New Contours of the World Order
No. 4 2005 October/December
Sergei A. Karaganov

Professor Emeritus
National Research University–Higher School of Economics, Moscow, Russia
Faculty of World Economy and International Affairs
Academic Supervisor;
Council on Foreign and Defense Policy
Honorary Chairman of the Presidium


SPIN RSCI: 6020-9539
ORCID: 0000-0003-1473-6249
ResearcherID: K-6426-2015
Scopus AuthorID: 26025142400


Email: [email protected]
Address: Office 103, 17, Bldg.1 Malaya Ordynka Str., Moscow 119017, Russia


In the
past year, there have been several definite tendencies in
international relations that indicate the beginning of a new
political stage in the world’s development. The period that
replaced the Cold War era is over, while few people can say with
any degree of certainty what will happen next in the world.
Nevertheless, factors that will determine its future development
are already obvious. The format of this article does not permit an
all-embracing analysis of international developments; so many
important factors have been left out, including the proliferation
of nuclear weapons, the progressive weakening of international
governance systems, and the growth in the number of failing or
failed states.



The center
of international politics is steadily shifting to Asia,
demonstrated by the People’s Republic of China, a sprawling nation
that continues to increase its potential at an incredible pace.
Since 1978, the year when its economic reforms began, China’s GDP
has increased four times, while the annual growth rate of the
Chinese economy stands at 8.5 to 10 percent. There are some
analysts, however, who speculate that Beijing deliberately conceals
the true figures of China’s economic growth, perhaps in order to
conceal the true figures of its defense spending.


A majority
of analysts have come to the conclusion that the economic growth
rates of China will remain high and that within the next 20 years
the country will become the world’s second leading power in terms
of its economic performance figures. It already ranks second in the
world as regards the purchasing power of its gross domestic
product, while the amount of U.S. securities owned by China
provides influence on the United States and the global financial
system. Meanwhile, many analysts argue that China’s rapid reforms
will inevitably bring about a crisis there; however, such
prophecies have been popular for two decades now.


to some forecasts, by 2040-2050 China will account for 14-16
percent of global GDP. These prospects magnify its present
economic, political and military might, while increasing China’s
weight on the international scene. Thus, it is no surprise that
other nations are struggling for influence on Beijing, as well as
for access to the Chinese market. At the same time, efforts to
contain China, or gradually integrate it into the world economy,
are becoming dominant features of global politics.


Asian country making rapid progress into the top ranks of global
powers is India. Over the last 10 years, the Indian economy has
been growing by 8 percent annually. Moreover, this growth is
arguably more stable and sound than that in China, as it is ensured
by domestic, rather than foreign, investment. India is becoming a
motor of global technological progress, and in 20 to 30 years it is
expected to be the world’s third leading power after the U.S. and
China. India is one of the world’s largest suppliers of software
and other high technologies, and has more people who rank in the
middle class than does the European Union.


Of course,
India and China remain relatively underdeveloped, with many people
living in poverty. Yet their people no longer starve as they did
just five to ten years ago, and this factor adds to their
stability, and especially in India which is a very stable


armed forces – relatively modest in strength considering the
country’s size (one million servicemen – less than Russia’s troop
strength) – are capable of rapidly increasing their combat
readiness. India is building a mighty navy that in the future will
include four aircraft carrier groups, and may become an independent
military and political guarantor of stability in South Asia and in
the Gulf region. Furthermore, New Delhi is increasing its
international activities, offering large military forces for UN
peacekeeping operations.


To all
appearances, India’s main goal is to become a nation of major
influence in the whole of Asia, including in the unstable region of
the Broader Middle East, most notably Iran and the Gulf States. By
pursuing a policy of gradual rapprochement with China, New Delhi
simultaneously seeks to become a counterbalance to Beijing without
turning into an instrument of its “containment.”


in South and Southeast Asia include a group of successfully
developing “Asian Tigers.” South Korea, for example, has achieved
high growth rates, while Japan is overcoming a protracted economic
crisis. In light of the aforementioned developments, there is no
doubt that the competition for influence in Asia (just like the
struggle for Europe was in past centuries) is becoming a major
factor of international politics.


being employed against China include both its “containment” and
integration into global structures, with emphasis made on the
preservation of China’s dependence on external energy supplies.
India is no longer “contained;” on the contrary – active attempts
are being made to “turn it Westward.” Meanwhile, India is in no
hurry to become anyone’s ally, preferring instead to pursue a
relatively independent multivector policy.


