Global order upended

Over the past several decades there have been a few years that really stand out for having an impact that resonates for many years to come. One such year was 2001 when Americans’ view of threats faced by their country was fundamentally altered. The financial crisis of 2008-09 devastated the American and global economies for years to come.

This past year, 2022, will go down in history for shaking the established global security order to its core. What was believed to be the post-World War II era of stability and security is no more. It was broadly accepted that the age of major wars, particularly ones that sought to change national borders was in the past.

The relative security of the post-World War era had put countries, and particularly industrial economies of Europe, into a false sense of security. Despite repeated urgings by the US, wealthy European countries, particularly members of the Nato alliance had little interest in spending two per cent of their GDP on defence, as stipulated by the treaty. While the US continued to overinvest in defense, Europeans were happy to spend on their welfare state – providing for education, infrastructure, and healthcare, beyond what the US has been willing to do.

This relative calm came crashing as the Russian military marched into Ukraine in February. While Russia had been nibbling away at sovereign Ukrainian territory since 2014, it had been largely neglected by the West, treating them as minor incursions. It is no longer possible to ignore Russian actions.

While the US has approved large sums in military aid to Ukraine, Olaf Scholz, the chancellor of Germany, has announced additional 100 billion euros in German defence spending. In fact, no major country in the world can ignore any more the risks from potential adversaries.

The Russian invasion of Ukraine has also rapidly altered global alliances. The US has led the charge to heavily sanction the Russian economy, with the hopes of crippling it. But much to the West’s disappointment, too many countries in the world including in Europe have been dependent on Russian oil and gas, and grains and fertilizer from Ukraine.

The war has also impacted the fortunes of countries near and far. While Europe has suffered greatly from spike in energy prices, others in the Middle East and elsewhere have been at the receiving end of capital fleeing Russia. India has openly flouted US-led sanctions of Russian energy benefitting from importing deeply discounted Russian oil.

The world is seeing the limitations of sanctions on a country whose products are in demand.

Even as the world was reeling from the effects of the Russian invasion, the US was dealing with internal threats to its own democracy. A former president was refusing to accept the results of the elections he lost two years ago. Results of the US midterm elections held in November this year brought a little relief to the worst fears of the public. Most of the candidates with extremist, antidemocratic views lost. It appears Trump's political influence is also diminished.

Among the many factors influencing US election results was a decision by the Supreme Court to reverse five-decades-old decisions affirming a woman's constitutional right to an abortion, at least in the early weeks of pregnancy. Regardless of how one feels about the right to an abortion, the Supreme Court's willingness to reverse what was considered ‘settled law’ has created deep anxiety among many sectors of American society. There is fear as to what rights this activist court may go after next.

Beyond politics, the financial markets in the US had one of their worst years ever. Trillions were wiped out in financial wealth. High-flying technology stocks such as Amazon, Facebook and Tesla lost more than 50 per cent of their value. The aura of tech billionaires lost much of their shine as many of them were exposed to be not necessarily so bright. Facebook's Mark Zuckerberg has learnt that ‘Metaverse’ may not be a winning bet yet. Tesla owner Elon Musk bought Twitter for $44 billion and quickly learned managing a global social media company may be more complicated than firing rockets into space.

Similarly, the collapse of a major Crypto exchange has brought reality to that speculative venture.

As the world moves into 2023, the effects of the crises spawned in 2022 may stay with us perhaps for years to come.

The writer is a freelance contributor based in Washington DC. Website: www.sqshareef.com/blogs