Navigating the ‘new normal’: Understanding our new multipolar world

Two and a half thousand years ago, Greek philosopher Heraclitus posited, “The only constant in life is change”, and nowhere is that clearer than in our modern world.

The story of human history and the rise and fall of empires and clash of civilisations is testament to this inescapable and universal truth, the era of multipolarity that we are now wading into is just the latest incarnation of this reality.

However, few moments through history have borne witness to the era of multipolarity that will come to characterise global and regional affairs over the coming decade and century.

The globalisation of the world which began in earnest in the 15th century and eventually evolved into post-Second World War and post-Cold War order, built upon America’s shoulders and its commitment to building international consensus, global prosperity, stability and peace is coming to an end.

For Australia, this marks a major departure from the historical norm that both our policymakers and the Australian public have grown “fat, rich and happy” under and a direct challenge to the complacency which continues to dominate our policy making.

Where we have historically enjoyed the global primacy of our primary strategic benefactor, in the British Empire initially and then the United States following the fall of Singapore in 1942, the era we are now entering is shaping up to be vastly different to the competition of the 20th century, more akin to the Napoleonic-era than many would like to believe.

The emergence of multiple competing centres of economic, political, and strategic power – ranging from north and Southeast Asia to the Arabian Peninsula and north Africa, the Indian subcontinent, alongside traditional centres of power across Europe – serve to highlight this new reality.

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While still in its infancy, this new, multipolar world will come to shape Australia’s future stability, security, and prosperity over the future century, with the changes expected over the next decade to be the most transformative.

Accordingly, navigating these challenges will become of paramount importance for our future, but first, we have to understand what we could be dealing with.

A US in decline, a middle power UK, and a European basket case

No matter who wins this year’s presidential election, there is no escaping the divided, diminished and declining state of the contemporary United States.

At home, the American people are divided and polarised, inflamed by both domestic political factors, further capitalised upon by foreign adversaries in Russia, China, and Iran to name a few.

These issues are compounded by a political and managerial class who, at best, have downright apathy for middle America and, at worst, actively despise them while also presiding over the collapse in the value of the US dollar since the decoupling of the gold standard in 1972 and the US national debt skyrocket to be worth US$34 trillion (AU$52.16 trillion) or 124 per cent of the nation’s gross domestic product by December 2023.

Meanwhile, the US population stands out as one of the fattest, unhealthiest demographics in human history, highly sedated with record volumes of opiate and anti-depressant abuse fuelling or perhaps capitalising upon social dislocation and listlessness to drive an explosion in private or household debt at US$17.5 trillion (AU$26.84 trillion) for end of quarter four 2023.

This demise in public confidence across middle- and working-class America has been driven further by the continued US involvement in costly (both in terms of blood and treasure) foreign wars that have stretched the US capability to provide broader global stability, while leaving the nation’s borders open and actively whittling away at the industrial base that once secured liberty, freedom, and human dignity at the height of the Second World War and provided opportunity to generations of Americans.

All of this ultimately bodes ill for the long-term and enduring capacity of the United States to act as the undisputed economic, political, and strategic hegemon across the globe. Indeed, we are already seeing the harsh reality of this unfurl in real time in the Red Sea.

Across “the pond”, in the United Kingdom, things don’t seem to be faring much better and despite what the naysayers might protest, things have not been doing well since before the Brexit vote in 2016.

At the government debt level, His Majesty’s government has racked up £2.65 trillion (AU$5.12 trillion) or 100 per cent of the nation’s gross domestic product, with a population living under the highest tax burden since the Second World War, despite a crumbling infrastructure, while services like the National Health Service continue to falter in spite of growing budgets.

Personally, the British public has £1.83 trillion (AU$3.54 trillion) or 120 per cent of gross domestic product. This is further compounded by declining heavy industrial capacity in the United Kingdom and its own growing levels of domestic disharmony, division, and increasing ethno-religious tensions between natives and migrants, and then between migrants themselves, adding to the tensions.

This powder keg has also given rise to mounting cases of modern slavery among migrant communities, all the while the British government has openly lost control of the United Kingdom’s borders with record channel crossings and a failure of multiculturalism, according to former home secretary Suella Braverman, which has resulted in a phenomenon that has seen more British Muslims joining ISIS than are serving in the British military.

All of this has a dramatic impact on the British Armed Forces which has increasingly faced budget cuts, “austerity” measures, each with a dramatic impact on the defence capability and national security of the United Kingdom, let alone its status as a global power, despite the best efforts of former prime minister Boris Johnson and his “Global Britain” initiative.

If all of this sounds depressing, don’t worry, it gets worse.