In Asia,
there is an obvious move toward the formation of a regional
economic center – a soft integration bloc capable of becoming a
mighty center of economic strength within a decade, possibly built
on the basis of the Association of Southeast Asian Nations (ASEAN).
It is not ruled out that such an alliance will ultimately develop
into a formal integration association, similar to the North
American Free Trade Agreement (NAFTA), or the European Economic
Community of the past. The yuan, the yen and the rupee may all
strengthen at the dollar’s expense. The development of the new
association will be met with serious resistance (above all, by the
U.S.), but this process can hardly be stopped.


Simultaneously, the new phenomenon of nationalism is also
growing in the fast-developing Asian countries, and is manifest in
relations between these countries (witnessed in conflicts between
Japan and China, for example, and between Japan and South Korea,
stemming from differences in the interpretation of history), and in
their attitude toward the West. The Asian nations, growing more and
more confident about their strength, seek to remove the
centuries-old ideological and cultural domination of the West. They
declare their readiness to pursue independent economic and
political lines – with their neighbors’ support or (for the time
being) through their own initiative.




probability for the increased proliferation of nuclear weapons in
the world continues to grow. North Korea may already have these
weapons, while Iran is about to develop them. A majority of
analysts are skeptical about the chances for a global solution to
the problems in Teheran; according to estimates by U.S. officials,
a diplomatic or military solution is possible within the next 12 to
16 months. After that, the process will become irreversible and the
price of settlement will sharply increase. The next U.S.
presidential elections will be an important factor in solving the
Iranian problem.


leaders of Iran and North Korea believe there are high military and
political threats to their countries, while the majority of their
neighbors also feel concern for their security. The development of
nuclear weapons by Pyongyang and/or Teheran may provoke a chain
reaction and cause Japan, South Korea, Egypt, Saudi Arabia and
other states to unfreeze their nuclear programs. No state has ever
tried to combat the causes of the nuclear “disease;” emphasis
remains on fighting its symptoms. Building the necessary confidence
for such a program requires the creation of regional security
systems, together with the creation of local “Helsinki processes.”
This agenda requires the participation and guarantees of the Great


To date,
all attempts to deliver democracy to the Broader Middle East have
failed, although Washington has succeeded in bringing some of the
local regimes (Syria, Egypt, Libya) around to its point of view by
means of pressure. Meanwhile, the breakup of Iraq remains a
probability; the most optimistic estimates show that the situation
there will not stabilize for at least another 8 to 12 years.
Another hotspot is the Palestinian-Israeli conflict, which may
flare up again at any moment. The latest moves by Israeli Prime
Minister Ariel Sharon indicate that, by sensing the approach of a
new crisis, he is seeking to shift responsibility onto the
Palestinians. It is not clear yet whether the U.S. and other
external parties to the Middle East process, including Russia, are
ready for the “imposition of peace.”


In any
case, the present concept of transforming the Broader Middle East,
based not on modernization but democratization (this refers, above
all, to the holding of elections according to the Western model),
has failed, or at least postponed for an uncertain amount of time.
A solution to the problems facing the Moslem Middle East can be
accelerated through modernization. This process should begin with
economic and educational reform, the improvement of the position of
women, and the softening of particular religious


modernization cannot be started before regional security is
strengthened through systematic measures. The regional elites will
use the pretext of external threats – be it “Western,” “Israeli,”
“Saudi” or “Iranian” – for rejecting




The United
States is witnessing an unprecedented drop in its popularity, once
the very foundation of its international influence, as developments
in recent years have undermined Washington’s prestige and


