By Sangita Gazi and Christabel Randolph

, International Monetary Fund (IMF) states that 鈥榌t]he dollar鈥檚 share of global foreign-exchange reserves fell below 59 percent in the final quarter of last year, extending a two-decade decline鈥�. However, surprisingly, the decline in the dollar is not associated with the 鈥榠ncrease in the shares of the pound sterling, yen, euro, and other long-standing reserve currencies.鈥� Instead, the shift in the dollar鈥檚 share in the reserve currency system went in two directions鈥攁 quarter into the Chinese renminbi and three-quarters into the currencies of smaller countries that have historically played a limited role as reserve currencies. This piece examines the shifts underlying this trend with a focus on increased regional alliances in trade and payment systems technology. We conclude with forecasts and implications for a more multipolar monetary order and 鈥榙ollar diplomacy.鈥�

Since the onset of the Covid-19 pandemic, geopolitical tensions and economic stagnation have led to fragmentation in cross-border trade and payment systems. The ongoing Ukraine-Russia conflict and international sanctions imposed by the Western economies have also contributed to this situation by causing disruptions for countries with trade relationships with Russia, particularly for essential commodities like fuel, grain, and oilseed. Moreover, many countries are running low on U.S. dollar reserves amidst inflation, prompting them to consider alternative currencies for cross-border trade settlements. This is further exacerbated by the aggressive rate hikes by the Federal Reserve in an attempt to contain domestic inflation within the U.S. The historical correlation between the U.S. dollar and commodity prices has been disrupted for the first time. As a result, evidence suggests a degree of regional fragmentation in trade-related activities and the use of alternative currencies, leading to a shift away from the U.S. dollar as the primary currency for international trade. For instance, in March 2023, the yuan was the most widely used global currency, surpassing the U.S. dollar and euro.

Further, central banks from emerging markets and developing economies seek to diversify their foreign currency reserve composition. The shift began in April 2022, after key Russian banks were removed from SWIFT following Russia鈥檚 invasion of Ukraine. China increasingly uses the yuan to buy Russian commodities, such as oil, coal, and metals, settling their bilateral trade with Russia in Chinese currency instead of dollars. In a similar effort, India has made several initiatives to create bilateral trade relationships with countries like Bangladesh, the United Arab Emirates, and Malaysia to internationalize the rupee and use it to settle cross-border trades. This trend toward exploring alternative currencies may affect the global financial landscape. Still, its impact about newer currencies鈥� volatility and regulatory systems.

The Trends of De-Dollarisation and Underlying Reasons

Low dollar Reserve

The trend of dollarisation is the culmination of multifaceted socio, economic and geopolitical factors. Following the abandonment of the gold standard in 1971, the U.S. dollar has become the most prevalent foreign currency reserved by developing economies. The dollar reserve portfolio is seen as a measure of a country鈥檚 economic health and power. Two main factors have shaped the current dollar-based trade and cross-border payments system. First, the majority of global energy transactions are conducted in dollars. For instance, the oil trade involves billions of dollars every day, and since every country requires energy, this leads to a high demand for dollars in the foreign exchange market. Second, the U.S. dollar has become the most credible medium of exchange for cross-border trade settlements. Until 2019, the dollar accounted , 74 percent in Asia, and 79 percent across the globe. However, since the covid-19 pandemic, the swirl of stagnant economic growth worldwide and geopolitical tensions have created dilemmas for emerging economies as they face trade deficits and low U.S. dollar reserves.

In 2021, the IMF reported that 鈥渢he share of U.S. dollar reserves held by central banks fell to 59 percent鈥濃��– primarily driven by short-term exchange rate fluctuations and central banks鈥� action towards diversifying their foreign currency reserves. For many developing countries, more import demands and a downward trend in remittance have been causing the depletion of foreign exchange reserves. Moreover, for developing countries, the rising interest rates in the United States and the appreciation of the U.S. dollar , debt servicing, and borrowing costs, undermining the prospects of their full economic recovery. Under these circumstances, many developing countries depreciated their currencies against the U.S. dollar, such as the Argentine Peso, the Pakistan rupee, the South African Rand, the Indian rupee, and the Indonesian rupiah. To slow currency depreciation, many central banks in emerging economies have been selling their foreign exchange reserves, contributing to the depletion of overall dollar reserves in the world, thus, seeking to use alternative currencies for international trade settlements.

Outbreak of Ukraine-Russia War and international sanctions

The de-dollarisation process has been hastened due to the outbreak of the Ukraine-Russia war and the imposition of economic sanctions on Russia. Following SWIFT鈥檚 ban on Russia, it has been exploring opportunities to establish bilateral trade relationships with various countries involving payment in rubles instead of dollars, partially or fully. For instance, Turkey has agreed to pay for its gas imports from Russia in rubles. Additionally, Turkey has confirmed that five of its commercial banks would use the Russian Mir payment system, enabling Russian tourists in Turkey to use their currency. As part of its efforts to reduce the dollar hegemony and shift to alternative currencies, the Moscow Exchange in Russia has begun offering bonds denominated in Chinese yuan. The international sanctions and weaponisation of SWIFT against Russia have overarching geo-political implications for emerging economies. For countries with strong trade relationships with Russia, the sanctions by the West and SWIFT have created a significant trade barrier, given the rising export costs. As an alternative, developing countries actively try to resort to alternative currencies and use different payment systems to facilitate cross-border payments and settlements. For instance, during 2022, total settlements on the Cross-Border Interbank Payment System (CIPS), China鈥檚 alternative to the SWIFT international payment system, rose 21.5% year-on-year to 96.7 trillion yuan in 2022.

Internationalisation of currencies

In the wake of increasing geo-political risks and the changing economic dynamics, from China, India, and Brazil to redesign the economic order by using their currencies in global trade while cutting the US dollar. Given its dominant position in international trade and the rapid digitalisation of its currency and payment systems, China is among the most active players in this endeavour. Similarly, India has been actively advancing its foreign trade agenda by promoting the use of the rupee in international transactions. As part of its 2023 policy on foreign trade, India has prioritized using the rupee, with neighbouring countries like Bangladesh opting to settle bilateral trade transactions in their respective currencies – the taka and the rupee. Malaysia has also agreed to engage in trade with India using the rupee, while India and the UAE are currently working on an agreement for a rupee-dirham payment mechanism. The central banks of both countries have signed a Memorandum of Understanding to enhance collaboration in financial services, particularly in exploring the interoperability between their respective digital currencies.

Long-term implications on geo-politics and global economy

India鈥檚 offering of the rupee as an alternative currency for international trade settlements is positioned as a mechanism of 鈥樷�� exchange risk primarily based on the dollar. This narrative has longer-term implications as it signals the fragility of the U.S. economy, political processes, and foreign policy. The panic-induced shifting to alternative trading and reserve currencies begs a broader question of whether a dollar hegemony is sustainable or whether this signals a more multipolar global monetary order. The long-term implications of the current trend of de-dollarisation can be assessed in light of a combination of factors:

Firstly, the current de-dollarisation trend is not just one motivated by the necessity of mitigating exchange rate shocks. Instead, it is one of opportunistic competition between regional powers to consolidate economic and political power 鈥� a trend that will likely accelerate. This acceleration will likely be fuelled by emerging economies where governments pursue public policy goals of quick economic development and retaining populist support.

Secondly, of Western democracies, particularly the U.S. and its allies, increasingly focus on Russia and China, leading the fastest-growing economies in the global south to reject divisiveness and that yield better Coasean bargains. According to the report published in May 2023 by the U.S. Department of Agriculture, during 2022-23, despite the international sanctions. Two countries that have substantially are NATO member Turkey, which has seen trade with Russia surge 93 percent, and US partner India, whose trade has ballooned by nearly 250 percent since 2021. Governments in Asia-Pacific, Latin America, and Africa have been forging regional alliances and setting-up institutional arrangements, most notably on trade, data, trade, and payment systems. Trade-based alternative currencies will likely proliferate further as the U.S. expands its protectionist measures by locking-in supply chains under the and tightening scrutiny under .

Thirdly, Western governments have a blas茅 attitude towards leveraging technology to redefine global payment systems, focusing more on supplementing security measures of entrenched institutions. This ignores the sustained efforts of China to like CIPS. Smaller emerging economies like Bangladesh that cannot wait on a resolution of Western conflicts for development or infrastructure projects have leveraged not just alternative currencies but are evaluating the prospects of newer global financial technology systems to continue cross-border payments.

To be clear, amidst the alarming cries of de-dollarisation, the narrative also has its fair share of scepticism. The most apparent and common-sense response is that no currency can singularly replace the dollar. Around 60% of global trade invoicing is settled in the U.S. dollar while using the . Examined every quarter, 鈥淸t]he U.S. dollar accounted for in the fourth quarter last year鈥�, according to data from the IMF鈥檚 Currency Composition of Foreign Exchange Reserves (COFER). Comparatively, the euro is a distant second, while the Chinese yuan accounted for just 2.7% in the same period.鈥� The current de-dollarisation trend is not merely a one-dimensional response or retaliation to the U.S. and Group 7 sanctions on Russia but an outcome of the U.S.’s sluggish and divisive economic and technological statecraft. 

鈥楧ollar Diplomacy鈥� is contingent on the robustness and stability of internal administration, agility in integrating technology in financial infrastructure, and uncomfortable alliances – a craft in which the U.S. is losing ground.

Sangita Gazi is听a Ph.D. researcher in law at the University of Hong Kong and a research fellow at Yale Law School. She writes extensively on the convergence of law, finance, and technologies, particularly from the Global South鈥檚 perspective. Sangita’s X handle is @. 听

Christabel Randolph is Public Interest Fellow at Georgetown University Law Center and a Law Fellow at the Center for AI and Digital Policy (CAIDP). At CAIDP she leads听the legal group’s work on governance of artificial听intelligence, machine learning technologies, privacy and digital mediums in the United听States. Christabel鈥檚 X handle is @.

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In Everyday Politics in the Libyan Arab Jamahiriya, Matteo Capasso provides an alternative analysis of Libya鈥檚 history and regime under Colonel Gaddafi leading up to the 2011 events that sanctioned its fall. The book offers a compelling counterargument to the mainstream narrative of Libya as a stateless, authoritarian and rogue state by focusing on international and geopolitical dynamics impacting Libya鈥檚 governance.

Q.1 Your book argues against the dominant western analysis of Libya under Colonel Gaddafi as a dictatorship, completely dependent on its economic legitimacy from oil. To quote:

鈥�This book has cautioned readers from rushing to define the Jamahiriya as an umpteenth authoritarian regime in the Arab world that crushes and controls its people. The significance of this issue lies in how the increasing repressible characteristic of the regime inevitably reflected wider power鈥�. 

What do you mean by wider power dynamics?

When you pick any book on the political history of Libya, you are bound to encounter the argument that Qaddafi鈥檚 Libya (not the Libyan Arab Jamahiriya or the Libyan government) was a stateless society, governed ruthlessly by a dictator who was aiming to disrupt the US-led international order.听 In the book, I define these arguments as a conceptual tryptic, including the ideas of statelessness, authoritarianism and rogue state. The book starts off questioning the use of these analytical frameworks and instead proposes to address questions of political legitimacy and authority via the study of the everyday. To do so, however, brought me to face another problem, namely the fact that most academic studies approach the 鈥榚veryday鈥� with an overemphasis on the agency and power of the people. This, in turn, has led to dismiss a bit too quickly the impact of global and structural factors; and this is where I come to answer your question. While the everyday gained prominence and became a privileged site for studying politics in the Arab region, especially in the aftermath of the 2011 mass uprisings, these analyses 听remain disconnected from long-standing international dynamics of politics and political economy. In other worlds, how were these states integrated in the wider international political economy? Did the political projects pursued by the Libyan government, especially in the aftermath of the 1969 revolution, challenge the interests of Western geopolitical forces? Why was Libya progressively subject to military assaults and geopolitical pressure?听 If one ignores鈥攔ather conveniently鈥攖hese aspects, it ends up to square one, basically explaining the politics of the country as the result of internal factors. In this manner, one not only delinks the socio-political formation of countries in the Global South from the international world, but also ends up flattening out its hierarchies existing.

