This article attempts to explore the gradual erosion of USA led unipolar world over the last one and a half decades. How the Russian special military operation in Ukraine is pointing to the symbolic end of US-led unipolarity and opening many new battle spaces in the currency market, oil market, and within every country between eroding unipolar and rising multipolar world orders. The impact of this military operation on global politics, economics, and the military is to be examined, and with where the world is heading to.
Rise of US-led Unipolar World
The rise of the US-led unipolar world order emerged after the collapse of the Soviet Union in 1991. The word unipolar is obtained from the legacy of the Cold War where the world is claimed to be divided between two superpowers USA and the Soviets. An important difference between these two superpowers was while the USA was an economic, technological, and military superpower simultaneously, the Soviet was the only technological and military superpower.
So the USA tried to counter the Soviets by denying the latter the former’s huge market. At the same time, the USA won an alliance with all other advanced economies of West Europe and Japan using its huge market and by fear-mongering about communism. When the Soviets collapsed, the USA became the sole superpower to lead a unipolar world. Western Europe and Japan remained subservient to the USA militarily. Russian military became a mere shadow of what it was in Soviet times. The Gulf War of 1991 made another socialist power China aware of the fact that it stood no chance against US military might. The 1990s was a clear unipolar world with no distant challenge against the USA, neither economic nor technological nor militarily nor political or ideological.
The USA-led Western world started propagating the ideas of globalization, free-market-oriented reforms, and the end of history. A sudden ideological challenge came in 2001 when self-claimed Islamic organization Al-Qaeda attacked World Trade Center in the USA. West immediately opted for the Clash of civilizations theory resulting in Islamophobia throughout the globe. US Army began its never-ending war in Afghanistan and Iraq. Mostly Islamic organizations like Islamic Emirate (in Afghanistan) and Al-Qaeda (in Iraq) fought US Army. Another economic resistance came from oil-selling countries like Venezuela and Iran who found new power from rising oil prices which was a result of rising demand from the growing Chinese economy.
Venezuela ideologically challenged the USA by popularizing socialism throughout Latin America. Iran used its shite soft power and took control of the Shites of Iraq, Syria, and Lebanon which started to scare Sunni Arabs and Israel. Russia too paid back all the foreign debt using high oil prices and occupied South Ossetia and Abkhazia from Georgia. But these resistances were too weak to challenge the US-led unipolar world order.
Erosion of US-led Unipolar World
The unipolar world got a decisive blow when the financial crisis shook the world economy in 2007. It was clear that the Chinese growth over 30 years has changed the global economy a lot. The USA had become the global demand center while China had become the global supply center. The USA was buying from China and China was using its export earnings to credit US spending on Chinese imports. This made the USA highly indebted to China. When the financial crisis shook the US and Western economy it was China that bailed them out.
It was clear by 2009 that the old global economic arrangement would not work anymore. The Chinese economy is becoming too big to rely on the USA market or even the global market. China started to invest non profitably in infrastructure to create demand within its own economy in 2008. In this way, China reduced its dependence on the US market as well as the global market. This non-profitable investment-led growth helped China to project itself as rising socialism. So US-led unipolarity started facing a strong ideological challenge. By 2013 China was confident enough to apply globally its non-profitable demand-creating investment model.
China named it Belt & Road Initiative (BRI). This was a major move to challenge the US position in the global economy as a global demand center. Measured in kind (PPP) Chinese economy had already surpassed its US counterpart by 2014 while measured in current USD China will surpass the USA between 2024-28. This means US Dollar is representing an economy that is losing its share of global GDP. But Chinese Yuan is representing an economy that is gaining a share of global GDP. So to make production and finance compatible use of the US Dollar has to fall while the use of the Chinese Yuan has to rise.
US government knew this trend since the 2007 financial crisis. The US found many of its Third World allies were having China as its largest bilateral trading partner. As these allies were getting more dependent on China economically, the USA tried to use the ideological power of electoral democracy. The USA helped to bring about Arab Spring in 2011 against the Arab non-elected governments. Both allies like Egypt-Tunisia and foes like Libya-Syria got destroyed by Arab Spring. This made all allies of the USA skeptical about US intentions and they started to move toward China and Russia. But the USA got its fatal blow in Syria when it failed to dispose of Bashar al-Assad.
Russia and Iran militarily intervened in support of Assad. Loss in Syria damaged US-led order to the core and a section of US elites began to question if the USA was getting any benefit from unipolarity. Donald Trump came to power in 2016 by claiming to end endless wars, calling US overseas military spending a wastage of money and free trade as a cause of the de-industrialization of the USA. He started a trade war with China enraging globalization supporters of Wall Street. Even Henry Kissinger advised that USA and China needed to draw red lines between themselves to avoid economic or military war. In 2020, Trump lost to Biden but the former claimed that the election was rigged. Trump’s supporters attacked the US House of Congress i.e. Capitol Building causing great damage to the reputation of US democracy.
Biden took charge by claiming the USA is back to lead the world but his military withdrawal from Afghanistan proved to be a disaster. Not only the withdrawal was chaotic but it was also clear that the USA would not stand by its allies in critical moments, US intelligence failed to estimate the power of the adversary, and the US military was involved in a lot of corruption while training Afghan forces. By the end of 2021, it was clear that the USA has lost both the wars of Iraq and Afghanistan. The USA tried Arab Spring-type color revolutions in Hong Kong, Belarus, Thailand, Ethiopia, Bolivia, Venezuela, and Cuba but failed.
