Russia’s intervention in Ukraine and the ensuing Crimea crisis is wrongly seen as the start of Cold War II. However, while the fallout from Russian President Vladimir Putin’s defiance of international law and public opinion will be very different from that of the Soviet Union’s long campaign to defeat capitalism, the geopolitical ripple effects are certain to be just as far-reaching, if not more so.
Russia is set to sideline itself from the global economy and by doing so it will usher in a new era in international relations. International sanctions will be only the first consequence. Markets and banks penalize uncertainty, so the Russian economy will progressively be cut off from international trade and investment and consigned to a future of slow or no growth.
That is Russia’s own funeral, of course. The wider consequences will be a shake-up of international politics and of governments’ attempts to address common problems, ranging from global governance to climate change. The result may even be positive, with events in Ukraine unexpectedly opening the way to a significant realignment of fast-emerging countries whose 21st century roles will be decisive.
The first result of the West’s standoff with Russia is that it spells the end of the grouping of Brazil, Russia, India, China and, recently, South Africa (BRICS). For a decade or more, BRICS has been a major feature of world politics, challenging the might and influence of industrialized Europe and the US. However, with Russia set to become a pariah, either pushed out of or withdrawing from global markets and multilateral forums, the days of BRICS summits and institutions, such as the group’s embryonic development bank, appear to be numbered.
The BRICS may not be formally dissolved, but it is hard to imagine that the other four members would be willing to place their own positions in a globalized economy at risk by being drawn into Russia’s quarrel with the world. Bit by bit, the idea that the group represents a coherent voice in world affairs will be quietly buried.
A maverick Russia, bent on pursuing assertive foreign policies and creating a “Eurasian Union” trade bloc, poses obvious dangers. The more important outcome, though, will be how Russia’s former BRICS partners realign with other major emerging economies in the G20.
Cue the arrival on the world stage of MIKTA — a new group made up of Mexico, Indonesia, (South) Korea, Turkey and Australia. These countries’ foreign ministers plan to meet soon in Mexico to discuss a joint agenda on global governance issues. When they first met under the MIKTA banner on the fringes of the UN General Assembly in September last year, the initiative seemed little more than a club for countries that for one reason or another did not qualify for BRICS membership, but fell short of major-power status.
Russia’s self-inflicted difficulties will change all of that. With the BRICS alliance set to be transformed almost overnight into something of a very different character, the way is cleared for a much larger grouping of countries that share many of the same concerns.
What the MIKTA countries share are rapid economic growth and increasing influence outside of their own borders. They have development problems, but they are also models of economic dynamism and innovation with a substantial stake in the way post-World War II global institutions and rules should be reshaped. Many of their challenges and ambitions dovetail with those of the BICS (the BRICS, minus Russia).