ED: This article is a series about the new transactional multipolar world order.

​What has gone wrong with the world? Protests and wars have broken out across the globe. Analysts are warning that weak countries like Turkey, Romania, Bulgaria and Indonesia could face problems. Europe has lost its competitive edge and is deindustrialising as a result of the boomerang effect of sanctions. Russia and China are booming and Ukraine has all but lost its war.

As bne IntelliNews recently reported, the world is going through a fundamental change. It has abandoned its rules-based international order for a transactional multipolar world model. Donald Trump’s ascendance as US president is the most obvious example, but he is a symptom of this change, not the cause.

These changes are a sharp turnabout from 1991, when the socialist experiment failed. The first decade following the collapse of the Soviet Union was chaos as major economies like Russia’s completely collapsed. The second decade was a golden period of optimism as 3bn socialists abandoned their ideology and joined the 3bn capitalists. The world was united under a single ideology for the first time, promising the end of war and global prosperity. It was famously “the end of history.”

These were the boom years for Russia. The economy was growing at over 6% a year, public sector wages were rising by 10% a year and inflation had fallen to single digits for the first time since independence in 2007. That year the Kremlin launched a $1 trillion infrastructure investment programme that should have transformed Russia into a normal vibrant country. The future was bright.

And it was not just Russia; the entire region began to enjoy the fruits of the “catch-up” growth as they adopted the new economic paradigm wholeheartedly. It was also an era of political liberalism, where the private sector was flourishing, and Putin kept to his promise of “you don’t interfere in politics and we won’t interfere in your lives.” There was “repression-lite,” as security analyst Mark Galeotti dubbed it, but the Kremlin largely kept out of people’s hair and let them get on with earning money and having babies.

It reached its liberal political apogee in the summer of 2008, when legendary liberal economist Sergei Guriev, who later went on to become the chief economist at the European Bank for Reconstruction and Development (EBRD) and is now rector of the London Business School, was in complete control of the economic reform agenda. He told bne IntelliNews in an interview that he drew up an economic blueprint that included restarting the privatisation programme and a raft of deep reforms and then President Dmitry Medvedev didn’t change a word when he presented the plan at the annual St Petersburg International Economic Forum (SPIEF).

Then it all blew up. In September the US went into the sub-prime mortgage market meltdown. The Kremlin scrambled to rescue what it could. Russia was especially exposed, as its companies had borrowed heavily on international debt markets and as their share prices tumbled, they were being hit with “margin calls” that sucked cash out of the country. In the previous 20 years Russia had seen a net circa $600bn of capital leave the country, except in 2016 and 2017 when it saw net inflows of around $600bn as Russian entrepreneurs finally believed their country had a future. The entire amount left again in 2008 and Russia has been a net exporter of capital ever since.

Lessons learned from the destruction of Carthage

But history still has lessons to teach. Over the last three decades the US has gone from being the second largest economy in the world after the collected EU countries that was half as big again, to being the largest by half as much again as the EU.

But that could be ending now. Trump is a wrecking ball. The Pax Americana is clearly being destroyed from the inside. Trump is systematically dismantling the liberal legislation that is the embodiment of the values-based order the US is supposed to be protecting, by targeting things like Diversity, Equity & Inclusion (DEI).

Ironically, he is more popular now following this attack than when he took office in January, as he is playing to the ennui of the US public with government. Voters are fed up with the lack of responsiveness of government: US incumbency amongst the senior leaders has been over 90% for years, while the government’s approval rating is in the low teens. People have got the point where they simply want to see the old system smashed, rather than reformed.

This same dissatisfaction is also driving a wave of protests around the world. Southeast Europe is in uproar with mass protests in Turkey, Serbia, Romania, Bulgaria and Georgia. Southeast Asia is also aflame with indignation in Indonesia, Hong Kong and South Korea. In the more civilised northern Europe dissatisfaction, fuelled by half a decade of the polycrisis has seen the rise of the right in Germany, France, Austria and the Netherlands, to name some obvious examples.

