By Robbin Laird
Recently, I talked with Dr. Harald Malmgren, the noted political-economist and strategist, about the Ukrainian crisis in the wider global context.
We started by discussing a surprisingly little focused upon development since the Russian seizure of Crimea in 2014, namely, the emphasis of the Putin regime on reducing Russian dependencies on the global economy, notably on its food supplies. Russia is the largest wheat exporter in the world and Ukraine is the fifth largest, which if the Ukrainian supply is under Russian control makes them a wheat export superpower along with their energy exports, two very key elements of a geopolitically oriented trading approach.
Harald Malmgren: “The two are indeed closely linked as agriculture depends on intense use of energy. The high price of energy drives the cost of seeding, harvesting, processing, and delivering food worldwide. Agriculture is highly energy intensive. For example, almost every crop has to be put in ovens to dry before it can be packaged. And the fertilizer, a large part of the fertilizer used worldwide is derived from or dependent on oil and gas. For example, 80% of nitrogen for fertilizers is derived from natural gas.
“And globally, there have been droughts and floods such as in the United States and China which further reduce the food supply which in turn drives up the cost of food.
“If I take a five-year view, energy may well be experiencing high costs, but food prices are probably going to be even more inflated. And such a situation can drive a prolonged recession or worse. In the United States, the average citizen will see whatever income gains they achieve being eroded by the inflationary pressures from food, heat and fuel costs for vehicles.”
I noted that Russia is clearly using both its export commodities as a targeted geopolitical approach, so that one might note that both Turkey and Egypt, for example, are the top importers of Russian wheat. The energy case has been clearly demonstrated for years in shaping European fuel dependencies.
We then discussed the Russian and Chinese relationship and how that relationship makes a sanctions policy to be even more difficult than in the past. With China not sanctioned, but China working a deeper relationship with Russia, it is obvious that alternative alliances are being shaped which a nation-only sanctions policy will have little effect in altering geopolitical behavior.
Harald Malmgren: “And China under President Xi is also pursuing a reversal of what China has been doing for decades. Over the past few decades, China opened up in order to extract knowledge and capital from all over the world. Now Xi is shutting down everything from permissions to go abroad to overseas education. Passports are no longer freely available, and they are shutting down much teaching of English, basically turning off connectivity with the U.S., and Western Europe while focusing on self-sustainment.
“At the same time, there is growing resistance to Xi’s policies at home. He is under pressure as the economy is performing much worse than in the recent past as China is turning inward towards aspiration for self-generating growth.”
We then discussed European reactions to the Ukrainian crisis, and how those reactions could well reshape how the next phase of European development would not be led by Germany. With a clear inability to build hard power into an overall national approach to power, Germany’s position is clearly undercut. In this crisis, the Nordics and the Poles have led the way along with a French leadership increasingly wary of German failures in leadership. We have seen a recent commitment to doing more in Germany, but how that becomes real is an open question.
Harald Malmgren: “The impact on Germany and its role in Europe and the world is significant. Germany is in economic decline given their extraordinary dependence on exports and the kind of global economy where you can trade openly with states who are clearly unfriendly to the liberal order. To take the case of heavy machinery, China has been the key customer for Germany in this area. Now China has taken that technology, reproduced, and are trading to areas that Germany has had as clients in the past.
“In this crisis, other states are leading Europe, and this will have a lasting consequence in shaping the next phase of European development.”
In effect, what we are seeing in significant changes in alliance relationships, both on the authoritarian and Western sides. Clearly, the United States is a key player, but it is not and will not be the dominant player it once was. And the Biden Administration, although it seems to believe it is restoring “the pre-Trump luster of the Obama years,” has accelerated the changes in the alliance structure as well, starting with its rejection of U.S. energy independence, and rejection of the long overdue changes in U.S. nuclear modernization,
Harald Malmgren: “We are yielding our role in the world because of priority focus on internal rearrangements and domestic issues. For example, we are rearranging the economic dynamics among the states between the north and the south which override international concerns. The priorities are increasingly domestic. The U.S. will need to redefine what role it needs to play and can play realistically. But this is not happening in the Biden Administration or Congress.”
A final subject we discussed is how allies are changing their roles in what used to be called the American-led order. For example, South Korea has been reaching out to Australia and to red states in the United States to build out new capabilities in key resource areas to counter China.
Harald Malmgren: “South Korea has been playing an enhanced global role. It’s been in the shadows of Japan for a long time. It’s been under the umbrella of the U.S. for a long time. It’s been almost an orphan accepted into the family, but not really part of the family. South Korea is looking to make its own place and which makes it of course a dynamic but also unpredictable partner within the broader Western systems.”
It’s not just the authoritarian powers versus the liberal democracies. It’s also the question of changes of scale and roles among the allied powers as well. That will be extremely interesting to see. And Australia, South Korea are clearly two examples of the changing dynamics in the “Western” system.
Harald Malmgren: “Australia is a good example of the kind of global change we are undergoing. What is the role of a third party in global reconfiguration, meaning Australia is not central to the reconfiguration, but nonetheless it’s very much affected by how this reconfiguration takes place. A key concern is how allies will work together in a crisis, and how the reconfiguration of cross-allied relationships take place in crises, which will be important than words written on treaty documents.”
Malmgren concluded: “The Ukraine crisis does remind us that there can be no return to complacency about global security.
“We are on a pace to see new challenges, but are we ready to operate in such a context?”
Featured Photo: February 25, 2022. View of civilian building damaged following a Russian rocket attack on Kyiv, Ukraine. Credit: Bigstock
Also, see the following:
Meeting the Challenges of the 21st Century Authoritarian Powers