Ahead of the crucial Shanghai Cooperation Organization (SCO) summit in Qingdao this coming weekend, three other recent events have offered clues on how the new world order is coming about.
The Astana Economic Forum in Kazakhstan centered on how mega-partnerships are changing world trade. Participants included the president of the Asian Infrastructure Investment Bank (AIIB) Jin Liqun; Andre Belyaninov from the Eurasian Development Bank; former Italian Prime Minister and president of the EU Commission Romano Prodi; deputy director-general of the WTO Alan Wolff; and Glenn Diesen from the University of Western Sydney.
In parallel, as Diesen argues, Moscow aims “to ensure the sustainability of an integrated Eurasia by establishing a balance of power or ‘balance of dependence’ to prevent the continent from being dominated by one power, with China being the most plausible candidate.”
In a nutshell; this New Great Game installment revolves around “Russia’s strategy to enhance its bargaining power with the West by pivoting to the East.” Concerning Astana, Diesen told me that the AIIB’s Liqun “took the hardest stance in defense of diversifying financial instruments, while Belyaninov was very critical of anti-Russian sanctions.”
Diesen argues that: “The emergence of economic mega-blocks actually improves economic relations by creating more symmetry. For example, China’s CIPS (Cross-Border Interbank Payment System) undermined the ability of SWIFT (Society for Worldwide Interbank Financial Telecommunication) to be used for economic coercion, while CIPS and SWIFT still cooperate. Similarly, the EAEU [Eurasia Economic Union] gets its strength from the ability to integrate with other regions as opposed to isolating itself.”
And here’s the clincher: “China’s cooperation with the EAEU mitigates Russian concerns about asymmetries, and enables greater EAEU-BRI [Belt and Road Initiative] integration under the stewardship of the SCO. Also, unlike the EU, the EAEU provides great benefit to non-members (non-zero sum) by creating an effective transportation corridor with harmonized tariffs, standards, etc.” – Mint Press News
Perhaps the biggest irony in all of this is was that the G-7 voted out Russia from their original G-8 group, only to see Moscow pivot East and now become a leader in the Asian/Eurasian movement that appears likely to take over from the West as the world's economic power through the rest of the century.