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The development of the world economy in modern conditions is being transformed under the influence of a number of factors that are not only man-made but also due to the imperfection of the system of economic relations that have developed as a result of the absolutized denial of state regulation and attempts to replace it with supranational rules. The basic determinants were the recommendations of the Washington Consensus (1992), which were aimed at an attempt to ensure an accelerated transition to the market rails of the states of the transformational economy after the collapse of the USSR, and they extended to all developing economies. This led to the formation of the world capitalist economic system in the form of a pyramid. The economic globalization of the world economy is based on the internationalization of reproduction value chains. The main drivers of world globalization have become TNCs or MNEs, which have launched active activities in developing countries, de facto ignoring national legal norms, and pursuing solely the goal of making a profit. As a result, the world economy has received by now the highest degree of disproportionality in the incomes of the population in both developed and developing countries; population aging in developed economies, deindustrialization of developed economies, lack of social mobility for young people, climate change in African countries and the weakening of internal incentives for the development of national economies, as well as local wars, have led to an influx of nonregulated migration from Africa, which, for the most part, does not want to accept the rules of public life in the developed countries. The pandemic that disrupted the GVC contributed in no small part to the factor contributing to the transformation of the global economy, and the introduction of unilateral and large-scale sanctions, including secondary ones—to an acceleration of the transition to polycentrism. Polycentrism is based on ensuring the full-fledged sovereignty of the state, the fulfillment of its international obligations, noninterference in the internal affairs of foreign states, and the formation of more equal conditions for international cooperation. The marginal prices for Russian oil or natural gas trade was an indicator of an attempt to introduce a command-administrative model into world trade under capitalism, thereby undermining its basic foundation—competition. Capitalism in the twenty-first century should also be based on private property and the inviolability of its legal basis, the inviolability of private property, the development of fair competition, including at the interstate level, on the basis of reaching a consensus of interests, on the need to promote the alignment of development levels in the world community, stimulating and supporting entrepreneurship in developing countries, including helping to implement the principles of responsible business conduct, but not imposing their social-mental or spiritual values on them as the basis of the socioeconomic formation of social development. It is polycentrism in international relations that makes it possible, while preserving the foundations of the capitalist economic model, to ensure the progressive development of national economies that use their competitive advantages on a global scale.
Research Institute of International Economic Relations, Department of World Finance of the Financial University under the Government of the Russian Federation, Moscow, Russia
*Address all correspondence to: vperskaya@fa.ru
1. Introduction
According to the International Monetary Fund, the world economy is slowing down, its growth is falling from 6.0% (in 2021) to 3.2% (in 2022) to 2.7% (in 2023), and the inflation rate is significantly higher than a few decades ago: global inflation will rise from 4.7% (2021) to 8.8% (2022). However, the average inflation rate in 2023 and 2024 is expected to be 6.5% and 4.1%, respectively [1]. The monetary authorities will continue to pursue a tight monetary policy to mitigate the impact of inflation on the welfare of citizens. It is expected that structural reforms within national economies will also be aimed at fighting inflation, helping to increase labor productivity, and removing restrictions on the development of domestic trade [1]. At the same time, IMF experts believe that multilateral international cooperation will be focused on an accelerated transition to “green” energy.
The packages of sanctions introduced and planned to be introduced by developed countries (2014–2022) against Russia at the country level are in conflict with the UN Charter, but at the same time, they have a significant negative impact on the state of the world economy destabilizing it. Russia is a major exporter of oil, grains, and other key commodities, and it is deeply integrated into the global economy.1 And as a result, sanctions have a much greater global economic effect than before. Their magnitude should prompt a reconsideration of sanctions as a powerful policy tool with serious global economic consequences [2].
The sanctions acted as a detonator of a sharp rise in energy prices although the pandemic has already had a significant impact on global value chains and disrupted logistics in the global economy. Lockdowns in countries around the world in connection with the pandemic led to an increase in food prices (by 28% in 2020, 23% in 2021). According to the FAO, in 2022 increase in prices for the main food commodity groups against December 2021 continued (Figure 1) and it will take place in the coming years.
Figure 1.
Food price dynamics in 2022. Legend: Row 6—Sugar, row 5—Oils, row 4—Cereals, row 3—Dairy products, row 2—Meat, and row 1—FAO food price index. Source: World Food Situation. Available from: https://www.fao.org/worldfoodsituation/csdb/ru/ [Accessed: December 17, 2022].
Over time, it has become clear that the side effect of sanctions against Russia has a negative impact on the entire global economy. The focus of sanctions on the exclusion of Russian commodity exports from a number of world markets led to an increase in prices for almost all groups of commodities, and payments for imports of goods increased several times having a negative impact on the budgeting of public finances of all countries, especially countries with emerging markets and developing countries. Many countries are facing rising debt (both domestic and foreign), rising costs of switching to renewable energy sources, rising interest rates on debt and borrowing, and the threat of global stagflation.
In the interests of ensuring sustainable development, achieving the well-being of countries and peoples of the world, and the stability of the world economy, a number of experts call for concerted action to counter the consequences of sanctions against Russia adjusting the policy of sanctions, directing long-term investments in the infrastructure of developing economies, avoiding a sharp tightening of monetary policy to prevent capital flight from emerging markets [2].
Thus, the modern world economy is in a state of turbulence and it seems important to consider what kind of transformational transformations can be expected in the coming period in connection with the world community transition to multipolarity on the foreign policy circuit.
The purpose of the study—Since economic globalization has become the defining and dominant trend in the development of the world community since the end of the last century, the transition to polycentrism in international relations is currently causing the transformation of the components of economic globalization.
