Multipolar world order in a shrinking world

PerryScope
By Perry Diaz

Pax-Americana.2After the collapse of the Union of Soviet Socialist Republics (USSR) in 1991, there was only one superpower left in a unipolar world order: The United States of America. For the next two decades, America was the world’s hegemon. It kept peace in an ever-increasing turbulent world. Thus began the era of Pax Americana (American Peace).

Today, America is being challenged by two emerging superpowers: The Soviet Union’s progeny, the Russian Federation; and China, the fastest growing economy. While the two are still far behind the U.S. in terms of economic and military power, they have embarked on an ambitious path towards parity with — or superiority over — the U.S. And they are catching up, particularly in developing their nuclear power.

And what concerns the U.S. is that Eurasian and Asian powers are teaming up to confront America in a game of geopolitical brinkmanship. The Russia-China compact was sealed when Russian President Vladimir Putin and Chinese President Xi Jinping held a summit in Moscow on March 22, 2013.

Xi Jinping and Vladimir Putin toast their strategic partnership.

Xi Jinping and Vladimir Putin toast their strategic partnership.

In my article, “New World Disorder” (March 26, 2013), I wrote: “Upon his ascension to the presidency, Xi’s first venture outside China was to visit his Russian counterpart Vladimir Putin. At their summit in Kremlin last March 22, the two leaders agreed to form a “strategic partnership” to advance their countries’ interests. They affirmed their mutual support for each country’s geostrategic and territorial interests, which include territorial disputes. With more than 20 territorial disputes that China is embroiled with various countries — including Japan, Philippines, India, Malaysia, Taiwan, Vietnam — this could put Russia squarely on the paths of conflict, which could involve the United States who has mutual defense treaties with at least four of China’s adversaries.”

China Dream

"Secret" South China Sea ADIZ.

“Secret” South China Sea ADIZ.

Since then, China has become more assertive – and aggressive – in pursuing its territorial claim over 90% of the South China Sea and East China Sea. On November 24, 2013, China declared an Air Defense Identification Zone (ADIZ) covering most of the East China Sea.

Last December, Kanwa Defense Review, a Chinese-language military magazine based in Canada, reported that China had secretly set up an ADIZ over the South China Sea. The ADIZ supposedly covers the area that is demarcated by the nine-dash line, which was the basis of China’s territorial claim over the South China Sea.

Artificial islands

Artist's drawing of the military base under construction on Johnson South Reef.

Artist’s drawing of the military base under construction on Johnson South Reef.

The U.S. military believes that China is building an airbase on the Johnson South Reef in the Spratly archipelago in the South China Sea. China’s other reclamation projects include the Fiery Cross Atoll, Gaven Reefs, and Cuarteron Reef, which are also claimed by Vietnam and the Philippines.

China’s construction of military bases — including air and naval bases – in the South China Sea would allow it to reach a wide swath of area bounded by the First Island Chain that runs from Japan’s southern tip through the Ryukyu string of islands, through Taiwan, through the Philippines’ islands of Luzon and Palawan, and all along the western part of Borneo. Interestingly, the First Island Chain runs parallel to the nine-dash line.

Indeed, that’s what Chinese President Xi Jinping’s “China Dream” is all about. Xi dreams of the revival of imperial China that had maintained Chinese hegemony in Asia during the reign of the Ming dynasty. “The great revival of the Chinese nation is the greatest Chinese Dream,” Xi said before taking office in November 2012.

Lake Beijing

First and Second Island Chains.

First and Second Island Chains.

During the summit meeting between Xi and President Barack Obama in California last June, Xi told the media that he and Obama were meeting “to chart the future of China-US relations and draw a blueprint for this relationship.” Then he added: “The vast Pacific Ocean has enough space for two large countries like the United States and China.”

It is now apparent that Xi wants the U.S. completely out of the South and East China Seas. China’s next move is to control the entire Western Pacific waters along the Second Island Chain which stretches from Japan all the way to Papua New Guinea by way of the U.S. territories of Guam and Saipan. That would put China’s navy at America’s doorsteps. If that happens, that would turn the entire Western Pacific waters into Lake Beijing; thus, fulfilling Xi’s China Dream.

