Russian President Vladimir Putin made his first foreign visit to China since leaving office. “These two men seem to be inseparable” (Le temps) and “Moscow and Beijing underline their common goal of reforming the global order” (Der Spiegel).
Meanwhile, the headlines are dominated by the “peace conference” to be hosted by Switzerland, while the Russian armed forces continue their offensive to create a “sanitary zone” in Kharkiv to protect the border regions of Belgorod and Kursk from Ukrainian long-range rocket and artillery attacks.
Dr. Pascal Lottaz is an Associate Professor for Neutrality Studies at Kyoto University’s Faculty of Law. He received his MA and PhD from the National Graduate Institute for Policy Studies (Japan) and specializes on neutral actors in international relations, especially on neutrality during the two World Wars and during the Cold War.
Let’s start with Russian President Vladimir Putin’s first foreign visit since his re-election. In Beijing, Putin and Xi signed a declaration on deepening comprehensive partnership. What do you think about the nature of relations between Russia and China?
The relationship is now definitely deepening even further but the relationship is very much one of economic nature, not military as it is sometimes portrayed in western media. Russia and China are not in an alliance, but they are partnering to enhance each other’s economic, technological, trade, etc. fortunes and build an alternative trade system from what we have known over the past 30 years after the end of the Cold War when all trade was essentially tethered to the US Dollar and US-led trade institutions. The fact that Vladimir Putin brought almost his entire government with him to China and especially the governor of the Russian central bank as well as the finance minister tells us that the talks are strategic and go very deep. My best guess is that they are working on financial mechanisms that would smoothen trade and probably function as preparatory steps towards mechanisms in the larger BRICS club.
A peace conference is being held in Switzerland without Russia’s participation. What does it mean that heads of state are meeting to discuss peace in Ukraine when one of the two main actors is not at the table?
I’m very skeptical toward this “peace summit” since it obviously can’t achieve peace. If they called it “peace process summit”, that would make more sense, because that’s even what the president of Switzerland’s federal council said what it is, a step in the process toward a peace. So, while I think the approach for a proper peace summit is wrong–which would obviously need Russia at the table, something might come out of it. And we see that some nations that are very skeptical of the West’s approach, like Hungary, also see it that way because they are willing to participate while still criticizing the approach. I think the summit was originally planned as another step in the pressure game that had been going on of naming and shaming Russia (adding in sanctions) to increase diplomatic pressure on it, since the summit is an outcome of these “Zelensky Peace Formula” meetings that had been going on several times and the rhetoric is still the same from the West at the moment, that the Zelensky Peace Formula has to be the backbone of a peace agreement.
However, what this might morph into is kind of the West’s consolidated starting point of a real peace negotiation and hence the outcome of the summit might still be useful in some sense as it might open avenues for actual negotiations. I’m not sure this is what it will be but in the most optimistic scenario, the outcome document might be something that the Russians (and some third-party mediator like China) might actually be able to work with in some sense. But maybe that’s just my hopeless optimism speaking. It’s very well possible that the entire affair will go down as simply another Western PR stunt to make it seem as if though “the whole world is against Russia” which is neither true, nor will it move the Russian’s even an inch from their course. We have seen many, many such moments in the past, and this one might become another one.
Today, the global South is back. It is a geopolitical phenomenon rather than a coherent, organized grouping. Do you think these countries represent a new pole in the world?
Absolutely. The way the Global South, as it is now called, has come to the fore is really unprecedented. This is often compared to the Nonaligned Movement of the Cold War, but what we are seeing is much bigger and stronger than that. We are seeing independent poles emerge, China and India first and foremost, but others, too, like Iran and Brazil that used to be pretty constrained by the rules of the game that the US and Europe forged, but by now they are much less constrained and are able not only to coordinate but to act in ways we haven’t seen before. The way in which Iran just was able to assert itself vis-a-vis Israel and the US would have been impossible just a few years ago. But now the US actively tries to avert yet another war because it has reached the limits of its power-projection capabilities and that is also true in the economic realm where US and EU policy is now confined to ever more sanctions (that backfire rather than coerce others) and to pleading and threatening other states, since they lack actual methods of implementation of their demands. We saw this recently with Janet Yellen going to China to beg them to export less to third markets in which the US wants to compete and then by Tony Blinken going over to demand the same but backed up with threats of even more sanctions. And sure enough, now the sanctions are coming but they won’t be able to achieve the goals since the real issue is not Chinese vehicle exports to the US, it’s that US vehicles are not competitive in 3rd markets and that’s something that’s simply out of the realm of US sanctions. So, we are seeing the US sanction system coming apart. It still carries weight but less and less so in the Global South which is now for the first time emancipating these states to go alternative routes. This is very new and the US as well as the EU are utterly unprepared for it. 500 years of Western dominance are coming to a close.
I’d also like to mention the phenomenon of Javier Milei in Argentina. What does the rise of right-wing populist or even outright fascist movements around the world have to do with the financialization of the global economy? Is this rise an anomaly or is it part of a process deliberately orchestrated by the ruling classes?
Well, Milei was able to tap into economic grievances in Argentina, of which there were plenty. I would be careful with the word “fascist” as it is not clear to me that he is aiming for that kind of state organization. To me, Milei is just an outrageous form of Margret Thatcher, who won over people with a lunatic discourse of what the economy is about—an utterly distorted view of economic reality, as I see it. Ironically enough for Argentina, his policies will most likely produce the exact opposite of what he is promising, and drive the country even deeper into financial crisis from which then only the US will be able to save it (since most of Argentina’s external debt is in USD), which, in turn, will hand over the Argentinian economy to the US (even more than before). That is very similar to what happened in Russia after 1990. But to be fair, we have to wait and see if that’s the case. I just can’t see any scenario in which ditching Argentina’s sovereign currency and “dollarizing” (or some softer form of that) is going to be beneficial to Argentina. You need a sovereign and working currency to have any kind of hold over your economy, so Milei’s policies are in my view suicidal for the political economy of Argentina. But you are right, the process will benefit a relatively small elite in Argentina that is already hard-wired into corporate US, and will profit from being the ones who sell out Argentina’s remaining national assets, or function as the middle men to control them. We see this with examples in Guatemala or even Haiti, in which very, very small elites live, work, and have their kids in Florida but still control large parts of wealth in their home countries and they are the first ones to cheer up any kind of economic coercion against their countries as long as they might produce more profits on the top. It’s capitalism at its ugliest but this is still how it works in weak, western economies.
