Global economy – Globalities

On the Houthi shipping threats

Helena CobbanDecember 22, 2023December 22, 2023Gaza, Global economy, Israel, Palestinians, Shipping news, UncategorizedLeave a comment

The above image shows a Yemeni Coast Guard vessel guarding the hijacked Israeli-owned vessel Galaxy Leader

This is a Twitter thread I posted Wednesday, about the (economic!) effectiveness of the attacks and threats that Yemen’s Houthis have been making against Israel-related shipping trying to transit the Bab el-Mandeb straits.

Just in case it’s not accessible there I have uploaded the PDF of that thread here. And below, you’ll find (non-clickable) screengrabs of those pages. If you want clickable, go to the first link I put above.

(Just an update Friday afternoon: Reuters reported that France, Italy, and Spain– all of which SecDef Lloyd Austin had earlier announced would be members of the counter-Houthi ‘Operation Prosperity Guardian’ coalition– had all declared that they would not be; but their navies would continue coordinating with the U.S. Navy under previously existing arrangements. France and Norway also seemed to be pulling back from Austin’s OPG bravura…)

Global South resists Washington’s anti-Russia campaign

Helena CobbanJuly 28, 2023July 29, 2023BRICS, China, Global balance, Global economy, Global governance, Russia3 Comments

Above: Pres. Putin poses with some of the African leaders who attended the Russia-African summit he hosted this past week

Biden administration officials and their supporters have long claimed that the conflict in Ukraine is a clear-cut contest between “democracy” and “authoritarianism” that affects the whole world… and that on that basis the countries of the Global South should line up to support NATO’s campaign against Russia. One big recent version of this argument has been the claim that Russia’s refusal to renew the agreement allowing Ukraine to export grain via the Black Sea is raising grain prices and preventing much-needed foodstuffs from reaching hunger-struck countries in Africa…

But the campaign to win global support for NATO’s anti-Russia crusade has never been very successful. Recall that in the three votes Washington initiated at the UN last year to denounce Russia’s actions inside Ukraine (e.g., 1, 2), three dozen countries including global behemoths China, India, and three dozen other countries failed to support the “Yes” vote.

And just this past week, the proceedings of key gatherings held in South Africa and Moscow have underscored the extent to which the “West” has lost the support of that large majority of humanity that lives in the formerly colonized countries of the Global South. (If indeed, it ever had it… Perhaps a better description of what’s been happening in recent months is that the West is now revealing itself as incapable of imposing its will on the countries of the Global South. More on this, later…)

So what happened at these two recent gatherings?

John Kerry, China, and averting planetary disaster

Helena CobbanJuly 18, 2023July 22, 2023China, Global balance, Global economy, Global governance, U.S. policy, U.S.-China relations3 Comments

Have you, like me, been wondering what U.S. “climate czar” John Kerry has been talking about with his hosts in a Beijing that, like much of China and the United States, is drenched in extreme weather events?

If you read the (uber-nationalist) New York Times account of the meetings, you’ll learn that Kerry lectured and hectored his hosts. The Washington Post account was more measured, starting as it did with this lede:

John F. Kerry praised China’s “incredible job” expanding renewable energy sources Monday, while urging the world’s largest greenhouse gas emitter to stop building coal-fired power plants.

Let’s hope that Kerry’s approach toward his hosts was indeed respectful and collaborative. The fate of humankind and our whole, deeply troubled planet hangs on these two mega-powers finding ways to work together to reduce greenhouse gas (GHG) emissions, while also reining in the currently raging over-depletion of all of our planet’s material resources.

If these two governments cannot overcome, or set aside, their political differences and find a way to work together to reduce CO2 emissions and resource depletion, then we will surely, within the next 20 years, see extreme weather events “baked” into all of the world’s climate system. We will also see entire economies, small and large, forced screeching to a halt—and also, all the social and political turmoil that will predictably result from that.

First, two key pieces of data regarding these two countries’ recent and projected CO2 emissions:

Click on either graph to expand it. The y-axes (verticals) show the same thing: billions of metric tons of CO2 emissions—but to different scales, as shown. The x-axes show past reported CO2 emissions levels through 2021 or 2022, and then projections from then through 2050.

