Strategic flux

2025 so far is seeing a high-speed strategic revolution unfolding within the world's greatest power, with consequences for the rest of the world too. 

The central strategic factor in world geopolitics is the relationship between America, on the one hand, and China and Russia on the other. They were all on the same side in World War 2; they were on opposite sides in the Cold War; but Chinese economic reform allowed pragmatic cooperation with America, while Russian political reform eventually ended the ideological basis of the conflict. 

For a decade or two, America was the premier power in a world system that lacked serious conflict between great powers. The world was a borderless marketplace in which the most vigorous rival to western ideology was neo-medieval Islam. However, new problems emerged between America, on one side, and China and Russia, on the other. 

They both felt threatened by American export of democracy, and were repelled by the progressive values that were increasingly packaged with it too. Russia also felt threatened by the expansion of America's European military alliance, and by Ukraine's attraction to Europe's economic union. China, on the other hand, provoked American fears simply by its own continuing economic and technological success. China became the world's main industrial and manufacturing power, and the main trading partner for most of the world, something which naturally turns into political and geopolitical influence. 

The conflict took shape in the mid-2010s, when Ukraine's Euro-revolution prompted Russia to seize Crimea and sponsor separatism in two eastern provinces, while strengthening strategic ties with China's new leader Xi Jinping. Meanwhile in America, Trump came to power for the first time, treating China as an economic rival rather than a partner. His policy agenda was frustrated by institutional resistance, and then the Covid years saw him lose office. Geopolitics was also on hold for two years while the world dealt with the crisis. 

Trump's successor Biden did, however, retain the more adversarial economic attitude towards China. And then in 2022, fooled by the swift collapse of the American-backed regime in Afghanistan, Russia invaded Ukraine, expecting a quick victory. In the end, Ukrainian resistance, with western backing, kept the war going for three years. Russia, for its part, benefited from long cultivation of ties with the non-western world, which remained neutral in the conflict. And that was long enough for Trump to return to power, this time in sufficient strength to enact his conservative nationalist agenda forcefully. 

Trump's domestic agenda includes the reversal of the progressive revolution of values. Russia views this positively, as a sign that they will be able to communicate with America again. Trump had also declared his desire to end the Ukrainian war quickly, and cast doubt upon America's NATO alliance with Europe. This led the European powers to discuss how they could defend themselves and support Ukraine, independently of America. On the battlefield itself, fighting continues, but Ukraine and Russia have been showing a new interest in ceasefires and peace talks. A realignment is therefore occurring, which may well lead to an end to the fighting in the near future. 

On the Chinese front, however, there was an escalation that began in April 2025, when Trump imposed major tariffs on America's trade with the entire world. This was part of a radical attempt to change America's economic position - bring back jobs, reduce the debt and the trade deficit, deal with the downsides of having the world's reserve currency, and reduce dependency on China in particular. Amidst the initial burst of trade diplomacy and turbulent tariff changes, it looked as if China and America would be unable to make a deal at all. Just lately, they have held talks in Switzerland that promise de-escalation. But the fact that China has emerged as a rival to America on every economic and technological front is still there, so this story isn't over. 

AI interlude, early 2025

I'm working on an update! Meanwhile, you may wish to read my assessment of the current state of the AI race. 

Elections and wars of 2024

The world is one week into 2024. It is still divided between an American-led bloc, a bloc centered on Russia and China, and a neutral bloc who play both sides, India being the biggest such country. 

There are many elections scheduled for this year. There are ongoing wars too. The biggest is still Russia versus Ukraine, almost two years old, Putin's gamble that he can halt the eastward expansion of NATO. The newest is Israel versus Palestinian Gaza, Netanyahu's war to uproot Hamas. There are also civil wars in Sudan, Myanmar, and elsewhere. 

All these wars have a geopolitical context. The war in Ukraine is obviously a war of Russia against the American bloc. Less obviously, the Palestinian war with Israel is also part of a long Iranian-led war to drive the American military out of the region too. Russian access to the Red Sea and Chinese access to the Indian Ocean are at stake in Sudan and Myanmar. Wars around Israel and Iran affect Indian trade routes to Europe and Russia. 

The political calendar is busy. Already, as 2023 ended, the conservatives lost power in Poland and a radical libertarian was elected in Argentina. A presidential election will be held a few days from now in Taiwan. Pakistan and Indonesia will hold elections in February, with Pakistan's former prime minister Imran Khan in jail, and Indonesia's popular Joko Widodo having reached the limit of ten years in office. 