Trump is retreating from the rest of the world and breaking the tight international relations that Washington has worked so hard to build up since the Cold War. Like Russian President Vladimir Putin, he is ignoring the UN Charter’s commitment to territorial integrity with threats of annexing Canada, Greenland and Panama, while economically attacking the US’ best trading partners with threats of tariffs; on March 26 he announced 25% tariffs on European car imports that will exacerbate a crisis in the automotive sector that is already well underway. The automotive sector and heavy industry across the Continent are already shutting down plants due to the ongoing polycrisis, engendered first by the Ukraine conflict and now Trump’s irrational policies. A recent article in the Financial Times found that Trump is now more closely aligned with Putin and Chinese President Xi Jinping than he is with the EU.

Like ancient Rome following the defeat and destruction of Carthage, the quality of the US leadership has plummeted. Trump has stacked his cabinet with Fox News anchors and loyalists, mostly unqualified to carry out their duties. As was argued by Edward Gibbons in his classic, The Decline and Fall of the Roman Empire, part of the reason for destroying your biggest rival eventually comes back to bite you. The destruction of the West’s biggest rival, the Soviet Union, can lead to a self-inflicted sabotage that appears to also be underway in modern America and Europe.

Ancient Rome was fixated on Carthage. Cato used to end all his speeches in the Roman Senate with “Carthago delenda est” or “Carthage must be destroyed”. But when Scipio Africanus eventually did raise the legendary city to the ground, he also took away the goad that kept the Roman army sharp and the politicians focused. Rome boomed in the aftermath, but historians argue that it began to turn in on itself and eventually imploded in a quagmire of corruption, incompetence, self-interest and in-fighting. Markets are efficient thanks to the competition within them. The same is true of geopolitics.

Remaking the global rankings

History came back with vengeance in the third decade following the end of the USSR. The new economies rose from the ashes fast and the old school hegemons didn’t like it. The BRIC countries were transformed from a Goldman Sachs’ marketing term for exciting stocks to a geopolitical Frankenstein' monster that is rapidly building up membership to what had metamorphised into a political entity which has the intent to challenge directly the West’s right to run the world.

Underpinning this changing landscape is the transformation of geopolitics from the two-speed affair of “emerging markets” eyeing the rich life style of the “developed world” jealously, into would-be equals.

In the last ten years, as the new economies begin to overtake the old economies, tensions have built. The Emerging Markets have become “Emerged Markets” and are rapidly closing the gap. Currently BRICS nations make up four out of five of the world’s largest economies in adjusted terms, with China, the US and India in the lead (in that order). Both China and India are expected to overtake the US in nominal terms too by about 2070.

Even Russia, which was supposed to have been crushed by extreme sanctions in 2022, overtook Germany two years ago and Japan last year in PPP (purchase power parity) terms and has seen its economy double in size in nominal terms in the last four years to $2.3 trillion. Having expanded by 4.1% in the last two years, it is one of the fastest growing major economies in the world today – albeit with plenty of economic problems.

When Boris Yeltsin became president, Russia was soon invited to join the G7, the exclusive geopolitical club of the world’s richest and most powerful nations. But when the 2008 Great Financial Crisis hit, world leaders convened a meeting of the G20 to deal with the fall out, not the G7. That was arguably the start of the new multipolar world order. Since then the G7 has steadily lost ground and tellingly when Trump offered to readmit Russia into the G7 last month, Russian Foreign Minister Sergei Lavrov said the Kremlin was not interested anymore as the G7 has become “irrelevant.”

Closing the tech gap

Many forces have been driving these changes. Emerged markets have embraced the capitalist system and poured money into innovation and infrastructure as they race to modernise. A “leap-frog effect” is in play where new countries skip over several generations of incremental improvements and go straight to state-of-the-art technological solutions, producing year after year of fast “catch up” growth as their shiny newly made market economies begin to function. However, more importantly and more recently, these countries have gone from importing Western tech to creating their own.

China is the most obvious example and is rapidly closing the technology gap that has been at the core of the West’s dominance since the industrial revolution. The so called “sea turtles” – Chinese academics and researchers working in the West – have been coaxed home by high pay and state-of-the-art laboratories. China has been the global leader in new patent filings for over a decade, significantly outpacing all the other leading countries, including the US. In 2020, China's intellectual property office reported 1.5mn patent applications, which was 2.5 times more than the United States, the second-ranking country. By 2023 China was filing three-times more patents than the US.