The dimensions of de-dollarization

Helena CobbanMay 5, 2023May 8, 2023China, Global balance, Global economy, U.S. policyLeave a comment

The image above shows Saudi Arabia’s King Faisal and Pres. Nixon, on the White House lawn in 1971, the year Nixon unpegged the dollar from the gold standard

De-dollarization — that is, the choice that countries in the Global South have been making to conduct their trade in currencies other than the U.S. dollar — is a growing global phenomenon. It has profound implications for the economic situation in not just countries of the Global South but also Europe and (especially) the United States. It is a trend that strikes at the heart of the hegemonic, dollar-dominated “world order” that has existed since 1945, and is a key marker of the ongoing shift toward multipolarity.

Fairly good explanation of de-dollarization from Visual Capitalist. Click to enlarge

De-dollarization is intimately linked to developments in the world hydrocarbons business, including the decision U.S. elites made more than a decade ago to increase domestic shale-oil drilling, which over the years transformed the United States from a net importer to a net exporter of oil and gas products. That shift acted as a key catalyst spurring countries in and far beyond West Asia to base their trading relationships on currencies other than the greenback. The shift also upended Washington’s relationships with key oil producers in West Asia, which then provided a significant opening for the expansion of China’s influence in that vital region.

Those trends were all discernible before 2022. But when Washington (responding to Russia’s invasion of Ukraine) slapped harsh sanctions onto Russia, it boosted all of them into an overdrive that now looks poised to radically transform not just the global economy but also the global power-balance as we have known it since 1945. In this essay, I’ll quickly pull together what some key thinkers from North America, Europe, West Asia, and elsewhere have been writing about the current push toward de-dollarization and its impact on world affairs.

1.

One of the latest pundits to weigh in on the impact of de-dollarization has been Frank Giustra, co-chair of the influential, West-dominated Crisis Group think-tank. In a May 3 article at Responsible Statecraft, Giustra made the powerful argument that the United States’ true strength in international affairs lies not in its military but in the role of the dollar.

What shape of a world do we want to build?

Helena CobbanFebruary 24, 2023March 11, 2023China, Europe, Global economy, Global governance, U.S. policy, Ukraine crisis4 Comments

The photo shows a unanimous vote at the U.N. Security Council in January 2022, affirming that nuclear wars must never be fought

Unless your name is Tom Friedman, I guess you’d agree that the world is not flat. But what shape does our world have today—and what shape of a world do we want to build over the years ahead?

I’m pulling strongly for the kind of multipolar order in which all the world’s children have a decent chance of growing up in an environment with a sustainably livable climate and from which the threat of nuclear ecocide has been removed.

Joe Biden seems to have a different preference. Time after time, and in a rising crescendo this past week, he has loudly been painting the world as dominated by a bipolar fight between what he calls the “rules-based order” and Russian aggression—and one that the “West” (as embodied by NATO) must win… And from the other side of the Ukraine frontline, Russia’s president Vladimir Putin has been loudly proclaiming his own, mirror-image version of that view.

There are two big problems with seeing the world as essentially bipolar:

The zero-sum-game aspect of any bipolar view of the world entrenches competitive actions at a time when the already evident effects of climate change (hello!) and the threat of nuclear annihilation demand cooperation, rather than competition.
Our world is already deeply and irreversibly multipolar! Hence, seeing it as bipolar, or acting as if it were, is extremely retrograde and ends up being damaging for all the peoples of the world (and almost certainly counter-productive for any leader who follows such a path.)

We should all be glad that this week, the government of China has published a concept paper for a new “Global Security Initiative” (GSI) that presents a realistic, essentially multipolar description of the nature of global power. And just today, Pres. Xi Jinping has issued a powerful call for a ceasefire and peace talks in Ukraine that is clearly derived from the GSI’s principles.

There’s no word yet on whether anyone in China’s corps of global diplomats has been exploring with Moscow or Washington whether and how a Ukraine ceasefire can be attained, or what role Beijing or others might play in that diplomacy. (If such contacts are being conducted, by any party, we most likely wouldn’t hear about them until they were close to success… For my part, I live in hope.)

Meanwhile, two studies recently published in “the West” underline the degree to which power in the world has already become widely diffused. In this one, “The New Geopolitics”, Columbia University economist Jeffrey Sachs focuses on the economic underpinnings of today’s world. And in this one, “United West, divided from the rest”, three analysts from the European Council on Foreign Relations look at the degree to which the public attitudes in China, India, Türkiye, and Russia already diverge starkly from those in NATO countries.

In today’s essay, I will quickly summarize the key findings of the Sachs and ECFR papers, then offer my own preliminary thoughts on the nature and shape of power in today’s world.