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Release peace: the magazine

Release peace: the magazine

Analysis & Background Stories on International Affairs

Europe, US, China: What Happens if Our Interconnected World Falls Apart?

This article was published as part of a cooperation with the Peace Research Institute Frankfurt (PRIF), one of Europe’s leading peace & security think tanks. It is based on this analysis by Matthias Dembinski and Dirk Peters.

Decoupling at a Glance

An emerging ‘new Cold War’ appears to pit the West, led by the US, against autocracies, led by Russia and China. But the analogy between today’s regime competition and that of the ‘old’ Cold War can be deceptive. Today, China and Russia are much more closely intertwined economically with the world economy than the Soviet Union ever was. There is growing pressure to engage in so-called decoupling, that is, to break these interdependencies. Research on past instances of decoupling, conducted as part of the Drifting Apart project of the Peace Research Institute Frankfurt (PRIF), shows that such processes often exacerbate conflict. The interdisciplinary project was developed under PRIF’s lead within the Leibniz Research Alliance Crises in a Globalised World. It offers four lessons about the dynamics of decoupling – and little cause for optimism about today’s disengagement processes.

Moving Away From Interdependence

After the Cold War, economic interdependence among states was widely considered as a means to improve prosperity and secure peace. Countries around the world became increasingly enmeshed and were expected to be wary of disrupting those relationships. Otherwise, they would pay a price by losing access to markets and supplies and harming their domestic economies. Nonetheless, there are numerous instances in which states have chosen to break existing interdependencies to pursue goals they valued more highly.

Learning From Past Episodes of Decoupling: The Drifting Apart Project

“Drifting Apart” brought together historians, area specialists and peace researchers to examine five past cases of dissociation: states disengaging from international cooperation. It covered a broad range of cases: Iran’s split from the West in 1979, East Germany’s exit from the Warsaw Pact, Russia’s disengagement from the European security order since the mid-2000s, China’s creation of alternative financial institutions since 2013, and the UK’s exit from the EU since 2016. Although the project’s findings are only a first cut, and despite the differences between cases, typical patterns are evident and four general lessons can be drawn. As outlined by Matthias Dembinski and Dirk Peters in their 2023 article,  we shall look at tbe lessons learned.

Lesson 1: Decoupling Tends to Increase Tensions

Decoupling processes are often embedded in broader conflicts. States typically withdraw from cooperation because they have wider disagreements. The individual act of disengagement can therefore be categorised as a contribution to the broader conflict. Take China’s initiative to establish the Asian Infrastructure Investment Bank (AIIB): While China depicts the AIIB as complementary to the global financial architecture, the US regards it as a strategic attempt by China to strengthen its position in competition with the US. Secondly, decoupling is disruptive: It removes established processes and makes it necessary to initiate new ones. This readjustment is typically fraught with conflict. Even in a benign case like Brexit, where the former partners negotiated and codified the contours of their new relationship, tempers flared up. Even navy vessels were dispatched in a dispute with France involving fishing quotas.

Lesson 2: Ideational Conflict Increases Tensions

Some dissociation conflicts are more complex than others. The project distinguished between conflicts that involved the distribution of material costs and benefits (“distributional conflicts”) and those that involved disagreements about fundamental values (“ideational conflicts”). Tensions increased in cases where both sides focused on ideational differences. For example, in the confrontation between the US and Iran, following the latter’s dissociation from the West in 1979, both sides emphasised their ideational differences. Relations quickly deteriorated and remained very conflictual. Conversely, Iran and West Germany deemphasised the ideational aspect of their conflict, allowing them to maintain low-key forms of cooperation despite the rift. Similarly, Russia’s distancing from the Western security order since the mid-2000s escalated in part due to its ideational framing on both sides, which pitted Western ideas about order against Russian ideas. This made it difficult to treat territorial and economic conflicts as issues to be resolved through negotiation.

Lesson 3: Domestic Dynamics Reinforce International Conflict

Given how an emphasis on ideational issues tends to increase tensions, it would seem rational for policymakers to avoid ideational framings of their policies. However, the case studies show that they are rarely free to do so. Policymakers are often confronted with domestic processes triggered by dissociation that push them toward an ideational framing and uncompromising stance at an international level. This is because decoupling affects the economic interests and ideational preferences of actors within states. Governments have strong incentives to shift blame for problems resulting from decoupling to the other side, closing the ranks at home and thus ensuring their political survival. Following Iran’s dissociation from the West in 1979, the religious leadership cultivated the image of the US as the arch-enemy and escalated the conflict with Washington to suppress moderate voices within the revolutionary coalition. Among the five cases, there is only one in which a government deliberately tried to ignore domestic voices for a tougher stance. But even this case shows how difficult it is to resist pressure for international escalation.

Lesson 4: Defusing Conflict is Difficult but Possible

That one case is East Germany’s withdrawal from the Warsaw Pact in September 1990 that took place in the context of German reunification. In Moscow, Gorbachev was met with fierce resistance within the Politburo because East Germany’s withdrawal threatened the Warsaw Pact as a whole and could be seen as the Soviet Union’s ultimate defeat in its ideational conflict with the US. Gorbachev, however, chose to de-emphasise this wider frame and instead focused on the immediate distributional issues resulting from the withdrawal. He demanded economic concessions from Germany to compensate those who were affected, namely the troops who were transferred from East Germany back to the USSR. When he received those concessions, East Germany’s departure from the Warsaw Pact became an example of a successfully managed dissociation. Despite all these factors favouring an intensification of conflict in decoupling processes, their peaceful management could be achieved. However, it also shows the dangers that decision makers expose themselves to in such instances. By essentially overruling dissenting voices in the inner cirlce of decision making, Gorbachev chose a high-risk strategy that ultimarely contributed to his political demise and the attempted coup against him in August 1991. Ideational dissatisfaction with the post-Cold War situation remained a strong political force in post-Soviet Russia and is arguably still a key factor in Putin’s policies today.

Managing Decoupling in times of Regime Competition

These past lessons are sobering. Even though they have different historical backgrounds and the scope of affected interdependencies varies, they all show that decoupling is a process that is fraught with tensions and tends to exacerbate rather than calm underlying conflicts. Managing decoupling thereby requires de-emphasising ideational issues and, wherever possible, treating conflicts as distributive issues for which compromise solutions can be found.

 

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