And that investment is staring to pay off. China is now taking the lead in technology after technology. The examples of EV and solar panels is well known; China’s BYD overtook the US’ Telsa in terms of sales in 2024, topping $100bn for the first time. And the quality and low price of its solar panels is undisputed, while the solar panel industry in Germany, where it was invented, has been shut down, no longer able to compete.

More recently, China shocked the world by launching DeepSeek, an AI that is more powerful than the US pioneer OpenAI but produced at a fraction of the investment and can run on less advanced chips at lower cost. China is soon to lead in battery technology too, and also claims to have built the world commercially viable fusion reactor, well ahead of the Americans.

The other Emerged Markets are much further behind, but while they lag in pure science and microelectronics, their investments into lower tech production are turning them into powerhouses because of their sheer size. As bne IntelliNews reported, Russia missed out on two revolutions into precision tools and is hopelessly behind, but with a population that is half as big again as any other country in Europe and its long-standing excellence in engineering, together with global leader China, Russia is the industrial production powerhouse of Europe. As European Commission President Ursula von der Leyen admitted in her recent ReArm speech, Russia is producing more arms than all of Europe plus Ukraine combined. Proficiency in lower technology sectors also counts.

Alarmed by the increasingly obvious Emerged Market successes, the Biden administration tried to lock in US technology superiority with things like the CHIPS legislation and the Inflation Reduction Act (IRA) that ban sharing the US’ technological lead with the new economies of the world. The EU has just launched a similar scheme with its €800bn investment programme to revive its flagging economy, amongst several new initiatives. However, a study by the Federal Reserve Bank of New York last year found that the tech export restrictions have not only failed, but have backfired. They have stoked innovation in China’s tech sector by forcing massive investment and consolidation of the multitude of tech enterprises in what was a highly fragmented sector until the US legislative onslaught. In the last few years China has gone from a net importer of tech to a net exporter of increasingly sophisticated products.

For centuries the West grew rich from exploiting the wealth differential between their colonies and their home markets – a process that has continued to this day, although the label has been changed to the most politically correct “globalisation” of business.

But the closing of the differential between low-income countries exploited for their cheap manufacturing labour and resources, exported to the developed countries, is already having profound effects.

The West has been bleeding the Global South of wealth. As bne IntelliNews reported, the Global North currently exports some 80% of its manufacturing to the Global South. But as wages rise in the emerged markets the flow of wealth from south to north will slow. Moreover, in the past the Western firms have focused mainly on low-skilled work, but the same research shows that 25% of the exports are now taking advantage of the emerging high-skilled work, which is constantly growing thanks to the beneficial know-how transfer that comes with effective foreign direct investment (FDI).

The export of manufacturing is profitable but it leaves the Global North increasingly reliant on the service sector, the very problem Trump is trying to address with his tariff policy that is aimed at bringing manufacturing back home.

Don’t destroy Carthage

So, what went wrong? The West is slowly losing its competitive edge as a result of these changes. As bne IntelliNews reported, a report by the former Italian Prime Minister and ex-European Central Bank boss Mario Draghi detailed how Europe has already lost its competitive edge, while the US is starting to experience the same thing after Telsa lost the lead to BYD.

Europe has fallen behind thanks to its complacency and decades of underinvestment into infrastructure and innovation, according to Draghi. The US has kept up its investments thanks to a vibrant private sector, but at the same time it has exported a large share of its manufacturing, which now only accounts for 10% of GDP, behind Europe’s 15% in 2024 (and Germany is the leader with just under 20%). However, all of these countries are behind Russia, which leads Germany and China (25%), the global leader.

Russia still trails badly in many higher technologies but it is not a basket case. Russia scored a spectacular success in developing the world’s first and best coronavirus Sputnik V vaccine and it continues to lead in things like electronic warfare (EW), military avionics and hardware and some software areas thanks to its educational emphasis on the hard sciences and maths. Nevertheless, its successes is patchy.

