Putin’s war is ushering in a new age of inflation and disintegration - by Jeremy Warner - 09.04.22
The Ukraine conflict threatens to irredeemably divide the global economy and end 30 years of global growth says Jeremy Warner in this article for the Telegraph
Bifurcation – the division of something into two branches or parts – is the word increasingly used to describe our geo-politics.
The recent crisis in Ukraine may have been the catalyst but underlying developments in East-West relations have been concerning analysts for much longer.
Taken together they all serve to undermine the fundamental goals and objectives of the G20 which now finds itself more divided than ever according to Jeremy Warner in an article for the Telegraph.
Not least of which is who should be allowed to attend the summit. Janet Yellen, the US Treasury Secretary has already signalled her opposition to certain parties being present for the forthcoming meeting of G20 finance ministers later this month:
“I’ve made clear to my colleagues in Indonesia that we will not be participating in a number of meetings if the Russians are there,” Janet Yellen, the US Treasury Secretary, told members of the House Financial Services Committee last week.”
But out in the wider world, Russia is not regarded as the pariah which many in the West would have us believe:
“A number of G20 countries, including Britain’s supposed ally, India, feign neutrality, while one or two appear overtly to back Russia’s actions.
The Arab world had to be dragged kicking and screaming into support for western sanctions, as well as voting for Russia’s suspension from the UN Human Rights Council.
Most continue to prioritise their western ties over any alliance with Moscow, but it is with evident and growing lack of enthusiasm.
As for China, it is plainly increasingly embarrassed by the “no limits partnership” it signed up to with Putin, as well as dismayed by Russia’s failure to execute the land grab with the ease Putin promised.”
What may this mean for us all in the long run?
“It is still too early to say definitively that the world economy is dividing irredeemably into two, and in the process kissing goodbye to the unfettered globalisation of the past 30 years.
Yet this is now unambiguously the direction of travel. For both sides of the divide, it is proving a rude awakening.”
Like any divorce this ‘separation’ may not be easy, clean or even practical:
“If the sort of sanctions that have been applied to Russia were to be imposed on China, it would be utterly disastrous for East and West alike.
There’s a mutual dependence there which makes it hard for Beijing to lend anything more than verbal support to Putin’s hubris. Ultimately, economic considerations will take precedence over any ideological, or even geo-strategic ones.”
Germany in particular, the de-facto leader of Europe, is still compromised in its dependence on cheap Russian fuel:
“And with good reason, because the German economic miracle is partly built on buoyant sales to emerging markets such as China and Russia, and those buoyant sales in turn depend partly on access to inexpensively priced Russian energy.
In no small measure, the competitiveness of Germany’s energy intensive industries, from automotive, to chemicals, fertilisers and metals, is based on cheap Russian gas.
Pay the going rate internationally for energy, and many of these firms will lose their competitive edge, and perhaps look no better than anyone else.”
The geo-political fall-out from all this is likely be substantial:
“The relative stability of plenty, integration, disinflation and globalisation is fast giving way to an age of scarcity, inflation and disintegration.
It’s a different world, and a much more dangerous one. Oh for the comfortable reassurance of G20 narcolepsy.”
The full article can be read here with this link to the original beneath it:
G20 Summit - 2021