Europe, true to form, is perhaps our most entertaining basket case, amid demographic collapse and migrant challenges, mounting domestic political, economic, and societal tensions, particularly between southern European countries and wealthier northern European countries and, of course, the ever-present threat of Russia on their borders.

This trend has also seen once-mighty European industrial powerhouses like Germany steadily undermine its own economic, political, and industrial sovereignty for the sake of striving forward with its transition to renewable energy via energy dependence on Russia’s vast natural gas resources.

Further compounding this is the growing recognition that Europe’s military forces aren’t fit for purpose to face down the growing aggression from Russia and any global tensions that may require or necessitate European participation. Russia’s invasion of Ukraine in 2022 has only served to highlight the declining capability of Europe’s militaries and the supporting defence industrial base to meet Ukrainian demand despite the reassurances of Europe’s leaders.

This is reinforced by economic modelling and analysis conducted by PricewaterhouseCoopers which stated that major European economies including the UK, France, and Italy will significantly decline when compared to global competitors that would see the, “UK could be down to 10th place by 2050, France out of the top 10 and Italy out of the top 20 as they are overtaken by faster growing emerging economies like Mexico, Turkey and Vietnam respectively”.

What this leaves us with is a divided, declining United States stuck in the narcissistic spiral we have seen dominate US culture and politics arguably since 2008 and a lack of commitment to global responsibilities, as domestic politics, coupled with the ever-increasing pressure of public and private debt, will hinder the economic vitality of the United States.

For the United Kingdom and continental Europe. we see rising waves of European nationalism across the continent with elements of ethno-nationalism driven by waves of migrants who haven’t integrated into their new homes, coupled with declining economic opportunities creating a powder keg for the collapse of the European Union and rapid “Balkanisation” limiting Europe’s presence and capacity to act globally.

Based on these factors, it is hard to see how the powers of the “old world” will be capable of “righting the ship” without a major course correction away to provide a truly viable and sustainable global presence by 2035.

The ’Dragon’ and ’Elephant’

While it sounds gloomy for the world’s established powers, it isn’t all good news for the world’s emerging and revisionist powers, but they are nevertheless, in many ways, in a far less vulnerable and precarious position than their American and European counterparts.

Beginning with the People’s Republic of China, the mounting economic challenges facing the Chinese Communist Party are well acknowledged, with major challenges facing the Chinese real estate market following decades of explosive growth that has, in many ways, prevented Australia’s own slide into economic obscurity and recession.

Nevertheless, one can’t ignore the immense economic and industrial capacity of China, which has benefited immensely from the period of hyper-globalisation which swept through the Western world in the aftermath of the Cold War, and saw China rapidly become the “factory of the world” following the economic liberalisation initiatives spearheaded by Deng Xiaoping beginning in the late-1970s and early-1980s.

As a result, the world has seen China’s economy explode with a range of industries, from textiles and large-scale consumer goods to heavy industry including commercial and naval shipbuilding, arms manufacturing, auto-manufacturing, renewable energy infrastructure, steel, and other key industrial inputs and a host of other industries, leaving the Western world’s economies hollowed out.

In order to soak up excess capacity as well as building a global network of pseudo-alliances, there are initiatives like the Belt and Road Initiative (BRI) to re-establish China as the true Middle Kingdom at the centre of contemporary global economic, political, and strategic affairs, while securing China’s access to critical raw materials, food, energy supplies and, of course, consumer markets as part of a broader industrialisation plan.

However, nothing lasts forever and the chickens have come home to roost, with the fallout of the one-child policy now facing a demographic collapse unprecedented in human history, with subsequent economic, political, and strategic implications with the potential to utterly devastate Beijing’s ambitions for the global order.

Highlighting this is US strategic policy analyst Peter Zeihan who explained, “Chinese fascism has worked to this point, but between a collapse of domestic consumption due to demographic ageing, a loss of export markets due to deglobalisation, and an inability to protect the imports of energy and raw materials required to make it all work, China’s embracing of narcissistic nationalism risks spawning internal unrest that will consume the Communist Party...’

“China absolutely faces deindustrialisation and deurbanisation on a scale that is nothing less than mythic. It almost certainly faces political disintegration and even de-civilisation. And it does so against a backdrop of an already disintegrating demography,” he explained.

Despite all of these challenges, China is still on track to being the world’s largest economy by 2050 according to detailed economic modelling and analysis conducted by PricewaterhouseCoopers, which would see China responsible for 20 per cent of the global GDP by 2050, dwarfing the US and EU economy, respectively.

This leaves Australia, in particular, in an extremely vulnerable position as the nation has actively hitched its economic wagon almost exclusively to the Chinese horse, as the rising superpower transitions to a more stable demographic and population model which could, according to some estimates, see China’s population halve by the end of the century.