When Rome destroyed Carthage it removed its main rival and took over, among other things, the rich wheat fields of North Africa, which saw money flood in. However, as Gibbon argued, over time the lack of the spur of rivalry led to politics turning in on itself and a rot set in. Demographic decline led to ever increasingly numbers of mercenaries in the Roman army until they eventually revolted and the empire collapsed.

The Scottish philosopher Sir Alexander Fraser Tytler went into more depth, hypothesising that all empires collapsed after about 200 years. His idea was that new empires are united by an idea, a desire to create some sort of better society, which they largely achieve. But after three generations or so, the children and supporters of the doyens of the new society lose sight of this goal and are all about securing their hold on power and wealth, which eventually leads to an implosion. Tytler looked at many empires, including Greece and Rome, but also those of the Age of Exploration in the Early Modern Period (15h-17^th centuries) like Portugal, Spain and the Netherlands, which all came and went.

These problems take generations to appear. However, all of the Emerged Markets are at the start of this process with their new ideas of building a functioning market economy, whereas most of the Developed Markets are at the end of this process, having ruled the world for centuries.

In a poignant sign that something is wrong, there has been a collapse in the quality of leaders in the new US administration. Four of Trump’s senior officials are former Fox News presenters with little experience in government or policy making. Many are primarily business people and Secretary of Treasury Scott Bessent and Secretary of Energy Chris Wright have no public office experience at all.

By contrast, Putin’s Cabinet is stocked with highly skilled, long-serving public servants. One of the reasons that the Russian sanctions have been so ineffective is the West badly underestimated the quality of Russia’s economic management, say analysts. Russian Finance Minister Anton Siluanov and CBR Governor Elvia Nabiullina are considered to be amongst the best in the world. Russian Foreign Minister Sergei Lavrov, who hasjust turned 75, is widely considered a master of his profession.

Catering to public demand for a new system, Trump is specifically targeting government employees with long experience and has replaced them with college students, tearing down the unpopular old system to presumably build a new one with the same disregard for planning that Emperor Nero showed, golfing as Washington burns.

The unprofessionalism of the team was highlighted by a recent scandal when US National security adviser Mike Waltz accidently included the editor of the Atlantic magazine into a group chat on the message service Signal discussing war plans for Yemen. Trump has also sacked Fiona Hill, acknowledged as America’s leading expert on Russia, and appointed Steve Witkoff as Special Envoy to lead the talks with Russia, who could not even name the four regions Putin annexed in 2023 in a recent interview with US celebrity journalist Tucker Carlson on March 23.

The UK has suffered from a similar collapse in quality. During a meeting in the first year of the Ukraine conflict, former Foreign Minister Liz Truss told Lavrov that Russia should return Rostov-on-Don to Ukraine. Rostov-on-Don is Russian region. Lavrov walked out of the meeting, saying it was a waste of his time.

America may be saved by the fact that Trump’s term will be limited to eight years. Democracies regularly take left turns like this with the people making some terrible electoral choices but correcting them at the next election. However, Trump will do a lot of damage in the meantime and even changing the president will not reverse the inward gaze of US politics. Stepping back, if one of Putin’s goals was to undo the unipolar order, led by the US, and create a multipolar world, he has already achieved that goal and the longer Trump stays in office the firmer this change will be.

 