Q.2 How can al-Fatih鈥檚 policies be described as anti-imperial and the Revolutionary Command Council (RCC)鈥檚 governance model as socialist? Can we argue that government-led accumulation and despotism simultaneously have a more macro vision of anti-imperialism? Some would say this is a contradiction.

This is a great question, Farwa. I think there are two fundamental points to be raised in order to answer it. First, there is the question of time, which entails providing an analytical explanation to the gradual transformation of al-Fatih. The government was neither despotic nor socialist from beginning to end. In forty-two years, major political and economic changes took place, which reflected the necessities to manoeuvre a changing international order, i.e., the unipolar rise of the US, the collapse of the Soviet Union, the rise of political Islam in the region, and so on.

For instance, whereas the Libyan government tried to pursue and implement redistributive policies and projects of regional cooperation in the first two decades after the 1969 revolution, these policies were gradually reversed by the late 1980s. The revolution had struggled to overcome its dependency on oil revenues, and the working masses had not become self-productive. At the same time, the military confrontation with the West, as well as the imposition of the sanctions created the necessary grounds for delegitimizing the Libyan government at home and abroad, thus defeatism鈥攏ot revolution鈥� became the name of the game. Yet, while the funding and support of liberation movements鈥攁nd by this, I mean the use of direct violence鈥攈ad been a major goal pursued by the RCC, it changed completely in the 1990s. By then, Libya was pursuing a strategy of what we now call as 鈥榤ultipolarity鈥�, namely diversifying its own political-economic integration and alliances, with a specific focus on the African continent. As you can see, these are two different strategies of anti-imperialist policies, which show the necessity to adapt oneself to the changing geopolitical system, but also produce very different results.

Second, contradictions will always be present; yet, as Mao-Tse Dong would argue, what form they take is as fundamental. There is no doubt that the thirteen-years military debacle in Chad, one of the most understudied proxy wars, gave a major blow to the Libyan government. Faced by a military alliance combining Western geopolitical forces (France and the US) together with Israel, Sudan and Saudi Arabia, what were the prospects of coming victorious from that war? Did the Libyan government miscalculate its strategy in Chad? Similarly, if the events of 2011, as history has shown us, turned out to be an imperialist aggression against Libya, why did the Libyan public struggle largely to grasp its nature? As I show in Chapter 3, the ideological and educational grip of the government over the population had progressively failed.  

I think these are examples of how a more productive discussion could be developed in order to gauge the limitations, successes, and defeats of a country of the global South that was wrestling to regain its right to political, economic, and social development.

Q.3 Libya鈥檚 exemplary record in providing free health and education services are now an important reference point of its move towards domestic welfarism. How was this achieved and what led to its demise. 

Once again, there is so much confusion when it comes to Libya, even among leftists. Today, there is a plethora of social media posts rallying the achievements of pre-2011 Libya, where鈥攚e are told鈥攈ealth care, education, and all kinds of other social services were provided with little or no costs by the government. Is this true? Yes and no. This is where we must proceed with an historical analysis of the changing material conditions. For instance, in the aftermath of the 1969 revolution, there are no doubts that the government poured millions in establishing a model of economic development that reached out to the most disadvantaged sectors of society. Unless you ask someone descending from a family of wealthy landowners whose properties were confiscated and redistributed, the economic policies pursued by the government were of a truly progressive nature.  By the mid颅-1980s, these policies boosted economic development in Libya and raised the general standard of living. The rate of infant mortality witnessed a massive reduction, the average intake of calories per day was the highest among the members of the Organization of Arab Petroleum Exporting countries, and life expectancy had increased from fifty-five to sixty-four years old over the course of eleven years. The government had fulfilled many of its promises, transforming slums and unhealthy dwellings into modern tenements, building a wide range of infrastructure and construction projects, such as an artificial river, transport and communication networks, and providing free healthcare and education. These policies translated into a large consensus around and support for a model of political and economic development that challenged the idea of a state-centric and market-oriented world political system.

If you fast-forward the status of the infrastructural development to the 1990s-early 2000s, the situation has changed drastically. From the increasing stealing of public money by private actors to an UN-imposed decade of international isolation, the services provided by the government were not of the same quality. As I trace in the book, Libya never ever reached the levels of poverty and disenfranchisement that Tunisians or Egyptians were experiencing by 2011, yet Libyans were nonetheless dissatisfied because they aspired to see Libya become like Dubai, not Egypt.

Q.4. The book makes an interesting link between US- led sanctions on Libya and the deepening of unequal exchange relations under dependency theory. Can you explain this?

Starting with the US-led unilateral sanctions in the 1970s and then becoming UN-led multilateral ones (1992-2003), Libya fell under the grip of sanctions for more than two decades. Now, as much as mainstream academic analyses tell us that sanctions had a minor impact, this is not the case. Take, for instance, the US ban on spare parts related to the aviation industry. This ban imposed major financial costs on the nascent Libyan sector. The US monopoly over the aerospace industry functioned as part of the process of unequal exchange of technology and impeded the healthy development of a service that was vital to Libya鈥檚 economy. That is, Libya was heavily reliant on the import of products and foreign skilled labour. When a country is prevented from harnessing its resources for national and regional developmental goals, then these economic measures aim effectively to keep a relationship of economic dependency. Once again, by the 1990s, this type of technological control could not be exercised by the US anymore, since European states and other countries had broken its monopoly over the aviation sector. However, the UN-imposed multilateral sanctions had different types of consequences. By 1994, just two years into the UN sanctions鈥� regime, as many as nine thousand medical patients had to be treated outside of the country, since Libya was not allowed access to the necessary equipment to treat them. Medical staff reductions, at the same time, had seriously impaired the functioning of the health services, which were strongly dependent on the expertise of foreign doctors. Archival documents from the United Nations reveal the extent of the impact across several industrial sectors, including oil, transportation, and agriculture. Meanwhile, inflation had reached record rates, at 42 percent in 1993, peaking at 50 percent in 1994.

I am now working on a paper that will hopefully be published soon on the nature of sanctions on Libya, and I would argue that sanctions operate as one among many forms of imperialist warfare, which were unleashed to maintain the dominance of US-led imperialism in the Arab region, and the global South at large. In this regard, sanctions remain a fundamental tool of the imperialist 鈥榮ecurity doctrine.鈥�

Q.5 Libya鈥檚 pariah governance model and identity as an Arab as well African state also deserves attention to regional influences. If we pay attention to Gulf States as class states, following Adam Hanieh, Libyan aspirations based on the Dubai model tell us something about the role of empire in forming consumerist construct. What did Dubai mean for Libya and Libyans? Similarly, what did Libya mean for African states?

This is the focus of Chapter 5 in the book, in which I trace the rise of consumerist desires, as well as the fantasy of turning Libya into the Dubai of North Africa. The book shows that these fantasies are a reminder of the rise of the global to the surface of the mundane, specifically the triumph of global capitalism with Gulf characteristics. These fantasies were symptomatic of the gradual defeat of another vision for the future that had initially sought to build an alternative model of development, largely reflecting the sociopolitical context then prevailing in the wider 1970s African and Asian postcolonial resistance. However, this political model not only showed its internal limitations, but also collapsed under the constant threat of war and sanctions by Western geopolitical forces. Consequently, these more progressive policies that had been pursued were abandoned, metamorphosing into more repressive policies and rising socioeconomic inequalities for the Libyan people. In such a context, meaning in the early 2000s, capitalist modernity was being desired, while the contribution of these same Western-led forces to the defeat of the Libyan Arab Jamahiriya was being ignored/forgotten.

At the same time, the Dubai model competed with another vision of the future that another segment of the Libyan elite was pursuing, namely the Sirte model. In 1999, an official meeting was hosted in the Libyan city of Sirte to proclaim the establishment of the African Union. I describe the model of Sirte, in other words, as incarnating the aspirations of the regime to turn Libya into a bulwark of African regional development. The Libyan government pursued a foreign policy of diplomatic expansion and economic investment toward the African continent. These policies further hindered normalization with the US in particular, because, for example, Qaddafi lobbied the African Union to reject the presence of the US African Command Army (AFRICOM) on African soil, forcing them to relocate their headquarters to Frankfurt, Germany. The Gulf monarchies, on the contrary, have embraced a progressively normalizing stance towards the Zionist-Israeli occupation of Palestine, encapsulated in the signing of the recent Abraham Accords. Also, Libya sponsored and supported the launch of the first African-owned communication satellite, whose creation put an end to lucrative subcontracts for Western countries. And, as we now know thanks to Wikileaks, Libya was planning the launch of important monetary changes for the African continent. It had, in fact, accumulated 143 tons of gold that were intended to be used to establish a Pan-African currency based on the Libyan golden dinar; the plan was designed to provide the francophone African countries with an alternative to the French franc.

Q.6 Where does Libya stand since 2011?

Libya has become one of the numerous theatres of wars in the region, created by US-led capitalism/imperialism in order to maintain its dominance. In 2011, the country was destroyed by a NATO-led military coalition, largely backed by Gulf countries. Since then, Libya no longer has a national security apparatus that acts independently without foreign meddling, and its major financial portfolios are still subject to international sanctions, which will be presumably lifted鈥攁s the so-called international community repeats鈥攐nce the war ends.

Since the US invasion of Iraq, the Arab world has been the protagonist in a passage from an equilibrium between economic and military imperialism, where the ideology of economic 鈥榞lobalisation鈥� had the upper hand, to a militaristic and technological form of imperialist expansion, where war and pauperisation are pursued, as in Libya and Syria. The war in Libya continues because it is part of a new geopolitical balance, in which鈥攄espite the decline of US hegemony鈥攏o other country is dominating. The corollary for Libya is that its integration into the global economy has also changed. How? Via war, militarism, border missions and death, which have imposed themselves as the new mechanisms of social reproduction and capital accumulation at the global level. In such a scenario, futile are the international actors鈥� calls for an arms embargo and ceasefires. Why? Because wars and their consequences are becoming the new terrain of social reproduction for a US-led imperial capital that struggles to remain alive. As I explore in my recent article, have increasingly become a paradigmatic form of investment opportunity through which the global South is being framed and integrated into the global economy, where armaments, drones and technological infrastructures of surveillance can be tested, perfected and reused at home. Finally, there is another fundamental element to this question, which is directly related to our work as academic. The military-industrial complex in which Libya has fallen also has an academic dimension; that is, since 2011, there is an increasing attempt by so-called security and thinktank experts to occupy the space of knowledge production on Libya. This is not the result of coincidence. This is part of a political economy of war that fosters a certain discourse and in which alternative鈥攁nd more critical鈥攖ypes of analyses are rejected, if not outrightly attacked.

 is a Research Fellow at the University of Manchester in the UK. Her research focuses on comparative development, Industrial policy, corporations, economic geography and the changing landscape of development assistance. She tweets at .

As the COVID-19 pandemic expanded across the world in early 2020, it generated the 鈥渇irst global supply chain crisis.鈥� Global supply chains represent the integrative structure of contemporary global capitalism, and any disruption to them potentially threatens the functioning of the system itself.

In response to the crisis, the global supply chain community, encompassing academics and policymakers keen to promote their purported benefits, are proposing ways to increase supply chain 鈥渞esilience.鈥� The notion has been defined by the World Trade Organization and Asian Development Bank as 鈥渢he ability of these chains to anticipate and prepare for severe disruptions in a way that maximizes capacity to absorb shocks, adapt to new realities, and re-establish optimized operations in the shortest possible time.鈥� Enhanced global supply chain resilience is to be pursued through a range of policies to be implemented by lead firm managers and supported by states.

While global supply chains are promoted as generating positive gains鈥攆or firms and workers, North and South鈥攖here is mounting evidence to suggest that they represent organizational forms of capitalism designed to raise the rate of surplus value extraction from labor by capital and facilitate its geographic transfer from the Global South to the Global North. As demonstrated in a previous Monthly Review article (鈥�,鈥� November 2021), global supply chains have contributed to dynamics of concentration in leading firms, and a marked shift in national income from labor to capital across much of the world.