At the
beginning of the 21st century, the United States pinned its hopes
on two factors in regional politics: first, “controllable
destabilization” of international relations which included the
possibility of using its military superiority in this situation;
second, the democratization of the Broader Middle East, with a view
to reducing the terrorist threat while strengthening its own
positions in the region.


attempts to achieve these goals, however, in particular by invading
Iraq, failed. The Iraqi operation tied Washington’s hands and
limited its capabilities to influence other crises (Iran, North
Korea, the Palestinian-Israeli conflict). For the first time in
recent decades, the American elite divided over Washington’s
foreign policy. The United States had enough military power to win
any war, but lacked the resources to achieve political goals and
“win peace” – that alone would have been advantageous enough. Then,
the tragic events in New Orleans demonstrated the ineffectiveness
of the American government’s response to natural cataclysms on its
own territory. This served to highlight the limitations of the
capabilities of the sole superpower.

the U.S. and Europe are still parts of one political, economic and
cultural civilization, the divergence between them now is too great
to be overcome. Washington does not conceal its intention to
prevent a European integration that would turn the Old World into a
global military and political actor. The United States is obviously
giving up its orientation toward Europe as a key actor, giving
long-term preference instead to Asia. In all probability, Asia will
be a real factor in U.S. policy for the next few years.


In the
intensifying competition for influence in India, the U.S. is
displaying unprecedented interest. Washington proposes to New Delhi
not only “special relations” and seats in the Group of Eight and
the UN Security Council, but also cutting-edge armaments. America
is ready to participate in the construction of nuclear power plants
in India, while General Electric and Westinghouse – companies that
enjoy political support from the White House – have already made
construction proposals. These offers of assistance are made despite
India’s nuclear status, a relatively recent development that has
delivered a severe blow to the nonproliferation regime.


foreign-policy difficulties are aggravated by structural problems
of the American economy. U.S. foreign and consumer debt continues
to grow, while overestimates in the real estate market have
produced another bubble. Simultaneously, U.S. officials often utter
super-liberal statements while pumping back door money and
investment into the economy by means of the state debt mechanism
(actually, by neo-Keynesian methods), thus ensuring very high and
stable growth. The newly created bubble may harmlessly deflate, or,
on the other hand, it could burst and bring about social


The U.S.
is the world’s largest provider of the highest quality education,
as well as major technologies. At the same time, however, American
experts express concern over the level of technical education in
the country. The shortage of highly skilled specialists in the U.S.
is partly compensated for by an active policy of attracting
educated immigrants into the country, and partly by outsourcing in
technologically rising countries.


It seems
likely, given these conditions, that America will eventually face
serious economic problems. In the foreseeable future, however, it
will remain the fastest-developing society and the main economic,
military, diplomatic and ideological superpower. Moreover, it is
very unlikely that the United States will give up its active global
role: even circles that traditionally espouse isolationist ideology
support Washington’s energetic interventionist policy. Attempts to
take avail of the relative unpopularity and partial weakening of
the United States would be extremely dangerous and would cost any
state dearly.




failure of France and the Netherlands to pass the European
Constitution by referendum came as the gravest crisis for the
European Union in its history, and revealed many of its structural
weaknesses that had been accruing for years. These include slow
economic growth, a consistently high unemployment rate (about 10
percent or even higher in the majority of the countries of “Old
Europe”), and the inability to carry out liberal reforms due to
their rejection by the majority of their population. However,
despite the awareness of the crisis situation, which includes
stubborn low growth rates, there is little chance for a drastic
change in EU economic and social policies. Europe simply cherishes
its well-being too much to launch painful reforms. The causes that
sparked two world wars have been eradicated, it is believed, and
there is no more need to combat the Communist influence. Meanwhile,
the Europeans have achieved almost all the goals set out in the
original integration project. Today, it seems that power belongs to
the younger generation, a group that has a tendency to take the
presently favorable situation for granted. While the “new
Europeans” may initiate reforms in “Old Europe,” the potential of
their influence is limited.


