Chaos as an economic reality

In the past few years, assessing the global situation as ‘increasing chaos’ resulting from the US’s weakening potential for acting as the ‘sole superpower’ capable of effectively regulating global economic and political processes has become a political science banality.

On the other hand, describing the global economy in terms of ‘chaotization’ – a process understood as globalization losing its forward momentum with growing development asymmetries generating geo-economic diversity – is a relatively new trend. Indeed, chaos is the most prominent feature of the current state of the global economy. Although a predominantly political phenomenon in form (in any case, the most vivid manifestations of the growing chaos are political), this process also reflects medium-term economic changes, where political and military-political circumstances, goals and interests play an increasingly important role, and political and military tools are being increasingly used to achieve economic goals.

The most important aspect reflecting the growing role of chaotization in the global economy is the invalidation of the concept of comprehensive global economic influence being indispensable for achieving broader global influence.

This reflects the collapse of ‘mainstream globalization’ that was characterized by the attempt to standardize development models of states in the global arena and strengthening their influence. These models have formed and developed towards strengthening economic opportunities and improving the quality of a state’s and its corporate structures’ involvement into the essential technological chains – preferably, high-tech ones. The new global system implies significantly more complex and multifactorial, multicomponent sources of global influence. De-economization of the world development is, undoubtedly, not linear and perhaps temporary but at this point it has become evident. 

The most important effects of global chaotization include hybridization of operational space of the global economy; the impossibility of further following the fundamental principles of the economy of commercial efficiency that is often equated to the market economy. This requires a completely new approach on behalf of Russia, including when it comes to its relations with economic partners and political allies that is, basically reviewing the basic principle of forming an allied system. Russia’s task is to review its approaches to forming the global multi-polarity. 

Not only Russia but the world in general exists amidst ‘a long-term chaos’ that has remained controllable only indicatively, and for the past five years only at the level of political declarations and targeted application of military and force instruments. 

The current long-term chaos is a complex combination of global, regional and local political and economic interests. Its most obvious features are:

 •         A relatively fast degradation of all main global political and economic institutes, created both during the era of globalization and during the Cold War and the bipolar world (the UN, IMF, the World Bank to a lesser extent). The near-fatal WTO crisis was the most apparent manifestation of a global geo-economic crisis.

•         The emerging demand for an ideology with the appearance of several competing ‘images of the future’. The ideology of the new radical ecologism is one of the most graphic manifestations of this demand, which has reached an advanced level of socio-political planning. But this also means the demand for a possible change in the system of political identification and representation of key economic interest groups.

•         The increasing importance of access to natural resources, and the countries and coalitions’ ability to provide access to the most valuable natural resources such as energy. 

•         The emerging issue of the structure and spatial parameters of geo-economic macroregions that are most important for a global economic development. As of today, none of the existing geo-economic macroregions have a guaranteed status, and their borders are subject to review, which is not always planned.

•         The sharp increase in the amount and effectiveness of information and political manipulations, which reflects both advanced means of communication and a greater vulnerability of the global economy due to growing uncertainty and non-formalization of the dominating investment vector despite declared priorities in AI and biotechnologies.

Obviously, the aspects of chaos altogether show a new format of global economic competition, which can be named geopolitical as it is developing beyond the traditional requirements for commercial efficiency. 

Despite substantial emerging risks, as regards investments Russia is facing more opportunities rather than problems due to Moscow’s expanding options for competition for control over investment space and investment assets with the use of hybrid instruments and attraction drivers related to Russia’s essential opportunity for engaging in investment turnover in various forms within a relatively isolated yet large investment space. For Russia, the key aspect of minimizing the geo-economical chaos effects is developing proper and relevant instruments and enough investment-attractive focuses to accumulate investment resources that have been driven out of global and regional economic systems. 

By Dmitry Evstafiev, Professor at the Communications, Media, and Design Department at the Higher School of Economics

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