[Global Column] The Ukraine War and the World Economy in the New Cold War Era

Despite many concerns from the international community, Russia launched a full-scale military operation against Ukraine on February 24, deploying ground forces along with missile strikes. At this point, it is premature to predict the outcome of the Ukraine war, but it can be anticipated that this event will be a decisive moment that could drive profound changes in the international order.

Above all, through this Ukraine war, the US-centered unipolar system that began with the fall of the Berlin Wall in Germany in 1989 will officially come to an end. The US-centered unipolar system, which emerged from the dismantling of the Cold War system that lasted since 1945, began to be shaken by China's economic rise. The Obama administration declared a "pivot to Asia" and tried to maintain US hegemonic status through a rebalancing policy aimed at containing China's rise, while the Trump administration did not shy away from overt trade conflicts with China. One of the justifications the Biden administration gave for withdrawing from Afghanistan was the need to focus on the hegemonic competition with China. However, Russia's invasion of Ukraine has clearly shown that merely containing China's rise is not enough to maintain US hegemonic status.

The end of the unipolar system based on US hegemony will result in the "return of geopolitics," dominated by power politics among great powers. The Ukraine war can be seen as a signal heralding the full-scale return of geopolitics. After the end of the Cold War, geopolitics had somewhat disappeared from international politics for a while, but its return now strongly suggests the possibility of reorganizing the international order into a new Cold War system. First, the "democratic alliance" declared by the Biden administration will gain further momentum due to the Ukraine war. In response, China and Russia will also strive to build their spheres of influence to counter the US-centered democratic alliance. If the war results in the division of Ukraine, then just as the fall of the Berlin Wall symbolized the end of the Cold War, the division of Ukraine will become a symbol of the new Cold War. Ultimately, the endpoint of the Ukraine war is highly likely to be the starting point of a "new Cold War."

The new Cold War system will have profound effects on the global economy beyond military and security aspects. Globalization, defined as the deepening of international economic exchange and interdependence, was possible because ideological barriers fell with the end of the Cold War. The new Cold War system means the reestablishment of ideological barriers that hinder international economic exchange. Since China and Russia already play central roles in the global economy, the advent of the new Cold War system will cause a significant reorganization of the world economy. In particular, under the new Cold War system, the global economy will accelerate economic bloc formation centered on ideological boundaries rather than geographical borders. The economic status of each country in the future may also change significantly during this global economic reorganization. South Korea's future depends on the choices it makes during this process of global economic restructuring. It is time to begin serious reflection on where South Korea's position should be in the new Cold War system.

Jae-Hwan Jeong, Professor, Department of International Relations, University of Ulsan

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