After the
failure of the Constitutional referendums, the process of building
a political union, or a quasi-state (the last shot of the older
generation of Europeans), will most likely stop for a few years. A
further enlargement of the European Union does not arouse much
enthusiasm among the ruling elites, while it is not supported by
the larger part of the population. The decision to admit Bulgaria
and Romania into the EU in 2007 was made behind the scenes, almost
in secret from the European public, at the level of foreign
ministers rather than heads of state, as is the standard protocol.
The question of Turkey’s EU membership has been practically removed
from the agenda for the next few years, while Ukraine’s candidacy,
let alone Russia’s, is not seriously considered.


European Union may spend another four or five years debating its
future, while wasting precious time required for the reforms.
Furthermore, it is unlikely in the immediate future that the EU
states will draw up a common foreign policy, or, more importantly,
a common defense policy. As a result, Europe’s lag behind other
world centers may increase and become irreversible. By 2030-2050,
United Europe will fall behind the U.S. and China in the volume of
its GDP.


In a world
where military force is again acquiring weight, the EU is building
a one-million-strong “post-military armed forces” which are unable
to fight, not to mention effectively participate, in the majority
of peacekeeping operations.


In light
of the above factors, there is a growing belief that the Old World,
although still culturally attractive, is increasingly out of sync
with global policy and that it has, in any case, lost its economic


Thus, the
European Union has actually begun to freeze its rapprochement with
Russia, despite the continuing atmosphere of friendly rhetoric, and
pursue a policy of “peaceful coexistence” and even stiff
competition in the economic sphere. Against the background of
outstanding problems, such as agricultural subsidies, energy prices
and transit rights to the Kaliningrad Region, the EU is trying to
undermine the competitive ability of Russia’s civil aviation and
aircraft industry, while threatening Moscow that it may withdraw
from the agreement on Russia’s accession to the World Trade
Organization – even though Russia has met the request of Brussels
and signed the Kyoto Protocol. At Russia’s expense, the European
Union seeks to create an impression that it has a common – and
effective – foreign policy.


Hence the
ongoing attempts to play the role of an arbiter in addressing the
problems of “frozen crises,” or rather “unrecognized states,” and
constant demands that Russia withdraw its troops from these states.
The EU’s appointment of a “special representative for Central Asia”
falls into the same category of such moves. Meanwhile, the European
Parliament almost always sides with the Baltic States which hold
strong anti-Russian positions, while it has also supported Japan’s
demand that Russia “return the Northern Territories.” The approval
of the “Road Maps” document has failed to attain even the
short-term goal of mitigating the crisis in Russian-EU


strained relations between Russia and Europe are provoked by
difficulties inside the EU and the growing divergence of the ways
of their internal development. Moscow is now pursuing a policy that
was characteristic of the West European states many decades ago.
But these differences are surmountable, especially as a
renunciation by Russia of the European path, which best corresponds
to the Russian mentality and traditions, is very unlikely and would
mean the nation’s self-destruction.


relations have not yet reached the “end of history.” In the future,
the European Union may change its values and stop building a
political association, returning instead to the model of an
“extended common market and social union, plus a common currency.”
Besides, seeing the weakening of its positions, Brussels may
finally assume a policy of strategic rapprochement with Russia.
Therefore close interaction with the EU remains an imperative of
Russia’s policy.




that caused the present relative oil shortage include increased oil
consumption in Asia, and the uncertainty of producers about
international political stability, which limits their readiness for
investment. There is also the shortage of oil refining


The demand
for oil is not expected to decrease even if Western economies slow
down their growth or decline. India and China increase their demand
by approximately 25-30 percent per year. The demand for oil
products is rapidly growing in other Asian countries, as well. The
demand for oil and oil prices will not fall also because the share
of oil costs in the world GDP is much lower than the same figure
during previous oil price hikes. Besides, consumer countries often
earn on more expensive oil products through the tax system much
more than energy-producing countries themselves.