Capitalism, as Karl Marx observed, is rooted in the exploitation of labor by capital through the latter鈥檚 ability to extract surplus value from the former. It is characterized by dynamics of concentration and centralization of capital, where fewer and larger firms increasingly dominate each economic sector. These dynamics are intrinsically related to capitalism鈥檚 uneven geographical development and the reproduction of geopolitical tensions and rivalries. As Harry Magdoff once wrote:

Centrifugal and centripetal forces have always coexisted at the very core of the capitalist process.鈥� Periods of peace and harmony have alternated with periods of discord and violence. Generally the mechanism of this alternation involves both economic and military forms of struggle, with the strongest power emerging victorious and enforcing acquiescence on the losers. But uneven development soon takes over, and a period of renewed struggle for hegemony emerges.

In fact, a recent World Bank publication explicates how the COVID-19 crisis is exacerbating capitalism鈥檚 inner monopolistic tendencies:

COVID-19 could cause a further rise in corporations鈥� market power because large corporations are in the best position to withstand the economic downturn and deploy new technologies.鈥� In the past three recessions, the share prices of US firms in the top quartile across 10 sectors rose by an average of 6 percent whereas the share prices of those in the bottom quartile fell by 44 percent. The same divergence has been evident since the start of the COVID-19 outbreak.

This article argues that the resilience agenda represents an ideological justification and fortification of these very same tendencies鈥攐f labor exploitation, of concentration and centralization of capital, and of an increasingly geopolitical dimension to capitalist competition.

Following this introduction, the first section of this article outlines the emerging notion of resilience as formulated within the global supply chain community. The next section discusses how the first response by firms and states to the COVID-19 crisis was to make workers bear the brunt of the crisis. The concluding section identifies the geopolitical dynamics of resilience, focusing on the White House鈥檚 2021 report,听Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth.

Resilience in Global Supply Chains

The supply chain community鈥檚 response to the COVID-19 pandemic has been to call for enhanced supply chain resilience, entailing expanded leading-firm power over suppliers and greater control by capital over labor throughout and across supply chains. The resilience agenda is a response to the flaws of the just-in-time model of production, wherein increasing numbers of firms reduced their inventories, relying instead upon cheaper (and for some time) more efficient speedy delivery systems. However, this model magnifies so-called bullwhip and ripple effects: situations where small disturbances at one node in the supply chain generate increasingly large disruptions further up or down the chain. As Peter Hasenkamp, former director of Tesla鈥檚 supply chain strategy, noted, 鈥淚t takes 2,500 parts to build a car, but only one not to.鈥�

In response to heightened risks, firms are advised to enhance supply chain resilience by introducing:

• New products, which enable easier replacement of standardized inputs, and the establishment of buffer stocks;
• New forms of chain governance, that involve risk analysis of both places and suppliers;
• Resilience monitoring, through assessing recovery time required by suppliers in response to shocks in the chain;
• Re-shoring or near-shoring production.

Supply chain mapping is posited as a key element of lead firms鈥� resilience strategy. In a Harvard Business Review article, Willy C. Shih highlights how it 鈥渆ntails going far beyond the first and second tiers and mapping your full supply chain, including distribution facilities and transportation hubs鈥� to identifying suppliers鈥� capacity to withstand shocks. The deployment of new technologies will be essential, as 鈥渇irms are increasingly looking to robotics to augment locked-down employees, support health and safety measures, and tap into new opportunities or salvage their operations.鈥� New dynamics of outsourcing are posited as enabling cost efficiencies: 鈥淏y geographically broadening their supplier bases, MNCs [multinational corporations] are more likely to cut production costs by offering more competitive [that is, lower] wages at the local level and more likely to better serve local customers by tailoring products to their demands.鈥�

A McKinsey survey of supply chain executives across different industries in July 2020 found that 93 percent aimed to enhance their supply chain resilience, and that 90 percent aimed to increase the use of in-house digital technologies to do so. Of the executives, 70 percent and 55 percent thought that re-skilling current employees and recruiting new workers, respectively, would facilitate this endeavor. A mid-2021 follow-up survey found that almost 90 percent of the executives expected to pursue 鈥渟ome degree of regionalization鈥� within the next three years.

The above-noted policies imply an escalation of capitalism鈥檚 core tendencies of concentration and centralization. This is because the costs of implementing elements of the resilience agenda, such as supply chain mapping, are often prohibitively expensive. As Shih notes, 鈥淓xecutives of a Japanese semiconductor manufacturer told us that it took a team of one hundred people more than a year to map the company鈥檚 supply networks deep into the sub-tiers following the earthquake and tsunami in 2011.鈥� Only the biggest and best-resourced lead firms will have the resources to comprehensively implement such strategies.

Intrinsic to notions of supply chain mapping is enhanced surveillance by lead firms over supplier firms. Even mainstream supply chain commentators note how such dynamics may generate 鈥渁 rather paradoxical co-evolution of surveillance and collaboration wherein companies will be more watchful of their suppliers鈥� actions and capabilities while collaborating with them to strengthen their capabilities.鈥� The concentration and ownership of information by lead firms about their suppliers is part and parcel of what Ugo Pagano calls intellectual monopoly capitalism, where information becomes an increasingly essential part of supply chain management and interfirm surplus value appropriation. Practices imposed by lead firms upon their suppliers, such as requiring the latter to open their books, are being used to augment lead-firm power and to exert further control throughout the supply chain by, for example, determining from whom suppliers source inputs and at what prices. In a recent case, H&M, Next, Lidl, and Zara鈥檚 owner, Inditex, have been accused by hundreds of Bangladeshi garment suppliers of paying them less than production costs during the COVID pandemic.

The reshoring narrative was deployed by former U.S. president Donald Trump in his 鈥淎merica First鈥� agenda, claiming that by 鈥渂ringing back鈥� production to the United States from locations such as China and Mexico, his policies would restore industries and jobs from before the current neoliberal era. However, his agenda attracted few global firms (back) to the United States鈥攗nsurprisingly, given global wage differentials in which wages in China are still a fraction of U.S. wages. For example, in 2017 Trump hailed Foxxcon鈥檚 plans to invest $10 billion in Wisconsin, generating 13,000 blue-collar jobs. By 2021, the Taiwanese electronics giant had reduced its investments to under $1 billion with fewer than 1,500 expected new (mostly white-collar) jobs blaming relatively high U.S. labor costs. As the Financial Times noted, 鈥渃oronavirus-induced 鈥榬eshoring鈥� is not happening.鈥�

It is not just the enhanced power of giant firms that is being promoted and facilitated by the resilience agenda, but also heightened labor exploitation. The mainstream resilience literature openly advocates certain forms of enhanced labor exploitation (described as 鈥渆nhancing labor productivity鈥�) as part of its strategy, while hiding other forms.

Supply Chain Resilience鈥攖hrough Class Struggle from Above

The first response by many firms and states to the COVID-19 pandemic and concomitant lockdowns was to seek ways in which to increase labor exploitation in key supply chains. They did so through handing state (public) subsidies to big corporations while presiding over dangerous conditions, wage theft, and deployment of unfree labor and forced wage labor.

A study of garment workers in Ethiopia, Honduras, India, and Myanmar found sharp declines in working conditions and an 11 percent average decline in pay. Income loss occurred because of 鈥渓ess opportunity for overtime; not being paid the appropriate overtime rate; unfair deductions from wages; unpaid work; late wages; severance pay theft for workers who have been terminated; and unpaid wages for workers who have been temporarily suspended.鈥�

In the early days of the pandemic in April 2020, the U.S. government pushed through legislation forcing workers to labor in unsafe working conditions. Then-President Trump deployed the Defense Protection Act to force meat processing companies to stay open amid fears of meat shortages. The act, supported by Tyson鈥攖he United States鈥� largest meat-processing company鈥攔educed companies鈥� liability to their workers for remaining open and potentially exposing them to the COVID-19 virus.

Around the same time, Vietnamese electronics exports boomed as the country appeared to have successfully implemented a zero-COVID strategy. However, by May 2020, COVID-19 cases began to spike, and worryingly for the government and for exporters, cases were clustered in industrial districts. In response, the government told manufacturers to either shut down or find ways of maintaining operations by isolating workers from the wider population. In the provinces of Bac Ninh and Bac Giang, located east of Hanoi, Samsung Vietnam formulated a 鈥渢hree-on-site鈥� containment policy, where workers worked, ate, and slept in the same area. Lam Le reported what this arrangement meant for workers: 鈥淸Workers] were moved onto the factory鈥檚 premises. The lines between their workplace and home evaporated. For nearly three weeks, Nam slept with a blanket on a mattress in a warehouse alongside around 100 other male colleagues, moving between there, the company canteen and the production line in what felt like a twilight of unending work. His life revolved around screens.鈥�

Some companies responded to the skyrocketing demand for personal protective equipment during the pandemic by forcing workers to labor. Malaysia and China were two important sources for this production, and both presided over increased incidences of forced labor, says the U.S. Bureau of International Labor Affairs (BILA). The majority of the almost two billion medical examination gloves used (mostly across core states) during the first six months of the pandemic were sourced from Malaysia. Forced labor is endemic throughout this sector, to the extent that the BILA includes Malaysian rubber gloves in its official list of goods produced by child or forced labor. According to the bureau:

Forced labor predominately occurs among migrant laborers from Bangladesh, India, Myanmar, and Nepal working in more than 100 rubber glove factories throughout Malaysia. Reports indicate that there are an estimated 42,500 migrant workers employed in the Malaysian rubber glove industry. Workers are frequently subject to high recruitment fees to secure employment that often keeps them in debt bondage; forced to work overtime in excess of the time allowed by Malaysian law; and work in factories where temperatures can reach dangerous levels. Additionally, laborers work under the threat of penalties, which include the withholding of wages, restricted movement, and the withholding of their identification documents.

But it is not only through wage repression, wage theft, and forced labor that firms along the supply chain enhance their resilience. Part and parcel of the resilience agenda is the promotion of new, often digital, technologies to raise labor exploitation and firm profitability. In fact, giant lead firms are investing heavily in digitalization, robotization, and automation to achieve these objectives. In the global warehouse subsector, for example, the automation market is projected to increase from $15 billion in 2019 to $30 billion by 2026. Amazon is at the forefront of these innovations, which seek evermore to subordinate workers to machines. As Sarah O鈥機onnor reports in the Financial Times:

Chuck is an autonomous robot trolley which leads a human picker through a warehouse from one shelf to the next. 6 River Systems, which sells or rents the robots to warehouse operators such as DHL, XPO Logistics and Office Depot, says the technology relieves strain on workers because they no longer have to push a trolley around. But Chuck also sets a relentless pace.鈥� A 6 River Systems 鈥渂usiness case鈥� report says workers who set their own pace 鈥渢ravel only half as fast as when they follow Chuck [and] their speed without Chuck also fluctuates wildly.鈥�

The human developmental consequences of ever-greater subordination of workers to machines are predictably dire. In a survey of 145 workers at an automated Amazon warehouse on Staten Island, 66 percent experienced physical pain while working (in their shoulders, hands, back, ankles, and knees) and 42 percent continued to experience pain outside work. As O鈥機onnor notes, 鈥渉umans are being crunched into a robot system working at a robot pace.鈥�

Remote work boomed during the COVID-19 pandemic as increased numbers of 鈥渨hite collar鈥� workers began working from home. These workers are subject to so-called algorithmic management鈥斺�渃ontinuous tracking of workers鈥� performance, automated decision-making about tasks and evaluations of client feedback鈥濃�攚hile undertaking a range of unpaid tasks that are essential to their jobs. Antonio Aloisie and Valerio de Stefano list the proliferation of surveillance technology at the disposal of employers:

Activtrack monitors the programs used and tells managers if the employee is distracted and wasting time on social media. HubStaff takes snapshots of employees鈥� computers every five minutes. Time Doctor and Teramind keep track of every action conducted online. Interguard compiles a minute-by-minute timeline that considers every piece of data, such as web history and bandwidth utilization, and sends a notification to managers if workers鈥� activities appear suspicious and when they exhibit a combination of flagged behaviours. OccupEye records when and for how long someone is away from their workstation. Sneek continuously takes photos of colleagues to generate a timecard and circulates them to keep the team鈥檚 mood up. Afiniti pairs customers with agents according to demographic data. Pesto synchronizes professional calendars and music playlists to create a sense of community; it also has a facial recognition feature that can display a worker鈥檚 real-world emotion on their virtual avatar鈥檚 face.

