Pandemic To Putin, Rise Of The "Independence Obsession"
First, the COVID-19 crisis, and now the need to respond to Russia's invasion of Ukraine, are forcing countries to confront the risks of global interdependence. In its place comes a rush to establish national autonomy for crucial resources, from masks to oil and gas. But at what price?
PARIS — Russian troops aren't only ravaging Ukraine. They're setting off shock waves that will change history. And it turns out, those waves are pushing us in the same direction that COVID-19 did: the fragmentation of the world.
Because when facing the assault of a virus or an army, nation-states are forced to take control.
National leaders move quickly to weaken the enemy and protect populations. But it all happens at the expense of openness, which had been well-established as a priority since the end of World War II, reinforced since the fall of the Iron Curtain and recalled as a necessity during the financial crisis of 2008.
It's a major break, and French President Emmanuel Macron is one of the clearest signs of the shift. In the wake of the attack launched by Moscow, he explained that “we will have to promote a new economic model based on independence.”
The word “independence” had been mostly absent from Macron's daily vocabulary until now, but he used it six times in his recent address to the nation — and again, the next day in the letter in which he formally announced his candidacy for reelection next month.
But this goes well beyond just election posturing, as independence has become an obsession again for world leaders.
The public health crisis of 2020 prompted countries to chase after medicines and masks, discovering with astonishment that these essential products to fight the virus were no longer manufactured at home. Many countries have since even banned the export of these products. The same scenes and the same reactions were seen when the vaccines were launched.
Russia and Ukraine together account for one-third of the world wheat exports
Since then, a fundamental reflection has been undertaken on relocating production and supply chains deemed vital. The European Union's massive COVID-19 recovery plan includes a series of measures aimed at strengthening the continent's autonomy. For medical products, but also microchips and automotive batteries.
The war waged by Russia in Ukraine will push this quest for independence much further.
First, because war itself has major effects on two essential resources: food and energy. Russia and Ukraine together account for one-third of the world wheat exports. However, the ports through which these sales transition are now blocked by the conflict. The price of wheat suddenly spiked.
All the affected countries will therefore give serious thought to their food self-sufficiency. Some don't have much choice, like Egypt, which buys more than half of its consumption and whose territory is made of 96% desert. Others have more options.
Russia is also the world's second largest oil exporter and supplies nearly half of its gas to Europe. Disruption of these supplies have major effects on the global economy. If it is deprived of Russian gas, “the European Union will need to influence demand,” say researchers from the Bruegel Institute in a note.
Like the oil shock of 1973, the war in Ukraine will push energy-consuming countries to explore alternatives to become less dependent. Half a century ago, this was the starting point of nuclear power. This time, the acceleration will also focus on renewable energies — and frugality.
Russia supplies nearly half of its gas to Europe
Sanctions on money
But the biggest move arrived the other way around. It comes from the sanctions imposed on Russia by Europe, the United States and other countries. Without even mentioning the stakes, these sanctions of an unprecedented scale focus on a third major resource: money.
Excluded from the Swift financial messaging, Russian banks can no longer work internationally. Russian consumers can no longer use their Apple Pay and Google Pay cards. The search engine has also decided to freeze the comments on its geographical maps, which would have been diverted for military purposes.
Another major resource could also be affected: information. Bill Foster, a Democrat congressman, proposes that American Internet providers block traffic with Russia. The Ukrainian government has even asked the Icann, the organization managing Internet domain names, to eject Russia from it – a request rejected by Icann in the name of its neutrality.
In the name of independence, countries will identify their weak points and eliminate the most dangerous ones
But the message is clear. In this digital age, a country can block the circulation of money and information in another country. It is a major threat. The world's most powerful countries will therefore do everything to counter it.
Skimming financial systems
Russia had already begun its quest for financial independence after the annexation of Crimea in 2014. The Visa and MasterCard networks having then withdrawn from Russia, Moscow launched Mir, a Russian payment card system. China has also developed its own, UnionPay… which has just been connected to Mir following a new suspension of Visa and MasterCard in Russia.
After the very firm measures taken by Europe and America in the past few days, all countries — starting by China — that have the means will skim through all their digital and financial systems. In the name of independence, they will identify their weak points and eliminate the most dangerous ones, those through which foreign countries can operate leverage.
The pandemic forced countries to isolate themselves. The war Russia wages in Ukraine and the retaliation measures it has generated will amplify this effect. Each time, it strikes with the power of a cluster bomb.
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