With a New World Order lurking on the horizon, will America play nothing more than a supporting role? That is certainly the impression given by recent reports in the US and beyond. While the Ukraine crisis has helped to renew purpose among many nations in the West, the Global South, we’re told, recognises that the post-Cold War era is finished. The international system is fragmenting into “a multipolar world”, and the age of US dominance “may be coming to an end”.
Amplifying this view is the emergence of a renewed Sino-Russian axis, which, according to Vladimir Putin himself, has “consistently worked to create an equitable, open and inclusive regional and global security system”. China’s CCP-controlled Global Times is equally optimistic, suggesting that the Russia-Ukraine conflict serves “as a catalyst for the burial of American hegemony”. A recent University of Cambridge study seemed to confirm this: it found that, for the first time, developing countries are now more supportive of Russia and China than the US.
Yet while America’s unipolarity is undoubtedly fragile, we should be cautious about what this means — particularly when interpreting the motivations of states in the Global South, the symptoms of American decline, and the fragmentary potential of the new Sino-Russian relationship. Most obviously, states in the Global South are not some homogeneous non-Western “Other”, but a collection of different countries with competing interests. The historian Timothy Garton Ash recently argued that the West urgently needs a “new narrative persuasive to countries like India”. This may seem like a harmless observation to make, but it confuses soft power’s capacity to woo a diverse range of self-interested nation states: what is persuasive to India isn’t necessarily persuasive to Indonesia.
Rather than acting as a unified bloc, it is far more likely that states will play sides off against each other, especially as the division between the West and a China-centred global economy gathers pace. Indeed, their capacity to withhold support is a rational strategy to enhance their bargaining power and to win concessions from the West. It is a form of enticement, not indictment. In India, for example, record imports of Russian oil have boosted Narendra Modi’s position with key actors, such as the European Union, which has rapidly accelerated its free-trade negotiations with Delhi. This follows the rapid conclusion of a major semiconductor supply chain and innovation partnership with the US, which will be followed this summer with a visit by Modi, designed to shore up the two countries’ defence and economic links.
Meanwhile, those who posit the decline of America, and by extension the liberal world order, often get key metrics wrong. For instance, it has been argued that as the unipolar moment fades, so will the dollar’s international reserve currency status. Writing in UnHerd, Thomas Fazi recently argued that Western sanctions on Russia have “enhanced the yuan’s reserve currency status”, while Bloomberg reported that the dollar has reached a “critical inflection point”. Even the IMF has signalled alarm.
However, the use of the dollar is based as much on geopolitics as it is on economics. Foreign investors will continue to use the currency not just because of its incredible liquidity as a store of value and medium of global exchange, but because of the US’s legal and governance infrastructure. It remains, after all, the currency of choice in foreign-exchange swap transactions, accounting for nearly half of the $6.6 trillion daily foreign-exchange turnover. Of allocated foreign-exchange reserves in late 2022, the dollar accounted for 60% of the world’s total. The Euro, by contrast, stood at 20%. The Chinese Renminbi? 3%.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
Subscribe