Ukrainian authorities traditionally try to comment on the tragic events in Iran based on the ingrained “clip consciousness”. This is especially true in state decision-making centers as basic sovereign institutions.
Only a monstrous tragedy with a Ukrainian plane, for reasons as yet unclear, forced the Ukrainian politicians to “delve” a little into the problem.
Until this moment, the Persian Gulf zone, where one of the most destructive international confrontations of recent years is about to begin, was perceived by our politicians including the incumbent president exclusively as a “zone” of tourism and recreation.
Some experts began to actively assess the impact of events in Iran on world oil prices, while others started talking about the rise in the price of gold, while forgetting to note that international prices for the above goods began to rise since September 2019.
The world was preparing for a possible reincarnation of the global economic crisis, which, most likely, would be not cyclical, but growing (cumulative) in nature, and for a possible regional exacerbation in the Middle East: both Trump’s rhetoric and Tehran’s actions gave rise to constant reasons for this throughout the past year.
Why is this situation important for Ukraine? We’ll not talk about gold and oil, but about strategy. The seemingly well-established format of globalism is being replaced by a new, more flexible concept of global defragmentation. A resurgent neo-British “empire” will play a special role in this context as part of such major world economies as the USA, Canada and Great Britain after Brexit, but with its center in Washington and not London. “Neo-Empire” can be arbitrarily called the “New Atlantis.”
Next to this dynamic and economically aggressive mega cluster is its “alter ego” – a surprisingly “loose” eurozone with blurred political, military ambitions, more declarative than real values and an economy that has become more and more stuck in an “eternal recession” and the trap of Eichengreen’s “middle income.”
In fact, we have an invisible transatlantic split, which can be compared with the global fault between two tectonic plates. The Eurozone is axial Germany and peripheral countries plus France’s “complex role”.
Iran’s theme has already highlighted the fundamental differences between these global entities: Europeans are withdrawing their military from Iraq, not wanting to share responsibility for the toxic effects of the US regional strategy.
In the near future, New Atlantis will try to consolidate its dominant economic position, for which the discrimination strategy of the so-called “global south” will be actively applied, I mean China, India, ASEAN countries, the Russian Federation, and Latin America, and even some African economies. This discrimination can be manifested through energy and transactional shocks.
The United States at that moment became a surplus economy in terms of energy balance: coal, oil, natural gas – everything is exported. At the same time, America is well aware of the devastating consequences of the energy crisis of the 70s, when the Arab countries imposed a fuel embargo against the United States.
The crisis of the global supply is exactly what can be done with the “global south”, depriving it of energy resources (or providing it with expensive ones) and single-handedly dominating the world fuel market, using oil and gas as a factor in the competitive advantage of the national economy, when you have energy resources cheap and competitors have expensive ones.
The Gulf War could block oil flows from the region for a long time, and sanctions against the Russian Federation will do the same in terms of slowing the pace of development of new fields in Russia. Transactional costs mean the disconnection of particularly “guilty” countries from the SWIFT system.
At this moment, Ukraine runs the risk of becoming stuck in a negative dualism: on the one hand, the “European identity” spelled out in the Constitution and the vector of European integration, and on the other, strategic cooperation with the United States. While the two tectonic plates were at rest, such a policy was possible, as evidenced by the example of Poland. Well, and when they come into a state of “friction”, it will be practically impossible to maintain a balance.
Turkey, which at one time, like us, lived by the illusion of rapid European integration and moved much further than Ukraine along this path, tried to build strategic relations with the United States and the EU at the same time. But the global changes that are visible to politicians, rather than hologram presidents, have long forced the Turks to formulate answers that are adequate to the challenges.
And there is only one way out of the geostrategic trap in the form of “separation” of global tectonic plates: the resumption of the political subjectivity of the country and the increase in the conditional “degree” of its sovereignty. Only in this format, the country will not be “torn apart” in a situation of global “friction.”
But can the current government in Ukraine, albeit not on a Turkish scale, but renew the country’s subjectivity and increase the “degree” of sovereignty? The question is rhetorical.
At the beginning of 2018, a very important event changed the trajectory of the peripheral development of the world economy and according to the good old tradition, it was almost never noted in the Ukrainian expert environment. We are talking about the signing by Iran and the Eurasian Economic Union (EAEU) of an interim agreement on the creation of a free trade zone.
The interaction of Iran and the Russian Federation is based on a joint opposition to Western sanctions, primarily American. At this point, the EAEU includes five countries: Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia.
The reason for this integration lies in the macroeconomic theory of “economies of scale”, which was formulated by the American economist and Nobel laureate Paul Krugman. According to his theory, any quasi-state conglomeration with a population of 250 million to 300 million people is the optimal system for the production and consumption of goods and services.
If these parameters are not maintained, a systemic imbalance begins. An economic system with a population of more than 300 million people needs sales markets and increasing exports: otherwise, it will not be possible to ensure the employment of the population. If the number of people is less than 250 million, you become dependent on imports: it is already unprofitable to create national production across the entire line of goods.
It is this theory that explains US economic dominance. This country is an ideal cast of the theory of “economies of scale.” By the way, following its postulates, the idea of creating the EU arose – this is the same ideal ratio.
This theory found a lively response in the academic environment of the Russian Federation. They quickly calculated that if the population of the USSR was 280 million, in this case, the Union could be reformed and maintained without trade and economic integration with the Western world.
That is why the global survival of Russia directly depends on its ability to form a new integration core because the parameters of the federation do not allow it to create a sealed economic model. At first, the customs union should have become such a core, but without Ukraine, it was not possible to reach the optimal parameters. Now the Eurasian Economic Union is such a platform for connecting Lego of 250 million people.
If the EAEU expands due to the inclusion of Iran and Uzbekistan, then a quasi-union with a population of 285 million people and a GDP of $ 2.2 trillion will appear on the map. Along with the economic aspect, the ideological also plays an important role.
In fact, we are witnessing the emergence of a new theocratic union of countries in which the basic state ideology means not generally accepted democratic values and humanistic principles, but a theocratic form of organization of society with a weak interspersing of so-called sovereign democracy, the principles of which were formulated precisely in Moscow and Tehran.
It will be based on a state-supported religion: Islam in Iran and Uzbekistan, Orthodoxy in the Russian Federation and Belarus reinforced by post-Soviet ideology in the form of a hybrid mixture of capitalism and socialism. Kazakhstan in this system is both a hostage to the geographical location and a mixture of all these elements in one bottle.
Well, the nearest watershed between US and EU policies may go through transactional sanctions against Iran. The United States may impose sanctions against the SWIFT system if it continues to service operations with Iran and its related companies when they want to completely block them in Washington.
As a preventive measure to form an independent policy on Iran, the EU applied the so-called blocking regulation, according to which the extraterritorial sanctions of the United States do not apply to European companies.
EU High Representative for Foreign Affairs and Security Policy Federica Mogherini, while in New York back in 2018, announced the launch of a project to create an alternative system in the EU that could ensure financial transactions with Iran bypassing U.S. sanctions radars. As planned by European functionaries, this system may well develop over time into a more global project.
For Ukraine, this whole story is important in that we need to somehow absorb this new reality: economically, ideologically (informationally), politically (diplomatically). And for this, you need to develop a completely new ideology in all of the abovementioned three aspects.
What kind of concept this might be is the topic of a separate article, but it is now clear that the political tools currently being used (more precisely, their absence) are absolutely not suitable for this.