there is little hope that oil resources of Russia and the Caspian
region will seriously reduce the general dependence on Middle
Eastern oil. The Middle East (Iraq and Iran) boasts the most
promising oil reserves. The convenience of transportation makes oil
the main energy source for the foreseeable future, although it may
make way for natural gas or, less likely, renewable energy sources.
Electricity production is expected to increase at nuclear power
plants. The U.S. and Great Britain plan to build more such plants,
while Germany and Sweden have increased allocations for nuclear
power engineering and work to extend the lifetime of plants that
not long ago were planned to be shut down. Also, there is
competition among Western countries for the supply of nuclear
reactors to China.


geopolitics has entered a new era – that of struggle for control
over oil fields and oil transportation routes. The new developments
are best manifest in the U.S. policy. Washington seeks to deny
China free access to energy resources and to diversify routes of
oil supply from the Caspian region. The U.S. policy toward Russia
is friendly enough, yet it is not based on deep mutual
understanding; rather, it resembles the U.S. policy toward Saudi
Arabia. Less manifest developments include the struggle for the
future of Iraq, the aforementioned sharp buildup of India’s Navy,
and the rapprochement between Beijing and New Delhi which are not
interested to see any third force use their competition in its own




The recent
changes in the world situation have brought about several historic
challenges to Russia, causing it to amend its policy. The rapid
redistribution of forces on the world arena in favor of “New Asia”
(not to be confused with traditional Asia, whose values are the
center of gravitation for Russian “Eurasianists”) requires that
Russia revise its economic and political priorities.


I do not
mean the phantom axes between Moscow and New Delhi and between
Moscow and Beijing, but specific moves to reinvigorate economic and
political cooperation with the world leaders. These moves must
include a long-awaited breakthrough by the Russian energy sector
into the South and the East, an accelerated construction of oil and
gas pipelines, and a marked increase in investment in geological
prospecting. It is Russia, not Europe, that must seek to diversify
routes for the supply of energy resources in order to raise their
prices and prevent limitations on the country’s exports and an
increase of price diktat.


At the
same time, the political and cultural line toward rapprochement
with Europe must remain a priority of Russia’s foreign policy. The
pause imposed by Brussels must be used to reinvigorate the search
for a “new beginning” in Russian-European relations. At the same
time, constructive relations with the U.S. must continue to be
viewed as a major resource. For example, Russia needs to launch a
project to explore Siberia and the Russian Far East, in cooperation
with the United States, European and Asian countries.


policy with regard to the Commonwealth of Independent States also
needs revising. The majority of integration projects, including the
Common Economic Space, will not be fully initiated due to the
position of Ukraine, as well as, to a lesser degree, that of
Belarus. The only viable projects left are Russian-Kazakh and
Russian-Belarusian interaction, that is, if Moscow decides to
breathe new life into its Belarusian policy.


majority of the CIS countries will inevitably see a changeover in
post-Soviet political elites. The only country where the incumbent
leadership theoretically can remain in the saddle is Kazakhstan. In
this situation the conservatism in Russia’s policy is not
justified. Wherever possible (in Belarus and, possibly, Armenia),
Russia should promote a relatively painless change of the ruling
regimes, providing them with corresponding guarantees. In other
newly independent states (first of all, in Central Asia), Russia
should try to share responsibility for ensuring stability there
with third outside forces (China, the United States, and the
European Union) or keep itself aloof from that at all.


chances are approximately 30 to 40 percent that Ukraine, which the
West seeks to keep within its zone of influence, will join NATO in
the next few years. There is no disagreement on this issue between
the U.S. and the EU, which most likely have already agreed in
principle to such a scenario. Ukraine will be followed by Moldova,
Georgia and, possibly, Belarus (if Moscow fails to bring about
changes in Minsk and if developments there unfold according to the
Ukrainian scenario).


enlargement will force Moscow to make one of the most difficult
choices in its history. Should it demand NATO membership for itself
at that point? That would be unrealistic; moreover, it would
prevent the necessary consolidation of the Asian vector in Russia’s
policy. The question is: Should Moscow introduce a regime of “real
borders” with countries tied by close, human bonds? Or should it
confront the West, despite the fact that it lacks enough resources
for that? The latter variant would inevitably make Russia still
more dependent on China.


