By Ngaire Woods*
As the US and China divide the world into allies and enemies, many smaller countries are resisting pressure to take sides. It is wiser to navigate rising economic nationalism without unconditionally adopting the foreign-policy preferences of superpowers.
Critics of geopolitical non-alignment have long characterized it as a flawed and doomed policy, and in the wake of Russia’s invasion of Ukraine, non-alignment is rapidly falling out of favor. After all, Ukraine was invaded because it was not a member of NATO, causing Sweden and Finland to abandon their long-held neutrality and apply to join.
But non-alignment, or the refusal to ally with any major power unconditionally, may be necessary to restrain the world’s superpowers. Otherwise, their increasing nationalism could lead to a global order antithetical to the interests of all other countries.
Economic nationalism is on the rise among the world’s major superpowers. A 2019 report by the Peterson Institute for International Economics highlighted then-US President Donald Trump’s advocacy of protectionism, restrictions on inward foreign investment and immigration, and rejection of multilateral constraints. Previously, the United States offered allies its commitment to a rules-based international order and shared security, which President Joe Biden’s administration seeks to restore. But Trump’s “America First” narrative has changed that offer, and many Republican candidates in November’s midterm elections are vowing to weaken it further.
China is also reshaping its offer to potential allies. Ten years ago, China’s Belt and Road Initiative promised partner countries generous funding for infrastructure and development projects as Chinese policymakers created a powerful network of economic, financial, political, and security relations across the world. Those investments are now being scaled back as China takes a harder-nosed commercial approach to overseas ventures.
Likewise, just six years ago, President Xi Jinping pledged support for a global rules-based order. At the Communist Party of China’s 20th National Congress this month, he declared that profound changes in the international landscape and external attempts to blackmail, contain, and blockade China mean that “we have to put our national interests first.”
“Economic nationalism is on the rise among the world’s major superpowers.”
The new nationalism of superpowers forces other countries to make some hard choices. During the Cold War, aligning with the US enabled Western European countries to benefit from open trade and rebuild their economies and democratic systems. But other countries derived no such benefits and responded to the Cold War accordingly. The Non-Aligned Movement was founded in 1961, championed by Egyptian President Gamal Abdel Nasser, Ghanaian President Kwame Nkrumah, Indian Prime Minister Jawaharlal Nehru, Indonesian President Sukarno, and Yugoslav President Josip Broz Tito.
Non-alignment during the Cold War never meant not taking sides. Within a year of founding NAM, Nehru turned to the US for assistance in the Sino-Indian War. A decade later, Nehru’s daughter, Prime Minister Indira Gandhi, turned to the Soviet Union for help. Egyptian President Anwar El-Sadat famously dumped the Soviets for the Americans in the early 1970s. To a degree, non-alignment enables some countries to pit one side against the other for investments, aid, arms purchases, and security arrangements.
It also enables countries to hold superpowers to account. Non-aligned Singapore, for example, refused to support Indonesia’s invasion of East Timor in 1975, opposed the US invasion of Grenada in 1983, and has condemned Russia’s invasion of Ukraine. The countries comprising the Organization of American States have condemned Russia’s invasion and suspended its observer status. But they have not joined the US-led sanctions against Russia, citing the effects on people in Cuba and Venezuela. Kenya voted to condemn Russia’s invasion of Ukraine in the UN General Assembly, but a month later abstained from the vote to remove Russia from the Human Rights Council. Kenyan Ambassador Martin Kimani reminded the world that the West had suspended Libya from the Human Rights Council as a precursor to invading the country, with disastrous consequences for Libya’s neighbors.
Non-alignment also enables smaller countries to advance their values and interests without tethering themselves unconditionally to a superpower’s international policies and preferences. For the superpowers, this is challenging. Blind allegiance is more comfortable and allows them to project greater power.
“Boosting self-reliance can be difficult even for wealthy countries.”
Today’s emerging nationalism requires economic self-reliance, which can be difficult to achieve after decades of actively participating in global markets. To strengthen its financial resilience, India has accumulated more than $500 billion in foreign-exchange reserves, while Brazil increased its reserves to over $300 billion. Another way to strengthen resilience is to reduce foreign debt. In the mid-2000s, 46% of Indonesia’s public debt, and 83% of Chile’s, was denominated in foreign currencies. By last year, Indonesia and Chile had cut this share to 23% and 32%, respectively.
But boosting self-reliance can be difficult even for wealthy countries. For example, a recent report by the European Council on Foreign Relations argues that the European Union must improve its technological capabilities if it wishes to act according to its values “without being bullied by others.” With such considerations in mind, the EU has already taken steps toward its goal of greater strategic autonomy by establishing the European Battery Alliance, which aims to develop a competitive and sustainable battery value chain on the continent.
But there is still a long way to go. The global power balance is shifting as the US-China rivalry escalates. Moreover, both superpowers face domestic political challenges that could affect their foreign policies. In the meantime, other countries should not be faulted for pursuing non-alignment to achieve self-reliance. Perhaps resisting the pull of the major superpowers can help to ensure a more equitable world order.
*Ngaire Woods is Dean of the Blavatnik School of Government at the University of Oxford.
© Project Syndicate, 2022.