[The Editors' Verdict] The Second Cold War Era Is Coming

Kim Kyung-soo, Professor Emeritus at Sungkyunkwan University

During my university days, I took a course called Modern Diplomatic History. The thick textbook, written on the topic of diplomatic failures and wars in resolving disputes between countries, was tedious, but the professor’s remark that there are wars that could have been avoided and wars that are inevitable has stayed with me for a long time.

Most media outlets believed that Putin was unlikely to invade Ukraine. I thought so too, because I believed the cost to be paid would be too high.

However, historian Niall Ferguson predicted the war. He argued that by carefully examining Putin’s statements and the international relations situation, Putin, who aspires to be a Tsar (the monarch of Imperial Russia), would judge that he had finally seized the opportunity.

It has been almost three weeks since Russia invaded Ukraine. Contrary to Putin’s expectations, despite NATO forces not intervening, the war has fallen into a stalemate. According to Ferguson, a Tsar who loses a war cannot keep his position. This is a point where the front lines could expand and the war could become even more brutal.

This war demonstrates how powerful digital influence is. First, the impact of social media, which has connected the world into a hyper-connected society. Multinational corporations leaving Russia regardless of sanctions are more afraid of global attention than of the risk of secondary sanctions. With the support of big tech companies, Ukraine holds the upper hand in cyber warfare. In 21st-century warfare, cybersecurity?protecting internet infrastructure, detecting enemy movements, and blocking misinformation?can determine victory or defeat.

Economic and financial sanctions against Russia will bring economic pain, but they do not seem likely to break Putin’s will, who has staked everything on this war. Rather, the global economy will suffer.

Economic and financial sanctions carry the risk of stagflation?a combination of inflation and recession?and financial system instability. The recent rapid decrease in the U.S. Treasury yield curve spread is evidence that investors have a bleak outlook on the real economy.

Under the current circumstances, aggressive interest rate hikes by the U.S. Federal Reserve seem difficult. The rapidly increased geopolitical risks make it hard to predict the ripple effects on financial markets, raising concerns about a credit crunch.

Many experts predict that if Putin achieves his goals in this war, Taiwan will be next. This is set against the backdrop of heightened geopolitical risks following the weakening of U.S. hegemonic status, symbolized by the withdrawal from Afghanistan in August last year (refer to “When the U.S.-Centered World Order Collapses: Pros and Cons,” September 14, 2021).

Regardless of how the war ends, as long as Putin remains in power, Russia’s isolation from the global economy and economic hardship are inevitable. Now, the only place Russia can turn to is China. China has taken on economic burdens due to soaring international commodity prices. Moreover, by siding with Russia, China has incurred the ire of Europe, which had hoped for good relations, putting it in a difficult position. Meanwhile, China gains a secondary benefit from this unnecessary war: turning a Russia that has no one else to rely on from a strategic partner into an economic satellite state.

Freedom and peace are rights enjoyed by powerful nations. This has not changed even in the civilized world of the 21st century. What has changed is that only when diversity is respected and a transparent, integrated society is supported can a country become a powerful nation armed with robust diplomacy, defense, and advanced industries. In the era of the Second Cold War, which began with the Ukraine war, President-elect Yoon Suk-yeol faces a challenging task that no previous president has accomplished.

Kim Kyung-soo, Professor Emeritus, Sungkyunkwan University

This content was produced with the assistance of AI translation services.