International commerce used to be dominated by flows of goods and services between the big Western economies and the developing world – with the “advanced nations” generally dictating the terms. Over recent decades, though, there’s been a surge in trade between the developing countries and emerging markets themselves, bypassing the “leading countries” altogether.
As the developing and emerging economies’ share of the global economy has surged from one-third to more than a half of global GDP over the last ten years, they’ve done increasing amounts of business with each other. Such “south-south” flows, just a few percentage points of world trade as recently as 1990, rose to a fifth by 2004 and now account for almost a third of all cross-border commerce.
William Hague was on rather shaky ground when he argued this week that Moscow has chosen “the route to isolation” by recognizing Crimea’s referendum. On the contrary, it is the European Union and the United States who look as if they have seriously overplayed their respective hands in Ukraine. Across Asia, Africa and Latin America, the cry of “Western hypocrisy” has been heard much louder than complaints about Vladimir Putin.
Even in the UK, mainstream opinion is steadily becoming more critical of Western interventionism and our “New Cold War” posturing – despite some pretty one-sided media coverage and much establishment “tut-tutting”. Independent thought is still viewed with suspicion, and even disgust, by some – and I should know, having consistently argued we should negotiate with Moscow, not threaten tough sanctions we’ll never impose.
I’ve been struck in recent days by the growing gulf between conflicting points of view towards the crisis in Crimea. I’m not referring to the firmly held differences in opinion between respective governments in London and Washington on the one hand and Moscow on the other. What I have in mind, after numerous conversations and broadcasts about Russia and Ukraine over the last week, and having closely followed events in this region for many years, is the polarization of opinion within the West itself.
As far as our politicians and diplomats are concerned, Russia remains the Cold War enemy, our implacably foe, where little or nothing has changed since US President Ronald Reagan dubbed the Soviet Union “the evil empire”. Never mind that the USSR collapsed almost a quarter of a century ago, or that it was 31 years ago yesterday that Reagan made that speech.
Who cares if post-Soviet Russia has transformed itself, via the chaos of the 1990s, from a closed, sclerotic, planned economy based on armaments and commodities, into a nascent capitalist society, well-integrated into global commerce and, unlike any other large emerging market, with a fully-open capital account?