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The War in Ukraine and the Emergence of the Post-Western World: A View from Brazil

Analysis - 29 September 2022

That Russia's war in Ukraine is beginning to reshape the global order is a broadly accepted claim. Oliver Stuenkel, Brazilian expert and Associate Professor of International Relations at the Getúlio Vargas Foundation (FGV), shares his take on the emergence of a post-Western world for Institut Montaigne's series Ukraine Shifting the World Order. Due to Brazil’s economic ties to poles of power, he argues the country will not be able to avoid maintaining relations both with Beijing and Moscow, and with the West.

When Russia invaded Crimea in 2014, Western leaders imposed sanctions on the invaders that were the clumsy result of the commitment not to let the annexation go entirely unpunished - but careful enough not to let them affect the economic interests of European nations with extensive trade relations with Russia. This may have contributed to Putin's calculus that when he would attack the rest of Ukraine at a later stage, countries like Germany, dependent on Russian gas, would probably oppose more incisive economic measures against Moscow. Still, before announcing the invasion of Ukraine on February 24, 2022, Putin sought to increase the resilience of the Russian economy against an eventual new round of economic sanctions from the West, both by increasing the Russian Central Bank's international reserves and by deepening its economic and strategic partnership with China.

A few days after the invasion, many analysts pointed out that Putin underestimated the Western - and Ukrainian - response to the attack. The invasion of Ukraine generated a political earthquake in Europe. In numerous cities, hundreds of thousands of people took to the streets to protest against Russian military action on Ukrainian territory. In the midst of a sudden shift in Europe's political mood, the German population found itself supporting tough measures against Russia, even though they were aware that they would have a negative economic impact. The majority of the German population feared that Russia could attack other countries in Europe and began to favor an end to Russian gas imports. The war activated a mechanism that many Europeans had forgotten: when national security issues come into play, economic interests take a back seat.

Security concerns trump globalization

The Western political elite reacted promptly. Instead of yet another economic sanctions package similar to the one imposed on Russia in 2014, the European Union has made choices that until recently were considered unlikely. It blocked the Russian Central Bank's reserves in currencies such as the dollar, euro and pound sterling (an amount estimated to be more than half of the total) and excluded a number of Russian banks from the Swift interbank system. With these measures - described by the Financial Times as "financial weapons of mass destruction" - the West adopted a strategy unimaginable: punish and isolate, for geopolitical reasons, a large economy, well integrated into the international economy, even at the risk of forcing Russia to default. All this produces a shock of economic deglobalization producing global repercussions, particularly in the developing world, where an increase in food and energy prices quickly leads to political instability. Furthermore, many Western countries including Germany, traditionally reluctant to interfere in other countries' armed conflict, began to send weapons to the Ukrainian military.

The return of great power politics 

The unexpected reaction of the West shows that the logic of the international system of the last thirty years - marked by the absence of superpower rivalry - is no longer valid. When it chose to isolate Russia economically, the West prioritized security considerations over market interests. To understand the profound consequences of this, it is necessary to remember that the world over the last decades - increasingly globalized, free from serious geopolitical tensions capable of influencing the flow of capital and the exchange of ideas - became possible thanks to a rare economic symbiosis between the main economies, namely the United States, China, the European Union, Russia, as well as emerging economies such as Brazil and India.

While major powers historically sought to contain or destroy major rivals, as the United States in several instances during the 20th century with countries like Germany, Japan or the Soviet Union, the US response to China's rise was the exact opposite.

Instead of trying to undermine the country's development, the US bet on cooperation and facilitated Chinese growth.

Instead of trying to undermine the country's development, the US bet on cooperation and facilitated Chinese growth. Optimism about the end of the Cold War formed a certain consensus in Washington that trade liberalization would inevitably lead to a political opening by China and Russia and that, sooner or later, Beijing and Moscow would be content with operating within a US-led order - or at least would not do anything that could destabilize the international system.

Although it had already been shaken, this consensus collapsed during the final years of the Obama presidency, when the US government understood that the great gamble of the 1990s had failed. The "Panda Huggers" were pushed to the margins and China skeptics took charge during the final years of the Obama administration. Far from being an anomaly, Trump's anti-China stance and the beginning of the trade war between Washington and Beijing were manifestations of a new consensus that was already being formed in the previous administration and was thus largely kept in place in the Biden administration. In 2014, something similar happened in relation to Moscow: the Russian invasion of Crimea weakened those who had defended, since the end of the Cold War, the policy of economic engagement with Russia.

In Europe too, the idea of Wandel durch Handel (literally "transformation [i.e. political liberalization] through trade integration") was finally losing political support, often advocated by liberal German thinkers in favor of preserving trade ties with Russia and China despite the increasing political repression in both countries. Supporting an argument considered unfeasible and radical until recently, Ivo Daalder, former US ambassador to NATO, recently defended the return of a policy of containment towards Russia, including complete commercial disruption. For some analysts, the risk of a Chinese invasion of Taiwan is growing - a scenario that could end once and for all the great experiment of economic globalization, which allowed multinational companies to operate without worrying much about geopolitics.

