GeoPolitical Insight – The sun sets on the legacy of the fall of the Berlin Wall -Matthew Bugeja

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This article appeared first on The Corporate Dispatch Week, published on November 2nd 2019 

The fall of the Berlin Wall on the 9th of November, 1989 was a defining moment in history. It heralded the fall of Communism, and helped to usher in a new period of peace and prosperity for Europe, and indeed the world. At least, in relative terms. Wars continued to rage in places like Somalia, where ethnic cleansing was carried out in places as far apart as Rwanda and Bosnia. Hunger and social unrest were still part of the human condition. Nevertheless, conflict between the great powers of the day, the United States and the Soviet Union, was no longer an imminent threat. The world operated under a certain set of rules and norms that were generally agreed upon by most, if not all, global actors. As they say, there was honor among thieves.


Looking at the world today, closing in on 2020, we cannot say the same. The world has become far more complex than at any point since the fall of the Berlin wall. The end of the Cold War saw the US reign supreme over the global order, and up until the 10th of September, 2001, it seemed as though it could shape events in any corner of the world, at its will (or close to it). What has led us to this point?


Last week, I touched upon several elements that led to the weakening of America’s grip on global power and leadership. Today, I will go into a little bit more detail into my perspective on how and why US leadership of the global order is on life support, why we are entering into what is being called a “geopolitical recession”, and what that means for the world around us.


The United States is no longer interested in leading the global order. That much is clear under the current Trump Administration. Trump’s “America First” mantra is as explicit as they come: the US will look after its own interests first, and generally leave the running of global affairs to others. Whilst his predecessor, Barack Obama, did not use this type of nationalist rhetoric, his inability to commit to a foreign policy vision within the context of America’s leading role in the world saw its credibility wane.


But one could consider three events that weakened America’s image, perhaps irreparably. The 9/11 attacks in 2001 removed America’s aura of invincibility, which was precisely what Osama bin Laden wanted, and struck at core images of its economic and military might – the Twin Towers in New York City and the Pentagon in Washington. The 2003 invasion of Iraq was controversial, fomented by fierce anti-American fervour in the Middle East and cynicism from its European allies. The United States’ image was tarnished. Finally, the Financial Crisis of 2008-09 highlighted greed and excess in the capitalist system – the same system which defeated the Soviet Union twenty years ago with the fall of the Berlin wall. Capitalism is now seen with some wariness in some quarters, with Europe looking to introduce stricter controls on financial markets as a result of the crisis, whilst the US has largely rolled back financial regulations introduced during Obama’s tenure. Whilst Europe has sought to swing to the left on economic regulations, others have swung even further in that direction by adopting China’s state-backed capitalist model. In short, the government is in a position to direct industries to follow through on certain objectives. These industries would be expected to turn a profit, but the government provides them with financial resources and direction, whilst they may be asked to focus their production on key strategic objectives that would further enhance China’s power both at home and abroad. On this score, America’s influence is waning.


Economies go through periods of expansion, followed by periods of correction. Usually, an economic cycle lasts on average somewhere around 6-8 years, depending on the economy and the circumstances. In geopolitics, cycles last far, far longer. One could argue that the current geopolitical cycle traces its roots back to the end of the Second World War, where the US & the Soviet Union emerged as global superpowers, whereas the European nations were economically devastated and politically exhausted. But the fall of the Berlin wall in 1989 represented a revision of the calculus of global power dynamics. The US stood alone. Now, thirty years later, there are challenges to its power, both overt and less so, from nearly every continent on the planet. China and Russia have expanded their diplomatic ties and economic interests into South America and Africa. In the Middle East, the US is no longer seen as a major player in the Middle East. Should Democrats take back the White House for the next administration, it will still be difficult to reverse course on some of Trump’s policy pronouncements and actions. America is less trusted as an ally now than it has been in some time, if you believe in the polls.


I believe that when history is written some years from now, they will view the fall of the Berlin wall as being a bookend in history – the start of unrivalled American dominance. The end of the Trump Administration, whenever that may be, be it in 2020 or 2024, and will represent the end of America as a geopolitical superpower. This does not mean that America’s military might, a measure of whether a country is a superpower or not, will be reduced. But its ability to influence others on the global stage is going away, and it will not be coming back.


What does this mean for the future? A world in which global powers carve up spheres of influence in a more aggressive manner. Issues will be resolved on a regional, rather than a global level more often than not. The world is a dangerous place, and the Cold War threatened nuclear conflict which could have ended humanity as we know it. But we are entering into an 1800s Europe-like struggle for great power supremacy, except with advanced technology.


The fall of the Berlin Wall marked a turning point in global history. But the sun is now setting on the world it once heralded. Now it is a question of what the new world will look like.


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