The World Order Is Changing: But is Brexit Faltering?

The World Oder is not changing in some big convulsion, but it is changing bit by bit. Much of it could be for the better, but as yet we cannot tell where it will end up, so we cannot arrive at an informed conclusion.

America remains the biggest economy, the most technologically advanced and the richest country in the world. It is the foremost military power by a wide margin, although some of its strike platforms, including its huge naval battle groups led by nuclear carriers, could prove vulnerable in top rank conflict to the latest missile and cyber technology.

Russia is politically much more assertive than in the immediate post Communist period, but it is economically dwarfed by America and China. It is the world’s second military power and has a tradition of ‘smart’ weaponry and tactics enabling it to surprise in major conflict. Its defence budget is in total smaller than the increase in the US total just proposed by Trump. But Russia occupies the greatest land mass of any country on the planet, which is rich in every mineral and fossil fuel. Much of this remains undeveloped as does its under populated interior, offering huge opportunity for economic development and growth.

China’s rise is well documented and does not need to be explored here in detail. It is the third largest economy, the second largest military spender, yet in no sense a military power on the scale of the US. It is a very big financial player with a vast investment programme now fanning out across the world. It remains full of poverty in some of its regions, whilst others display enormous wealth. Its heavy industries are old fashioned, but alongside them new world class innovation and production in all the latest technologies is gathering pace. In the last ten years China has built more new High Speed rail miles than all of the rest of the world put together. Unlike Russia, which has become a type of democracy even if it keeps electing the same people, China remains Communist. But it is a form of communism which would be unrecognizable to Karl Marx and which essentially makes China the number two capitalist nation.

Now for the EU. In 2016 the EU was the second largest economy after the US. Change is afoot here and there are some structural problems, but there is now a greater chance they will be resolved, following political changes in France and the rise of Germany as the top European power. Greater integration of the inner eurozone with its own finance ministry and more democratization of its institutions is now much more likely than before. The euro is probably safer than it was, although those in it may reduce. There may now be an outer ring of members in the single market and customs union, but an inner euro core driving forward to ever closer union.

What is really different is the posture of the United States. So too is how the rest of the world views the US. America is hugely powerful, but it is no longer the only power. In the new globalized world, with the economic model under scrutiny through populist pressure unknown for decades, there are now several centres of power and influence. First comes America, then Europe, China and Russia. But following on are Japan, India and others. Unusually there is now more that binds them than separates them; more adversaries and threats, economic and physical, common to them all, than perhaps at any previous time in history.

But the days when only the American voice counted are over. So are the days when there were two competing ideologies or blocks. Now everything is interwoven and interdependent. Perhaps for the first time, we are all in it together.

And where is Britain in all of this? Sadly just at the moment it does not know. What we do know is that the cost of the Brexit project is beginning to bite. Before the fateful referendum, we were the fastest growing economy in the G7 and growing a lot faster than the EU. We are now the slowest in the G7 and the EU economy is now growing faster than the UK. The OBR, set up by the Tories to monitor government finances independently, says that if the UK were a bank it would not pass the financial stress tests that its own banks have to pass. This is not good. Nor is it quite what people thought they were voting for. Curiously the UK may be exerting more influence on Europe by leaving, than it ever did belonging. And if the result is real change on the continent, it is possible that we may choose to stay after all. The greatest political event for generations outside of war, Brexit, may be the spark of change across the world order, yet not itself actually happen.