The West’s economic war

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Along with the global response to COVID-19, Russia’s war of aggression has kicked the world into a destabilised state that could result in a new kind of Cold War. During the last Cold War, African countries were used as proxy battlefields, the Angolan civil war being a case in point. The question is, why wouldn’t the great powers of this new world not return to that? If nuclear threats are on the table, why isn’t it unthinkable that arms would be pumped into, for example, the ongoing and terrible civil war in Ethiopia?

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What wasn’t surprising about the vote on Ukraine at the United Nations General Assembly on 2 March 2022 was that South Africa abstained. We’ve supported Robert Mugabe and Omar al-Bashir, the former Sudanese dictator and architect of the Darfur genocide, so why not Putin? His war in Ukraine isn’t, for Pretoria, an unjustifiable invasion of a sovereign and democratic nation.

On the surface, all that the abstention proves is that the wonderfully democratic and progressive state of South Africa is governed by an illiberal collection of morally bankrupt tenderpreneurs who don’t like judges and the rule of law in general. For South Africa’s foreign policy to become focused on human rights again, the left-nationalist power cabal that is the ANC must go. The only progressive stance left at this stage is the ruling party’s position on Palestine.

But underneath, tremendous forces are at play. The world is being reordered and it is unlikely to be in Africa’s favour.

At the Assembly, 141 countries condemned the invasion, 35 countries abstained and only five voted against: Russia, Belarus, North Korea, Syria and Eritrea. So far so good, and to be absolutely clear, condemnation of Putin’s war of conquest is absolutely the right thing to do.

But it is the states that have abstained that are of critical importance in the long run. They include India (population 1,38 billion), China (1,43 billion), Pakistan (220 million) and Bangladesh (164 million). Seventeen African countries also abstained: combined, 433 million. In fact, the 35 countries represent close to 4,2 billion people. Although the abstainers have only 25% of the global GDP, fortunes will change.

Just over half the world refused to condemn the invasion.

The Americans, EU, Japan and other allied actors have embarked on economic warfare with the immediate goals of forcing Russia out of Ukraine and, maybe, toppling Putin. Their sanctions have two main thrusts. The first is to make it illegal for Western firms to deal with major Russian banks (the list of Russian banks seems to grow larger by the day) and to remove the country from SWIFT, which facilitates international payments between banks. In effect, since about 80% of commodities are traded in dollars, this stops Russia from trading on the global market with the exception, for now, of energy and a few other key commodities such as wheat.

The immediate consequences are that Russia’s market has crashed, the rouble has declined, and it looks as though it no longer has access to about $400 bn of its $630 bn foreign reserves. The price of commodities has soared. For example, the price of oil has climbed to $114. Along with sporting, cultural and academic bans, the objective is to isolate Russia completely and make it a pariah state. There is debate over whether this will work in terms of ending the war. What is certain is that they have raised the stakes for Putin – the war is now an existential one for him. It’s all or nothing.

Engaging in this kind of extreme economic warfare is a warning to any other country wishing to invade another, in particular, China and any plans it may have to invade Taiwan. And this is where blowback might start.

The West has made a display of power and many resent its economic and military dominance. Deep historical reasons, including having been under the thumb of direct Western control in the past, are part of this resentment. The more recent invasions of the sovereign nations of Iraq and Afghanistan also contribute to the resentment. The force of these feelings cannot be overestimated – people do not forget.

Apart from Ethiopia, every African country had to liberate themselves from Western colonial powers and often with help from the Soviet bloc. The British ruled India for over 400 years. Algeria’s war of independence was extremely brutal. Vietnam, which, like Algeria, abstained, fought a long and bloody war against the Americans. The scars of the opium wars are part of China’s national consciousness, as is Japan’s vicious occupation during the Second World War.

Western control over the global financial architecture really grates, which is why many of the countries that abstained, if not all, will continue trading with Russia. Crucially for Putin, both India and China have indicated business as usual.

Actions come with reactions.

Both China and Russia have developed alternatives to SWIFT, albeit neither of these has the range of SWIFT. Expect these to be developed and expanded rapidly. There will also be a push for more commodities to be traded in Chinese yuan and a greater use of crypto currencies. Put another way, many countries see breaking the dollar’s domination as a necessary step for their own development, and this requires overcoming the West.

The great danger is that the world is breaking up into blocs. Along with the global response to COVID-19, Russia’s war of aggression has kicked the world into a destabilised state that could result in a new kind of Cold War. During the last Cold War, African countries were used as proxy battlefields, the Angolan civil war being a case in point. The question is, why wouldn’t the great powers of this new world not return to that? If nuclear threats are on the table, why isn’t it unthinkable that arms would be pumped into, for example, the ongoing and terrible civil war in Ethiopia?

Africa needs peace in the Ukraine for its own future, but there’s very little hope of the ANC changing tack and condemning the invasion. To have a moral compass, you need to have morals.

Tristen Taylor is a freelance journalist and photographer. He is also a Research Fellow in Environmental Ethics, Stellenbosch University.

Also read:

Oekraïne: Berigte te velde

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