EADI at Fifty: Time for Looking Back and Understanding the Sea Change of World History

By Jürgen Wiemann

This year, 2024, global peace, prosperity and the environment are threatened by a cumulation of geopolitical crises, and we do not know yet whether this will lead to a final breakdown of international cooperation and more wars, or whether it will be possible to turn history around towards a brighter future. Looking back at the half century since EADI’s foundation in 1974 may help us to understand how we have arrived at this dramatic moment.  

The arrow of history pointing upwards for 25 years to a possible end of history

Two opposite waves of world history can be distinguished with the turning point in the middle. In the decade before EADI was founded, the Cold War had reached a climax with the construc­tion of the Berlin Wall in August 1961 and the Cuban missile crisis a year later. After the Iron Curtain through Europe had been fortified and nuclear Armageddon averted, a détente between the USSR and the USA became possible – with the milestones of the Helsinki Conference of 1975, the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1990/91. Parallel to that, Western Europe deepened its economic and political integration, and, in 1992, invited the former socialist East European countries to become member states of the EU. The process of European economic and political integration generated an unprecedented economic reconstruc­tion and a steady improvement of living standards, first in Western Europe and then in the new member countries in Eastern Europe.

In Africa, the 1960s had been a decade of independence movements of former European-ruled territories. In the wake of this, the former colonial powers of Europe – Great Britain and France in particular – had to (re-)establish economic ties with their former colonies by applying the new instruments of development cooperation. Having lost its former colonies in Africa at the end of the First World War already, West Germany too, participated in this new approach of official devel­opment assistance with the special aim of preventing developing countries from recognizing the German Democratic Republic and aligning with the Eastern Bloc.

Sinc the 1970s, the newly independent developing countries became self-confident in pursuing their economic interests and designing their economic policies. Various experiments with econo­mic self-reliance and delinking from the Western dominated world markets were even acclaimed by left-leaning development experts in the North. However, the results of these experiments proved not too satisfying, so that more and more developing countries turned to capitalist development strategies and opened their economies to the world markets.

As most of these newly industrialising countries (NICs) were in East and South-East Asia, the World Bank labelled these success stories an East Asian Miracle, beginning with Japan’s dynamic reconstruction after its defeat in the Second World War, with the next tier of tiger countries Hong Kong, Taiwan, Singapore, South Korea to be followed by Thailand, Malaysia, and Indonesia. After Mao’s death, even communist-ruled China allowed private investment and opened to inter­national trade and foreign direct investment. This unleashed an unprecedented growth spurt that pulled hundreds of millions Chinese out of extreme poverty to middle income levels. Vietnam followed the Chinese example some years later, and in 1991, even India abandoned its unique model of heavily protected and government controlled industrial development, liberalized its economic policies and opened the economy to import competition and foreign direct investment. Meanwhile, India is aiming to catch up with China in terms of economic development and living standards.

The two processes combined – European economic and political integration in close cooperation with the U.S. and developing countries reintegrating into the world economy – sparked a long wave of economic globalization and spreading of democracy to more and more countries around the world. After the end of the Cold War in 1991, economic globalization accelerated again, leaving behind, however, the poorest and least developed countries and the less educated people in the developed world who suffered from competition with cheap imports, from relocation of their companies to China and other NICs, and from immigrants competing for their jobs. Thus, economic globalization produced its own backlash by its completely uneven impact on different segments of western societies.

The turning point

At the beginning of the new millennium, two events triggered the reversal of the deepening of globalization. One was the global financial crisis of 2008, raising doubts around the world about the benefits of ever deeper economic globalization and of the wisdom of the governments to steer their countries through the accumulating political and economic crises. The loss of economic and social status of the poorer and less educated people in most Western countries was aggravated by their perception of not being respected by the elites who benefit most from globalization and modernization. These feelings of humiliation were exploited and fuelled by populist politicians and parties on both ends of the political spectrum to delegitimize and undermine the political institutions of democracies.

The second event that led to the reversal of the long wave of history toward globalization and democratization were the terrorist attacks on New York and Washington on 9/11, 2001. They provoked a strong impulse in Americans to retaliate. As the only remaining superpower, the U.S. no longer respected the interests of its former rival and of the rest of the world. They invaded Afghanistan in 2001 and Iraq in 2003 without legitimation by the U.N., thereby undermining the credibility of the rules-based global order created at the end of the Second World War to prevent a third one. The following gradual erosion of the UN System has undermined its credibility in preventing the assault on the rules-based world order that Russia, China and the other authoritarian states are aiming at in the new millennium.

