The United States’ unipolar world is crumbling. The change is happening faster than expected for Washington. And in connection with this, the white West’s dominance which has lasted over 500 years, is disappearing. This dominance is based on genocide across multiple continents, racist and imperialist colonialism and neo-colonialism.
Simultaneously, our planet is hurtling towards a climate crisis where we face mass migration and displacement on a scale never before experienced. We risk becoming the dinosaurs of our time, without exiting with a bang. More than ever, the slogan applies: “Black and white, organise, unite and fight.”
The new multipolar world order that is in the offing is fundamentally different
from the bloc-divided world, between East and West, under the United States and
the Soviet Union, when our slogan was “Struggle against both superpowers, for international solidarity”. The Soviet Union is history. Russia is a great power with nuclear weapons and raw materials. China is not a new superpower.
Historically speaking, this period has been relatively short, about 45 years.
The period with US unipolar hegemony from 1991 was even shorter. In retrospect, it is possible to date the start of the decline to around 2003, with the US invasion of Iraq in March, at a time when the US and its allies were involved in the war in Afghanistan, which started in October 2001.
These two wars turned out to be devastating, sucking money out of a militarily overstretched United States, and without these wars changing the imperialist order in favour of the USA. Naomi Klein writes in “The Shock Doctrine” how President George W. Bush and his circle of neo-cons who believed that seizing Iraq’s oil resources and subsuming them under a neoliberal economy would pay for USA’s war expenses.
The non-aligned alliance
A term for that part of the world whhich now is growing and creating the new multipolar world order, could be “the non-aligned alliance”. There is no new great power bloc rallying around or setting China or Russia in the centre. The countries in the “global South”, of different sizes and differing economic strength form “alliance-free alliances” based on their own interests.
It is anti-hegemonic. It is economically and partially politically motivated, and to a very small extent military, even though the Shanghai Group (Shanghai Cooperation Organisation, SCO) has an old security policy arrangement to protect the Central Asia area against terrorism. But the SCO is not a military alliance on par with NATO. Neither is the Russia-dominated CSTO (Collective Security Treaty Organisation).
Militarily, for the foreseeable future, the United States will continue to be the strongest military superpower by far. This is so, even though China, in the last decade, has increased its military budget – in the last year by over seven percent – and built three carrier strike groups.
Besides, the biggest challenge lies in the technological revolution connected to artificial intelligence (AI) that the military apparatus is now, with terrifying intensity, jumping into, and the struggle over raw materials for the high-tech industries.
A feature of the “non-aligned alliance” that has become more prominent the last decade is that it is expanding existing – or building – new institutions and that increasingly overlap:
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Brics has become Brics+.
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The SCO has admitted more members, most recently Iran.
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China’s new “silk roads” – yi da, yi lu or the Belt and Road initiative – (BRI), is constantly rolling out new projects since President Xi Jinping launched the venture in 2013, despite certain difficulties concerning debt and profitability.
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The BRI is linked to the Asia Infrastructural Investment Bank (AIIB).
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International North-South Transport Corridor (INSTC), the transport route from
St. Petersburg to Mumbai is getting several forks on the way through Central Asia, Iran and the Gulf region.
New institutions
The criticism from the USA and Europe, imbued with poisonous scepticism, is that
the development of Brics+ will have no weight and pose no challenge to the world order as neither the countries involved nor the organisation is uniform. The criticism misses the mark, because this is not the intention of Brics+. Neither does the criticism take into account the situation in other international forums, such as the G20.
The G20 meeting in New Delhi last year ended with a final statement that widely sidestepped all central points of contention. The G20 meeting that recently concluded in Brazil, did not produce any final document because the disagreements were too large on many of the same points of contention. This will repeat itself at the upcoming G20 summit in Río de Janeiro on 18th-19th of November 2024.
This will underline that the G20 is becoming just as irrelevant to world politics as a more united G7 is, the countries whose world order now is being challenged.
Another misleading criticism that the US Treasury Secretary and former Central Bank governor Janet Yellen has held to, is that neither Brics+ nor other associations will be able to replace the US dollar with another global currency.
But the aim is not to replace US dollars with Chinese renminbi (yuan) or to create a separate currency for Brics+, but to create payment mechanisms for trade between the countries and replace the USA-based and dollar-based SWIFT.
