A Large Dose of Uncertainty with Smatterings of Hope

There’s no way to sugar-coat the pill — we are living through the age of uncertainty. The pandemic has coincided with political divisions around the world, which are as profound as those that prefaced World War II almost a century ago. These splits are clearly visible both within countries and between them, and 2022 is set to spring more surprises.

Eastern ambitions leave US officials on alert

While most of us were kicking our heels at home during the first three waves of the pandemic, geopolitical tensions have intensified, above all between China and the USA. Analysts for US pension funds and banks have started to take the possibility of war over Taiwan (Chinese Taipei) seriously. With US financial institutions having an estimated USD 700 billion invested in Chinese companies, they have begun to speculate as to what would happen if conflict broke out.

Meanwhile, Russia is ramping up its attempts to divide the EU and to split the Atlantic alliance. The refugee crisis on the Polish border with Belarus is the latest manifestation of this. Even more serious is the buildup of Russian troops on Ukraine’s borders. President Vladimir Putin has demanded that the West prohibit “any further eastward expansion of NATO and the placement there of weapons systems in the immediate vicinity of Russian territory”.

Western intelligence agencies are increasingly concerned about escalating Russian military activity on Ukraine’s eastern border. President Joe Biden called for a series of meetings with President Putin, in order to prevent the situation from running out of control. Biden’s ratings may be slipping, but he has actually handled a series of difficult foreign policy issues quite well, notwithstanding the mishandled withdrawal from Afghanistan last August. A week of formal talks between US and Russian officials commenced in Geneva on 10 January 2022.

Paradoxically, there are signs that peace may be breaking out in various parts of the Middle East. For the past 15 years, this has been the most neuralgic region of the world. But now Russia has proposed a multilateral security concept for the Persian Gulf, and the Biden administration appears interested. According to Newsweek, the Biden administration has indicated tacit approval for the idea. Its author, the Russian Middle East specialist Vitaly Naumkin told Newsweek that Russia and the USA “have one common threat, the threat of war”, adding that, “Neither the United States nor Russia is interested in having this war”.

Omicron increases pressure on recovery measures and international cooperation

Another reason to be positive is on the scientific front. Governments have taken advantage of the stunning achievements of scientific cooperation around the globe in creating and, in the developed world at least, rolling out a vaccine to get people back working and mingling. This involves permanent improvisation. The emergence of the Omicron variant makes it abundantly clear that the virus isn’t finished with us yet. Just as we thought we had made it through the worst, infection rates rose to record levels on several continents, notably Europe and North America, prompting another round of lockdowns and constrained international travel.

The very presence of Omicron points to a major geopolitical failure. Had the USA, Britain, and the EU diverted more money and vaccines to southern Africa, the chances of such a robust new strain emerging would have been much lower. Until we share the distribution of vaccines more equitably, new mutations will have the ability to send us all back to square one.

The ongoing pandemic has obscured the tectonic shifts in geopolitics which have been underway since 2016, preempted by the election of Donald Trump to the US presidency, and the Brexit referendum. The rapid deterioration in relations between China and the USA represents the most powerful of these shifts. This erosion began before Trump took office, starting when his predecessor Barack Obama adopted the ‘pivot to Asia’ — a move that has become the ‘strategic competition’, if not rivalry, which has accelerated under Trump and President Xi Jinping.

President Biden has not deviated significantly from the Trump line on China, and in recent months the issues of Hong Kong (SAR China) and Taiwan (Chinese Taipei) appear to have ramped up hostile rhetoric on both sides. The Chinese leadership seems to believe that the USA is retreating from its acceptance of a ‘One China’ policy, and that this may be encouraging Taiwanese independence.

We are now seeing saber-rattling on both sides. But for the moment, China and the USA remain mutually dependent in manufacturing and tech, which acts as a brake on any precipitate action in the western Pacific. Biden has also appealed directly to President Xi for the two sides to cooperate on areas of mutual interest, particularly climate change in the wake of COP26. These may be small steps, but they suggest that dialogue between the two is not yet dead.

The Eurozone flexes autocratic tendencies during key leadership handovers

If the world were judged solely on economic performance, the EU would be as important a part of these discussions as China and the USA. But politically weakened by Brexit, the EU faces unprecedented challenges to its authority. This comes in the first instance from within its own ranks, notably from Hungary, Poland, and Slovenia — three member states slipping into autocracy.

For the EU to strengthen its geopolitical influence, this will depend on developments in France and Germany. The new German ‘traffic light’ coalition must reconcile Germany’s dependency on Russian gas with the need to uphold its humanitarian values. The new chancellor, Social Democrat Olaf Scholz, is likely to show flexibility in his dealings with Putin. But the Greens, whose joint leader is the new Foreign Minister Anna Baerbock, will want to emphasize support for Ukraine and the need to stand up for human rights across the former Soviet Union.

A key moment in 2022 will be across the Atlantic, with the US mid-term congressional elections in November. The outcome looks grim for Biden and the Democrat party. Commentators predict they will lose control of both the House and the Senate. This would seriously weaken Biden for the final two years of his administration. Despite this, he has succeeded in persuading Congress to pass his infrastructure bill, allowing the President to concentrate on his big-ticket issues such as climate change. So although we are heading into year three of the pandemic with a grim geopolitical outlook, below the surface one or two green shoots are pushing through.