Over the last years, tensions between the United States and China have been getting more and more serious and frequent. A growing number of Chinese companies are now on the US Entity List. In the same vein, numerous US technology companies that previously struggled to operate in the Chinese market have ended their operations in the country or not even started them. In the same way, several Western media outlets, such as the BBC and CNN, have ceased operating in Russia. Visa, Mastercard and PayPal have decided to suspend their operations in the country, leaving it increasingly financially isolated. It is difficult to imagine that this new Iron Curtain, digital and technological, is only temporary. Even if there may be cooperation and trade, the main dynamics between the poles of power will be marked by geopolitical considerations and containment, as the recent Western response to the Russian invasion demonstrated.

The new Cold War 

Countries in the Global South would be naive to think that the decline in relations between the world's two greatest powers is a reversible process. Governments and companies around the world need to prepare for a scenario that tends to get much worse and that will include difficult choices all the time. The pressure that the Bolsonaro government has suffered from both Washington and Beijing in relation to Huawei's presence in Brazil is just the beginning, but it provides a sense of what is to come. Likewise, the Russian invasion of Ukraine shows that countries in the developing world will find it increasingly difficult to maintain cordial ties with all the major poles of power.

The result of this divorce will be a more "geopoliticized" and "localized" economy, a scenario in which multinationals will have to be constantly aware of risks such as trade and technological wars.

This will inevitably lead to a less efficient economic system (and therefore higher prices), less innovation, and a greater risk of political and military conflicts. It seems to be the return of geopolitics and permanent tensions between great powers - and the beginning of the end of globalization as we know it. After all, Russia's decision to invade Ukraine in 2022 - and not, for example, in 2008, when Putin had made clear that he did not consider Ukraine to be an independent nation - can largely be explained by his assessment that invading and permanently annexing another country under US unipolarity would almost certainly led to complete diplomatic isolation and economic collapse.

The result of this divorce will be a more "geopoliticized" and "localized" economy, a scenario in which multinationals will have to be constantly aware of risks such as trade and technological wars. 

In this sense, the outbreak of the war can also be understood as a symbol of the arrival of multipolarity, which provides powers such as Russia - and potentially China - to act on their dissatisfactions in a way they could not during the 1990s and 2000s. 

Even in the most optimistic scenario for the Ukraine war - a peace agreement and a cessation of hostilities in the coming weeks or months - the world is thus unlikely to be the same again. The Russian invasion and the West's imposition of tough sanctions against Moscow are just the latest chapters in a trend that has been visible for a decade. After an unprecedented cycle of trade liberalization in the 1990s and 2000s - the first truly "global globalization", involving practically every corner of the world and the absence of tensions between major powers - the period from 2016 onwards is likely to go down in history as of "deglobalization" and greater geopolitical turmoil. As a consequence, countries dependent on food imports may experience significant economic and political upheavals to adapt to the new normal. 

Brazil aims for Non-Alignment 

In Brazil, not all analysts will interpret the new reality described as bad news per se. After all, while the West celebrated the end of the Cold War in the early 1990s, believing that global governance and a rule-based order would replace traditional geopolitics, Brazilian diplomats reacted to the collapse of the Soviet Union with caution and some unease about the almost unrestricted leadership of the United States.

This concern explains Brazil's attitude towards the United States, which has always sought to influence the domestic politics of Latin American countries - not always promoting democracy and the rule of law. 

The rise of other great powers, such as China, as well as Russia's resurgence, will help Brazil to limit the United States' room for maneuver in Latin America.

Initiatives that could have given the United States more influence in Latin America, such as the Free Trade Area of ​​the Americas (FTAA), launched by President Bill Clinton in 1994, have been kicked into the long grass by Brazil, even at a time when personal ties at the presidential level were excellent. Projects that could have generated concrete benefits for Brazil, such as greater coordination with the Colombian government in the fight against the FARC to bring closure to civil war across the border, were blocked because they would have implicitly legitimized the US military presence on South American soil. 

Following this reasoning, the rise of other great powers, such as China, as well as Russia's resurgence, will help Brazil to limit the United States' room for maneuver in Latin America.

Brazil's fear of the possible risks and threats of the unipolar world explains, in part, why the country has never fully embraced the Western-led global liberal narrative. Even more liberal governments - such as those of Fernando Collor and Fernando Henrique Cardoso - adopted a foreign policy that sought to preserve a degree of autonomy for Brazil in an increasingly interdependent world.

To protect itself against pressure from major powers, such as the United States or China, Brazil has developed, over the course of decades, a flexible and ambiguous international posture, avoiding the ties of strategic alliances or excessive proximity to Washington, Beijing or any other pole of power. This allowed it to play a relevant role within non-Western groups, such as the BRICS or the G77 - made up of developing countries; stages of the world's most influential nations, such as the G20; as well as Western-led groups such as the OECD, to which it is currently seeking membership. From Brazil's point of view, strong political and commercial relations with other great powers are crucial to better manage its relationship with Washington. In 2014, Brazil remained on the fence as ties between Russia and the West worsened in the aftermath of Moscow's invasion of Crimea. Brazil's former President Dilma Rousseff resisted pressure from the United States to "uninvite" Putin from the BRICS summit in Fortaleza in July of that year. However, despite the differences, Brazil managed to preserve cordial ties with the United States and Europe. This, together with Brazil's dependence on Russian fertilizers, explains why not a single leading policy maker or political candidate in Brazil proposed joining the West in imposing sanctions on Russia or isolating Moscow diplomatically. The post-western world may offer numerous opportunities - such as achieving a broader debate that gives a larger number of actors a say in global decision-making processes - but at the same time, the Global South's reaction to Russia's invasion of Ukraine shows that defending international rules and norms - and sovereignty for countries like Ukraine - may be more difficult in a multipolar order.

