Month by month now we are seeing a rewriting of the world order that has held sway for many decades, as old certainties give way and new alliances are formed. It’s both fascinating to watch and terrifying at the same time.
The headline is the continuing hostilities around the Strait of Hormuz, given added impetus by the sudden advance this month of the Houthi group in Yemen. The Houthis have threatened to close the Bab al-Mandab Strait and have attacked Saudi oil facilities, which have driven oil prices even higher. They have also carried out several attacks directly against Saudi Arabia, even managing to hit the capital Riyadh.
The US has refused Saudi calls for help as so far the Houthis have honoured their 2025 ceasefire arrangement with the Americans and not hit any US ships. Nor have Pakistan and Turkey rushed to aid Saudi Arabia despite their recent Mecca Joint Defence Agreement. Britain, which is one of the biggest arms suppliers to the Saudis, has done the absolute minimum and offered a single mid-air refuelling tanker which won’t have made any real military difference.
At the same time, many of the leaders of the BRICs countries gathered in Delhi, India for a summit that showcased India’s growing diplomatic strength. Narendra Modi, prime minister of India, told his guests – who included Xi Jinping, president of China, Vladimir Putin, president of Russia, Masoud Pezeshkian, president of Iran, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, crown prince of Abu Dhabi, and Cyril Ramaphosa, president of South Africa – that they should become “rule-shapers”, not “rule-takers”. This group represents a counterweight to the hegemony of the Western industrialised nations. There are plenty of differences between them but they all recognise that Trump has shattered the ties that bound the West together.
The EU has come to the same conclusion and paved the way to accepting Canada as its first associate member, though there’s no definition as to what that might mean. Ursula von der Leyen, president of the European Commission, told the European Parliament that Canada shared similar values to the EU, noting: “Partnerships are a strategic choice for Europe. But they also respond to the fracture in the international rules-based system”. This could build on the existing Comprehensive Economic Trade Agreement between Canada and the EU that eliminates duties on 99 percent of export goods by adding a wider security element. But the first hurdle is getting all the EU countries to ratify that existing CETA.
Meanwhile, the British prime minister Andy Burnham has signalled that he wants closer cooperation with the EU, with some asking if an associate membership could achieve this without reigniting the painful Brexit arguments. Burnham also has to deal with the restlessness from the non-English parts of the United Kingdom. The first ministers of Wales, Scotland and Northern Ireland met this month to explore ways they could work together to achieve greater independence from the Westminster government. For both Britain and Canada, circling around the EU offers some protection from whatever madness the American president Donald Trump might inflict next.
There are a growing number of aggressive interactions between NATO and Russian forces, quite likely encouraged by Trump having questioned America’s commitment to NATO. These have ranged from Russian drones that have strayed over NATO borders, including one shot down in Lithuania, to a Russian warship firing emergency flares at a Danish military helicopter. Added to this, the European nations are seeing increased evidence of hybrid warfare. This includes a fire at a Starlink satellite station in central Poland that aimed to disrupt internet access to several organisations including the Ukrainian army. And this weekend British police have arrested five men around the RAF Fairford airbase who were alleged to have explosives in an apparent terrorist attack that may be linked to Iran.
Naturally all this is amplifying those voices calling for increased defence spending. The Canadians are trying to sign other nations up to the Defence, Security and Resilience Bank, which promises cheaper loans to fund defence projects but requires upfront investment – around £870m over three years for G7 economies like the UK. But G7 economies have been optimised to grow GDP and reduce tax, not for frivolities like rearmament and social welfare.
However, Trump has undermined the ability of Western governments to govern, first with his tariff policy and now with his war on Iran. Almost as soon as a European government minister announces a new policy, some further disruption in the Gulf leads to a surge in oil prices that wipes out the funds needed to pay for it. The latest UK figures from the Office for National Statistics show that inflation rose in August from 2.9 percent to 3.1 percent, driven mostly by transport costs. The price for motor fuel has gone up 23 percent from last August.
All of this is providing fertile ground for more extreme parties to bloom. Or not – with many people hoping that the looming mid-term elections in the US will peg back Trump’s freedom to cause chaos around the world. Elsewhere, there were fears that a hard right party would enter government in Sweden but ultimately a coalition led by the centre left Social Democrat party prevailed, with Magdalena Andersson set to become the new prime minister. A more mixed picture emerged from this month’s state elections in Germany, with the hard right AfD party winning in Mecklenburg-Western Pomerania while the Left party came out on top in Berlin. The ruling CDU party lost badly all around. Not surprisingly, Putin’s United Russia party retained its majority in the country’s recent elections, largely due to opposition parties being prevented from running and absolutely nothing to do with an unfortunate tendency of some Russians to fall out of windows in tall buildings.
The British party Reform, which has been trailing in the polls in the wake of several corruption allegations, has been boosted by massive donations from two crypto billionaires, each of £36 million. This has made a mockery of the British government’s tepid efforts at capping such donations amid a general fear that the ultra rich can buy elections and undermine democracy. Then again wealthy business people have always exerted an undue influence on any democracy – what else is the point of having money if not to shape the world?
But it could be argued that with many western economies already at breaking point, some redistribution of wealth is long overdue. As it is, we are now seeing a very small number of people such as Elon Musk, Jeff Bezos and Mark Zuckerberg, having control over such large sums of money, that their quest to build new AI data centres is undermining the ability of the largest industrialised economies to finance themselves by hoovering up the available capital.
Add to this the growing threat from the artificial intelligence technology these people and their companies are developing – with near daily reports of AI agents hacking into other companies and even state-run IT systems, and warnings from those developers of the risk to human life from these systems. Trump, who in many ways is the embodiment of artificial intelligence, complete with hallucinations of his own omnipotence, has refused the calls to regulate the pace of development. But surely he is not the first elderly man to turn to the seductive friendship of a chatbot when all his other friends have deserted him?
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