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Tuesday, December 7, 2021

Putin and Xi’s dangerous miscalculations offer a slim ray of hope

Alexander Lukashenko was out to cause trouble for Europe. Earlier this year, the Belarusian government began shipping migrants from the Middle East to Minsk. Then, it transported them to its western border and sent them packing into Europe.

It was an act of retaliation for EU sanctions imposed after Lukashenko fraudulently stole an election last year and then violently suppressed protests about it. Perhaps noting how the EU had handed over buckets of cash to Middle Eastern and North African countries to slow the migration crisis of 2016, he reckoned he could achieve a similar outcome.

At first it seemed like a plot devised by an evil genius. But with Poland violently defending its borders, thousands of migrants now stuck inside Belarus and further EU sanctions being threatened, it’s starting to look like a severe miscalculation. It’s one of several made by governments hostile to the democratic world in recent years.

Since 2008, we have been racked by doubt over ideas once established as truth by the end of the Cold War: is the democratic, capitalist model really the best one? Will it prove its worth by out-competing autocracy, communism and fascism? Perhaps technocratic, centrally planned or strongman systems are better suited to thrive.

Increasingly, however, there are signs that the major powers hostile to the West may be overplaying their hands in ways that support the old theory: autocracy interferes with the crucial process of trial and error that helps nations prosper.

Belarus’s larger neighbour and sponsor, Russia, is another example. Ahead of the winter, Moscow decided to cap a dreadful year for Europe’s economy by strangling its recovery from the pandemic using gas prices. Contrary to its usual practice, Gazprom said that it would not be delivering extra gas for the colder months.

The news sent gas prices soaring, thwacking factories and households with huge bills. Though Russia denies it, the move was a deliberate ploy, thought to be aimed at speeding up German approval for the Nord Stream 2 pipeline, which will allow Russian gas to bypass transit nations like Ukraine and give Moscow a direct line with which to yank around the German economy.

If so, it hasn’t yet achieved its aim. The approval process for Nord Stream 2 was suspended by the German regulator this week because the pipeline consortium has not established a local company subject to German law. That might sound like a technicality, but it isn’t. Subjecting the whole pipeline to German regulation could make the geopolitical shenanigans of the past few months significantly more painful for investors.

Even worse for Russian clout long-term, Moscow’s deployment of the “gas weapon”, just like Saudi Arabia’s use of the “oil weapon” in the Seventies, may well prove to be the peak of its power in resource diplomacy. It has helped to reawaken interest in Western nuclear power programmes long abandoned and strengthened the argument made by those European nations still heavily reliant on coal, like Poland, that they must not be made to phase out the fuel too quickly. For the sake of his personal power, Vladimir Putin has shifted the energy calculation in Europe, and not in Russia’s favour.

Meanwhile, in China, Xi Jinping’s government is well on its way to canonising the dear leader, having last week issued a “historical resolution” – a diktat on how to interpret history that elevates Xi to the same revered status as China’s other communist leaders, Mao and Deng. Xi’s additional advantage over them, of course, is that he is not dead.

Throughout his decade in power, Xi has made it a priority to eliminate not only his rivals, but all potential successors. After a while, this strategy becomes self-reinforcing, because he has too many enemies to risk stepping down or allowing any opposing factions to emerge. It has enabled a string of dangerous policy shifts and made it more difficult for China to adapt to the consequences of past autocratic policies, like the steep population decline brought about by the one-child policy.

The most salient policy shift has been the increasing intrusion of the Communist Party into the economy. It began with party committees being forcibly inserted into companies and then expanding their roles to include personnel management and company strategy. Recently, Beijing has waged war on China’s tech companies and billionaires, wiping trillions off their values, disappearing Alibaba founder Jack Ma for several months, and taking seats on the board at supposedly private firms like Tiktok owner Bytedance.

At the same time, the government has outlawed whole industries overnight, like the private tutoring business, which was worth an estimated 2-3 per cent of Chinese GDP. It has also begun a crackdown on real estate giants like Evergrande, spooked by spiralling debt levels, and is clinging to a zero-Covid approach that requires shutting down chunks of the economy periodically.

In foreign policy, China’s continued pouring of billions into expansionist projects like strings of militarised islands and its “new Silk Road” infrastructure project have created high-profile drains on the national coffers that will be painful to scale down.

Its blatant obfuscation of any investigation into the origins of Covid and corruption of international science, recently documented in stark detail by a new book called Viral, by Alina Chan and Matt Ridley, has fuelled rising hostility to China around the world. The number of countries voting against China in key UN votes has risen, not fallen.

And in just the latest blow to China’s global reputation, Beijing looks to have disappeared the tennis star Peng Shuai following her public allegations of an affair and sexual assault by a retired senior party official.

None of this means that these hostile governments are about to collapse, but they are making dangerous mistakes perpetuated by political systems that stifle scrutiny and debate. As depressing as it is to watch the retreat of freedoms in the West, with draconian vaccine mandates taking hold in Europe and Left-wing activists waging war on free speech here and in the US, there is no reason to be fatalistic about the fate of the democratic world.

In a couple of weeks, US president Joe Biden will convene a summit of democracies to work out the path forwards. Whatever our own problems, let’s be heartened by the sight of these seemingly all-powerful autocracies mis-stepping badly on the world stage. It’s not over for the free world yet.

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