Working from home has also been accompanied by a significant increase in the length of the work day. The Harvard Business Review noted that, in the United States, 鈥渢he length of the average workday increased by 48.5 minutes during lockdown in the early weeks of the pandemic.鈥� We estimate that the best organizations have seen productive time increase by 5 percent or more.鈥�

Resilience as Geopolitics

The supply chain resilience agenda has been adopted by the U.S. state in its attempts to constrain China鈥檚 rise through economic, political, and geopolitical means. The United States benefits from access to China鈥檚 labor force鈥攖he world鈥檚 largest鈥攚ith wages and social reproduction costs held down by the Hukou (household registration) system. The system divides China鈥檚 working class according to the location of a worker鈥檚 birth and denies workers of rural origin the relative social benefits and protections enjoyed by urbanites. It also includes the ability of local states to compel rural workers to return to their places of origin. In this way, the system reproduces a vulnerable laboring class, ripe for exploitation by firms such as Foxconn.

However, China鈥檚 state-managed integration into the world economy, first as an export assembly platform but increasingly as a producer of high-tech products, has accelerated the formation of its capitalist class and strengthened the Chinese state, together gaining the ability to challenge U.S. economic hegemony.

This began to worry U.S. policymakers who, at least since President Barack Obama鈥檚 pivot to Asia, have responded by formulating political, economic, and military strategies to constrain China鈥檚 rise. This containment strategy represents an attempt to maintain China in a semi-peripheral position by forestalling its attempts at becoming part of the core of the world economy. As Minqi Li puts it, 鈥渁lthough China has developed an exploitative relationship with South Asia, Africa, and other raw material exporters, on the whole, [it] continues to transfer a greater amount of surplus value to the core countries in the capitalist world system than it receives from the periphery.鈥�

Maintaining this pattern of surplus value transfer (so that China鈥檚 working class effectively services core economy firms) and limiting China鈥檚 regional influence is part and parcel of U.S. containment strategy. During his election campaign, President Joe Biden was explicit in identifying China鈥檚 perceived threats to U.S. business, arguing that:

The United States does need to get tough with China. If China has its way, it will keep robbing the United States and American companies of their technology and intellectual property. It will also keep using subsidies to give its state-owned enterprises an unfair advantage鈥攁nd a leg up on dominating the technologies and industries of the future. The most effective way to meet that challenge is to build a united front of US allies and partners to confront China鈥檚 abusive behaviors.

The supply chain resilience concept has been invoked significantly by the U.S. state as part of its efforts to contain China. Part of the resilience agenda is to highlight the importance of supply chain diversification, especially away from excessive reliance upon Chinese production, often referred to as the 鈥減lus one鈥� strategy. Whether or not academics advocating these types of strategies are purposefully buying into a Sinophobic agenda is an open question. But the U.S. state is deploying the resilience agenda for explicitly geopolitical objectives. In a speech addressing the U.S. response to the global supply chain crisis, with implicit continuities to former president Trump鈥檚 鈥淢ake America Great Again鈥� economic agenda, President Biden argued that:

The United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity and national security.鈥� Resilient American supply chains will revitalize and rebuild domestic manufacturing capacity, maintain America鈥檚 competitive edge in research and development, and create well-paying jobs. They will also support small businesses, promote prosperity, advance the fight against climate change, and encourage economic growth in communities of color and economically distressed areas.

Four months later, the White House published its report entitled Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth. The report expressed concern that the U.S. economy was potentially vulnerable to supply chain shocks in four key industries鈥攔are-earth minerals for telecommunications and other core electronics sectors, semiconductors, active pharmaceutical ingredients, and advanced batteries for large-scale utilities and electric vehicles鈥攁nd proposed a range of measures to enhance supply chain resilience.

The geopolitical element of the resilience agenda is often couched in Sinophobic or general-interest terms, or both. For example, Rajat Panwar, Jonatan Pinkse, and Valentina de Marchi argue how the White House report mentioned above raises concerns about 鈥渁ggressive industrial development policies of other countries, especially China.鈥� A recent Organization for Economic Cooperation and Development report highlights China鈥檚 increasing dominance of many core materials and intermediate inputs. Consequentially, 鈥渟upply chains characterised by low diversity of suppliers or buyers can indeed increase the probability of disruption and can magnify the propagation of shocks.鈥�

The White House report is much more explicit about U.S. geopolitical concerns and objectives. China is mentioned 458 times, signifying an increasingly visible geopolitical dynamic in the world of global supply chains. For example, 鈥淐hina was estimated to control 55 percent of global rare earths mining capacity in 2020 and 85 percent of rare earths refining. The United States must secure reliable and sustainable supplies of critical minerals and metals to ensure resilience across U.S. manufacturing and defense needs.鈥�

Using the time-honored ideology of upholding free trade principles, the report also notes how 鈥淐hina stands out for its aggressive use of measures鈥攎any of which are well outside globally accepted fair trading practices鈥攖o stimulate domestic production and capture global market share in critical supply chains.鈥� Indeed, the U.S. state openly interprets supply chain resilience in geopolitical terms: 鈥渢he United States has a strong national interest in U.S. allies and partners improving the resilience of their critical supply chains in face of challenges鈥攕uch as the COVID-19 pandemic, extreme weather events due to climate change, and geopolitical competition with China鈥攖hat affect both the United States and our allies.鈥�

Politically and economically, Biden鈥檚 response to the global supply chain crisis is meant to signal Washington鈥檚 willingness and ability to undertake gigantic investments in research and development, infrastructure (sea ports, airports, highways, and logistics infrastructure, including warehouses and transport terminals), and directly in manufacturing. Federal investments of taxpayer dollars will be dedicated to revamping the foundations of global supply chains dominated by U.S.-based private capital, representing another huge public subsidy to the private sector. Recent gestures by the U.S. government, from Nancy Pelosi鈥檚 visit to Taiwan to Biden鈥檚 recent restatement of the intent to use U.S. military force to defend the island from potential aggression from Beijing, represent a broader program of containing China鈥檚 rise.

Conclusions

The global supply chain resilience agenda is being promoted by corporations, academics, policymakers, and politicians upon the assumption that global supply chains are the most beneficial form of contemporary capitalist organization. This article argues, by contrast, that global supply chains represent the latest phase of organized capitalist expansion and exploitation, and the resilience agenda aims to fortify these relations.

For advocates of the resilience agenda, enhanced lead firm surveillance (control) over suppliers signals a potential way of reviving global supply chains, as does the deployment of digital technologies to increase workers鈥� productive efficiency. From the monopoly capital perspective, by contrast, these proposals represent strategies to accelerate dynamics of concentration and centralization of capital within and through the expansion of lead firm power and the attempt to raise the rate of labor exploitation. While advocates of supply chain resilience refer to the dangers of over-reliance upon China for key inputs, the United States is actively deploying the concept to advance its geopolitical containment agenda. At times, academic analysis and U.S. state objectives seem to overlap in ways that suggest the former are not as impartial as they would like to appear.

While the resilience agenda seeks to revive global supply chains, it is in fact contributing to policies that are hastening the concentration and centralization of capital and increasing geopolitical dimensions of capitalist competition. Far from contributing to a more stable global political economy for the economic benefit of all, the supply chain resilience agenda represents an attempt to reassert the power of monopoly capital in core economies over subordinate capitals, peripheral and semi-peripheral states, and above all, over labor.

Notes

1. Stefano Feltri, 鈥�,鈥� Promarket (blog), March 5, 2020.
2. Yuqing Xing, Elisabetta Gentile, and David Dollar, Global Value Chain Development Report 2021 (World Trade Organization, November 2021), 154.
3. Benjamin Selwyn and Dara Leyden, 鈥�,鈥� Monthly Review 73, no. 6 (November 2021): 15鈥�28. See also Intan Suwandi,  (New York: Monthly Review Press, 2019); John Smith, 鈥�,鈥� Monthly Review 64, no. 3 (July鈥揂ugust 2012): 86鈥�102; John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna, 鈥�,鈥� Monthly Review 63, no. 2 (June 2011): 1; John Bellamy Foster, and Intan Suwandi, 鈥�,鈥� Monthly Review 72, no. 2 (June 2020): 1鈥�20.
4. Karl Marx, Capital, vol. 1 (London: Penguin, 1990).
5. Harry Magdoff,  (New York: Monthly Review Press, 1992), 4鈥�5.
6. Christine Zhenwei Qiang, Yan Liu, and Victor Steenbergen, Global Value Chains in the Time of COVID-19 (Coronavirus) (World Bank, 2021), 202.
7. Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth (Washington, DC: White House, 2021).
8. Benjamin Selwyn, 鈥淏ringing Social Relations Back In: (Re) Conceptualising the 鈥楤ullwhip Effect鈥� in Global Commodity Chains,鈥� International Journal of Management Concepts and Philosophy 3, no. 2 (2008): 156鈥�75.
9. Cited in Patrick McGee and Andrew Edgecliffe-Johnson, 鈥淐ompanies鈥� Supply Chains Vulnerable to Coronavirus Shocks,鈥� Financial Times, March 9, 2020.
10. S茅bastien Miroudot, 鈥淩esilience versus Robustness in Global Value Chains,鈥� Centre for Economic Policy Research, June 18, 2020; Richard Baldwin and Simon Evenett, eds., COVID-19 and Trade Policy (London: UK International Chamber of Commerce, 2022); McKinsey Global Institute, Risk, Resilience, and Rebalancing in Global Value Chains (2020).
11. Willy Shih, 鈥淕lobal Supply Chains in a Post-Pandemic World,鈥� Harvard Business Review, September鈥揙ctober 2020.
12. Qiang et al., Global Value Chains in the Time of COVID-19, 201.
13. Qiang et al., Global Value Chains in the Time of COVID-19, 204.
14. Knut Alicke, Ed Barriball, and Vera Trautwein, 鈥淗ow COVID-19 Is Reshaping Supply Chains,鈥� McKinsey & Company, November 23, 2021.
15. Shih, 鈥淕lobal Supply Chains in a Post-Pandemic World.鈥�
16. Rajat Panwar, Jonatan Pinkse, and Valentina De Marchi, 鈥淭he Future of Global Supply Chains in a Post-COVID-19 World,鈥� California Management Review 64, no. 2 (2022).
17. Ugo Pagano, 鈥淭he Crisis of Intellectual Monopoly Capitalism,鈥� Cambridge Journal of Economics 38, no. 6 (2014): 1409鈥�29; Cecilia Rikap, Capitalism, Power and Innovation (London: Routledge, 2021).
18. Doug Miller, 鈥淭owards Sustainable Labour Costing in UK Fashion Retail,鈥� SSRN (2013).
19. Sarah Butler, 鈥�,鈥欌�� Guardian, January 11, 2023.
20. Suwandi, Value Chains.
21. David Shepardson and Karen Pierog, 鈥淔oxconn Mostly Abandons $10 Billion Wisconsin Project Touted by Trump,鈥� Reuters, April 20, 2021.
22. Alan Beattie 鈥淐oronavirus-Induced 鈥楻eshoring鈥� Is Not Happening,鈥� Financial Times, September 30, 2020.
23. Genevieve LeBaron, Penelope Kyritsis, Perla Polanco Leal, and Michael Marshall, The Unequal Impacts of Covid-19 on Global Garment Supply Chains (Sheffield: University of Sheffield, 2021).
24. Demetre Sevastopulo, Aime Williams, and Gregory Meyer, 鈥淒onald Trump Orders Meat-Processing Plants to Stay Open,鈥� Financial Times, April 29, 2020.
25. Lam Le, 鈥�,鈥� Rest of World (blog), November 22, 2021
26. S. Bureau of International Labor Affairs, List of Goods Produced by Child Labor or Forced Labor (Washington, DC: Department of Labor, 2022)
27. Sarah O鈥機onnor, 鈥淲hy I Was Wrong to Be Optimistic about Robots,鈥� Financial Times, February 9, 2021.
28. O鈥機onnor, 鈥淲hy I Was Wrong to Be Optimistic about Robots.鈥�
29. New York Committee for Occupational Safety and Health, Time Off Task: Pressure, Pain, and Productivity at Amazon (2019).
30. O鈥機onnor, 鈥淲hy I Was Wrong to Be Optimistic about Robots.鈥�
31. John Michael Roberts, Digital, Class, Work (Edinburgh: Edinburgh University Press, 2022), 176.
32. Antonio Aloisi and Valerio De Stefano, 鈥淓ssential Jobs, Remote Work and Digital Surveillance,鈥� International Labour Review 161, no. 2 (2022): 298.
33. Eric Garton and Michael Mankins, 鈥淭he Pandemic Is Widening a Corporate Productivity Gap,鈥� Harvard Business Review, December 1, 2020.
34. John Bellamy Foster, 鈥�,鈥� Monthly Review 73, no. 3 (July鈥揂ugust 2021): 1鈥�20; Tiejun Cheng and Mark Selden, 鈥淭he Origins and Social Consequences of China鈥檚 Hukou System,鈥� China Quarterly, no. 139 (1994): 644鈥�68.
35. Steven Rolf, China鈥檚 Uneven and Combined Development (London: Palgrave Macmillan, 2021).
36. Foster, 鈥淭he New Cold War on China.鈥�
37. Minqi Li, 鈥�,鈥� Monthly Review 73, no. 3 (July鈥揂ugust 2021): 47.
38. Joseph R. Biden, 鈥淲hy America Must Lead Again,鈥� Foreign Affairs 99, no. 2 (2020).
39. Peter Enderwick, 鈥淎 鈥楥hina-Plus-One鈥� Strategy,鈥� Human Systems Management 30, no. 1 (2011): 85鈥�96.
40. White House, 鈥淓xecutive Order on America鈥檚 Supply Chains,鈥� February 24, 2021.
41. White House, 鈥淓xecutive Order on America鈥檚 Supply Chains.鈥�
42. Panwar, Pinkse, and De Marchi, 鈥淭he Future of Global Supply Chains in a Post-COVID-19 World,鈥� 10.
43. Christine Arriola et al., 鈥淓fficiency and Risks in Global Value Chains in the Context of COVID-19,鈥� OECD Economic Department Working Paper 1637 (2020).
44. White House, Building Resilient Supply Chains, 6, 9.
45. White House, Building Resilient Supply Chains, 11.
46. White House, Building Resilient Supply Chains, 12.
47. Vincent Ni, 鈥淛oe Biden Again Says US Forces Would Defend Taiwan from Chinese Attack,鈥� Guardian, September 19, 2022.