History on a slippery slope downwards – to a different end of history?

Obviously, Russia has given up competing with the West in the arena of economic modernization and technological development. This leaves the Russians with their traditional feeling of inferiority that was aggravated by what they felt as humiliation by the hubris of the U.S. claiming to be the only superpower left in a unipolar world, no longer bound by the rules of the world order, e.g., the International Court of Justice. The discrepancy between Russia’s inferior economic sta­tus and its presumed military parity with the West became a problem when Ukraine prepared for associating with the EU, thereby following the example of other Eastern European countries which have gained political freedom and economic prosperity by leaving the Russian orbit and joining the EU. Russia’s ruling elites fear the risk that a successful Ukraine would make ordinary Russians want to follow the example of these former Soviet people who share their historical and cultural background. To prevent the contagious effects of former Soviet states opting for the West, Russia’s elite saw no alternative but military threats (including nuclear threats) and real war, demonstrated by the invasion of Georgia in 2008, the annexation of Crimea in 2014, and the unprovoked war against Ukraine since February 2022. The opposition against this belligerent course has been crushed over the years. Russian politicians and journalists who had advocated, after the end of the Soviet Union, to open Russia to the rest of Europe to secure democratization and liberalization of the economy were marginalized, incarcerated, assassinated, or had to emigrate to save their lives and freedom.

A cautious look into the future

At the beginning of this year, 2024, one cannot predict the outcomes of the upcoming elections in numerous major countries and how they will change the course of their governments. The presidential election in Russia has already prolonged the dictatorial rule by another six years, after which another “election” could extend it to 2036. The longest ruling dictator after Stalin may take a high percentage of positive votes as a justification for intensifying the war against Ukraine and for challenging the West’s willingness and capacity to support that country and to combat Russian attempts at subverting elections and democratic institutions by means of hybrid warfare. This year’s elections in the UK, the EU and in Germany (at subnational level) will not bring fundamental change but reveal how far the populists will be able to strengthen their political role and further undermine the democracies with conspiracy theories and aligning with authoritarian enemies abroad. At the end of the year, the most important election of all will take place in the U.S. The presidential election in November could bring America’s oldest democracy as we know it to an end and with it the existing rules-based world order.

Even if the outcome of the last and most important election of 2024 cannot be predicted, the following major trends will continue to shape world politics for the foreseeable future:

  • First, the geopolitical struggle between democracy and authoritarianism will go on, possibly become even more vicious and violent. Until some years ago, democracies’ strength and resilience in times of crisis was unquestioned, and their eventual victory over authoritarian systems seemed guaranteed. The latter controlled weaker economies and had to suppress internal opposition longing for a democratic revolution in their countries. Today, we face a long process of democratic decline and simultaneous authoritarian rise, and the struggle between both systems could lead to a stalemate. What has changed since the geopolitical confrontation during the Cold War? Today the populists associate themselves with the authoritarian leaders of Russia, China and other adversaries in their opposition against cultural modernization and political liberalization. How this competition between opposite governance systems with their respective domestic opposition will unfold, also depends on the course of the current war of Russia against Ukraine. A Russian success may even persuade other authoritarian rulers to follow Russia’s example and invade and subjugate neighbouring countries.

    With the rise of China and other more advanced countries of the Global South, the geopolitical and geoeconomic arenas will undergo further changes that will question the legitimacy and viability of the rules-based world order as enshrined in the UN system, the Bretton Woods institutions and the WTO. It seems that the U.S. is no longer willing or able to play the role as the guardian of the world order, supporting the long-term trend of globalization and democratization. Whether the EU will be willing and able to bear more responsibility for the functioning of the rules-based global order, including effectively sanctioning the unruly behaviour of powerful adversaries like China, remains to be seen. China claims to offer an alternative global order that should be more suitable to its eco­nomic and political interests and that of its allies in the Global South. The principles on which the alternative world order would be based have never been spelled out, and it remains to be seen whether it will be possible to design and develop a system based on the unpredictable behaviour of authoritarian single-party rule. For example, would smaller countries be willing to accept the dominance of China without any recourse to the principles of human rights and national sovereignty enshrined in the UN Charter?

