The economic-geopolitical architecture of the world which we are familiar with, breaks up. The turbulence grows. Now, there are players over the world which will compete fiercely against each other. And these players don’t look at the world from the same perspective. They don’t have a common sense about the world. Therefore, they cannot come up with common solutions to the world problems. Reaching ‘consensus’ becomes more and more difficult.

WHEN WRITING THE NEWS,

the reporters usually use the method called “reverse pyramid”. This method foresees a large ‘base’ as much as possible for the introduction of the news. The most interesting notions of the news which a large number of people are curious to know about, are included in the first paragraph. So, as we are journalist, we did the same in this article. First, I would like to emphasize the notions requiring the highest attention. The supporting materials will be detailed in the next paragraphs…

To summarize what I will tell in this article:

The economic-geopolitical architecture of the world which we are familiar with, breaks up. The turbulence grows. Now, there are players over the world which will compete fiercely against each other. And these players don’t look at the world from the same perspective. They don’t have a common sense about the world. Therefore, they cannot come up with common solutions to the world problems. Reaching ‘consensus’ becomes more and more difficult.

USA is worried. Feels insecure. Disconcerted. It’s pessimistic about the future. “The National Strategy Document” declared last December, unveils clearly this perspective. China, declared number one ‘rival’ by USA, is on the rise both economically and technologically. And it doesn’t intend to accept the rules that it didn’t introduce. The future of EU is a question mark. Germany feels worried and is in search of. Except of the Western powers, almost all leading countries including Turkey, try to have a good position for themselves within the ‘global system’ which is about to reshape…

“The trade wars”, going out of control, bear the potential of turning into “a war of hegemony” testing seriously the current economic models and the durability of alliances.

The world becomes more and more a lawless place.

We are dragged to a new generation of “Thucydides Trap”

***

Many things changed in recent years, many many things…

Commenting after the release of the National Security Strategy Document on 18th December 2017, US President Trump’s National Security Adviser General H.R. McMaster announced this new era with the following statement: “The holiday beginning after the end of the Cold War is over. The geopolitics is back at full speed.”

Washington consensus is over. G-20 doesn’t function. The World Trade Organization is weak. United Nations is ineffective. Industry, 4.0, nano-technology, biotechnology are on the agenda, we are at the start of a new economic revival era thanks to the new technologies…

We were hopeful as “the competition among countries is replaced by the cooperation”, “the transformative power of the new technologies create opportunities for the countries falling behind, the world is balanced” etc… But what did it happen?

A fundamental change arises in the functioning of the global system. “Multilateralism” is out. “Unilateralism” is in. To tell in Turkish, “a world order with several parties” is over. Now we have “a world order with one party”…

The protective winds in the economy embrace the politics too. The liberal democracy is threatened by “illiberal” democracy….

The globalization which, in the past, was criticized by the countries like Turkey, concerns now the central countries. And mainly the declining middle class feels unhappy with the globalization… Indeed, Brexit and the election of Trump are the outcomes of this trend… The anti-immigration sentiment dividing Europe and nationalism almost turning into racism too…

***

The cognitive code too is deteriorated…

The idea that “the free market” system is the best one is no more popular as it was in the old days. On the other hand, the general acceptance that “the states should withdraw from the economic activities once they set the necessary rules and environment to help the markets to function freely and smoothly” is no more “general”.

“The State Funds”, the practices similar to the “state capitalism” are adopted by several countries like Russia, Poland, Hungary and even, India. The role of the state doesn’t diminish but grows… The model on which the global system was relying until recently, is no more seen as a model effective enough to solve the problems. The dominant economic, political and cultural hegemony weakens…

***

In this new era, new powers rise in the world…

As US is worried about losing its power of solving the problems of the global economy or politics or bringing an order, China mainly and other players take stage.