For all its problems, Russia still has a
high political, economic and foreign-trade

– a relatively fast-developing economy
(although this process is now decaying);

– rich mineral and energy resources
(which can be used much more effectively);

– nuclear weapons;

– large general-purpose forces (almost
equal to the forces of India, China, and United

– membership in the UN Security Council,
the Group of Eight and, simultaneously, the Shanghai Cooperation

– advantageous geopolitical position
(neither the U.S., nor China or Europe want Russia to be under the
influence of only one of the centers, which gives Moscow wide room
for maneuver);

– the immediate neighborhood with states
that are sources of terrorism (the unstable Broader Middle East and
unstable Central Asia) increases Russia’s geopolitical weight.


Nevertheless, the unpredictability of
the global situation and threats to Russia’s security and
geopolitical position increase its vulnerability to external
challenges, which in some cases merge with domestic ones. The
country’s international position is becoming increasingly
complicated and unpredictable, threatening to seriously worsen in
several years.


Such developments can and must be
prevented by stepping up domestic reforms and increasing the
effectiveness of the political model, the decision-making system
and general governability. Without these measures, as well as
without stepping up state policy, including investment, in the
basic sectors (education, medicine, the transport network,
communication, geological prospecting, aircraft building, the
exploration of outer space, and others), Russia will not be able to
change its image of a degrading state, which undermines all
foreign-policy prospects.


Under the present conditions, the
effectiveness of the political system cannot be increased without a
combination of authoritarian and democratic principles. However,
the excessive growth of authoritarianism is now depriving the
“power vertical” of its basis – active support and participation of


The new conditions require increased
attention to foreign and foreign-economic policies, as well as the
coordination of efforts. But the main thing is that the Russian
leadership and intellectuals understand the unprecedented nature
and acuteness of our external challenges.


The aforesaid requires creating (or
recreating) a non-governmental analytical and forecasting mechanism
that would fulfill specific tasks set by Russia’s leadership. This
mechanism must rest on the potential of the Russian Academy of
Sciences, on capabilities of the corporate sector, and on foreign
intellectual resources. This task may require the establishment of
several new-generation research centers (technology for creating
such small centers has been developed and tested.)


Finally, it is time to implement the
long-overdue idea of setting up a group of centers (institutions)
that would analyze the situation in CIS countries and,
simultaneously, serve as channels for influencing them. Borrowing
from foreign experience, Russia should rebuild its research and
analytical base at a new level for working out a modern pragmatic
concept for developing Siberia and the Russian Far East.


Moscow must allocate funds (relatively
small) for the training and retraining of personnel and adapt it to
the new geopolitical and geo-economic situation. First of all, this
refers to high-level personnel for work with the European Union.
(According to different estimates, there are 20 to 25 highly
skilled experts in this field in the country, and only half of them
work in the state apparatus. This is even less than in the Baltic
States.) What is also required is retraining specialists in Asian
issues, most of whom still identify with “old” Asia, which now is
actually non-existent.


* * *


Thus, in order to prevent the weakening
of its positions in a changing world, Russia must carry out the
following steps:

– change the philosophy of its approach
to the CIS, focusing its attention only on those countries that
play a key role and where Russia’s active policy has good

– reorient and diversify energy exports
to Asia or the world market as a whole;

– step up dialog with rapidly developing

– avoid sliding toward an anti-Western


Calls to embrace Asia do not imply a
multipolar policy directed de facto against the U.S. Such a move
should not be interpreted as the conservation of backwardness, the
triumph of barbarian “Eurasianism” under the guise of an “original
path,” an anti-Western policy or renunciation of the European
choice. It should be viewed as a movement along the path of
accelerated modernization, without which there will be neither
prosperity, nor democracy. This is a call for a real multivector
strategy aimed at using the new tendencies in the global
development in the interests of the country.