The challenges of neutrality

The political consensus in Brazil that a "neutral stance" is the best way forward in the Post-Western World shaped by great power politics does not mean, however, that adapting to Ukraine's post-invasion world will be easy. After all, for over a hundred years Brazilian diplomats have considered international institutions, rules and norms as the best option to defend Brazil's interests and sovereignty. This generated concrete results: the seven and a half decades after the Second World War were, in many ways, extraordinarily successful for Brazil, suggesting that the multilateral order positively impacted its ability to transform itself from a poor rural economy into one of the ten largest economies in the world - all without having to spend a lot on military power to defend their sovereignty or face a threat to their territorial integrity. Over the last thirty years, Brazil has become highly successful in projecting itself in international diplomatic forums. It is one of the countries that most frequently occupies a seat of non-permanent member in the UN Security Council. At the World Trade Organization (WTO), Brazil won so many trade disputes that the Cornell International Law Journal published, in 2008, an article entitled "How to Explain Brazil's Success [in trade disputes]?"

Brazil also ended up benefiting from the global dynamics starting in the 1990s, and the external environment contributed to consolidating its economy and democracy enough for President Fernando Henrique Cardoso to be able to articulate a regional leadership strategy in relation to South America. In 2000, Cardoso, for the first time in history, convened the heads of state in the region, most of whom were democratically elected. 

The crisis of multilateralism could therefore diminish a space that has been crucial for Brazil to defend its strategic interests. 

Debates about Brazil's regional leadership peaked in 2004, when Cardoso's successor, Luiz Inácio Lula da Silva, used the concept of "non-indifference" in the context of Brazilian leadership in the UN peacekeeping mission in Haiti.

It was the closest Brazil came to developing a regional foreign policy doctrine, whose origins can be traced back to 1995, when President Cardoso successfully overcame hyperinflation and began discussing ways to deepen regional integration and cooperation under the terms of Brazil.

The crisis of multilateralism could therefore diminish a space that has been crucial for Brazil to defend its strategic interests. A world without a WTO, without an annual meeting of G20 presidents and with a paralyzed UN Security Council - as was the case during the Cold War - would be a world more hostile to countries like Brazil.

Back in 2014, the West eventually caved in and accepted Putin's continued presence at the G20 summits. In the same way, Russia was allowed to organize the FIFA Soccer World Cup only a few years after the invasion, a sign that Putin's gamble had paid off. Since the Russian invasion of Ukraine, BRICS member countries are following the same strategy again. In 2014, the BRICS (besides Russia) - Brazil, India, China and South Africa - signaled that they opposed Western attempts to pull Russia out of the G20. With the exception of Brazil, they went further: the governments of China and South Africa blamed NATO for the conflict, and India is mobilizing to help Russia maintain its trade ties. Brazil's continued participation in the BRICS summit, a group that has become essential for the Russian president to avoid diplomatic isolation, could affect Brazil's image in the West, which is now strongly mobilized against Russia.

Providing global public goods to increase strategic autonomy 

Due to its deep economic ties with all poles of power, no future Brazilian government will be able to avoid maintaining relations both with Beijing and Moscow, and with the West, which, even after the displacement of power to Asia, continues to be essential for the Brazilian economy. While China has been the largest trading partner for more than ten years, the European Union countries, together, still represent the largest amount of investment, followed by the United States. Unlike the current government, however, seen as an unconstructive actor at the international level, a new government may try to increase its strategic room for maneuver by returning to being a provider of global public goods. To give a concrete example: when Brazil agreed to lead the UN peacekeeping mission in Haiti in 2004 - thus temporarily ridding the United States of a problem - President Lula increased his bargaining power when negotiating other issues with Washington. The more a new Brazilian government can project itself as a country that makes a concrete contribution to dealing with global problems in the Post-Western World, the more freedom it will have to resist the pressures of choosing a side among the great powers.

Seen by Bolsonaro as a strategic vulnerability, the Amazon Forest can, in this context, become a Brazilian diplomatic asset: as long as Brazil manages to project itself as an environmental superpower willing to quickly reduce deforestation and assume a key role in combating climate change - a stance for which it could receive billions of dollars in aid, - the country could try to minimize the political cost of maintaining ties with all the major players, both on the Western side, and with Russia and China. The best way to achieve this is for Brazil to become an essential player in the fight against deforestation and climate change. If it is recognized worldwide as such, it will have much more room to maneuver to defend its national interests in the post-Western world.
 
 

Copyright : Mikhail Klimentyev / Sputnik / AFP

 

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