Indeed, the figures prove right the concerns of US. In 1989, the end of Cold War where US came out triumphant from, the economic size of US was 5,7 trillion dollars. The same year, China’s economy was worth only 350 billion dollars. Today, US is an economy worth 19 trillion dollars and China’s economy is worth 12 trillion dollars. In other words, in the past 30 years approximately when the Cold War era ended and the globalization has been at full speed, US grew more than three folds whereas China grew more than 30 folds.

***

And the new powers taking stage are not limited with China…

Germany rises as a new economic hub. And after a long time, it began to build again military capacity.

During the last Davos meeting, there were two countries advocating for globalization: China and Germany…

In an environment where the cards are reshuffled, more people foresee the strengthening of Germany-China axis. Soon after G-7 meeting in last May, the German Chancellor Merkel stating that “we, Europeans, cannot trust anymore on others for our security. We should take the helm of our own destiny” was remarkable.

Russia isn’t perhaps “a super power” like in the past but its military power proved both in Ukraine and Syria that it will not be satisfied at all with “a weak” role.

***

The world is reshaped with the effects of the new rising powers. This adds a new mobilization to the world trade and system. The countries are almost forced to a new market positioning.

Given all these developments US, adopting a protectionist reflex, tries to give the message “I’m the king of the world. No one should dare to do a wrong move”… As there’s still time and it’s still powerful, it wants again to outpace the others. This policy lies on the backstage of the new customs duties introduced soon after declaring that “Chinese steal our technology”. Trump believes that they will win the trade war with China. On the other hand, China plans to lose less than US in this war, maybe thanks to the cultural differences and the experiences gained during centuries. Actually, the current landscape in terms of the system’s dynamics, reminds the fight among the big powers in early 1900s.

***

The hegemony competition among powers had similar outcomes in history. Like what happened between the big city states Athens and Sparta thousands of years ago… This competition had resulted to Peloponnesian War in 431 BC between the two main powers of the Antiquity. Time, events and players change but the essence remains the same:

The dominant power begins to be afraid of the rising power. It’s concerned about its future. This rising tension between the dominant power and the new rising power pushes one of the parties to take steps leading to wars or alliances out of its own will.

According to some analysts, these conditions emerged 16 times over 500 years and 12 of them turned into war.

This complex course has a name: Thucydides Trap…

***

US announced that it will apply additional taxes worth billion dollars to the dozen of goods imported from China which it has an annual trade deficit of 375 billion dollars with and whose rise is a matter of concern for US.

The counter attack of China began with “aviation”. It was followed by the agricultural products. And especially, soya bean…

The counter attack of China via soya bean seems to be carefully calculated. US is an important soya bean producer and exporter. Soya bean is also one of the principal foods of Chinese. China imports alone 56 per cent of soya bean exported by USA. And China stated that it’s planning to apply 25 per cent tax to the soya bean.

The soya bean producers in US and several other producers of agricultural goods are overwhelmingly the voters of the Republican Party… China, targeting the industry consisting of mainly Trump’s electorate, points out how the custom duties can reach up to the domestic politics of a country.

If Trump administration will continue to this game, he can be obliged to offer new incentives to the agriculture. And this will force the balances in a way not limited with US. The incentives provided to US farmers will give them advantages over the European and South American producers. This picture may push the South American countries and the European Union to take measures against it.

And here is a “Thucydides Trap” scenario over the recent developments…

***

We can encounter several other trap scenarios. The pieces of the world order began to fall out and they will be eventually reshaped. But how?

This notion is not clear! We can see more or less what is left behind. However, our eyes cannot distinguish yet effectively what’s coming…

What we know is that we are going through a turbulence. The stress over us will grow. If you are a captain pilot, your priority should be “to keep the plane in the air”! If you are passenger, fasten your belt! But it’s not enough. You should build your strategy on turning the tensions of the new era into energy!

It’s up to you to decide how to do it since you know the best your own opportunities and possibilities.

You should only keep in mind that:

Those who own a strength of will equivalent to sudden weather changes and mad waves and combining their energy with intelligence, will have more chance in this struggle!

As the saying goes: Everyone can be captain on calm waters!