- The conflict between Russia and Ukraine could change the world power, The Economist Intelligence Unit said on Wednesday.
- The team sees the emergence of new geopolitical alliances and new divisions between East and West.
- The new order could also force the US and the EU to reconsider its relations with China, the EIU added.
- New world order is emerging, and economists are beginning to consider what it will look like.
It has been a month since Russia began its invasion of Ukraine, and almost all political chambers have been affected. The Western powers around Ukraine, greatly exacerbate sanctions against Russia and exclude the country from the global financial system, and NATO is the most visible ally in decades. However, China is neutral, leaving the door open for relations with Russia that could provide the country with the necessary economic support.
Although the conflict is just a few weeks old, it is already a sign "a crucial moment in the reorganization of the geopolitical order," The Economist Intelligence Unit said in a report published Wednesday. These attacks have already had a profound impact outside of Eastern Europe, ranging from rising inflation to a major refugee crisis. But as the debate continues, it stands to shake up the world order with new alliances and divisions.
Here are three ways the Russian-Ukrainian conflict is ready to change the world power balance, according to the EIU.
The end of the post-Cold War era
The first decades after the Cold War were marked by the power of NATO and US unilateralism. Yet over the past two decades China has seen unprecedented economic growth and Russia is reviving its political power. That helped boost "Western competition" and undermined the US role as a leading global power, the EIU team said. The Russian invasion is a turning point in that history and indicates that the postwar US era is over.
"Russia's invasion of Ukraine is a clear challenge to the US role as a global police force, and suggests that the world remains unsettled and dangerous," economists say.
If the post-Cold War era was defined by US unilateralism, the EIU sees the next decades include "hostile, rival camps." Russia's invasion will speed up global trade shifts and focus on regional trade, the team said, with China and Russia vying for Western powers. Some countries will try to prevent divisions, but that “measurement measure” will become more difficult as time goes on and the gap between the different groups grows, the EIU said.
A new dividing line in Europe
There will also be minor divisions, especially between the EU and Russia. President Vladimir Putin has already tested the international system when Russia took Crimea in 2014, but its entry into Ukraine could establish a new de facto border in Europe.
"Russia's refusal to accept Western-led 'rule of law' signifies a turning away from Europe and the creation of a new continent, three decades after the fall of the Berlin Wall," the EIU said.
The "buffer zone" created by the attack, if Russia wins, will include part of Ukraine, Belarus, and Kazakhstan, the group added. That would undermine Russia's influence against EU members in Poland, Romania, and Slovakia.
NATO and the EU have warned that entry into member states will lead to immediate military retaliation. Groups have so far avoided sending troops to Ukraine amid fears of escalating the conflict into a third World War. However as the offensive continues and Russia shows no signs of withdrawal, the chances of a new dividing line increase.
Reconstruction of cooperation with China
One of the biggest unknowns in this dispute is where China will end up. The powerful economic center has refrained from supporting or criticizing Russia's invasion, but its economic ties with Russia naturally weaken Western sanctions.
Russia has been building its relations with China since 2012, and over the past decade has seen Russia grow more and more confident in trade with China. Presidents Putin and Xi Jinping have already announced at the recent Winter Olympics that their alliance will "know no bounds" and will oppose NATO, and it is likely that the relationship will only deepen in the years to come, the EIU said.
"What started as a luxury wedding has grown over the past decade into an intimate relationship," the EIU said. "In China, the alliance with Russia offers security at its northern border, natural resources and a shared authoritative approach with a Western attitude."
The practice, however, could force the West to reconsider its relations with China, the group said. The US will now have to focus on Russia's content while also relying less on China in trade. This puts Eastern allies such as Japan, South Korea, and Taiwan at risk, as their need for US protection may increase, the EIU said. The anti-China coalition in the Asia-Pacific region may emerge as political divisions grow, the party said.