The flight from the dollar
The challenge for the US is that an increasing amount of trade, between an increasing number of countries is priced in their own currencies. This is happening faster than the US expected.
Saudi Arabia, the United Arab Emirates and other Gulf states are considering selling oil and gas in other currencies than dollar, which has been dominant since the petrodollar “emerged” when the USA left the gold standard the 15th of August 1971.
This is a real challenge. With Saudi Arabia, The Emirates and Iran as new members, Brics+ now consists of four of the world’s largest oil producers (including Russia) and two of the world’s largest energy importers, (China and India).
The USA has more or less freed itself from imports from the Gulf and has itself become one of the world’s largest producers through the fracking of shale oil and gas. But where the Gulf’s energy resources go to and which currency is used, is still a strategic foreign policy challenge.
The USA itself is driving the “flight from the US dollar”. How?
US total debt has now passed 35.375 trillion dollars (September 15. 2024)
and is increasing at a breakneck speed. (See US National Debt Clock Real
Time). This is equivalent to the size of the debt of China, Japan, Germany, India and the UK economy combined.
The US national debt in 2000 was 3.5 trillion dollars. That corresponded to about 35 percent of USA’s GDP. In 2020, the national debt stood at 24 trillion dollars, which corresponded to around 95 per cent of GDP. The costs of war in this period amounted to 8 trillion dollars. The budget deficit doubled from 2022 to 2023.
The United States lets the banknote printing press go to cover its gigantic debt. This is called quantitative easing (QE). The biggest increase in debt up to 2019 came from loans and credit from private banks. Now the central bank is the strongest contributor to debt growth. This makes it easier to use QE.
The dollar is the dominant global debt currency. Countries have their debt in dollars. When the US strengthens the dollar with the help of the banknote printing press there are consequences for the debtor countries.
Debt without consensus
In August 1982, Mexico’s finance minister came to a meeting with creditors in New York with a message: We know that you know that we are unable to pay our debt. Mexico spoke on behalf of several countries that were in the same position. The debt bomb was detonated. Out of the crash sprang the Washington Consensus: The neo-liberalisation policies of the World Bank and the International Monetary Fund (IMF) and the privatization of the world economy through so-called structural adjustment programmes (SAP).
Public austerity and the sale of public properties and raw materials could trigger credits and new loans, or postponements and revisions of loans, in order to be able to service their debt. These policies were a bonanza for trans- and multinational companies that now were allowed to frolic in new profitable adventures, as the SAP requirements forced the debtor countries to reduce or remove restrictions limiting the opportunities for foreign capital (Foreign Direct Investments).
Now, a new total debt record has been set: 100 trillion dollars, according to the Institute of International Finance. This amounts to 336 percent of the world’s GDP. The debt rose by ten trillion dollars in the first half of 2023 alone. Debt in dollars means increased expenses when the US strengthens the dollar through the banknote press.
Over the course of 40 years, the World Bank has moderated its requirements in connection with structural adjustment platforms. But SAP is still a real letter combination that Pakistan, Zambia, Sri Lanka and others now are feeling the brunt of in connection with their tough debt negotiations with the IMF.
But the Washington Consensus has become weaker due to China’s rise as a global economic and financial actor. However, Beijing itself is experiencing that the queue of countries with serious and threatening debt problems has grown exponentially after the worldwide economy was shut down during the Covid-19 pandemic. A number of countries are in an imminent debt crisis.
Sanctions as foreign policy
The USA uses the dollar’s position as the world’s reserve currency as an advanced foreign policy weapon, through sanctions and secondary sanctions that affect third parties. Cuba knows all about this through the US blockade that was introduced in 1961.
The secondary sanctions were tightened with the Cuban Democracy Act (Torricelli-Graham Act) from 1992 which, among other things, meant a quarantine period of three months for ships docking in the United States if they had visited Cuba. The secondary sanctions were further strengthened through the Cuban Liberty and Democratic Solidarity Act (Helms/Burton Act) of 1996. This led to a marked increase in criminal cases against foreign companies who do business in the United States. Also under President Barack Obama, even though he, during the State of the Union Address to Congress in 2015, publicly recognized that America’s over 50-year old embargo policy towards Cuba had been unsuccessful. Pharmaceutical companies do not dare to promote Cuban medical innovations in tropical diseases or the healing of diabetes-2 wounds on feet, because they don’t want to risk being banned from the USA, the world largest pharmaceutical market. The threats of secondary sanctions contributed to Statoil (now Equinor) and a number of other European companies pulling out of oil-rich Iran, as a result of the USA’s Iran and Libya Sanctions Act (Ilsa) from 1996.
