Rift split wide open

It is a grim world out there.

Old conflicts that were thought to be resolved, managed or buried are back in a violent way, extracting a huge human toll. (AFP)

Old conflicts that were thought to be resolved or managed or buried are back in a violent and visceral way, extracting more human toll in a short concentrated period than at any time in the last three decades. New technologies offer unknown and expansive possibilities but also real, potentially irreversible, risks.

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The domestic political order in the US is under tremendous strain, with implications for every theatre in the world and every substantive issue the international community is grappling with. Great power conflict is back, both on the US-Russia and the US-China axes.

Multilateralism is in crisis, with the UN’s limited abilities to maintain international peace and security visible across domains. The gulf between the global north and south, even if those labels don’t exactly fit geographies anymore, is only growing. Rising nationalism, sometimes bordering on xenophobia, is on the rise in both the developed and developing world, colliding with the basic rules of the game.

All of it then has led to either the strengthening of western alliances and partnerships, largely due to shared insecurity; or the intensification of open-ended and fluid relationships with multiple partners across much of Asia, Africa and Latin America, largely due to diverse interests, a strategy of balancing and hedging, and uncertainty about what the future order will look like and who will be powerful. Global economic structures are in churn, with the rise of protectionism and return to State-backed industrial policies with an eye on boosting domestic manufacturing, which in turn is a way to create jobs, address restlessness at home, and prepare for the supply chains of the future.

While all these trends have been apparent for a while, 2023 was a year when they intensified. It was also a year which showed the hazards of political forecasting and the critical role of unanticipated events in altering history. A glance at four key trends offers insights into happened and hints at what may come in the future.

The big global entanglementsSo much of international politics is driven by developments within the American polity. The year began with Joe Biden feeling emboldened after victories in the midterms at the end of 2022. He had managed to push back on Russian aggression by supporting Ukraine, cemented transatlantic unity and seemingly put a break on Vladimir Putin’s overreach. He had instituted a strong set of partnerships in Indo-Pacific, broken the tech exchanges to China but also sealed an understanding with Chinese president Xi Jinping in Bali to manage competition. And he had hoped that the future of West Asia rested on his big diplomatic bid of Israel-Saudi normalisation.

At the end of 2023, all these calculations suddenly seem shaky.

Biden is facing a serious domestic political challenge with Donald Trump rising in polls despite multiple indictments. While Trump’s legal travails will play a role over the next year, his resurgence represents the continued strain in American foreign policy that wants to shrink its global commitments.

Republicans in the House echo this strand, which is why the US support for Ukraine is now uncertain. On the ground, the Ukrainian counteroffensive against Russia failed over the summer, and Putin is suddenly looking more energised than at any point since February 2022. Kyiv is wondering if it will be able to hold on its gains till the end of 2024, even as Putin banks on Trump’s return to see a closure of the conflict on terms that work for Russia.

The US-China relationship has had two strands over the year. The discovery of a Chinese surveillance balloon over continental American territory inflamed public opinion and interrupted the restoration of diplomatic contact. Competitive actions on tech have continued. The US sealed a historic trilateral pact with Japan and South Korea, added to military bases in Philippines, continued with Aukus (the nuclear submarine deal with Australia) and deepened partnership with India despite challenges. At the same time, the US desire to minimise the chances of a conflict and ensure stability as the country moves to elections, and China’s domestic economic downturn and increased external challenges, led to contact and cooperation, with a string of senior American officials visiting China and Xi Jinping meeting Biden in California. The competitive, even adversarial, dynamic is deep, but both countries are buying time to ensure that this doesn’t graduate to a conflict that neither is ready for at the moment.

And West Asia is burning. The dreams of Israel-Saudi normalisation and ambitious infrastructure projects in the region (the India-Middle East-Europe economic corridor being the most prominent) are suddenly suspended. The Hamas terror attacks of October 7 have led to a predictable, yet brutal, Israeli counteroffensive that has killed 20,000 people, a majority of them innocent civilians and children, and displaced 1.7 million in Gaza. Even as the polity in Israel continues on its extreme rightward trajectory, America has witnessed a deep domestic fracture on the most external issue that has the most internal resonance. The American administration has backed Israel, with cautionary notes on how it should plan its offensive, but a substantial segment of American society — progressives, minorities, people of colour, students — have opposed this support. This, in turn, has divided every American institution, from universities to the State Department; led to a surge in both anti-Semitism and Islamophobia; and dented Biden’s credibility globally, for whether true or false, the war in West Asia is not just seen as Israel’s war but one in which the US is totally complicit.

The structural changesAll of this is happening at a time when three other trends are changing the global political economy.

For one, while 2023 saw a shift in discourse from the need to “decouple” from China to “derisk” from China, the need to prevent over-dependence on vital and high stakes production on a single geography remains as salient as ever. And that is why the US national security state is shifting gears and telling US capital to come back home or invest elsewhere. There is an emphasis on domestic self reliance and trusted geographies. This is still work in progress but the next phase of globalisation will look different in terms of investment and trade flows.

The second is the increased salience of tech as the real heart of geopolitics. Artificial intelligence is changing the world already; the importance of reliable semiconductor supply chains is felt acutely; private participation in space has opened up the sector like never before; defence preparedness and deterrence is linked to possession of the smartest new tech; cyber threats can cripple countries even before economic sanctions or physical conflicts begin; the global south is innovating with experiments such as India’s digital public infrastructure; the idea of who can access tech and what tech and who needs to be denied tech is being debated at the highest levels of decision making in the West. All these trends played out in 2023 and will continue.

And the third is the interdependence between distant geographies. If the war in Ukraine caused a food, fertiliser and fuel crisis in distant parts of Africa and Latin America, the war in West Asia is suddenly causing distortion in maritime trade flows and could once again cause a spike in fuel prices, and therefore, global inflation.

As the world looks to the future, 2024 will be the year when there will first be intense competition, and then some clarity, about the future of American politics. To be sure, how other actors behave and how sudden events alter calculations will matter too. All of this together will shape the endgame of conflicts in Europe and West Asia, determine the trajectory of the US-China conflict, and shape the future of the global political economy and tech competition.