Photo: .

鈥榠f God the Father had created things by naming them, Elstir recreated them by removing their names, or by giving them another name鈥�.

Marcel Proust (II, 566)

An emerging consensus originated in the US has declared 2022 as the year of the , with a view to marking the beginning of an era of turbulence and unrest in the global economy.  Under this conceptualisation, recent events including the Covid-19 pandemic, climate change catastrophes, the Russian invasion of Ukraine and the rise in energy and food prices are generally postulated as separate crises, which can have an effect on each other but nevertheless have separate origins.  This centrifugal analysis of events predicates on the decline of the uni-polar world order, as well as acknowledging the emergent structural weaknesses in the traditional western powers; all of which can be loosely interpreted as occurring in a period during which power is dispersing and perhaps as a consequence of this dispersion, the current drivers of crisis have multiplied, leading to a multitude of crises, in contrast to preceding historical instances.

In spite of the current use of the term, the origins of the Polycrisis date further and can be more contextualised. However, there is no doubt that it has now become an important neologism for conventional western media and policy institutes, especially adopted by Bretton Woods Institutions, as well as other leading investors.

Civil society has also used this term as a neat summary, however, theirs is a critical response and is not interchangeable with how powerful International Financial Institutions (IFIs), policy think-tanks and investors use the term.  In this sense, the instrumentalisation of this neologism, seems to have more value than its meaning, with the discernible possibility that any perceived political mileage of the Polycrisis, is a complete transformation away from its intellectual roots. Nonetheless, as an artefact, the intellectual roots and the political role of the Polycrisis merits an integrated analysis beyond its instrumentalisation. 

A remarkable feature of liberal thought is the tendency towards identification of social phenomena through the selective elevation of their key distinguishing features, which are abstract enough to form 鈥榮ystems鈥� and neutral enough to subsume the inherent contradictions of capitalist development. Pandemics, climate breakdown, wars and global deflationary pressures are not mere externalities of the capitalist system but intrinsic to its operations- long predicted by a diverse group of thinkers. That these events converge in time is a political outcome, subject to planetary limits, not abstract systemisation, as the Polycrisis seems to imply.  

Critical responses to the Polycrisis have pointed towards its disregard in accounting for the long and sustained crisis of the capitalist world order and a resort towards 鈥樷�� to conceptualise things as they appear to be,  rather than questioning what is occurring beneath mere appearances. Prima-facie accounts often seek to capture the zeitgeist in the endeavour to simplify things. However, there is a need to differentiate between simplification and reductionism. As a concept, the Polycrisis is simultaneously all-encompassing as well as abstract.

In an attempt to grasp both these aspects, this short blog starts with a focus on three messages of the Polycrisis: a) the qualitative nature of change, b) the drivers or causes of crises and c) the role of Bretton Woods Institutions in adopting the concept. In addition, the blog proposes an alternative way of understanding the contemporary crisis, which hinges on the decline of the western capitalist model, followed by some thoughts on multipolarity and geopolitics. 

a) Understanding what has changed

The multifaceted 鈥楶辞濒测肠谤颈蝉颈蝉鈥� and its disparate manifestations convince us of something, which is qualitatively different, compared to previous crises. The nature of the disruption is hard to understand; on the one hand, Polycrisis is about disparate crises haunting the world, whilst on the other, it remains inexplicable why a single European war should trigger a global disruption of such magnitude.  After all, if we are talking scale, since 2001 to date, the extremely expensive War on Terror ravaged entire countries, without any degree of comparable or even suggested global turbulence. For an Afghan, Yemeni or Haitian child aged 10 or so, the world has always been a continuum of so-called Polycrisis. Any turbulence in global capital and stock markets and commodity prices, would be a minor and irrelevant addendum to the ongoing dearth of access to life, in the majority of the non-Western world. 

b) Poly perpetrators?

A key feature of the current crisis, which remains unaddressed by the Polycrisis concept are the substantive drivers of the crisis. While the Polycrisis is keen to explore the multiplicity and complexity of the current global order, the implicit causes of the seemingly conjectural crises appear as nebulous, automated and self-perpetuating. For example, the discussion paper by ., describes a global Polycrisis as a situation when 鈥榗rises in multiple global systems become causally entangled in ways that significantly degrade humanity鈥檚 prospects.鈥�

This methodology is reminiscent of modelling, as in the natural sciences, such as in the discipline of physics. In fact, all definitions of the Polycrisis although focusing on systems, are seemingly bereft of any identifiable agency.

Citing causal entanglements in political decision making is a strange analysis, diminishing the role of the powerful and the hierarchy of geopolitics. In describing a situation, which is no longer under any implicit control, we remain not quite sure about any obvious poly-perpetrators.

Who are they and what is their precise role in all of this?  

c) The Bretton Woods hijacking the crisis?

The Bretton Woods Institutions have effectively adopted the Polycrisis as an explanatory lens for the contemporary situation. The labelling of the crisis as too complex and multifaceted aligns with their on-going gospel of ad-hoc solutionism to political problems, and the linear mantra of debt-ridden liquidity for vulnerable countries.

The unwavering acceleration of private-sector led solutionism, may well be described as the availing of . The coinage of the term Polycrisis unto itself had no substantial impact on the Bretton Woods Institutions鈥� conventional operations but rather, the term went solely to the further substantiation of their ongoing technocratic approach to poverty. The metanarrative of all official reports by these institutions builds on themes of complexity, multiple and uncontrollable drivers of impoverishments. This is also similar to a host of used by financial investors, facing this seemingly unsolvable Polycrisis.

Alternative hypothesis

An alternative hypothesis of the current crises is the possibility that declining uni-polar world order does not necessarily equate to an elimination of imperial power and that the drivers of the current crisis are an essential outcome thereof. This hypothesis would suggest that we start our analysis from the crisis of the Western capitalist order and understand the recent implications of its global export.

1. Dynamics of declining uni-polar world order 鈥揺ntrenching extraction.

The pandemic was revelationary in highlighting the structural weaknesses of key developed economies in the West; stimulus packages to ameliorate the domestic impact of the pandemic were either inadequate and/ or profiteering at the expense of populations. In the run-up to the emergence of the Polycrisis narrative, in nearly every instance, the domestic private sector of most developed economies has consistently been bailed out disproportionately, as opposed to their citizenries.  To remedy this decline, Western economies have attempted to crudely pastiche China鈥檚 Belt Road Initiative (BRI) and sought to bandwagon on the drive towards external infrastructure connectivity, as a solution to their economic woes; a remedy which was both too little and too late (See Table 1).

   Table 1: Stimulating the Private Sector Domestically and Globally- US, UK, EU.

While these various infrastructure projects seek to further subsidise opportunities for the Western domestic private-sector, they remain fully oblivious to the unwillingness or inability of Western developed economies to decisively address the monopolistic and monopsonistic mutations in the OECD rent-seeking banks and merchantry, which represent a structural malaise and economic malignance that very much has global consequences.

To summarise: in addition to the implementation of global connectivity projects, which subsidise the western private sector, the role of the corporate and financial sector also needs attention in driving of global inflation.

Two obvious examples on food and energy prices:

• On food prices and global hunger: The trend of rising food prices, precedes the Ukraine invasion and in fact remains unhinged from the basics of demand and supply, raising the simple question of what is driving prices?

As investigated by through freedom of information requests, and detailed by journalists at , the transformation of food into an asset-class is led by the concerted speculative practices of international banks. As countries in the South are slowly being engulfed by hunger, the profiteering investors originating in the Global North remain without accountability.

• On energy prices: The logical inference to be drawn from the Polycrisis is a case against poly-opportunists, where the vacuum resultant of the decline of traditional hegemons, is rapidly capacitated by the emergence of previously impassive, globally competitive, private-sector actors.

When the outcome of the prompt of a global energy crisis, is solely rampant profiteering and market abuses perpetrated a few energy companies, as identified even by the liberal bastion of President Biden in his vocal complaints about , the case for regulatory and particularly fiscal intervention very certainly crystallises, yet remains very far from forthcoming.

How does the Polycrisis account for this crisis of western capitalism which accelerates both domestic and global extraction?

2. The world in the making: On multipolarity and geopolitics  

From a global perspective we must also ponder why the emergence of multipolarity- (progressive or regressive) should equate to a Polycrisis?

An interesting development in the current US-China-Russia analysis, is the now compulsive suggestion that 鈥榞eopolitics鈥� is an all-encompassing and defining feature of contemporary politics. That the Global South has been the site of proxy-war throughout stands peripheral to this and so the Polycrisis posits war and peace, as an exclusively Western binary, which fails to acknowledge the states of perpetual crisis and war in many developing countries. This is important because wars entail sustaining the process of existing capitalist order as well as reorder.

Consider the selectivity and uni-polarity of the consensus on contemporary sanctions, which are immiserating ordinary people鈥檚 lives. The militarisation of finance may have taken a seemingly new and unique route with Biden鈥檚 misadventures in Ukraine but as the gross and perverse inequity of the attests, this militarisation  is , and even now remains an intrinsic part of US strategy in different regions such as and is in fact  

The rise in contemporary attempts to circumvent the dollar in different iterations 听including and the implementation of long debated proposals for a is not simply a moment of crisis for many countries- but an opportunity. The recent discussion on the contours of a New International Economic Order (NIEO), beyond a mere and one which would inevitably be marked by a state of 听speaks of a new world order which will remain in flux but also contains the possibility of monetary relief for developing countries through a . Whether we like it or not, a dispersal of power is not equivalent to chaos if it leads to opportunities for more levelling between states.

