The global pandemic has had a destabilizing impact on many of the norms and institutions of world governance. For this week’s geopolitical look, we examine how several subsurface trends were brought to light by the crisis, focusing on a contraction of the middle class, lack of faith in democratic norms, and Russia’s increasingly unpredictable domestic and foreign policy. We highlight how a buildup of troops close to Russia’s border with Ukraine has raised concerns worldwide of an escalating conflict. As the global order attempts to navigate the choppy seas of conflict, the stakes continue to rise, necessitating a measured and disciplined approach to governance.  

Millions Are Tumbling Out of the Global Middle Class in Historic Setback

Shawn Donnan, Vrishti Beniwal, Marisa Wanzeller, Shannon Sims, Prinesha Naidoo, Randy Thanthong-Knight, Suttinee Yuvejwattana, Phil Kuntz and Michelle Jamrisko, Bloomberg

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A significant economic trend of the 21st century has been the emergence of the global middle class. This has been a central trend multinational companies have capitalized on over the last several years. For the first time in decades, the global middle class shrank in 2020. According to a Pew Research Center estimate, roughly 150 million people have fallen out of the middle class. The largest declines have been seen in India, South Asia, and Sub-Saharan Africa. Rising inflation and limited access to vaccines are compounding the struggles of the world’s middle class which will, in turn, have a lasting effect on the success of the global economy. The International Monetary Fund predicts the global economy will be 3% smaller in 2024 than it would have been without the pandemic primarily because developing countries will be unable to spend their way out of the crisis like many developed countries can. While the US is expected to end 2021 only 1.6% smaller, India and Indonesia will be 5.2% and 9.2% smaller than its pre-crisis growth trend. The rebound in growth so far this year is being mistaken for lasting recovery and the long-term economic effects are being underestimated.

Russia’s Weak Strongman

Timothy Frye, Foreign Affairs

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Russian President Vladimir Putin has often been portrayed as an “all-powerful, ruthless former KGB man who imposes his will on Russia,” but this influence may be weakening on both the popular and elite levels as the balancing act between the two becomes more difficult. With the oil-fueled economic boom which ushered him into office receding, Putin has had to play an increasingly weak hand to maintain his hold on Russia’s institutions. The consolidation of power into the executive branch is a double-edged sword: Putin may have the authority to make the policy, but the ability to manage every facet of the government is impossible for a single person. No matter how strong the personality of an autocrat, there will ultimately be slippage as delegated authority is used to advance the interests of the delegates. This problem is exacerbated by Russia’s “adhocracy,” a network of companies and individuals to whom the state outsources its dirty work. Cronyism may appease the interests of key elites for a time, but self-interest tends to win out over personal loyalty in the long term. On the other hand, measures meant to increase the loyalty of cronies, such as lucrative government contracts or investment in security services, tend to have a negative impact on public opinion and increase the risk of popular revolt. Russia’s foreign policy navigates similar straits, with the steps necessary for economic growth at odds with Russia’s assertive stance. The tools of personalist autocrats are relatively blunt, and Putin’s grip on public opinion is far from ironclad. The Russian populace has an indifferent view towards the US, and about two-thirds see the West as a potential partner rather than as an enemy or rival. To combat this, the Kremlin has increasingly had to lean on force as a suppressive measure, as made apparent in the treatment of opposition leader Alexei Navalny and his supporters. Such measures tend to be self-amplifying as repression increases dissent in the masses and complacency in the ruling class, enhancing the divide which prompted the show of force in the first place. Putin’s grip on Russia seems cemented for the short- and perhaps medium-term, but in the long-term today’s “equilibrium” is unsustainable; a change is inevitable. The question is how long Putin will be able to hold on to power.

Two Andean Elections Reflect an Age of Global Discontent

Ishaan Tharoor, Washington Post

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Over the weekend, both Peru and Ecuador held presidential elections. The elections themselves reflect a growing discontent with government not just in South America, but across the world as we struggle to elect competent, strong leaders who can lead us through times of crisis. The pandemic has exposed weakness and vulnerabilities in Peru and Ecuador’s economy and in their national institutions. In a display of protest and frustration, millions of Peruvians cast their vote for “no one”, leaving their ballots intentionally blank. Fernando Tuesta, a political science professor in Lima, expressed the situation well, “The pandemic has left a state with holes in it and enormously frustrated citizens, who reject politicians, and are not very interested in the elections.” In Ecuador, Guillermo Lasso, a millionaire ex-banker, barely beat out Andres Arauz, a leftist technocrat who was a proxy of former populist president Rafael Correa. In Peru, a variety of political scandals and corruption cases have plagued the nation. Pedro Castillo, a self-proclaimed Marxist, narrowly won the election against Keiko Fujimori, the daughter of former dictator Alberto Fujimori who is imprisoned for human rights abuses. The polarizing elections have heightened uncertainty and discontent at a time when each country should be focusing their efforts on a strong and united pandemic recovery.

Is Putin About to Launch a New Offensive in Ukraine?

Peter Dickinson, Atlantic Council

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A Russian military buildup on the border of Ukraine has sparked international concern about an escalation of the seven-year conflict between the two countries. While some see the move as an intimidation tactic against Ukrainian President Zelenskyy and a test of resolve for the Biden administration, others worry that the domestic pressures of Russia’s September elections and Zelenskyy’s firm sovereignty stance could be fueling an imminent offensive. President Biden and the State Department responded with a groundswell of communication with Kyiv, indicating their support for the country. William Taylor, Vice President of the United States Institute of Peace, called Ukraine the “front line of Russia’s war with the West,” adding that Russia has declared war in a variety of nonmilitary ways already. While Atlantic Council Senior Fellow Anders Åslund has seen similar buildups in the past seven years, this one seems particularly worrisome given the popularity of a “short, victorious war” in elections and the US’s transitional state. On that latter front, the Biden administration has made a show of support for Ukraine, but several experts have urged the administration to back up their words with sanctions against Russia if it does not de-escalate. Brain Whitmore of the Atlantic Council emphasizes the context of this buildup, pointing out Russia’s increased presence in Belarus and expanding military infrastructure in its westernmost oblast. While Taras Kuzio of the National University of Kyiv Mohyla Academy emphasizes the steep political cost of an outright military action, Putin’s saber-rattling could still have desirable outcomes for Russia without outright conflict (see Georgia’s 2008 conflict in South Ossetia, which enabled Russian troops to intervene and humiliate Georgia’s then-president Saakashvili). On the whole, the troop buildup near the Ukrainian border is a concerning development in an already-tense relationship with broad international implications; the West would do well to act swiftly and wisely to prevent escalation.