It has been a year since the conflict in Ukraine broke out. By now, it is clear that western sanctions on Russia failed to reach their desired outcome. Instead, they backfired in the most anticipated way: a full-blown energy crisis that derailed into a cost-of-living crisis. But the conflict has had ramifications beyond measure upon the rest of the globe. Not only have trends of de-dollarization emerge in several parts of the world, but there has also been a clear shift from the dominance of the neoliberal worldview. De- neo-liberalization accompanied de-globalization.  A maturing process of multi-polarization is now underway.

The conflict in Ukraine may have not been a direct precursor to such trends but it surely has been a spark for long-standing global contradictions. Tensions with regards to the primacy of the dollar and the prevalence of neoliberal western view go way back. In point of fact, the West has traditionally relied on sanctions as the concrete expression of these contradictions. Such is the case of many countries, especially Cuba and the DPRK, both of whom managed to pull through sanctions via state targeted policies and methods of self-reliance. Less secure countries experienced direct military interventions such as in Iraq and Libya whose former leaders attempted to substitute the dollar with other currencies. 

Neoliberalism and its wonders

Globalization and neoliberalism may be used interchangeably. These terms however are not exactly the same. Whereas globalization involves the method of integrating the world through trade and information, neoliberalism entails the envelope ideology of de-reproducing labor. As an ideology, neoliberalism has for long branded itself as an essential cornerstone of freedom and democracy. Its proponents have relentlessly advocated for lifting trade barriers, the dollarization of financial channels, and open and unregulated capital accounts. Together, these guarantee the flow of wealth from the periphery to the center.

With its armada of international financial institutions, its military alliances and selective humanitarian organizations, the West has sought to expand economic and military dominance across much of the world - up to Russia's borders where the conflict is currently taking place. The synergy between the Western military and monetary institutions were of particular relevance to the consolidation of the dollar supremacy. Yet, they required that they be legitimized on the basis of dubious success stories such as the Asian miracle of the Golden Boys of Africa. Evidently, neoliberalism has also subdued the real economy to finance. It has increased the scale of social dispossession and exploitation at unprecedented scales. It has generated a hierarchy between the waste-generator consumer over the value-making producer. It has facilitated the looting of natural resources and surpluses in former colonies by weakening the developing state at the expense of private wealth accumulation. It homogenized comprador classes across the Global South and it created oppressive financial instruments such as the Third-World debt to ensure that the process of resource extraction and usurpation stays put in much of the Global South. Where subjugation by diplomacy fails, militarism enforces compliance to non-compliant countries.

An unexpected 'boom'

One thing the West failed to anticipate was the rise of China. China's boom came as a surprise to many: the once peasant-like nation had suddenly become a competing power on the global stage. And worse, it had achieved an unmatched level of development without the recourse to neoliberal policies. China did not reject globalization but it refused neoliberalization as a benchmark for growth and social development. It managed to raise the standard of living of its entire population as well as that of other nations through investment projects by internalizing surplus and enabling social productivity to unfold. 

The "China threat" narrative has always existed since the onset of communism in China but has recently surfaced as a matter of national security concern since Obama introduced his "pivot to Asia" doctrine. The policy essentially identified China as being a strategic foe to US hegemony in the East Asian region and called for the US to 'pivot' away from the Middle East to China by concentrating US forces on the encirclement of China. It also involved an increase in the US' diplomatic and military ties with China's neighbors, and the establishment of military bases across the pacific. Then came Donald Trump with his republican protectionist agenda, calling for jobs to be returned and industries be relocated to the US from China. Trump set up tariffs and trade barriers and accused China of stealing intellectual property copyrights and unfairly manipulating its currency in a bid to boost its own defense capabilities. The Trump administration was undoubtedly the turning point at which the de-globalization kicked in.

So contrary to what many believe, the Ukraine conflict is far from being a precursor to the process of de-globalization. Rather, it was the outcome of a slow and gradual coming to awareness that globalization had not really paid off for the United States (since China rose). While not reversing the neoliberal ideology, the US had reversed globalization by highlighting the importance of strengthening the US' domestic economy. Europe's energy dependency to Russia was also a triggering point for de-globalization. Europe is a peculiar case because it does not realize that the US is not so much of an ally. Its working class is acting as a mercenary to the world financial class war against Russia by arming Ukraine.

At the brink of collapse?

Europe's economies were partly beaten down as they emerged from the pandemic, and the conflict in Ukraine added up to worsening the situation in a way that has triggered a bloc-wide energy crisis. The EU central bank (ECB) resorted to monetary contraction by raising the interest rate and damaging living standards at a time of business cycle downturn. But unlike the US dollar, the Euro does not bear upon the value of other currencies in the market. It remains low despite rate hikes, making the cost of dollar-priced energy even more significant. 

Since the onset of the Ukraine conflict, the EU said it seeks to adopt new alternatives to Russian gas, yet the lack or absence of other options make it difficult to reach this target. Knowing the EU is struggling to shift to a net-zero economy, the US has outwardly refused to take down its green subsidy program, and instead encouraged EU countries to blow up their gas lifeline by cutting ties with Russia or from buying Russian gas from China. It is obvious that European financial class put primacy in the power game with China and Russia at the expense of a Western working class led willingly to its demise for the many a time over the last century. It so appears that thanks to Western Marxism, the Western working classes have adopted once more the ideology of its capital class.  

Following a series of price caps aimed at choking Russia's energy market, Russia recently decided to cut oil production by 500,000 barrels per day in March. Some interpreted this as Russia having trouble selling its oil and refined products. The reality however is far from this. The move is aimed at curbing inflation while increasing deficit spending. On the flip side, the latest forecast from the European Commission shows that the EU economy is set to avoid the technical recession that was anticipated this year, when de facto Germany entered into recession. 

In sum...

The role of the conflict in Ukraine in this process of de-globalization has precisely been to resituate the global balance of power, the cornerstone for wealth accumulation. Obvious signs of a shift have been noticeable in the Global South, particularly in Africa where several countries have defied western sanctions and chose to align with Russia. But the important aspect of this conflict is that Russian endurance would ease the transition towards a multipolar world, in which the right for one to develop at its own pace will be granted against the diktat of western values.

A Russian victory would likewise inevitably highlight the decline of the American empire since China will have gains to reap from the western displacement of Central Asia and Eurasia. Likewise, with de-dollarization on the rise, less dollars are beginning to circulate on the global market. For an empire that accumulates more wealth as it becomes more indebted, the prospects are grim. Soon it may not be able to print dollars and grow richer at will.