3. Roads which don鈥檛 lead to Davos

Janet Roitman鈥檚 book the , speculates on the multiplicities of crisis in a different way.  Importantly, it outlines the role of the problematization of what is described as a crisis, particularly in order to pre-empt intervention. This is a helpful approach in mapping the alignment of the Polycrisis with the Western multilateral response 鈥� a lending bonanza fuelled by high interest rates and the paucity of aid coupled with the ascendency of as an exclusive corporate hub for the policy making of poverty amelioration.  In a non-executive, non-treaty based Davos, as both the developed and non-developed world struggles to put food on the table, the , seems to posit it as a vacuous catchall to describe all that impeding the elite鈥檚 vociferous demand for further financialisation.

Undoubtedly the current crisis is caused by the transformational role of financial and digital capitalism and the imminence of climate-change led human extinction. However, these are not anomalies to capitalism but part of its design, of which the consequences and spill-overs are unevenly distributed across the World. For example, even with its global permeation, as financial capitalism bereaves the working classes in the developed North, it continues to deepen extraction in the Global South, both and passively. Moreover, the global is not devoid of the footprint of .听 The consistency in the commodification of nature leading to the breaking-point of extinction, cannot rationally be separated from the general extractive activities of capital.

Unless the Polycrisis, seriously questions the drivers of power and finds ways of challenging them, it risks becoming yet another neoliberal policy buzzword.

 is a Research Fellow at the University of Manchester in the UK. Her research focuses on comparative development, Industrial policy, corporations, economic geography and the changing landscape of development assistance. She tweets at .

Photo: Capitalism IS the Crisis May 25, 2013 March from Union Square to Washington Square New York, NY (Photo: Ed/Flickr)

In the aftermath of the Russian invasion of Ukraine, major world powers including the United States and the European Union have introduced sanctions on Russia. These wide ranging sanctions have been approached diversely by states, leading to distinct  and  approaches. The marked is notable. As the invasion and the sanction regime continues, the global economy is also slowing down with the imminence of a . While the majority of analysis debates the , this Q&A with sociologist and author of the A People鈥檚 Green New Deal, , political scientist and author of the forthcoming Race, Nature, and Accumulation, , and historian and author of Finance in Colonial Zimbabwe: Money, Sanctions and War Economy, , analyses the structural and political nature of sanctions situating its modern iteration in a historical light. We ask them about the history of global sanctions, whether they an effective deterrent to wars, why countries in the global south have abstained from the current sanctions, how should we understand the current sanctions in the global order of neoliberalism, and whether sanctions are leading towards a new round of a non-aligned movement.

1.What is the history of global sanctions? Are they an effective deterrent to wars?

Max Ajl: Sanctions have a very long history within the world capitalist system. If initially they were meant to intervene in ongoing armed belligerent conflicts, they have become something else entirely under US aegis. They are not an alternative or adjunct to war, but war by other means, and furthermore a means to soften up target countries for direct armed warfare. They are primarily aimed from the core to the semi-periphery and the periphery (I use this term instead of global South because of the difficulty in classifying Russia and the complicated role of an ascendant China within the world system). They are engineered to severely damage the forces of production internal to nation-states. Their announced purpose has been to achieve 鈥渞egime change鈥� in those states, although in fact, that does not seem to be their general effect and so it is unlikely to be their general intent. The US/EU generally sanction countries not as an alternative to war, but because direct armed confrontation is often off the table when peripheral or semi-peripheral states have sufficient militarized deterrent capacity to make direct war unfeasible. For that reason, they are not only war by other means, but often the only means by which imperialist states can make war.

Bikrum Gill: There is a growing body of research into the history of global sanctions that suggests that sanctions function less as an 鈥渁lternative to war鈥� or 鈥渄eterrent to war鈥� and more, to borrow from the title of Nicholas Mulder鈥檚 recent book on the subject, as a 鈥渢ool of modern war.鈥� To understand the purpose and efficacy of sanctions as an instrument of war requires that we first understand how it has been forged out of the contradictions of the definite international political economy of our times – capitalist imperialism.  Capitalism has functioned, since the long sixteenth century, as a world system structured around two primary contradictions: i) the capital-labor relation and ii) the core/periphery dynamic that first constitutes the grounds upon which the capital-labor relation emerges and subsequently comes to stabilize its contradictions so it can be reproduced on an expanding scale.  The core/periphery relation is structured upon a denial of sovereignty to the colonized and imperially subjugated peoples of the periphery, which enables the colonizing and imperial core to exhaustively appropriate the world-scale surplus necessary to stabilize both capital accumulation and the reproduction of labor in the core. It is at the moment when resistance waged from the peripheries, in the form of decolonization and anti-imperialism, demonstrates a capacity to withstand the armed violence that is at the root of the denial of sovereignty, that sanctions emerge as a key strategy of the dominant capitalist states of the core to re-impose a diminished sovereign capacity upon the peripheries.

Sanctions have functioned within a framework of international law that, as Antony Anghie has demonstrated, has developed less as a means of establishing order amongst sovereign states and more as an instrument for reproducing different degrees of sovereignty across the world-system. Specifically, Anghie has shown that, from its intellectual origins in the juridical debates that accompanied the 16th century Spanish colonization of the Americas to its consolidation in the 19th and 20th centuries, international law has accorded EuroWestern imperialist states the right to wage endless war upon the peoples of the peripheries when the latter deny them the right to conduct commerce in their territories. Resisting EuroWestern commerce is, moreover, taken as evidence of an inherent irrational despotism that further calls into question the sovereign capacity of the colonized.  Of course, the colonial 鈥渞ight to commerce,鈥� as Fanon has shown, is grounded in a violent usurpation of the territories of the colonized and the re-orientation of their resources and labor towards provisioning the cheap inputs that stabilize capitalist production in the core. 

Sanctions emerge as an instrument of war at precisely that moment when the colonized have reclaimed formal political sovereignty by, as Fanon argues, returning to colonialism a 鈥済reater violence鈥� that alone can make it yield.  While the ex-colonies may now have formal political sovereignty, they confront a contradiction in the economic sphere that constrains their ability to overcome the material deprivation of colonialism. The contradiction consists of the imperial core鈥檚 retention of control of the capital accumulated from the colonial surplus drain, leaving the 鈥減ost鈥漜olonial state without the means to reorient their resources towards a form of national development that can overome the poverty, hunger, and overall underdevelopment inflicted by colonialism.  It is in their monopoly power over the capital generated from the colonies that the imperial states grasp the logic of sanctions as an instrument of war that, in light of the increasing difficulty of subduing decolonization by armed force, alone can re-generate, in neocolonial guise, the underlying principles of the capitalist world-system. The logic of sanctions is captured in Fanon鈥檚 characterization of the capital flight from periphery to core that accompanies decolonization: 鈥淚n plain words, the colonial power says 鈥業f you want independence, take it and starve.鈥欌�� This imposes a condition of dependency which forces a re-peripheralization of the postcolonial state, as its access to capital becomes contingent upon a renewal of the inherited colonial economy.

From an angle which apprehends sanctions as an instrument of a counter-revolutionary war of colonial restoration, I would argue that we can locate the beginning of the history of global sanctions in the early 19th century imperialist reaction to the Haitian revolution. The revolution established the independent republic of Haiti through an armed struggle that the French colonial power had been unable to subdue.  The Haitian revolutionary state would violate the colonial 鈥渞ight to commerce鈥� in so much as it had, in abolishing slavery and reclaiming land from the former plantation masters, overturned the property relations through which France had drained a large surplus from the colony. Unable to re-colonize Haiti by force, France and the US responded to the assertion of Haitian sovereignty by imposing a punitive trade embargo upon Haiti.  The French only agreed to lift their embargo, which had prevented Haiti from undertaking any trade with the outside world, if Haiti agreed to pay France a large indemnity for lost property and further agreed to provision France with heavily discounted exports. Haiti鈥檚 road to economic sovereignty was, as a result, re-directed into a debt induced dependent neocolonial path that would re-peripheralize Haiti as a provisioner of cheap inputs to the imperial core.

As Manu Karuka (2022) has shown, France and the US would continue to deploy sanctions as an instrument of colonial war across the 19th century, using embargoes and blockades to counter the resistance waged to imperialism in Cuba, Algeria, and the Phillipines.  As decolonization and anti-imperialism accelerated and consolidated from the mid twentieth century onwards into formally independent states across the global South, imperial reaction would accordingly intensify and expand the deployment of sanctions as an instrument of colonial restoration. Sanctions would be targeted especially at those states that most explicitly called into question the colonial 鈥渞ight to commerce鈥� by undertaking projects of nationalization and agrarian land reform that would fundamentally overturn the inherited colonial economic structure and thus make possible a reorientation of labor and resources towards sovereign national development. We can see evidence of such a history of 鈥渟anctions as counter-revolutionary war鈥� in the sanctions applied against the following states: Peoples Republic of China, after it had defeated Japanese and Western Imperialism and abrogated the post Opium War treaties; the Democratic Peoples Republic of Korea (DPRK) after it had defeated, first Japanese and then US imperialism; Cuba after it had defeated US imperialism and undertaken land reform and nationalization; and then later in the sanctions applied to Iran after its anti-imperial revolution; Zimbabwe after it moved to complete its independence struggle by reclaiming land from settler farmers in the 2000s; and Venezuela which was placed under punitive sanctions after the Bolivarian revolution undertook land reform and established greater national sovereign control over the oil industry. 

The history of global sanctions is not a history of states seeking to resolve conflicts by peaceful means, nor is it a history of peaceful deterrence of recalcitrant states violating established norms of the international system.  It is, rather, a history of counter-revolutionary colonial restoration. The material conditions for the emergence of sanctions include the limits of colonial military power evidenced by decolonization, and the concentrated control of capital exercised by the imperial core states which comes to provision the means through which sanctions can be threatened and deployed. Sanctions leave targeted states in a bind: either they relent and accept the conditions imposed by imperialism and in so doing consign themselves to a diminished quasi-sovereignty; or they continue with their projects of sovereign development but under conditions akin to siege warfare (Karuka, 2022) that inflict immense pain upon their people. 

Tinashe Nyamunda: The idea behind sanctions, which is to act as a deterrent to military conflict appears borne out of a desire to coerce targeted nations without any loss of life or significant material resources. Wars are very expensive, costly and sometimes unnecessary; therefore, sanctions appear to be a tool for negotiating desired outcomes. Certainly, the League of Nations sought to use them to avoid any conflict as significant as the First World War which cost over 20 million lives and significant financial resources. The United States that entered the War in 1917 (three year after it broke out), for example, spent well over which would be the equivalent of almost US$ 628 billion today. Imagine how much the war cost those who were involved from its outbreak in 1914 and the infra-structural devastation in Europe. So, the idea was to avoid such catastrophic loss of life, property and financial resources. But as the case of the league鈥檚 sanctions against Italy in 1935 showed, the sanctions were not very effective. Ultimately, they failed to avoid the outbreak of the Second World War which cost the lives of almost 50 million people, and cost the US alone over US $341 billion before adjusting for inflation, despite it entering the war much later than the European powers whose countries and peoples were devastated. The United Nations and its sanctions regime was even more convinced about its responsibilities to avoid an even more devastating war given the emergence of the nuclear age in the immediate post-Second World War era.

It is this context that I view the importance of sanctions for the major powers. However, for me, sanctions are a function of power which are more useful when bigger military nations are negotiating the balance of global power and avoiding costly wars, or when the larger nations are trying to enforce their will on smaller nations accused of moving away from the values of democracy and human rights which the larger nations hold to be acceptable. But what is interesting is that the United Nations was established in the context of the imperialism whereby European powers such as Britain, France, Portugal, Belgium and the United States had colonial possessions. Colonial possessions were secured, in most cases, through violence and the aggression of larger powers on smaller ones, what could ostensible be regarded crimes against humanity today. The sovereignty and territorial integrity of these colonized territories were completely ignored without consequence. As such, despite the moral, material and strategic considerations behind the use of sanctions in global politics today, they were applied unevenly and are an exclusive tool of powerful nations that claim the moral authority to apply them. For example, A country like Zimbabwe does not have the power to apply sanctions against the United States over the invasion of Iraq, for example, but the United States has the capacity to apply sanctions and galvanize international support for measures against Zimbabwe for flouting human rights for instance. In that sense, they act as a function of the exercise of power by larger nations.