In March, both Russia and Ukraine are due to have elections, though Putin's victory is preordained, and Zelensky might delay a vote because of the war.  China will also be having its annual "two sessions" of public political deliberation and consultation. 

India's vote, the world's biggest by number of voters, is so big that it will take two months to unfold, throughout April and May. Mexico will vote in June. And America's vote, the most geopolitically consequential, will take place in November, potentially a rerun of 2020's Biden versus Trump, if Trump can overcome the numerous legal challenges to his candidacy. 

Asymmetric war in the holy land

October's attack on Israel by Hamas may begin a new period that eclipses the war in Ukraine. But first, let's review what else was happening in the world. 

In America, supporting Ukraine in its war with Russia remained the main concern of Biden’s Democrats, while Trump’s Republicans wanted the southern border closed to illegal immigrants. 

For India, 2023 was the year it was in charge of the G-20. Arguably its main achievement was to get the African Union admitted to the grouping, alongside the European Union. Modi traveled everywhere except China. 

For Russia, the focus was the war against Ukraine, still framed as a war against America, Europe, and NATO. The revolt of the Wagner military unit against the Ministry of Defense produced a few days of drama, but ended anticlimactically. Then, during the significant BRICS meeting in South Africa, word came that the Wagner leadership had all died in a plane crash north of Moscow. 

For China, it was a year of post-Covid economic recovery, building towards the tenth-anniversary Belt and Road summit in October. Xi attended the BRICS meeting in South Africa but stayed away from G-20 meetings in India. 

In the Middle East, the Palestinian issue was long dormant. The biggest development was perhaps the imminent admission of Saudi Arabia, Iran, the Emirates and Egypt to BRICS in 2024 (along with Ethiopia and Argentina). It will be another big advance of multipolar geopolitics into a region where America is still the hegemon; building upon the restoration of diplomatic ties between Saudi Arabia and Iran, that Russia and China midwifed early in 2023. 

Israel itself was still working through its long western-style culture war between religious conservatives who believe that God gave them all the land, and secular liberals more open to sharing it with an Arab state. Its external diplomacy was focused on cultivating the alliance with Gulf Arab states against Iran. Prime Minister Netanyahu even had time to travel to America and muse about future artificial intelligence with Elon Musk. 

Then came “Al Aqsa Flood”, the devastating October 7 surprise attack by the Palestinians of Gaza, a small enclave between Israel and Egypt run by the Islamic movement Hamas. While a barrage of missiles flew overhead into Israel, Palestinian paramilitary forces broke through the border, grabbed hundreds of hostages for transport back to Gaza, and otherwise killed as many Jews as they could find - over 1400 in the end. 

The Hamas leadership called on all Arabs and Muslims to join the struggle until the Jews were defeated, and Israel could become Palestine. But for Israel, the massacre awakened deep fears of genocide, and the country mobilized with the intention of eradicating the Hamas party from Gaza at any cost. Gaza was cut off, heavy bombardment killed thousands of Palestinians, and Israeli tanks and soldiers gathered in preparation for an invasion.   

World opinion is largely divided along unipolar and multipolar lines. The countries of the American bloc support Israel’s actions as essential self-defense. Their perception is that Israel can do anything to prevent a second Holocaust. Countries outside the American bloc call for a ceasefire and a “two-state solution”, in which a sovereign Palestine would exist alongside Israel. Their perception is that Palestine is fighting for its freedom from foreign colonizers. 

Opinions within the Arab and Muslim worlds have particular significance. After fifty years in which opposition to Israel’s existence was led by Arab nationalists in Egypt, Syria, and Iraq, Saudi Arabia led the Arab League in agreeing to recognize Israel, if Israel could agree with the Palestinian state on borders, a shared capital, and the return of refugees. Meanwhile, dedication to the complete defeat of Israel was maintained by Islamic groups in Iran, Lebanon, and Gaza.  

As with the war in Ukraine, the end state of the war in Gaza might be found somewhere among the many peace plans and military scenarios that exist. But we do not yet know which of these will prevail.

Multipolarity in the 2020s: an update

Personal matters, and the rise of artificial intelligence, held me back from updating this blog. But let's see if I can say something meaningful about the state of the world. 

