The New-World Alignments: An Indication Of Our Future

Published 5 months ago
Rakesh Wahi

“The conduct of the Big Five leaves a lot to be desired in the management of conflicts, trade agreements and in financial grants.”

There has been an explosion in the number of conferences in Africa over the last 12 months. While the diary was always busy, it seems like anyone not engaging with or traveling to some part of Africa exploring ideas, would be missing out. The themes follow the flavor of our present time; the environment, energy (in all its avatars), trade, agriculture, infrastructure, and the complete value chain of finance and education. Most global multilaterals and institutions were in Africa this year and we had a bird’s eye view of almost all the discussions through some very insightful interviews on our television platform, CNBC Africa. The cherry on the top was the BRICS Summit meetings in South Africa with a clear message to the west that the new-world alignments are an indication of the future of our world where a rebalance is inevitable; the incongruity of the past has to be realigned giving a greater voice to developing economies.

I have over the last several years, like many others, been raising an important issue; the relevance of the United Nations (UN) as it stands today. This was further underscored by none other than the Secretary General of the UN. A bit of history will provide context. The League of Nations was the first inter-governmental organization that was established after World War I to ensure peace and stability. It lasted 26 years. The United Kingdom (UK), Japan, Italy and France were the four permanent members of the executive council and only 58 countries (its highest level of member states) were part of the League of Nations. Italy and Japan left the League for their roles in aggression and conflicts. The United States (US) never joined the League of Nations and some departments of the League of Nations were transferred to the UN, which was formed in 1945 after World War II.

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The UN has played a constructive role over the last eight decades in maintaining world order, selectively distributing wealth, and while significant good has come from the institutions that have formed part of the UN, the convergence and selective streamlining of power has created ongoing conflicts of interest. At the nerve center of the UN are five permanent members of the Security Council – the US, UK, China, Russia and France (Big Five). The selection criteria for this pedestal was circumstantial and relevant to 1945 as the ‘Big Five’ played a leading role in World War II and had notably amassed the largest number of nuclear weapons.

It has taken over eight decades for the saying, ‘absolute power corrupts absolutely’ to bring to the fore the conflicts of interest that exist in the world today. Benito Mussolini’s words from 1935 – at the time of the Second Italo-Ethiopian War – that “the League is very well when the sparrows shout, but no good at all when the eagles fall out” resonate with the same fervor as we see the Big Five go about the business of the UN; from the power of veto to the allocation of resources. Little has changed in the behavior of the strong.

“The vicious circle of centralized global control is creating a vortex that is detrimental for the future of mutual benefit and co-existence.” 

There are several other moving parts particularly relating to Africa. The western powers colonized Africa with the UK, France, Belgium, Italy, Netherlands and Portugal splitting the spoils of a resource-rich continent. The umbilical cord of slavery and colonization did not get severed even after African nations secured their independence and remain the agricultural and mineral resource hinterlands of colonial powers. With education, transparency, the immediacy of information and stark poverty, people have started questioning the hold colonial powers, large multinational corporations and other state actors continue to have over African nations. The uprisings in Niger, Gabon and many other African nations that were French colonies have resulted from inequitable deals (notably uranium from Gabon) that France continues to enjoy from the former colonies. On the one hand, these former colonial powers talk of corruption in Africa but on the other, are the very propagators of this corruption.

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The other bloc that needs review is the Commonwealth constituting 56 countries which were mostly former colonies of the UK; 21 of these are in Africa. The head of the Commonwealth is King Charles III and this congregation is now nothing more than an inconsequential talk shop under the ceremonial traditions of a faded empire. The colonial era has ended but the desire to control and have the developing world continue to be subservient to the British Empire has not ended.

Let’s examine the relevance of the two former colonial powers (UK and France) in the context of their economic and political clout in the new world order. While there is a lot of historic wealth and institutional strength in these countries, it’s no secret that they are declining powers. Significant money that has been invested into these two economies over the last two decades has come from the Middle East, China, Russia and the Indian sub-continent. The internal economies are not as resilient as before and political uncertainties and the global sustainability of institutions will be questionable. Both the UK and France have strong tourism and education sectors that are thriving because of student mobility and visitors/tourists traveling from emerging countries.

Additionally, indigenous population growth in both the UK and France has been on the decline; the recent demographic growth has come from migration from all parts of the world. Interestingly, even the sports teams of these countries have a large representation from Asia and Africa. The glaring question is whether these nations should still be part of the Big Five?