In terms of the effectiveness of sanctions, they are highly irregular. If the Russian invasion of Ukraine is anything to go by, despite the sanctions that have been applied on Russia, the war endures, lives continue to be lost unnecessarily and whole communities destroyed, especially in Ukraine. The biggest lesson of this war is that sanctions can also be a two way street. Whatever trade embargoes against Russia by the countries who are members of the North Atlantic Treaty Organization (NATO), Russia鈥檚 response to, for example, restrict gas supplies to Europe has devastating implications for energy supply as winter approaches. There are other unintended economic consequences, for example, how other countries have followed the example of Moscow to stop trading in US dollars and diversify their securities in a basket of other leading currencies which challenges the hegemony of the United States as a global key currency. Moreover, apart from specific effects such as the supply of wheat and wheaten products from Ukraine to parts of Africa, the war has led to sharp increase in the price of oil and has pushed the global economy onto the brink of a recession. In this context, as NATO attempts to galvanize the world against Russia鈥檚 invasion of Ukraine, African countries absconded voting. This resulted in both the Russians and the Americans lobbying African countries support through diplomatic trips to try and persuade them to take their sides. What this reveals of sanctions is that when the elephants fight, the grass suffers. As such, at least in the recent case, sanctions are failing, as they have done to in other historical cases, to act as a deterrent of war. If anything, they appear to be a tool that can be harnessed with irregular success by the bigger powers in global politics.

2. Why have countries in the global south abstained from the current sanctions?

Max Ajl: By now, huge portions of the global are being sanctioned. It is logical that as the US places more and more countries of the periphery and semi-periphery under sanctions it destroys any possibility that most of those countries will join the sanctions regime. Moreover, while China and other countries have historically disdained to support many US sanctions, it is one thing to sanction a small and poor and peripheral country like Zimbabwe, or a Venezuela whose main export is petroleum (when the US and its clients like Saudi Arabia had the ability to bring more oil fields into production in response to declining Venezuelan/Iranian production). It is another thing to do so to Russia which is a major exporter of oil, gas, minerals, and cereals, exports which many countries of the Third World rely directly on for their day-to-day needs. Thus on the economic and political plane, there are pressures to move towards a de facto 鈥渘on-alignment鈥� with respect to US-EU imperialism鈥檚 current tools of domination.

Bikrum Gill: The total abstention of global South countries from participating in the current sanctions against Russia derives from both structural and ideological forces, with the two of course being inter-related. Ideologically, the abstention reflects a view of the world shaped by an experience of centuries of ongoing Western imperialism that has been waged across the global South, with devastating consequences. That there has never been any accounting given for Western imperialism, nor any reparations paid or sanctions applied, suggests, from a global South perspective, that Western sanctions against Russia have less to do with punishment and deterrence for violating norms of sovereignty and human rights in Ukraine and more to do with weakening Russia in order to strenghten US imperialism in the face of an emerging multipolar world. It should be kept in mind here that such experiences are not in a distant past.  US led Western military invasions of Iraq, Afghanistan, and Libya over the past two decades, the ongoing colonization of Palestine, along with the impunity with which US drone strikes have terrorized families and communities from Pakistan to Somalia, have deeply shaped the skepticism with which global South states view the humanitarian motives attached to Western sanctions against Russia. 

In addition to the experience of endless Western war, global South states have, prior to this round of sanctions against Russia, been the primary target of US led sanctions. Whether in Venezuela, Afghanistan, Syria, Palestine, Iran, Zimbabwe, Cuba, or DPRK sanctions have been experienced as an instrument of war that inflicts substantial pain upon the people of these countries. For this reason, viewed from the global South, a refusal to participate in sanctions against Russia is a refusal to participate in the escalation of war. 

Most significantly, global South states have been compelled to act upon such ideological convictions due to their structural location in the world-system.  To join in on the sanctions would have the effects of isolating themselves from trade and investment relations with Russia and, in so doing, to place themselves at risk of greater economic dependency upon the West.  Again, historical experience demonstrates that the West exploits such dependence to impose neocolonial conditions upon global South states. Moreover, the sanctions against Russia follow upon the outrageous US seizure of the assets of Afghanistan, which might signal to global South states that it is necessary to build forms of economic interdependence that can withstand Western sanctions and generate forms of economic exchange that allow for more equitable distributions of global surplus value flows. The global South simply cannot risk either losing access to the key commodities that Russia provisions nor increasing their dependency upon a US led Western bloc that has never abandoned its imperial ambitions. 

Finally, the abstention of global South states from participating in sanctions against Russia not only reflects a structural imperative to avoid increased dependency upon the West, but rather also demonstrates that we now find ourselves, much more so than any other moment in the past thirty years, in an emergent multipolar world order. Such an order is one in which the US led Western bloc has evidently experienced a substantial decline in its unilateral power to force states to fall in line under US hegemony.  Global South states can now to a greater extent draw upon alternative South-South, or non-Western, trade and investment resources that allow them to conduct a more independent international relations policy.

Tinashe Nyamunda: Donald Trump鈥檚 presidency laid bare some of the attitude that at least a not so small group of white global north leaders may have of African leaders. His 鈥渟hithole countries鈥� comment caused significant damage to Africans perceptions towards the moral authority and leadership of the United States in global politics and significant disaffection. This should be viewed against the backdrop of the unequal application of human rights laws at the Hague where a number of African leaders have expressed that they are treated unfairly. Consider also the impact of the legacies as the Pact for the Continuation of the Colonization of African countries that has retained significant French influence in the political and economic affairs of African countries. Other examples include the inequitable handling of humanitarian crises in Africa compared to elsewhere in the world. For example, the attention given to Russian aggression was not equivalent to that given to crisis in the conflict in Cabo Delgado in Mozambique, for instance. Yet the invasion of Ukraine by Russia or the American response to Chinese sentiments on Taiwan have cause global instability. The handling of the Covid 19 and other pandemics also reveals glaring inequalities between the south and the global north.

Many African countries appear to not want to be aligned to any particular side. Secondly, they do not want to subscribe to the global north鈥檚 definition of what constitutes global. In case, choosing a side can be much costly than remaining non-aligned. In any case, Russia and China appears to have more entrenched histories of decolonization with African countries compared to members of NATO countries. All of these considerations contribute towards global south approaches to the application of sanctions against Russia. In this matrix, despite US Secretary of State鈥檚 recent pronouncement through the American strategy for Africa to make them equal partners in its development, African leaders remain very skeptical. As such, they appear to prefer non-alignment as a pragmatic option to avoid being drawn into super power conflicts which they do not have the capacity of sustaining.

In any case, there are countries such as Zimbabwe that are bearing the brunt of European Union sanctions and the United States鈥� Zimbabwe Democracy and Economic Recovery Act (ZIDERA). Zimbabwe has managed to galvanise support of other African countries such as South Africa to speak out against American sanctions. Yet when the Americans need support, they would approach countries such as South Africa without considering their relationship with countries such as Zimbabwe. In certain spaces, American policies may be construed as imperial despite the moral reasons behind applying those sanctions.

3. How should we understand the current sanctions in the global order of neoliberalism?

Max Ajl: These sanctions are attempts to cut off countries from the world in order to rip apart their productive capacity: to destroy their industrial and agricultural sectors, prevent them from technological development, and reduce the well-being of the poorer sectors of the population. There is a popular discourse that sanctions constitute failed attempts at regime change, or will continue until governments鈥� change in targeted countries. I think it鈥檚 a little more multifaceted than that. One, they mean to alchemize possible or potential models or beacons of Third World change 鈥� Venezuela and Zimbabwe, for example 鈥� into basket cases. The effect is to delegitimize the idea of social change, tarnish socialism as an emancipatory horizon, and make clear that states which resist, to any degree, the neoliberal arrangement and the US-EU insecurity architecture will be severely punished. They are warnings. They are also meant to aggravate internal unease with prevailing models of development 鈥� something absolutely inevitable in any state. In this way, they create huge social fissures that can be converted into US-supported-and-funded 鈥渃olor revolutions鈥� which surf any kinds of unrest. They are also meant to soften up countries before invasions: as in Iraq. This is the intent; the effect is not reducible to those explanations, because there is resistance and because the US-EU are not omnipotent.

Bikrum Gill: Sanctions have rapidly escalated during the neoliberal era.  This is due, in the first instance, to the financialization of the world economy that has been a principal component of the neoliberal accumulation regime. This has provisioned the United States, which dominates the financial and banking sectors, with an expedient economic instrument with which to increase the reach and costs imposed via sanctions. 

The US has used its power over the deepening financialization of the world economy to, in particular, wage economic war against those states from the periphery and semi-periphery that have most clearly challenged the hierarchy of the neoliberal global order.  Neoliberalism, as a global order, functions in significant part as a project of colonial restoration that undermines sovereign national developmental projects through policies of liberalization, privatization, and financialization that weaken global South states and open space for the takeover of its key resources by domestic and transnational capital.  States that have, to varying degrees, challenged this orthodoxy since the early 2000s, by increasing, or re-affirming, state control over the commanding heights of the economy, have found themselves subject to financial sanctions. This has not only prevented targeted states from accessing Western capital and consumer markets, but it has had the effect of disrupting the attempts by such states to construct alternative trade and financial efforts, as the US control over the global financial and banking sectors enables it to apply punitive measures to those caught trading with sanctioned states. In this way, the sanctions regime under neoliberalism is about more than just the targeted state; they are designed with the aim of re-affirming US economic power over global surplus flows in a context in which non-Western states, and especially China and Russia, are attempting to build alternative global economic architectures.

Russia and China, as Samir Amin and Domenic Losurdo have argued, constitute the clearest challenge to Western hegemony of the neoliberal order.  China, particularly over the past decade has clearly re-affirmed its state as the directive force of its national development project, and it has demonstrated a form of integration into global markets through which it has maintained and even strengthened its economic sovereignty.  Russia, which has remained more in line with the neoliberal framework, has, nonetheless, challenged the global ordering that was established by the neoliberal counter-revolution.  In particular, here it is necessary to recall that the neoliberal shock therapy that was imposed upon Russia by the West in the 1990s granted an excessive power to domestic and transnational capital to loot the Russian economy, which resulted in what was possibly the steepest 鈥減eacetime鈥� decline in life expectancy in modern history.  In response to this, and to NATO military expansion to its border, the Russian state from the early 2000s onwards, but especially over the past decade, has exercised more disciplinary authority over capital and has itself become a more active economic player. The Russian state has been active in establishing forms of economic interdependence that are less dependent on Western capital and trade relations.  The Russia led Eurasian Economic Union and, to a much greater extent, the Chinese led Belt and Road Initiative, are potentiating an alternative global economic architecture that can re-route global surplus flows away from the West.  Sanctions against China and Russia since 2014 can therefore be understood as responses by the US to the increased challenge these states pose to the hierarchical global order of neoliberalism the US advanced in the late 20th century.  

Tinashe Nyamunda: For me it is tussle for power which is manifesting itself in economic terms. Even if there is military conflict between Russia and Ukraine, there appears to be much more at stake. Although Russia is directly involved, Ukraine is viewed by many as a NATO proxy. At the end of the day, this appears to be more of an ideological conflict and battle for control in the international economic order. It has also expressed itself as challenging US dollar hegemony and viewed as attempts to trigger a shift towards a much more multi-lateral order, whatever the power implications may be.

4. Are sanctions leading towards a new round of non-aligned movement?

Max Ajl: The non-aligned movement emerged against the background of centralized, state-controlled blocs offering an alternative and more egalitarian way of organizing the world economic system 鈥� China and the USSR. Now although the USSR is gone, China is certainly not, which offers a potential buffer in the form of capital, sovereign technological capacity, potential loans, assistance with political and social infrastructure, etcetera. So when we talk about the shift to multi-polarity, which by definition means that US militarized accumulation and associated de-development policies have less free reign within the world system, we are talking about something with some resemblance to non-alignment, but in a markedly different historical era 鈥� when alternative poles of accumulation are stronger but their ideological cohesion and distance from the US-sponsored regime is weaker. Nevertheless, there are a range of burgeoning alternatives to the US-dominated system, from alternatives to using the dollar as the currency of settlement, slowly increasing South-South trade and diplomatic assistance and support, and South-South links which enable countries to break free from the sanctions straitjacket. I still would prefer we be a bit ginger with the historical analogies, because the forces which led the non-aligned movement were sometimes market socialists, sometimes were, like Nasser, supporting national liberation movements all over Africa while nationalizing imperialist-capitalist concerns domestically, and so forth. While there is still support for Arab-region national liberation movements, this is less a constitutive element of the new multi-polarity. I say all this to remind us that we need to keep in mind that while of course the non-aligned movement was non-aligned and heterogeneous ideologically, it was often in a direct ideological challenge to US-European capitalism. This is not the case at the present, which means that there is a need for a lot more struggle against internal contradictions, and in favor of domestic working-class and peasant interests, to re-constitute a bloc capable of really moving history in an emancipatory direction.

