Our fragmenting world

“Brexit” has stunned the world, but as early as the late 1980s the mighty rumble of watershed historical events should have warned us that it was coming: The fall of the Berlin Wall in 1989 and the collapse of the Soviet Union two years later was the harbinger of a new order struggling to be born.

Some call Britain’s decision to exit the European Union the rebirth of nationalism, with its xenophobic feature; others, the revenge of populism and the revolt of the dispossessed as the protected, uncaring privileged class tries to ward off the pent-up hunger for justice of the unprotected members. I think it’s all the above.

Brexit comes close on the heels of the grave refugee problem and the economic crisis in the continent which can be linked to the turbulent and destabilizing conditions in the European-Asian region. Looming large in many British minds is the specter of terrorism and the unacceptably high social costs embedded in the refugee problem: Their common refrain is: If the European Union has become helpless, ailing and dysfunctional, what is the point of remaining in it and sinking with it? “Better to be sovereign in our country than subservient to bureaucrats of the weakening union, so at least we have some control over our actions and destiny,” as one Brexit supporter put it.

The phenomenon of disengagement and nationalism is gathering steam: Exploiting the opportunity presented by Brexit, Scotland and Northern Ireland are threatening to secede from the United Kingdom. Recall that Scotland nearly succeeded in a close referendum in 2014; witness Donald Trump’s promise to build a great wall at the US-Mexican border to keep out Mexicans, and his platform of isolationism and America’s disengagement with the rest of the world (i.e., getting out of Nafta and Nato). And, there is perhaps no better symbol of the rising populism-nationalism than our own President-elect Rodrigo Duterte, who won convincingly on the strength of his image as a Machiavellian leader who will brook no nonsense from criminals and the establishment alike in his desire to fix the nation’s socioeconomic problems and make it more independent of the big powers.

What we are seeing can very well be the beginning of long-overdue reforms in key international structures put up largely by America after World War II: the United Nations (which began with 51 member-states and now has 193) and the Bretton Woods Institutions (BWI) composed of the International Monetary Fund (IMF) and the World Bank (WB). Together with their Eastern variant, the Asian Development Bank (ADB), these bodies were designed to prevent future global conflicts by uniting and connecting every nation in a web of interdependency and cooperation through dialogue, finance, trade, investment, and a cadre of technocrats who speak the common language of numbers, concepts and principles.

BWI was actually designed for Europe and Asia, the spawning grounds of WWII. The United States that emerged as the greatest power after the war feared the rise of regional hegemons who would aggressively reassert themselves through war (read: Germany and Japan), unless they were pacified by prosperity and interdependence. It worked splendidly for five decades as international trade, fueled by rising exports, ensured an orderly, manageable market-oriented world (where Germany and Japan thrived). Even communist powers like Russia and China became part of the “capitalistic” system, although both grumbled that the IMF, WB and ADB, as well as the World Trade Organization, were actually adjuncts of Wall Street and the rich industrial countries.

That vast, complex interdependent system held together and has given rise to a measure of stability and peace since 1946. No wonder Fukuyama ecstatically declared that 1991 marked not only the end of the Cold War but also “the end of history” itself, as the Western brand of democracy and economic system would triumph inexorably over all other systems well into the distant future.

But history has a way of thwarting the best-laid plans of men and nations. Ironically, the cracks appeared in the very key instruments of economic progress that drive an interdependent, globalized economy: free trade and exports. Among government planners, it is an article of faith, writ in stone, that booming trade and hefty exports meant economic prosperity and social stability. The monkey wrench was, of course, the 2008 financial meltdown on Wall Street that derailed the Chinese economic bullet train in 2012. With the recession in America and Europe, export-dependent economies like China, Russia and Saudi Arabia suddenly found themselves with a shrunken market. Germany, Japan and South Korea are also export-oriented countries, but they have the domestic consumer base to soften (at least temporarily) the impact of falling exports. But other, less resilient major players like China and Russia can’t stop the economic bleeding caused by plummeting exports by making the difficult transition to a domestic-driven economy for this simple reason: They don’t have enough middle-class domestic consumers to buy the goods earmarked for high-end international markets.

Walden Bello’s advocacy of reforming the system through a decentralized, pluralistic system of global economic governance (deglobalization), which allows countries to follow development strategies sensitive to their own values and history, now deserves a closer look.

The bottom line is that economics, new cybertechnologies that empower people from all walks of life,  and global terrorism of the jihadist variety, which triggered the dangerous refugee crisis in Europe, have changed the rules of the international playing field.

When under attack, nations (like individuals) assume either of two survival modes: Fight back aggressively or flee into a sanctuary. It is evident that in today’s fragmenting world, more and more nations choose to withdraw defensively into the comfort zone of their homelands.

Narciso Reyes Jr. ([email protected]) is an international book author and former diplomat. He lived in Beijing in 1978-81 as bureau chief of the Philippine News Agency.