Imperial Russia

Vladimir Putin after Crimea annexation.

Vladimir Putin after Crimea annexation.

Meanwhile, Russian President Vladimir Putin has been trying hard to restore Russia to its old imperial glory. In 2014, he made several moves to assert his leadership over the Eurasian subcontinent that includes all of the defunct Soviet Union’s former republics and client states.

While Putin had succeeded in annexing Crimea, his efforts to bring down the pro-west Ukrainian government of President Petro Poroshenko were met with strong opposition from the U.S., European Union (EU), and the North Atlantic Treaty Organization (NATO). Putin reportedly bragged that Russia is a major nuclear power and also made threatening remarks to Poroshenko: “If I wanted, in two days I could have Russian troops not only in Kiev, but also in Riga, Vilnius, Tallinn, Warsaw and Bucharest.”

But little did Putin realize that such braggadocio won’t make the US and EU cower in fear. But Obama and the EU leaders had a different weapon to use against Putin – economic sanctions.

Collapse

Ruble collapsing.

Ruble collapsing.

And then the unthinkable happened: the price of oil plummeted, from $115/bbl (barrel) in June 2014 down to $53/bbl today! With oil exports comprising 70% of Russia’s total exports, it accounts for more than 50% of its budget. For the budget to stay in the black, the price of oil should be no less than $100/bbl.

The ripple effect is devastating! The Russian ruble lost 50% of its value since the Ukraine/Crimea “invasion.” The ruble is now trading at 58.7 to $1. Its value has nearly halved and capital outflows have reached $120 billion. And inflation is projected to be 8% at the beginning of 2015.

And the sanctions are working, causing innumerable damages to Russia’s financial sector, military, and others that Russia’s economy is dependent on.

With that grim outlook on Russia’s economy, Putin’s imperial ambitions suffer a huge setback. How can he go to war when the economy is in shambles?

Will Putin's generals remain loyal amidst economic collapse?

Will Putin’s generals remain loyal amidst economic collapse?

Meanwhile, Xi offered Putin billions in loans to help Russia’s economy stay afloat and save Putin’s neck from the economically depressed Russian people who are expected to ask him to step down when the food lines start forming. But Putin said that Russia would only seek China’s help as a last resort, which begs the question: Would his generals remain loyal to him come hell or high water?

At the end of the day, planet Earth is going through a tectonic social upheaval; that is, a multipolar world order in a shrinking world.

(PerryDiaz@ gmail.com)


8 Responses. Have your say.

  1. Don Azarias says:

    Perry,

    My congratulations to you on your superb analysis of this developing global crisis.

    It’s true that Russia and all Middle Eastern oil-exporting countries and other OPEC members, including Venezuela, are facing economic crisis due the global decline of oil prices. As we may have already knew, Saudi Arabia—with a little strong-arming from the United States—is causing the oil glut. Despite pleas from other oil-producing countries, the Saudis refuse to cut oil production.

    Russia, in particular, is reeling from a double whammy: The low prices of oil that it exports and the effect of the Western alliance’s sanctions. Some analysts are hinting at Vladimir Putin’s possible removal from power. It’s possible, but with Putin’s iron-fisted rule and support from the Russian army, it may not succeed at this time. The U.S. and its Western allies should keep tightening its sanctions on Russia to the point where the Russian people can no longer take it. That, of course, can trigger Putin’s overthrow.

    While the gasoline prices are at their lowest in years, history tells us that they don’t last long. The prices could spike in a matter of days, if not weeks or months. It’s because, in the truest economic sense, the oil and gas prices are based on the law of supply and demand. What we are seeing now is some sort of oil market manipulation being done by the U.S. government and Saudi Arabia. Since it is adversely affecting our enemies like Russia, Iran and Venezuela, it’s something worthwhile that Americans should wholeheartedly support.

    However, if the oil market manipulation is being caused by those powerful Wall Street speculators—which always results in high oil and gas prices—then that’s a different story. Those speculators are nothing but greedy investors on hedge funds and other investment vehicles who just want to fill their pockets with billions of dollars to the detriment of those hardworking consumers.

    Since our economic system is based on capitalism, even the President and Congress are powerless to dictate market prices on goods and merchandise being sold in the open market. However, not very many people know that.

