Pax Mercatoria and illiberal political systems: Russia and China

Russia China Map

The concept of marker pax mercatoria is defined by political scientist Jim Chen, a professor at Michigan State University, who claims that the market and globalization can produce system stability: “In the public sphere, pax mercatoria represents the peace dividend that develops when free trade makes nations too busy and too rich to fight.”

Chen argues that the market is capable of eliminating the reasons for a clash in achieving a common benefit. We have already written about it: the market does not solve the problems of representation, social justice and the ecological and environmental challenge, states are complex and evolving systems, endowed with history, identity and culture, but it is the economy that determines time and needs.

The great history of these years is characterized by the affirmation of a Weltherrschaft of illiberal systems. However, the hegemonic wills of China and Russia clearly diverge.

China has made the markets of the world its own to assert its power, and it believes it has time on its side. It erodes the aspirations of neighboring countries through a slow process of definition of Lebensraum and financial crushing through credit leverage. Russia sees its time running out, flexes its muscles, arms its guns and declares war on the West as if we were in the 18th century.

The Russian rhetoric of Sergei Kagaranov – Putin’s ideologue – speaks of the great return of Russia after the collapse of the Soviet Union and the years of disorder and disarray after the fall of the empire.

https://www.rt.com/russia/550271-putin-doctrine-foreign-policy/

But it is the data of the economy and trade which establish the exact size and relevance of the country that lives on the revenues of hydrocarbons rather than on investments in productive activities. Russia seems to be the daughter of Goncarov’s pen when he tells the life of Il’ ja Il’ič Oblomov, an inept and indolent man who lives on income.

Let’s get to the numbers: Today the GDP of Russia is little more than that of Spain and less than that of Italy

https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=RU

 The GDP per capita is only $ 10,000 per year and the population is approximately 145 million inhabitants

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=RU

 The GDP of Russia is made up of 40% gas and hydrocarbons – which following the global green revolution – will be worth much less

The remaining 60% of the Russian GDP is made up of services for 50% and agriculture for 3%. Industrial production not linked to gas and fossil fuels is in fact modest.

https://www.statista.com/statistics/271378/distribution-of-gross-domestic-product-gdp-across-economic-sectors-in-russia/

The GDP of Russia invests over 4% in military spending, where we have the country’s true excellence in armaments and cyber warfare.

https://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS?locations=RU

A few days ago we pointed out how the green turning point – the revolution necessary for the economies of the world as well as the world – directly affected Russia, which has a backward economy. Moscow had banged its fists on the table and had gotten more time before methane gas was excluded from European energy plans.

Joseph Stiglitz, from the pages of the Internazionale, recalls that these will be the years in which large hydrocarbon producers and large companies will try to reap extra profits, because energy consumption models are changing. The Russian choice is that of an oil company, which seeks to change the rules of the markets when its concessions are completed.

https://www.internazionale.it/magazine/joseph-stiglitz/2022/02/24/il-modo-giusto-di-affronte-l-inflazione

Angelina Davydova, on the pages of the BBC website last November, described the inertia with which Russia faced the ecological transition and the decline of traditional fuels, with the belief that the game is not yet over: “In the next 20 to 30 years, industries related to oil and gas will remain one of the pillars of Russia’s economy,” says Alexey Miroshnichenko, first deputy chairman of Russia’s state development bank, VEB. “Even in the long term, renewable and conventional energy sources will coexist.”

https://www.bbc.com/future/article/20211115-climate-change-can-russia-leave-fossil-fuels-behind

Parag Khanna, in his 2016 essay on geopolitics Connectography – the maps of the future world order, observes that “if many post-Soviet borders are arbitrary and malleable, border pipelines are permanently connected to the resources of underground hydrocarbons.

“The one on which it owns the territory under, or through which the pipelines pass… for Moscow it is the alteration of its gas exports that constitutes an act of war, not the killing of its masked mercenaries engaged in eastern Ukraine.”

To deter Russia, threaten its role in the green economy. The rhetoric of the great Russia or the madness of a leader alone in power is literature for lovers of living rooms. The major strategic analysts from Paul Kennedy to Luttwak see Putin’s moves as a military and economic gamble, the children of a tactical rather than strategic decision-making process, in an interdependent, connected and green world that he does not know or refuses to recognize.

https://www.ilgiornale.it/news/mondo/lgramma-luttwak-ecco-perch-putin-inciamper-ucraina-2013365.html

https://www.corriere.it/politica/22_febebruary_27/paul-kennedy- economy-russia-non-reggera-urss-c17fabea-973e-11ec-ae45-371c99bdba95.shtml

The nuclear threat remains, a relevant issue, but the greatest global concern is the stability of economic and exchange systems, energy prices and global trade.

A few weeks ago Andrei Kolesnikov and Denis Volkov of the Carnegie Moskov Center wrote:

“As Moscow finally wakes up to the reality of climate change, the prevailing attitude among members of the ruling class appears to be that there is enough oil and gas to keep the state coffers full, buy voters’ loyalty, and control civil society and the media for as long as the country’s current leaders are in power (until 2036, when President Vladimir Putin may at last have to step down). What comes after that does not concern them: “After us, the deluge.”

https://carnegiemoscow.org/2021/11/24/coming-deluge-russia-s-looming-lost-decade-of-unpaid-bills-and-economic-stagnation-pub-85852

The theme is not unprecedented, because the end of the golden age of hydrocarbons represents the great theme of contemporary geopolitics. The tensions of the Arab countries of the last twenty years and of Salafi Islam, up to the response of the most prudent administrators, such as Muhammad bin Salman and his “Vision 2030” for the modernization of Saudi Arabia, up to the new season of Dubai and United Arab Emirates open to finance and tourism.

https://www.economist.com/middle-east-and-africa/2020/07/18/the-end-of-the-arab-worlds-oil-age-is-nigh

In the article The era of gulf’s oil empire is coming to an end published in “The Print”, David Fickling wrote:

“The monarchies have surfed a remarkable tide of wealth over the past half-century or so, but every wave eventually crashes. Future generations will never again see the wealth that current subjects enjoy. ” 

Let’s move on to the conclusions. We can read with keen interest the twentieth-century rhetoric of Kagaranov, the Kremlin ideologue, about the Russian redemption after the years of humiliation, the Empire, the beacon of civilization for the world, the spirituality of the third Rome and its encirclement by of hostile forces, up to Russkij Mir, or the Russian world, which includes all the countries of the former Soviet Union.

We can read Kagaranov, considering the framework of imperial thought, but the subtle idea remains that Putin’s gamble – who can ever consider him reliable – was to overturn Greta’s greentable to reaffirm the status quo and the primacy of hydrocarbons, not wanting to give up the largest gas reserves in the world, the only ones that support a country with an old and obsolete economy and its own elites.

https://sciencenorway.no/economy-foreign-affairs-russia/why-is-russias-economy-doing-so-poorly/1935453

https://www.worldometers.info/gas/gas-reserves-by-country/

The article was originally published on the Italian language site www.altriorienti.com

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