America is still the military and financial superpower of the world, first among equals in Europe's NATO; dominating the Indian and Pacific oceans via its "Quad" partnership with India, Japan, and Australia; and working through regional allies in South America, Africa, and the Middle East. 

China is still the manufacturing superpower of the world, still trading with the West despite ideological and geopolitical tensions, but also working with Russia to create blocs and institutions - the BRICS economic alliance, the SCO security alliance - independent of Euro-American power. 

Russia has long lost its economic rivalry with America, but it still has its military might, and it now proposes to be the armory of a multipolar world, and a defender of traditional values and civilizational autonomy worldwide, against the border-dissolving individualism of the West. 

India is arguably the newcomer among great powers, economy still only a fifth of China's, but population already greater; building the new institutions of the global "East" and "South", but also with a deep and growing presence in the Anglo countries of the West. 

Russia has been led by the same man since 2012, China since 2013, India since 2014; but America saw the populist nationalism of Trump in power from 2016 to 2020, before Biden managed to restore the liberal progressivism of the Obama years. 

This restoration took place against the backdrop of the worldwide Covid pandemic, which from 2020 to 2022 killed millions, and saw a state of emergency involving mass vaccinations, lockdowns of daily life, and massive economic disruptions, in most countries of the world. 

In the two Internet superpowers, America and China, the pandemic left its mark on the digitalization of daily life. In the West, the big tech companies grew even richer, as the upper classes preferred to work from home, until the public health emergency was gradually retired throughout 2022; while in China, a strict Zero-Covid policy was maintained for three years, adding a new layer to the state's close cyber-management of society, until the policy was suddenly abandoned at the end of 2022. 

The Chinese change of policy may have produced the last big wave of Covid anywhere in the world. In a few months, there were 100 million cases, and life was very difficult for a few weeks. But then it died out, just like the mid-2021 outbreak in India that produced a few weeks of national crisis, and resulted in the Delta strain. 

For most of the world, Covid itself slowly faded away, but the economic repercussions remained, with price rises, and unpredictable shortages of goods and workers, all around the world; and they continued with the next big event of the 2020s, the Russian invasion of Ukraine in early 2022. 

According to the former prime minister of Pakistan, Imran Khan, who was in Moscow when the invasion began, Putin estimated that it might take a month to win the war. 16 months later, tens of thousands are dead, millions have fled Ukraine, and the war is still going, fed by Ukrainian resistance, NATO weapons, and Russian refusal to give up annexed territories or allow NATO into Ukraine. 

The comprehensive severance of economic ties between Russia and the West is of a piece with the more selective tariffs and sanctions directed at China, first under Trump, and then continued under Biden when Xi's third term as president was confirmed. America wants to see Russia defeated in Ukraine, and to keep China in second place technologically. Russia hopes to win in Ukraine by hanging on until America loses interest, and China intends to master 21st-century technologies on its own, e.g. making its own advanced computer chips, if it is denied access to those made in Taiwan. 

America's close allies in Europe (the countries of the European Union) and East Asia (Japan and South Korea) have, more or less, gone along with the ever-sharper policies directed at Russia and China; but the rest of the world has declined to take sides. India is the exemplar here, dealing with both sides according to independent national interest; but the long queues of countries eager to join SCO and BRICS show that outside the West, there is a lot of enthusiasm for the multipolar world. 

2023 recession

Although the title of this blog suggests economics, in fact it's far more about international relations. 

However, I do find myself remembering how the "subprime crisis" of failing home loans in 2006 was simply a prelude to the "global financial crisis" of 2008 - and wondering if the crypto crash of 2022 is also just a prelude to a world recession of 2023. 

The shares of tech companies have been losing trillions of dollars in value since their late-pandemic highs of mid-2021. Some well-known crypto skeptics say "Crypto as a whole has been bankrupt since May". (That may be when FTX sister company Alameda started using FTX customer funds to pay their bills.) The possibility of recessions in Europe and China (and thus reduced demand) is already keeping oil prices down a little. 

We'll see if they come up with anything helpful at the G-20 summit. 

Crypto spectacle

 Something I just wrote on a private forum: 

"The second-biggest crypto billionaire (Sam Bankman-Fried of FTX) just lost everything, after being called out by the biggest crypto billionaire (Changpeng Zhao of Binance).

"Ironically, Bankman-Fried was a Biden donor, while Zhao backed Musk’s takeover of Twitter."