  • Second, climate change and other global environmental challenges will become more severe and climate-related natural disasters will affect more and more regions and populations. The effects will be felt most by poor countries and the poor in every country. Inequalities within and between countries will increase and become more intractable, so that it will be impossible to accomplish the Sustainable Development Goals by 2030.

  • Third, the pace of technological development is accelerating and opening a comple­tely new era of human development. Digital tech companies and social media are having an unprecedented impact on public opinion and democratic elections with the risk of eroding the legitimacy and credibility of even the oldest democracies in the world. Ano­ther existential threat to social stability and coherence is the accelerated development of artificial intelligence (AI). AI entails unforeseen implications for the arms race and other arenas of struggle between democracy and authoritarianism, e.g., by spreading fake news and conspiracy theories that undermine faith in the media and the legitimacy of democratic elections and decision making. On the other hand, new technologies, including artificial intelligence, may generate new tools and strategies to combat climate change even if it will not be possible to radically reduce greenhouse gas emissions.

The task ahead

Looking back at the fifty years since EADI’s foundation in 1974 with the stark contrast between the first half and the second leading to the critical point of history we are now experiencing – war and peace once again and the collapse of civilization around the corner – we may ask: What went wrong? Why was it not possible to prolong the path of ever deepening globalization and democratization? Could the end of the Cold War have been better managed so that everyone would have benefitted and enjoyed a better and meaningful life? One hypothesis is that economic globalization had not been civilized by a strong framework of rules and institutions that correct the shortcomings of laissez-faire capitalism – social insecurity and ruthless exploitation of nature by shortsighted companies. At the national level of Western democracies, capitalism had been em­bedded in such institutional and legal frameworks that made it work for the majority of the popu­lation without excessive harm to the environment. But the rapid globalization taking place since the 1980s and 1990s lacked such an effective institutional framework what helped to undermine even the existing rules and social security systems on the national level. The resulting steep rise of inequality both within and between countries and the accelerating degradation of the environ­ment, both on the national level and globally, revealed the failure of global governance.

With some luck, humanity may be able to avoid the abyss at the end of the present geopolitical confrontation and get a second chance to better regulate a new round of globalization. Yet, in view of the new triangular Cold War unfolding and the breakdown of trust between the major geopolitical powers, restoring the rules-based global order so that it will be accepted by all seems utopian. A more realistic perspective may be the following: More and more countries will prepare for a long trend of deglobalization by reducing dependence from global value chains and rearran­ging them to friend-shoring, i.e., to deepening the division of labour with reliable countries in the same global camp. This will be complemented by strengthening their national industrial base through active industrial policy. Western countries will try to find a manageable course of reducing excessive reliance on global value chains and inviting countries of the Global South to join their club of international cooperation based on shared values. This combination of security and efficiency will not only aim at deeper economic integration within the club of like-minded countries, but also at better managing, possibly even solving, the existential challenges humanity is facing – climate change and uncontrollable AI.

At the same time, the West should try to prevent the escalation of the new Cold War with China – and with Russia after the end of the war against Ukraine –by a new round of détente like the one between the U.S. and the Soviet Union in the 1970s and 1980s. This would mean a smart combination of military deterrence and cooperation in policy areas of common interest like climate change and containment of the risks of AI. And one should never give up the expectation that one day détente could lead to another happy end of the present geopolitical confrontation by a new generation of politicians coming to the fore in Russia and China who imagine a democratic future for their countries – Boris Nemzov, Alexei Navalny and other Russian dissidents paid with their lives for this dream.

To conclude: Universities and think tanks will have to reflect on and respond to the challenges of the present phase of world history. A closer and more equal cooperation between economics and other social sciences, including history, will be needed for presenting to policy makers the options for navigating their countries towards sustainable development and avoiding the existential threats of nuclear arms race, climate change and uncontrollable development of AI. Mainstream economics will have to reflect on its role in propagating globalization unchained without anticipating the potential backlash resulting from the problems created by globalisation – rising inequality, economic insecurity and degradation of the environment. Development Studies will play a complementary role in placing the Global South at the centre of a more inclusive and sustainable globalization. Thus, there will be ample food for thought and debate at the upcoming events to celebrate EADI’s fiftieth anniversary!

It is no longer the economy, but it’s history, stupid!

Jürgen Wiemann was EADI vice president until 2023

Image: 81349 on Pixabay

Note: This article gives the views of the author, not the position of the EADI Debating Development Blog or the European Association of Development Research and Training Institutes.

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