    Don

    • perry says:

      Hi Don,

      If the U.S. and Saudi Arabia continue to glut the oil supply, it won’t be long for Russia to collapse economically. Putin would then be forced to cut down his defense spending. What’s so good about the Russian invasion of Ukraine is that it forced NATO to rearm and deploy troops, warships, and aircraft in the Baltic region and Black Sea. From what I understand is that NATO forces along the Russian border have quadrupled… and still growing. With the end of the Afghanistan War, the U.S. and NATO are moving their war machines to Poland, Estonia, Latvia, Lithuania, and Romania. That would create a formidable military “firewall” that would be hard to penetrate.

      Meanwhile, Putin is at wit’s end. He’s left with little or no option to get out of abyss that he jumped into when he annexed Crimea.

      Perry

  2. pat talens says:

    Folks

    My hindsights and my prospects of the near-term tell me this black gold (of oil) is the trigger to World War III. My prayer is I am wrong.

    • pat talens says:

      So they say history repeats itself. And it is repeated because the world will always have men who shall make history to repeat itself.

      In our time, we have Vladimir Putin whose thinking and world perspective follow that of Adolph Hitler of World War II.
      In same vein of Hitler, Putin has embarked on bringing back the former Soviet Union and its once imposing stature in world affairs. Like Hitler, Putin will utilize all things possible at his disposal—including the use of nuclear weapons to meet his objectives.

      Being that oil is Russia’s primary source of revenue in rearming the military and challenging the West, Putin will resort to nukes if pressed against the wall of being humiliated in economic defeat because of collapsing price of oil.

      Putin is in the same mold of Hitler that he would rather die than accept defeat and surrender to the West. But here is the problem, he will try to make the planet die with him—with his massive arsenals of nuclear bombs and World War III.

      Again, may be I am wrong, indeed, very wrong. But, something to think about nowadays, folks.

      • Don Azarias says:

        Pat,

        Good insight. However, I don’t really believe that Putin would be that irrational to start a nuclear war with the United States and its allies. And I don’t believe that China’s Xi Jinping would also be that foolish to start a war that could mean the end of mankind.

        I also believe that those superpowers’ leaders, including that of the United States’, would think twice before “pushing the button.” Putin’s seemingly tough stance is nothing but pure bravado and machismo. And I also believe that Russia’s responsible military leaders would intervene and do everything to disobey Putin’s order.

        As in the words of President Ronald Reagan:
        “A nuclear war can never be won and should never be fought.”

        There’s a lot at stake and I do believe that those world leaders are familiar with Reagan’s powerful warning.

        Don

        • pat talens says:

          Don, thank you sa sagot mo sa aking seemingly morbid insights and darker reflection amid troubling current events around the globe.

          Anyway, I don’t mean to cry wolf about WWIII and scare people, but at times my perspective of prophecies and end times get into my writings. God bless…

  3. Don Azarias says:

    Perry,

    You’re right on target about the possibility of the Russian economy collapsing sooner rather than later. And I hope that would hasten Vladimir Putin’s fall from power. It’s really impossible for him to support his ambitious plan to upgrade his country’s military capabilities since Russia’s major source of revenue comes from oil. I don’t know how long Iran and those other OPEC members—that are hostile to the United States—can weather the storm.

    Of course, we also have to be concerned about the effect of the low oil prices on global economies, especially the United States and its Western allies. We have to realize that the oil and energy stock market collapse would have a catastrophic impact on the U.S. economy considering that oil and energy stocks—considered ‘blue chips’—are being held largely by the U.S. and European Union’s major corporations.

    Let’s just hope for the best.

    Don

    • perry says:

      Hi Don,

      From what I understand, it was Saudi Arabia’s refusal to cut oil production down to keep the price of oil. But the U.S. is also increasing its oil production. It seems that there is a conspiracy between the U.S. and (Saudi Arabia) to hurt Russia’s economy. I also read that it would force Putin to resign or he’ll be kicked out by the Russian military. The Russian military hates the U.S. but if there was one thing that they couldn’t tolerate it’s a loser lording over them.

      Perry

Join the discussion

Your email address will not be published. Required fields are marked *