The Global South has long been a battleground for global power competition. While US economic and political influence in the Global South has waned in recent years, Russia and China have stepped up their investments in the region and it’s paying off. The first article featured this week looks at how Russia’s long-term investments in the Global South have prevented many nations from speaking up against its war with Ukraine. On the other hand – as our last two articles explore – global food and fuel inflation, due in large part to Putin’s war, is sparking global unrest and threatening many regions’ recovery from the Covid-19 pandemic. Finally, we take a closer look at China’s framework for an alternative global system that seeks to replace the US order.

Putin and Xi’s Bet on the Global South

Gerald F. Seib, The Wall Street Journal

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Following Vladimir Putin’s invasion of Ukraine in late February, Western leaders announced sanctions whose intent was to turn Russia into an “international pariah.” In the months since then, Russia’s long-term investments in the global south have shown their resiliency, with nations across Africa, South America, and south Asia cautious to provoke the energy giant. This seems to be the intentional result of a strategic plan co-authored with fellow authoritarian Xi Jinping in China – the reorientation of the global axes away from an East-West bent and towards a North-South alignment. China’s Belt and Road Initiative is the preeminent example of this thinking, which pours billions of Chinese yuan into developing economies to curry favor. Even as the West reforges its internal ties in the midst of Putin’s aggression, the strength of the global south’s economic ties to China and Russia, combined with a widespread perception of the US’s incompetency at handling world affairs, has prevented Russia from being isolated as a result of its attack on Ukraine. If the US is to combat this new methodology, it will need to come up with creative solutions to rebuild its soft power and reestablish goodwill among developing nations. Otherwise, the West may see its influence die.

How China Wants to Replace the U.S. Order

Michael Schuman, The Atlantic

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While China has been eroding the foundations of the Western liberal order for years, only recently has it laid out its framework for an alternative system. President Xi Jinping expounded on what China’s governing principles would be in its Global Security Initiative (GSI), the platform used to legitimize China’s activities on the global stage. While many of its statements are wrapped in milquetoast language about promoting “security for all” and “maintain[ing] peace and stability,” in the context of a looming confrontation with the US many of the precepts hide dangerous implications for liberty and human rights. Even as the platform has given China room to air its grievances of the current order (ideological leverage to the US and its allies, the power of democracy as the sole legitimate form of government, suppression of China and its allies), China has frequently failed to uphold its own principles (an aversion to “unilateral” sanctions, for instance, is undercut by China’s own sanctions of Australia). As such, the treatise effectively hands authoritarian leaders moral authority to continue pursuing their own interests without meaningful accountability structures. The US-led global order has faults – there are weaknesses in structure and execution that must be addressed to further the cause of liberalism. But China’s proposal for an alternative would be a step in the wrong direction, and a conflict between the two systems of governance seem destined for a clash. The US must work diligently to shore up and repair the pillars of freedom if they are to withstand the onslaught of autocracy.

A region caught between stagnation and angry street protests

The Economist

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Latin America is bouncing back quickly from the Covid-19 pandemic, rebounding 6.8% in 2021, but the deeply rooted problems of inequality and political instability were made worse by the pandemic. Prior to the pandemic, Latin America endured a relatively long period of economic stagnation brought on by the end of the 2000s commodities boom. The pandemic recovery and Russia’s war on Ukraine have brought another commodities boom to the region for the time being, but the region is at risk of falling back into stagnation (growth rates of 2% or less) if the necessary reforms aren’t implemented. Latin America is arguably stuck in a development trap: “Politicians across Latin America have proved unable to agree upon and implement the reforms that the region needs if it is to grow faster, which foments more social discontent, which in turn makes both politics and government harder.” The region’s environment of high inequality and low growth is caused in part by a concentration of economic and political power, widespread political and social violence, and by social and labor systems that exacerbate economic inequality. Despite its woes, democracy has survived in Latin America, but it is under severe pressure as the rule of law weakens and distrust of government institutions spreads. Reforms are long overdue, but they have also become much harder to do.

Costly food and energy are fostering global unrest

The Economist

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Rising inflation is crushing living standards and sparking protests around the world. Russia’s war on Ukraine has sent food and fuel prices soaring. While many governments would like to cushion the blow, many cannot due to debt burdens and rising interest rates. Though Putin may be to blame for a good bit of global inflation, people blame their own governments. Historically, unrest increases as food and fuel inflation increases. The Economist’s statistical model built to assess this relationship found just that. The Economist is also ringing alarm bells for the coming months. Spending on imports of food and fuel is set to increase as are poor countries’ debts, therefore, the Economist’s model finds that many countries will see a doubling of “unrest events” in the coming year. A paper by Sandile Hlatshwayo and Chris Redl of the International Monetary Fund (IMF) finds that the strongest predictor of future instability is past instability. According to their research, the probability that a country will experience severe social unrest in a given month quadruples if it has suffered unrest in the previous six months and it doubles if a neighboring country has experienced it. No one can be sure which country will “explode” next, but places that were precarious before the surge in food and fuel prices may be tipped over the edge. One such place is Turkey where inflation is officially reported to be 73% but is likely much higher. Other countries of concern are Kazakhstan, where Russian troops were brought in to suppress civil unrest in January, or Tunisia which has a history of unrest and has “all the harbingers of havoc”. The expectations of unrest in places like China or Turkmenistan are low as their regimes would undoubtedly squash any uprising with force. Global unrest could very well hamper global growth. Another working paper from the IMF and World Bank finds that large outbreaks of unrest are on average followed by a percentage point reduction in GDP, concluding that unrest does indeed hurt economies. When the unrest is motivated by both political and socioeconomic factors, the loss of GDP is worse. The better, cleaner government that protesters around the world fight for is exactly what countries need, but it takes time to get there: “The short term will be turbulent”.