Block economics and geopolitics: from the Madrid summit to the Hiroshima meeting

in the historic city of Hiroshimaunfortunately, marked in human history, as the first destroyed by genocide nuclear- Group of 7 most powerful economies of the planet met to consider their geoeconomic and geopolitical strategy in the face of two fundamental realities of our time.

These realities are: the war of Russia vs. NATO fighting in Ukraine; and the basis of commercial and, potentially, military war, against the People’s Republic of China, redirected as a conflict between NATO+Japan+New Zealand+Australia, in the army and the European Union – converted to the political branch of NATO in Southeast Asia. Ukraine and Taiwan they become the source of conflicts (economic, military, geostrategic), in the rearrangement of hegemony and economic blocs, which breaks the dynamics of the globalizing economy and the globalist discourse of the 90s. It seems that this brings us to the polarization of the asymmetric and polyvalent axis whose epicenter Washington and Beijing. Pivots, depending on whether it is technology, finance, trade or military alliances. Polyhedra that change depending on the problems and according to what corresponds to the short-term, medium-term or long-term interests of the actors involved.

In its position as the undisputed hegemon since 1990 and the configuration of a unipolar world, USA promoted economic and financial globalization, the most expressive institutional expression of which was The World Trade Organization (WTO) and China’s integration into the International Monetary Fund. In this scenario, world wealth growth skyrocketed, largely due to conversion China in the factory of the world, a fact expressed in unprecedented growth rates that have resulted in China having a gross domestic product equal to or higher (depending on how it is measured) than the US. On the other hand, this same scenario of globalization enabled the emergence of the colossus of the world economy: India, Brazil and South Africa. Their wealth, as expressed by their respective GDP and growth rates, meant that, collectively,

Brazil, China, India and South Africa (the so-called BRICS) already in 2019, they represent 23% of the capitalist world economy, 18% of global foreign trade, but 42% of the world’s population, 30% of the planet’s territory (see https://www.infobae.com /america/ world/2019/11/13/ what-are-brics-and-what-weight-they-have-in-the-world/).

That unusual weight gain and accelerated growth of these national economies – strongly intertwined with the world economy – is not only an expression of economic strength, but an unusual increase in technological, scientific and educational capacities, along with the improvement of the living conditions of the masses who have literally passed from the world of hunger to that of consumption societies. Only India faces a structural problem due to the caste system, which is a brake on the very development of what could be the largest internal market in the world, since it is the most populous and the largest country. population growth today is not China, but India itself (1,429 million people).

On the other side, Indo-Pacific and nations like Indonesia, Thailand and Iran are experiencing unprecedented development ($1.2 trillion GDP in 2021, for Indonesia, USD 438 billion in the case of Thailand; and USD 460 billion in 2002.1 for the Iranian side, according to World Bank,).

From perspective World Bank rankingthe ten largest economies in 2023 are: USA, China, Japan, Germany, India, UK, France, Italy, Canada and Brazil. (On this issue, see: World Economic Outlook (April 2023) – GDP, current prices (imf.org). According to the same organization, the world economy would be worth 96.53 trillion US dollars in 2020, compared to only 33.84 trillion in 2000. (See https://datos.bancomundial.org/indicator/NY.GDP.MKTP.CD).

Let’s recall that GDP expresses the monetary value of final goods and services produced in an economy in a certain period (usually a year). In real terms (constant 2010 prices) the values ​​would be $86.86 trillion compared to $48.35 billion in the mentioned years. According to the IMF, Growth projections are 2.8% for the global group, while advanced economies will grow only 1.3% and emerging and developing economies 3.9%, with slightly more optimistic values ​​for 2024.

Distribution of GDP by large blocs, shows that only 5 countries concentrate 51% of Alluded world GDP (US$95.5 trillion), namely: USA, China, Japan, Germany and India (which would be worth 25, 18.3, 4.3, 4 and 3.5 trillion current dollars in 2022

The second block of countries, (France, Canada, Russia and Italy), with the average value of their GDP close to 2.2 trillion dollars, would constitute economic forces that, added to those of the first group, would monopolize 66% world GDP. We finally have a block from emerging powers such as Iran, Brazil, South Korea, Australia, Mexico, Spain, Indonesia and Saudi Arabia, with nominal GDP ranging between $1.9 and $1 trillion each. That way, the rest of the world (175 countries) totals only a trillion dollars.

Economic and population dynamics mark the path of the future, under the influence of the technological and scientific dynamoespecially in terms of resource control (mainly energy, such as gas, coal, uranium and lithium) and innovation such as Artificial intelligence, computer nanotechnology and biotechnology.

In short, the production and trade of these goods and services (from fuel to techno-scientific means and services) are the areas where war is being waged today, facing the decline of the unipolar order, the emergence multipolar order. made This is why it is paradoxical that those who were once promoters free trade (USA and European Union), today they are rooted in protectionism and the use of unilateral economic and financial sanctions in the fight against rising powers, eager for free access to markets.

However, the productive foundations of this struggle will make conflict scenarios move to areas like Africa or Latin America, rich in resources with successful population growth, which will force us to rethink strategies beyond what he proposed. Declaration from Hiroshima and the NATO doctrine published in Madrid (June 20-23, 2022), i.e. the redesign of foreign policy European Union according to the guidelines suggested by Joan Borrell in her

appearance before European Parliament (May 12, 2023), which pari passu, follows advance orders from the White House and they contradict what Presidents Sánchez (March 30, 2023) and Macron (April 2023) said, preceded by Chancellor Scholz on his pilgrimage to Xi Jinping in September 2022.

I don’t know if the citizens who are placed in the “European garden” know what their leaders are playing with, but they are certainly playing with fire: China is Europe’s main trading partner. According to European Comission the daily value of trade between them is 1.9 billion euros (see: https://ec.europa.eu/commission/presscorner/detail/es/ip_22_4547).

As you can imagine, the foreseeable end war in ukraine It will not be the end of the conflict, but rather a painstaking prolegomena of an ongoing redefinition of the world order that will involve far more war than peace without calling it a name. name, in Hiroshima, G7 members allude to China, when they express concern about his “coercive business practices” and pledge to oppose “malicious policies” in illegitimate transfer of technology or disclosure of information. As with Russia, the strategy set by Washington calls for reducing dependence on Chinese investment and trade.

(See: infobae, 20 May 2023; or text of the Declaration at https://www.g7hiroshima.go.jp/en/documents/ ) The parallels and strategy could not be clearer. And they cause the least doubts, because it was the USA and their European allies who apply unilateral sanctions and threaten to tighten them against countries like India that trade with their enemies and
opponents. In short, the world is “separated”, it is divided: it is good to go knowing where you are stepping and with whom you are playing.