The secondary sanctions regime is still in full force. When President Obama proclaimed Venezuela to be a “national security threat to the United States” after the election of President Nicolás Maduro, the effect was the same on foreign companies as with the Ilsa Act, also in other areas than the oil sector. Now the USA has started including Chinese, Indian and Iranian companies on its sanctions list, for doing business in Russia that is linked to the war in Ukraine. A main area affected by these changes is West Asia/Middle East and Central Asia because of energy. The USA has become more or less independent of imports because of its own shale boom that has made the United States to one of the world’s largest producers next to Russia and Saudi Arabia – and Venezuela with the largest oil reserves.
Challenges and militarisation
In this area, the United States is challenged every single day. This has been reinforced with Israel’s war in Gaza. After making arrangements for the reconciliation process between Iran and Saudi Arabia, Beijing has challenged US hegemony and monopoly when it comes to Palestine. First, China launched the idea of an international conference on Palestine to bring the question within the framework of where Palestine originates and has its home: in the UN. Subsequently, Beijing has been the meeting place for talks between the Palestinian factions.
It is outside the scope of this article to discuss how this could play out and which results could be produced, but this shows that the USA’s position is being weakened in area by area, and region by region.
America’s relative decline is steadily affecting to an increasing degree one election campaign after the other in the United States, while not in any way being articulated with weight by any of the candidates. The admission is more underlying. The USA’s response is to reinforce its military institutions in the areas that became subjected under “The Star Spangled Banner” after World War II: NATO in Western Europe and the US nuclear umbrella in Japan, East and Southeast Asia.
Nato continues to expand eastwards and northwards towards the Arctic and the Northwest Passage, which will become ice-free for transport between Asia and Europe in increasingly longer periods of the year. Ukraine has become what the name of the country means: borderland.
In Asia, the USA is expanding and connecting its military alliances. The USA wants several countries to join or be associated with AUKUS (Australia, Great Britain and the USA): New Zealand, Philippines, Japan, New Zealand. USA’s new military base agreement transforms the Philippines into a forward-positioned country towards Taiwan. And USA’s weapons industry is producing in high gear. Weapons and war are an explosive mixture. In an article on February 18th 2024 the Wall Street Journal writes about how the war in Europe (i.e Ukraine), is promoting the US economy. Industrial production within the military-industrial complex and aerospace has risen with 17.5 per cent since Russia’s invasion on February 22, 2022. 64 percent of USA’s weapons’ packages for Ukraine go to the military-industrial complex.
The think tank, Institute for Policy Studies observes that “US military spending is at an all-time high”. Between 2017 and 2023, Pentagon’s budget increased by over 50 percent. In October 2023, President Joe Biden described it as the “arsenal of democracy”.
But the military-industrial complex is draining capital from alternative production. There is an ever-widening gap between military production and other industrial production. In the 1950s, the United States accounted for 50 percent of the global economy. Today, the United States accounts for 26 percent of global GDP. China accounted for 2 percent in 1980 and 18 percent in 2021.
The West is pushing ever harder that the main contradiction in the world is now Democracy vs. Autocracy, or a superpower cold war between the United States and China.
The balance of power is changing
This change is occurring while, in 2023, world trade decreased by five percent and China is attempting to spread its economy beyond the US and the EU. When China became a member of the World Trade Organization (WTO), President Jiang Zemin stated that “we share the same bed, but have different dreams”. The USA’s motive was “westernization and dividing socialist countries”.
The WTO is not dead, but the Appellate Body (the supreme court for international trade disputes) has been almost idle since 2019.
Today, 26 countries cover around 40 percent of China’s exports through bilateral free trade agreements. The “Silk Road” project (BRI) affects in in varying degrees about 140 countries in Asia, Africa and Latin America.
In an increasing number of areas, China is catching up with or has already surpassed the United States when it comes to advanced technology. In Europe, Germany is losing ground, not least because of the war in Ukraine and the broken relationship with Russia.
The global contradictions are intensifying.
Translated by Johan Petter Andresen
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