Trump’s Cabinet bios
Official	Public Service Experience	Private Sector Experience
JD Vance (Vice President)	US Senator from Ohio; Member of Senate Armed Services Committee.	Co-founder of Narya Capital; Author of Hillbilly Elegy.
Marco Rubio (Secretary of State)	US Senator from Florida; Member of Senate Foreign Relations Committee; Speaker of Florida House of Representatives.	Attorney specialising in land use and zoning law.
Scott Bessent (Secretary of Treasury)	None.	Founder & CEO of Key Square Group; Former CIO for Soros Fund Management.
Pete Hegseth (Secretary of Defence)	Army National Guard officer (Iraq service, Bronze Star Medal); Executive Director of Vets for Freedom.	Fox News commentator focusing on military and political analysis.
Pam Bondi (Attorney General)	Attorney General of Florida (2011-2019); Prosecutor in Hillsborough County State Attorney's Office.	None
Kristi Noem (Secretary of Homeland Security)	Governor of South Dakota (2019-2025); US Representative from South Dakota (2011-2019).	None
Robert F. Kennedy Jr. (Secretary of HHS)	Environmental attorney; Founder of Waterkeeper Alliance; Environmental advocate.	None
Linda McMahon (Secretary of Education)	Administrator of the Small Business Administration (2017-2019).	Co-founder & CEO of WWE (World Wrestling Entertainment).
Chris Wright (Secretary of Energy)	None	CEO of Liberty Energy, specialising in hydraulic fracturing services.
Scott Turner (Secretary of HUD)	Texas State Representative (2013-2017); Led White House Opportunity and Revitalisation Council.	NFL player (1995-2004)
Tulsi Gabbard (Director of National Intelligence)	US Representative from Hawaii (2013-2021); Lieutenant Colonel, US Army Reserve.	None
John Ratcliffe (Director of CIA)	Director of National Intelligence (2020-2021); US Representative from Texas (2015-2020); US Attorney for Eastern District of Texas.	Private practice lawyer specialising in white-collar crime and national security.
Source: bne IntelliNews

 

 

Putin’s Cabinet bios
Official	Public Service Experience	Private Sector Experience
Mikhail Mishustin (Prime Minister)	Appointed Prime Minister in January 2020. Previously served as Director of the Federal Tax Service (2010-2020), implementing significant tax administration reforms.	Extensive background in banking, information technology and economics; led initiatives to digitise Russia's tax system.
Sergei Lavrov (Minister of Foreign Affairs)	Serving as Foreign Minister since 2004, making him one of the longest-serving diplomats in this role. Formerly Russia's Permanent Representative to the United Nations (1994–2004).	Career diplomat with extensive experience in international relations
Denis Manturov (First Deputy Prime Minister)	Elevated to First Deputy Prime Minister in May 2024. Previously served as Deputy Prime Minister and Minister of Industry and Trade, overseeing industrial policy and trade relations.	Background in mechanical engineering; has played a pivotal role in Russia's defence and civilian production sectors.
Andrei Belousov (Minister of Defence)	Appointed Minister of Defence in May 2024. Formerly served as First Deputy Prime Minister, focusing on economic policy.	Economist with experience in strategic planning and economic analysis
Anton Siluanov (Minister of Finance)	Serving as Minister of Finance since 2011. Held various positions within the Ministry of Finance, contributing to fiscal policy development.	Economist with a focus on public finance
Alexander Novak (Deputy Prime Minister)	Appointed Deputy Prime Minister in 2020. Previously served as Minister of Energy (2012-2020), playing a key role in Russia's energy policy and international energy agreements.	Experience in the energy sector, including roles in various oil and gas companies.
Dmitry Patrushev (Deputy Prime Minister)	Appointed Deputy Prime Minister for Agro-Industrial Complex, Natural Resources, and Ecology in May 2024. Served as Minister of Agriculture (2018-2024).	Former Chairman of the Russian Agricultural Bank; extensive experience in banking and finance related to agriculture.
Sergei Shoigu (Minister of Emergency Situations)	Reappointed as Minister of Emergency Situations in May 2024. Previously served as Minister of Defence (2012-2024) and has a long tenure in emergency management roles since the 1990s.	None
Maxim Reshetnikov (Minister of Economic Development)	Appointed Minister of Economic Development in 2020. Formerly served as Governor of Perm Krai and held various positions in regional administrations, focusing on economic policy.	Economics and public administration background
Konstantin Chuychenko (Minister of Justice)	Serving as Minister of Justice since 2020. Previously worked as Deputy Prime Minister and Chief of the Government Staff.	Legal background with experience in governmental legal affairs
Sergei Naryshkin (Director of the Foreign Intelligence Service)	Appointed Director of the Foreign Intelligence Service (SVR) in 2016. Previously served as Chairman of the State Duma and held various governmental positions.	Engineering and economics background
Yuri Ushakov (Foreign Policy Advisor)	Serving as Foreign Policy Advisor to President Putin since 2012. Formerly Russia's Ambassador to the United States (1998-2008) and held various diplomatic roles.	Career diplomat with extensive experience in international relations
Source: bne IntelliNews