Putin has called for a “new world order,” with the aim of stabilizing the globe. He believes the US is abusing its role as global leader. What’s not being widely reported is the fact that the pillars of the old order have been crumbing for years.
It used to be all so simple. The world was split into two camps – the West and the rest. And the West was truly the best. Twenty years ago, six of the world’s biggest economies were part of the pro-Washington world.
The leader, the US itself, was so far in front that its total Gross Domestic Product (GDP) was more than four times larger than China’s and nine times the size of Russia’s.
The world’s most populous country, India, had almost the same gross income as comparatively tiny Italy and the UK. Any notion that the order would change so dramatically in a mere two decades seemed laughable.
The Western perception was that China and India were backward and would take a century to become rivals. Russia was seen as a basket case, on its knees and ruled by chaos. There was a lot of merit in that notion in the 90's.
The world economy in the 1990s and today:
World’s Largest Economies by GDP, adjusted for purchasing power parity (PPP), Source: World Bank
1995 (in USD billions)
2015 (IMF Forecast)
United States 7,664
United States 18,287
United Kingdom 1,161
United Kingdom 2,547
US setting sun
Now the joke is on the West. The International Monetary Fund (IMF) estimates that by 2015, four of the world’s top economies will be members of the club known by its acronym, BRIC (Brazil, Russia, India, China). China will replace the US as top dog. This might already have happened; economic figures tend to lag behind economic facts.
Italy, the sick man of Europe, is out of the top 10 and the UK is barely hanging on, although London is still promoted as a financial powerhouse. The only people who believe that anymore are little Englanders. The UK has become the Julie Andrews of geopolitics, a fading star that was once luminous. France is impotent, lurching from crisis to mishap and back again.
It's too soon to write off the US. The empire isn’t going to end any day soon, but the sun is lower in the sky. This is less the fault of the US and more to do with the diminishing importance of its traditional allies.
Indeed, the only two that are still holding their own are Germany and Japan, neither of which are serious military players. Britain and France have long supplied the heft for martial adventures. In reality, Germany is not a hugely enthusiastic partner because a large section of Berlin’s political class is extremely skeptical of US power. Significant numbers of the German intelligentsia feel that Moscow is their natural ally – not Washington.
The rise in importance of the BRICs and other emerging economies has major implications for global consumption, business, and investment. By 2020, the IMF estimates that Russia will have overtaken Germany, and India will outperform Japan. They also forecast a fall in US global share from 23.7 percent in 2000 to 16 percent by 2020. In 1960, the US represented 38.7 percent of the world’s economy. Conversely, in 1987, China scored only 1.6 percent – but at the end of this decade it will claim 20 percent. This is unprecedented change in a relatively short time.
Putin’s speech at the Valdai Club was not a wild stab in the dark. It’s a nuanced understanding of where the global balance currently sits and is heading over the coming years. The US hegemony was based on the fact that, along with its allies, it controlled the bulk of global trade as well as wielding a big military stick. That is now history.
Rather than engage with Putin's issues, the Western media has mostly played the man and not the ball. Op-eds described his speech as a “diatribe” and assumed Putin was singularly focused on US foreign policy which he believes is anti-Russian. That misses the point.
Putin's concern is for stability and predictability, which is the antithesis of modern Western liberalism. In fact, Putin’s position is closer to that of past visions for world order promoted by the likes of Konrad Adenauer’s CDU in Germany and Harold Macmillan’s British Tories, classic European conservatism.