Shifting to the Indo-Pacific and the globe’s other emerging superpower, India, the story is a little different as the ancient power has been a little slower to enter the globalised economy, but is rapidly expanding its economic, industrial, political and strategic influence, establishing the nation as the second great anchor nation of the Indo-Pacific.

Once open to the globalised economy, India’s economy has steadily exploded with the economy rapidly rocketing up the global rankings to be the fifth largest economy now in the world, according to the International Monetary Fund. However, this success isn’t without major structural challenges, like GDP per capita which is still lagging dramatically, with the rising power ranked 139th globally.

This hasn’t stopped rapid Western investment in India and support for the rising superpower’s industrialisation, with companies like Apple, Boeing and Ford setting up shop, and even by defence companies like Lockheed Martin investing in the country in support of Hindu Nationalist Prime Minister Narendra Modi’s “Make in India, Make for the World” policy to rapidly industrialise and expand India’s industrial base to help expand the nation’s global and regional prominence.

But as mentioned, this economic development isn’t without its challenges, with India falling behind in the development of science and technology to power economic growth, where China spends 2 per cent of GDP on research and development, compared with India’s 0.7 per cent.

This also further complicated by the reality that China’s workforce is vastly more productive than India’s, stemming from a number of factors, including the respective number of their workforces affected by poverty and nutrition levels. This is highlighted by the 2022 UN State of Food Security and Nutrition in the World report, where 16.3 per cent of India’s population was undernourished in 2019–21 compared with less than 2.5 per cent of China’s population.

Shifting to the strategic domain, India has equally sought to expand its tactical and strategic military capabilities and partnerships in order to counter Beijing’s increased antagonism and adventurism, particularly in the Himalayas and Indian Ocean, which has seen the rapid development and expansion of the nation’s naval, land and air forces, drawing on both Russian and Western technologies and capabilities to level the playing the field.

But while we share a common threat, this doesn’t necessarily mean India will always side with the post-Second World War “rules-based order”, particularly when its major powers are in a state of weakened disarray. Former Australian high commissioner to India, John McCarthy, highlights this stating, “India will differ radically from the West on some questions. True, as the Ukraine war has progressed, India has put some daylight between itself and Russia. But it declines to impose sanctions on Moscow. Both countries benefit from Russia’s sales of oil to India.

“And never a proponent of the Western-inspired liberal international order, India is also a leader of the disparate – but re-energised – global south, effectively the developing world,” McCarthy stated.

The competition between these two major powers will serve as the main focal point for the Indo-Pacific over the coming decades, in some ways more so than the competition between the United States and China. For Australia, this reality is further complicated by a lack of understanding, or perhaps naivety around the influence of history, ethnicity, and religion on the relations between these two nations and their immediate neighbours.

Equally, the role of ethno-nationalism in both nations, particularly driven by Han Chinese and the Hindu-caste system, adds an additional layer of complexity in the strategic environment, where these nations will put their interests first without consideration for the second and third order affects, in the form of “transactional realism” through those respective prisms.

Ultimately, this will serve to further compound the demographic, economic and societal challenges creating a powder keg of hostility and competition that will leave Australia and its interests at home and abroad in the Indo-Pacific increasingly vulnerable.

Final thoughts

In the second part of this short series we will take a closer look at the broader emerging powers of the Indo-Pacific like Indonesia, Vietnam, South Korea, and the Philippines and the broader global environment that will become increasingly powerful and influential pillars of the new, multipolar world.

There is no doubt that Australia’s position and responsibilities in the Indo-Pacific region will depend on the nation’s ability to sustain itself economically, strategically and politically in the face of rising regional and global competition.

Despite the nation’s virtually unrivalled wealth of natural resources, agricultural and industrial potential, there is a lack of a cohesive national security strategy integrating the development of individual, yet complementary public policy strategies to support a more robust Australian role in the region.

While contemporary Australia has been far removed from the harsh realities of conflict, with many generations never enduring the reality of rationing for food, energy, medical supplies or luxury goods, and even fewer within modern Australia understanding the sociopolitical and economic impact such rationing would have on the now world-leading Australian standard of living.

Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia, this is particularly well explained by Peter Zeihan: “A deglobalised world doesn’t simply have a different economic geography, it has thousands of different and separate geographies. Economically speaking, the whole was stronger for the inclusion of all its parts. It is where we have gotten our wealth and pace of improvement and speed. Now the parts will be weaker for their separation.”

Accordingly, shifting the public discussion and debate away from the default Australian position of “It is all a little too difficult, so let’s not bother” will provide unprecedented economic, diplomatic, political and strategic opportunities for the nation.

As events continue to unfold throughout the region and China continues to throw its economic, political and strategic weight around, can Australia afford to remain a secondary power, or does it need to embrace a larger, more independent role in an era of increasing great power competition?