Uncertainty prevails

Uncertainty continues to reach unprecedented levels. It reigns supreme over calm and predictability, and will continue to do so in the future.

The international order is being stretched to its breaking point, and leaders worldwide are struggling to deal with the backlash. British Prime Minister Liz Truss is presiding over one of the biggest economic disasters Britain has ever seen. Her controversial mini-budget crashed the pound and derailed the financial markets. The lack of awareness is astonishing.

The war in Ukraine has shaken the world order, surely economic stability and fiscal discipline should be on every leader’s agenda. Bold tax cuts are certainly not the answer.

This brings us to the war in Ukraine which has marked the end of the post-cold war era and the return of superpower competition in both Europe and the Pacific. Now that the war has passed the half-year mark, we can outline some key observations and challenges going forward.

While the US has fallen short in some areas during this conflict, it continues to show its crucial and indispensable leadership role as Europe’s wartime guardian. The reality is that Nato can only protect itself under the US umbrella. It is surprising that the European Union continues to be deeply reliant on the US for its security. After all these years, the EU is still unable to develop its own strategic autonomy.

As time goes on, the US will find it increasingly difficult to maintain Western unity in the midst of growing hardship caused by the war’s economic fallout. As mentioned earlier, in a state of anxiety Liz Truss was attempting to deliver the Tories’ energy package to help people with their bills. Unfortunately, her execution fell woefully short. The US will also have to lead the way in searching for alternatives to Russian oil and gas while maintaining its domestic agenda of phasing out fossil fuels.

Even though the American sanctions against Russia have included very harsh measures such as freezing Russia’s central bank reserves, Russia is still managing to keep afloat. Earlier, the IMF predicted that the Russian economy would contract by approximately 8.5 per cent this year. It has now revised its forecast to about 3.4 per cent. Because Russia is a resource economy, it has managed to keep some form of stability. Its wealth largely depends on its export of oil, gas, and aluminum. These commodities have been protected against sanctions because the US realizes that the world relies on these commodities and banning them will cause even more upheaval.

While the West has condemned and sanctioned Russia, most of the Global South has refused to take sides. China has neither backed nor condemned the war. However, it seems China and Russia have become closer than ever before. This is partially due to America’s antagonistic rhetoric towards China. Its shortsightedness and inflexible approach towards China has backfired and pushed it towards Moscow.

The Global South’s hesitation to condemn Russian aggression is not surprising. They view Russia as a large authoritarian power that they can work with. Washington’s past has also made the Global South sceptical of it. President Biden labeling Pakistan as “one of the most dangerous countries in the world” reveals that the US is unwilling to alter their divisive rhetoric which ends up isolating key allies. The US will seek to focus on bringing these nonaligned groups of countries under their sphere of influence, similar to what it did during the cold war. For that, it has to win back trust, which will be very difficult to do. It would be wise for the US to take a leaf out of its old book when it was more tactful and diplomatic. Brash statements and a sanctimonious attitude will no longer work.

America’s main aim is to keep the word order intact. However, it will have to face the fact that it is no longer the sole superpower. We are in an era of complex and multifaceted power disputes. Both China and Russia have called for a new post-Western order. There is no doubt that the US still carries more influence than any other country, primarily because of its military prowess and the unique status of the dollar.

Countries still rely heavily on the dollar and that will not change, at least not in the near future. Just last month, the dollar reached a two-decade high because of the lack of alternatives to it. However, many major countries like Turkey, Saudi Arabia, and China are searching for a way to unfetter themselves from the global currency.

America would do well to step out of its bubble and devise a more cooperative approach to the rest of the world. If the US is seeking stability, it has no choice but to adopt a narrative that is based on genuine dialogue and collaboration.

The writer is a veteran journalist, political analyst and author. He can be reached at: humayun.gauhar786@gmail.com