrifice of India is already on US cards. The USA will only try to prevent China from dominating that Eastern Pacific which the USA considers its own backyard. China will sure agree with such a red line for at least the next ten years. The USA has also realized that not only Chinese are impossible to be tamed in their own backyard, same is true for Russia, Iran, and Turkey as well. So the USA is gradually accepting the new multi-polar normality. It will transform the US economy and politics too. The US will become more inward-looking and its economy will look more like West European welfare states. So huge transfer of resources from Wall Street and the Pentagon to common people is likely too. This domestic tendency will be in conformity with a global economy where the US Dollar’s share of usage has fallen. The same tendency will help the USA to control Latin America too.