The conduct of the Big Five leaves a lot to be desired in the management of conflicts, trade agreements and in financial grants. The US’ share of the global armament market in 2021 was about 38%-40% of the approximately $127 billion. It is in the national interest of the US to fuel conflicts around the world; the same goes for China, the UK, France, Russia and Germany. In a sad dichotomy, the custodians of peace are also the largest arms dealers. They have trade deficits and unemployment when there are no conflicts.

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The crisis in Ukraine today is the most recent example of the world being held ransom by a permanent member of the Security Council. But the conflict did not start with that. It’s no secret that the US and EU have been expanding the North Atlantic Treaty Organization (NATO) and have created instability where it did not exist. The current conflict in Ukraine will embolden China to act recklessly with their own aggression which will also go unchecked. What will continue to thrive will be arms sales to countries that need food for their people and not more guns. These arms exports and other resource-based contracts are allegedly linked to financial aid and grants that are disbursed by multilaterals. There are wheels within wheels when approvals of grants are given to poorer nations.

Another important aspect of note is the power of sanctions. Each time there is a conflict, there are sanctions that have resulted in the forfeiting of overseas assets by defaulters where the dominant nations are the judge, jury and executioners. All overseas assets and reserves of most nations today are held in US dollars, British pounds or in euros which are the default reserve currencies. What was seen as a strength earlier is now being seen as a weakness and threat by emerging economies. Sadly, the vicious circle of centralized global control is creating a vortex that is detrimental for the future of mutual benefit and co-existence.  

Over the last few decades, there have been calls from emerging economies to grow the permanent membership of the UN. This has been largely ignored owing to the veto powers of the Big Five. The developed world as we know it today is unlikely to retain their status as other emerging economies begin to overtake them in economic and military might. In recognition of this, the G20 was formed which included the 19 major economies of the world and the EU as an economic bloc. The reality is that there are so many countries in the EU that are protected through their belonging to the EU. The global financial crisis brought out the weaknesses in the economies of Portugal, Italy, Greece and Spain (PIGS) that have not recovered and with continuing problems will at best remain marginal economies in the near term. Europe in general will face a decline as we progress through the first half of this century. India, in its leadership role of the G20 since December last year, has played an important role in ensuring that the African Union, as an economic and regional bloc, gets a permanent seat at the G20.

The real question is whether the expanded G20 with limited powers (other than to the Big Five) will be seen as adequate by the emerging powers. Consequently, BRICS (Brazil, Russia, India, China and South Africa in the alliance) has increasingly been seen as an answer to the frustration that has come about from the high-handed behavior of western nations led by the US.

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There were many disparities that emerged during the pandemic and African countries, along with other emerging economies, faced the brunt of their citizens (as one example) being given lower priority for vaccinations. The need for indigenization and self-reliance has become a part of every country’s national agenda.

The BRICS meetings in South Africa have now led to the expansion of the bloc with the addition of Egypt, Ethiopia, Argentina, Saudi Arabia, Iran and the United Arab Emirates. While there is a long way to go in expanding the BRICS mandate, the BRICS bank (New Development Bank) has been established and each of the countries is setting up mechanisms for bilateral trade and payment settlements in currencies other than the reserve currencies. With the establishment of the African Continental Free Trade Area (AfCFTA) agreement, Afreximbank has already taken steps to launch the Pan-African Payment and Settlement System (PAPSS) as a cross-border payment system for African countries and has committed significant resources as a credit advance to underwrite this project which will save African countries an estimated $5 billion in annual transaction costs. The impact of all this will be seen in the not-so-distant future.

We are going through perhaps the most defining phase in human evolution. On one side, technology and innovation are disrupting the world and on the other, there are deliberate steps being taken for the realignment of bilateral and multilateral partnerships that will see a very polarized world in the short-term. Let’s hope and pray that when the dust settles, the world is a more inclusive, harmonious and fair place that is respectful to all citizens of the world, where opportunities are not based on religion, ethnicity, gender or any other man-made obstacle. I am reminded of the words of the former President of Poland and Nobel Peace Prize winner, Lech Wałęsa: “The path to a brighter future of the world leads through honest reconciliation of the conflicting interests and not through hatred and bloodshed. To follow that path means to enhance the moral power of the all-embracing idea of human solidarity.”

Amidst all the geopolitics, FORBES AFRICA turns 12 this month. My congratulations to Sid, Roberta, Renuka and the entire team at FORBES AFRICA who work tirelessly to keep the wheels turning slowly but surely towards showcasing the best in entrepreneurship in Africa. I also thank all our sponsors and readers for your continued support.

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