It was only in Ukraine that the USA successfully ousted the elected President and imposed its allied government by 2014. But it resulted in clashes between Ukrainian speakers and Russian speakers in the eastern part of the country. Russian speakers of Eastern Ukraine’s Donbas region began to seek independence from Ukraine. By early 2022 China, Russia, Iran, and Turkey were convinced that it was time to take the offensive against the unipolar world order to establish multipolarity. Russia launched the battlespace in Ukraine by claiming to help Russian-speaking freedom fighters of the Donbas region.
BattleSpace of Ukraine is opening Many Battle Spaces
Firstly, the Russian military operation in Ukraine proves that the USA is not in a position to go to war with Russia or China given the latter two’s deterrent capabilities. Secondly, it is proven that Europe, Japan, and South Korea are still showing allegiance to the USA but old Arab allies are no longer with the USA. Even Israel is showing reluctance. Sanctions against Russia have few takers in Global South. Even QUAD ally India refused to go against Russia.
Thirdly, Saudi Arabia and UAE refused to raise oil production and reduce global oil prices and in the process saved the Russian economy from Western sanctions. Saudi is reported to start selling oil to China in exchange for Yuan. This is greatly boosting Yuan’s role in the global economy. Fourthly, Russian foreign exchange stored in US Dollar and Euro have been frozen by the West and this made all countries aware of the fact that the West can freeze their foreign exchange if saved in Western currencies only. This has stimulated demand for the Chinese Yuan. All countries now want to diversify their portfolio of foreign exchange reserves.
Fifthly, sanctions against Russia have made the country dependent on China more than ever before. This has made China stronger strategically, militarily, and economically. Sixthly, the USA is trying to prop up India to counter China for almost a decade. But India still has an import-dependent military with 70% of military imports coming from Russia. Sanctions on Russia have made the Indian military vulnerable as it cannot use many types of equipment. Though the USA is asking India to divert military imports away from Russia to the West, the last ten years have proven that it is more difficult to execute than it seems.
Seventhly, Germany and most of Europe have no alternative to Russian oil gas and so they continue to buy from Russia. US sanctions have proved to be a complete failure in the oil-gas market till now. Even the Russian Rouble has its value restored to the pre-sanction level within two months of sanctions. Eighthly, the USA has to ease sanctions on two other oil sellers Venezuela and Iran to make sanctions against Russia fully effective. This shows that US sanction-making capacity has reached its limit.
Lastly, IMF and Goldman Sachs have claimed that economic sanctions on Russia will make the Chinese Yuan more important in the global economy at the cost of the US Dollar. Israel and Brazil have already raised Yuan as reserve currency significantly replacing US Dollar after the USA imposed sanctions on Russia. This shows that a significant section of global capital is drifting away from unipolarity and is accepting the rising importance of China in the future.
Some Notes on Ukraine Episode
Firstly, a less known fact is communists of Ukraine took a significant role in the freedom fighting in the Donbas region. Moreover, it is the Communist Party of the Russian Federation that proposed the Russian Parliament to help the Donbas people to achieve freedom. Parliament accepted the proposal and the Russian government launched a military operation against Ukraine to liberate the Donbas region. This shift of focus from class struggle to national liberation struggles for linguistic minorities can become an important juncture for the global communist movement. If communists take lessons from Ukrainian and Russian comrades then a new wave of communist movements of national liberation can spring up throughout the multi-linguistic countries like India.
Secondly, Ukraine has shown the world that the globalization of fighters is already an established military strategy. Independent fighters from Syria, Libya, the UK, Croatia, Poland, the USA, Colombia, and Chechnya of Russia are going to fight in Ukraine for both sides. We have already seen these tendencies in Somalia, Yemen, Afghanistan, Syria, and Libya through Islamic organizations and private fighter groups like Black Water and Wagner. But in the past, this was done unofficially but in Ukraine, both sides are doing this officially.
In the war of area domination, manpower is still important and it seems countries like USA and Russia with low fertility rates for decades do not have enough fighters to fight it. It must be noted that the USA avoided fighting a war of area domination in both Afghanistan and Iraq. In Syria, Russia fought this war with help of Shite militias, pro-Assad militias, and Chechens. Thirdly, very soon other powers may follow Russia and militarily intervene within neighbors in support of one or many freedom-seeking regions. This will ensure for intervening forces a significant native population as a supporting base.
Ukraine is a mere battle space among many other battle spaces like the oil market, currency market, and every country. So it is a total war between two world orders: eroding unipolar and emerging multipolar. In Ukraine, the likely outcome is Russia will take control of the Russian-speaking majority in Eastern and Southern Ukraine while the Kyiv regime will control the rest. The Kyiv regime will keep attacking Russia-controlled parts with the Western weapons while Russia will keep attacking Western and Northern cities.
This may go on for years. But Ukraine is not where the outcome of this war will be determined. The outcome of the war will be determined in all other battle spaces taken together. How much Yuan will replace Dollar and /or Euro is key to determining the outcome. In determining how much gains Yuan makes we need to see if Europe finds an alternative to Russian oil gas, how long Russia can sustain Western sanctions, and how much China and/or the USA to gain in the process. Another important fact will be how China dominates its backyard of the South China Sea and Himalayas.
How China deals with India is thus crucial as well. So far China has failed to lure India away from the USA and no hope of success is there. China may apply Russian tactics in India where it will find many freedom-seeking nations like in Kashmir and North East. External forces like some new wave of Communist or Islamist movements or a completely new type of political movements can also take advantage of this war between Unipolarity and Multipolarity.
Kissinger has sought red lines between China and USA while IMF-Goldman Sachs is signaling their readiness to accept more space for Yuan. This strong pro-profit lobby will work hard to keep China-US relationships comfortable and the global supply chain intact. Anything can happen but if history is a guide to understanding the future then the author predicts that China will have to take care of too big and diverse India which will break QUAD and force the USA to draw a red line with China.
DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.