Bikrum Gill: There are indeed clear signs that the sanctions regime accelerated by the United States in the neoliberal era is experiencing heightened contradictions.  Sanctioned states, such as Iran, Cuba, and Venezuela, have been deepening economic cooperation and diplomatic ties in an effort to collectively withstand the impact of sanctions.  The rise of China as an alternative source of investment capital and markets has provided further breathing space for sanctioned states.  In fact, Giovanni Arrighi argued quite early on that China鈥檚 ability to re-route global surplus flows towards the global South provides a stronger material basis upon which to reconstruct a non-aligned movement than had even existed in the Bandung era.  Sanctions have, in many ways, compelled global South states to expedite the construction of alternative trade and financial networks that can function independently of Western power.  It is this that has provided the material basis for the emergence of a new non-aligned movement wherein global South states can take independent foreign policy positions.

As I mentioned earlier, global South states have indicated that they view sanctions as an escalation of war and have clearly expressed a position of 鈥渘eutrality鈥� in relation to what is effectively a war between the West and Russia.  This position emphasizes the importance of dialogue and negoitation in achieving immediate peace in Ukraine and a broader lasting peace based upon a collective security framework that includes Russia. 

Lastly, a renewed non-aligned movement, that draws its strength from the material basis of the emergent multipolar world order, holds the potential to effectively demand an end to the West鈥檚 endless wars against global South states. Ending these wars, whether economic or military, opens space for a historical accounting of colonialism and imperialism, and a reconstruction of a balanced multipolar world order.

Tinashe Nyamunda: The question of alignment is a very clear one. Rather than non-alignment, I see the African response to this sanctions discourse as an expression of African agency. Unlike in the colonial period when they voice was muted and their actions imposed by imperial powers, in a post-colonial dispensation, African countries can exercise their sovereignty to some degree. In questions of sanctions against Russia, at least half of them exercised their right not to participate in the interests of their national interest and after considering the implications of such a move. The response of the Americans and Russians is particularly revealing of the influence that African countries have attained in determining global affairs.

Recently, the Biden administration undertook a re-engagement policy in Africa which is at least partially informed by Russia and China鈥檚 rising influence in Africa. American Secretary of State. Anthony Blinken has taken a tour of African countries to promote the American Strategy for Africa. But some media reports have suggested that the trip is also, in part, aimed at countering Russia鈥檚 footprint in Africa. In particular, that it鈥檚 a reaction to Russian Foreign Minister Sergei Lavrov鈥檚 recent visit to the continent. He visited Egypt, Ethiopia, Uganda, and the Democratic Republic of the Congo ().

Although Blinken鈥檚 first visit to Africa as Secretary of State took place before the Russian invasion of Ukraine, it is difficult to dispute the United States鈥� growing concern over Russian and Chinese influence on the continent. This is why, for the first time, the discourse of equal partnership informs the American strategy for Africa. Moreover, there is a recognition by the Americans that they cannot force Africans to choose their side, so their soft power approach has been to ask African countries to consider partnering with the US in the development of countries on the continent and promising to spend significant amounts of money in this effort. Looked at in this way, the African approach to the latest discourse on sanctions is informed by its countries best interests and a pragmatic approach to the issues. They do not wish to be entangled in this conflict, although they are economically affected by it. In some ways, their apathy towards the sanctions issue may actually be a deterrent for both sides by avoiding splitting the world into two camps and the tussle for influence over them may, in some ways hopefully help to de-escalate tensions. Moreover, they fully recognize the limitations of sanctions and therefore chose to be pragmatic about conflicts that do not have a direct implication to their own national interest.

 is a Research Fellow at the University of Manchester in the UK. Her research focuses on comparative development, Industrial policy, corporations, economic geography and the changing landscape of development assistance. She tweets at .

• Are we witnessing a shift to state-led development? A return of 鈥榮tate capitalism鈥� under a globalised and financialized form? Are these processes challenging market ascendance and/or neoliberalism as a global development regime?
• Has there been a transformation of the developmental state and of the logics and instruments of 鈥榗atch-up鈥� development? New tools of state intervention for industrial and innovation policy?
• What are the implications of the resurgence of 鈥榮tate-capital hybrids鈥� (state-sponsored investment funds, state-owned enterprises, development banks, etc.) as key actors in development? Are these transforming the global development finance architecture? What is the relationship between, on the one hand, state-owned, state-controlled, and state-directed capital, and on the other hand, private capital?
• What are the wider geopolitical and geo-economic shifts in which the rise of the new state capitalism is embedded? What is new about the recent 鈥榳ave鈥� of state capitalism across the global economy? What are the strategic, structural/epochal, and contingent drivers of its emergence?
• What is the progressive potential of these developments, both in the global South and in the global North? What are the limits to the new state capitalism, and the various forms of resistance to it?

We welcome both theoretical and empirical contributions exploring these themes. This blog series aims to stimulate critical debates from a plurality of academic perspectives (political economy, economics, sociology, development studies, law, international business, strategic management, geography, etc.) in order to critically interrogate the more visible role of the state in development, the economy, and society at large.

The more visible role of the state is also a chance to revisit and rethink (from both a theoretical and normative perspective) some of the most perennial questions of political economy: what is the state? What is the appropriate scope for state intervention? How should it relate to popular and democratic forms of control?

Overview of the series:

• State Capitalism Redux?听The first contribution to the series, written by Ilias Alami and Adam Dixon (both based at Maastricht University), acts as an introduction to the blog series. It provides some contextual information on the rise of the new state capitalism, and critically engages with the recent literature on the topic.
• The local state origins of national economic development. This contribution by Milford Bateman offers a revised understanding of the developmental state, emphasising the history (and the progressive potential) of the local state in driving ‘bottom up’ structural transformation processes.
• Indonesia鈥檚 State-Led Development: Custodian of the National Interest, or Boondoggle? James Guild looks at the much discussed case of State Capitalism in Indonesia under President Jokowi and identifies some key projects which highlight the developmental role of the state.
• Lean on me: Development financial struggles and national development banks. Kyunghoon Kim scrutinizes the political economic determinants of the growing mobilisation of national development banks in a wide range of developing and advanced economies.
• The Specter of State Capitalism. In this short commentary, Adam Dixon and Ilias Alami reflect on the coronavirus crisis and the reconfiguration of the state-capital relation it is catalyzing the world over.
• 鈥楥limate Emergency鈥�, COVID-19 and the Australian capitalist state. Anna Sturman draws upon materialist state theory to provide a critical reflection on the rearticulation of the Australian state in the context of the bushfire and coronavirus crises, and outlines strategies for reconfiguring the state in more progressive ways
• Assessing the 鈥楻eturn鈥� of the State: Bringing Class Back In. Mehmet Erol critically analyses the ‘return’ of the state in the context of the current crisis, and emphasises the theoretical-political necessity of carefully considering class dynamics
• Neoliberalism on Trial: Jokowi 2.0, Omnibus Bill and the New Capital City. Trissia Wijaya explores what effects do neoliberal policies have on state-capital relations in Indonesia through the case of the Omnibus Bill.
• The Promise 鈥� and Pitfalls 鈥� of State-led Development in Resource-rich Countries: Resource Nationalism in Latin America and Beyond. Jewellord Nem Singh provides an insightful analysis of the political economic determinants of resource nationalism as a state-led development strategy.
• When does state-permeated capitalism work? Andreas N枚lke examines to what extent large emerging economies (China, India, Brazil, and South Africa) feature ‘state-permeated capitalist systems’, and critically reflects on their economic success.
• RMB internationalisation as an extension of Chinese state capitalism. Kean Fan Lim investigates the rationale underpinning the internationalization of the renminbi and shed鈥媠 light on its uneasy relationship with the transformations of Chinese state capitalism into a global process.
• 叠狈顿贰厂鈥� multidimensional retreat from the Brazilian economy. Kyunghoon Kim scrutinises the rise and fall of听Brazil’s main national development bank, and argues that the current rollback of its operations听may signal the end of active state capitalism in Brazil.
• The return of State planning. Andr茅 Roncaglia and Jo茫o Romero assess how the COVID-19 crisis might be a turning point for the return of State planning, with particular attention to Brazil.
• Financializing state capitalism: Exchanges, financial infrastructures & the active management of capital markets in China. Johannes Petry unpacks how Chinese state intervention in and through capital markets shapes the particular form of financialization unfolding in China. His findings have crucial implications for how we conceive of the relation between financialization and authoritarian state capitalism
• Neoliberalism鈥檚 many deaths and strange non-deaths. This contribution by Jack Copley and Alexis Moraitis proposes to re-explore the political economy of states and markets by drawing upon Marx’s concept of alienation. Governing alienation, they argue, is the inescapable burden that confronts every state in capitalism, at the expense of human dignity.
• Separated under the Same Roof: The Revived Relationships of State-Market Institutions. Lorena Lombardozzi investigates the role the state can play in upgrading in global value chains with developmental objectives, drawing on her research on Uzbek horticulture value chain governance.
• The return of the visible hand: How struggles for economic and political dominance turn state capitalism into authoritarian capitalism. Dorottya Sallai and Gerhard Schnyder unpack how an authoritarian form of state has developed in Hungary. ‘Authoritarian capitalism’, they argue, is a much more useful category in this case than the widely used and loosely defined rubric ‘state capitalism’.
• Developmental Agency under the Radar: Developmental States and Coalitions in Dependent Market Economies and Low-Tech Sectors. David Karas and L谩szl贸 Bruszt听鈥媠crutinise the recombinant institutional trajectories of state socialism and post-socialism in Poland and Hungary. Their study highlight the limits of neoliberal developmentalism and the need for the state’s active role in economic development.
• Debating 鈥楽tate Capitalism鈥� in Turkey: Beyond False Dichotomies. Mehmet Erol critically engages with the ‘state capitalism’ debate in Turkey. Has Turkey drifted towards Russian-style authoritarian state capitalism? Erol warns against arbitrary periodisations and false dichotomies, as these can lead to a misinterpretation of capitalist trajectories and of the changing practices of crisis management by the capitalist state.
• Sino State Capital and the Strengthening of Serbian Stabilitocracy. Imogen T. Liu explores the relationship between Chinese state capitalism and Serbian competitive authoritarianism. Drawing upon fieldwork in Serbia, she argues that the penetration of Chinese state capital in Serbia, notably in infrastructure, contributes to both the political stabilisation of the Serbian regime, and to the spread of Chinese accumulation logics abroad.
• The Strategic Logics of State Investment Funds: Beyond Financialization. Adam Dixon examines why state-owned corporate entities are increasingly behaving like the private sector. Financialisation, he argues, may be an important factor, but is not the only one. Dixon identifies three other logics (a developmental logic, a regime maintenance logic, and a geo-political legitimacy logic) which are also at play, and fundamentally shape the rise of marketized state entities.
• A new Washington Consensus on the role of the state? Ilias Alami, Adam Dixon, and Emma Mawdsley argue that we are witnessing a reorientation of official agendas and discourses about the state, which now embrace a fuller role of the state in development (than the Washington Consensus), including as promoter, supervisor, and owner of capital. This new vision, is fundamentally shaped by the contemporary advent of state capitalism, and the profound apprehension this generates amongst liberal development institutions.鈥�

If you鈥檙e interested in contributing to the blog series, please contact the series editors Ilias Alami and Farwa Sial. This debate series is supported by the European Research Council under Grant 758430