The transition to multipolarity is taking place in the context of the developing economic crisis in the global economy (caused by the pandemic, unilateral sanctions that de facto damage the economies of the countries that develop them, energy and food problems), and increased confrontation on the foreign policy circuit, as developed countries resist the trend of losing their hegemony in the global community.
This study allows us to prove that polycentrism in international relations does not change the nature of the socioeconomic essence of capitalism, while maintaining the priority and protection of private property, the importance of entrepreneurship in the development of the economy, and promoting and developing a market model of management.
However, it is polycentrism that determines the strengthening of the role of state regulation and the importance of the state as an institution in the implementation of the national interests of the country (internally and externally) and ensuring full-fledged sovereignty.
Global value chains will be transformed in the key to reducing the level of transcontinental partnership, reducing the “shoulders” of supplies, and tending to use counterparties from the countries of the region.
Strengthening state regulation will regulate the activities of TNCs/MNEs, prescribing compliance with the national legal framework of the country of operation of the company.
At the same time, the responsibility of the state as an institution to its society will increase in terms of ensuring and accessibility of basic life benefits and public services, which leads to an increase in the importance of the factor of social justice in society.
Consequently, the effects of the implementation of economic globalization will be subject to compliance with the achievement of a positive social effect for all countries, and not for a select few.
All this will require the development of new interstate agreements regulating the foreign economic activity of business entities at all levels and international organizations aimed at ensuring the sustainable development of the world economy.
The objective of this study is to investigate the impact of the formation of a polycentric world configuration in international relations on the world economic system, to analyze the transformation of economic globalization, and to formulate the main determinants that will form the basis of the changing world economic system.
At present, the issues of polycentrism as a system of relations and the content essence of multipolarity in modern international relations in encyclopedic dictionaries are mainly considered in relation to the movement of leftist parties as a form of limited independence of communist parties [3]. After the death of Tolyatti in 1964, the IKP almost split into a “Russian” and “Italian” wing because of this concept [4]. In the 1970s, geographers began to consider theories based on universal/holistic views of the world and the dynamic nature of geographic space. Three approaches prevailed: a polycentric international system of power; a single, economically justified world system; and ecological and socially ordered geopolitics. These theories challenged the bipolar geopolitics of the Cold War, and de facto did not reflect the real geopolitics [5]. Aspects of polycentric configuration have been considered to vary degrees (Cohen 1973, 1982; P. Taylor 1989; Im. Wallerstein 1983).
Chris Rowley and Wes Harry [6] (2011) consider polycentrism in the context of management within large multinational companies noting that American and Japanese TNCs are more ethnocentric than European ones.
We consider an important article by D. Petrovics, D. Huitema, and An. Jordan (2020) on the emergence of a polycentric nature of climate management, trying to justify how and why a number of initiatives arise and develop on different continents, that is, “scalable,” and in particular the idea of building a clean energy community [7].
In the context of the polycentrism formation in modern conditions, monographs by V.V. Perskaya and M.A. Eskindarov [8, 9, 10, 11] were published, where the theoretical aspects of the formation of polycentrism in international relations, its content are considered, the prospects for the development of globalization as a process of internationalization of the world reproduction process are analyzed and as a policy of reformatting the world community under an augmented network management system; the reasons for the preservation of national identity and the state as an institution for ensuring security and development of society in conditions of polycentrism are considered.
A number of questions of theoretical, conceptual, and practical issues related to the content of the concept of multipolarity, its interpretation by the establishment and the intellectual community of the countries of the “golden billion” and developing economies, including Russia, were reflected. India, China, and Iran are analyzed. The transformation of the regulation and coordination of national interests’ modern system is considered, including the preservation of the foundations established on the basis of international law after the Second World War and the possibility of developing new forms and levels of interstate interaction.
The message of Yves Lacoste, who promoted environmental and socially oriented geopolitics with the creation of the magazine Hérodite (France), is interesting. Proposing “new geopolitics”, he focused on the Earth, and not on the state, believing that in this way it allows solving environmental problems in developing countries, world poverty, and resource depletion. At the same time, he supported the idea of changing the political structure of the world through the abolition of states and the creation of a joint global system.
And although once this idea had no real implementation, it was de facto implemented in the process of the dissolution of the Council for Mutual Economic Assistance (CMEA) and the collapse of the USSR, when the prerequisites for the transition to a monopolar configuration of the world community and the formation of network management of the world community were formed, de facto implemented at the present time on the “polygon of Europe” within the framework of the European Union.
The use of historical analysis and statistical research methods made it possible to formulate the main provisions for the transformation of globalization processes in the world economy in the context of the transition to polycentrism on the outer contour.
The modern world community is at a complex and rather contradictory transformation stage. Pax Americana built by the countries of the collective West since the collapse of the socialist states camp and the USSR itself, is no longer being eroded so much as being de facto destroyed. Created in fact on the basis of the Anglo-Saxon ideology since the beginning of the twentieth century, the construction of the world community, including the formation of bipolarity in connection with the existence of the USSR and the camp of socialist countries, was implemented, among other things with the help of two world wars that led to the death of more than 60 million people [12]. However, the Anglo-Saxon ideology is based on international relations and foreign policy on the priority of force, which is aimed at suppressing dissidents and those who do not obey the uniform rules developed by the dominant actor.
Since the beginning of the 90s of the last century, the goal has been designated to build a single world economy where unified norms and rules determine the order of interaction between the actors of the world economy, where de facto a precedent legal system and law enforcement practice began to be implanted, where the trans nationalization of economic activity should have become the leading force in world development destroying and subordinating to their interests the domestic business of the countries where TNCs came, and the dollar was supposed to become the only reliable financial instrument (the euro is actually a balancing instrument, also based on the US dollar). It is these tasks that began to be implemented in the process of economic globalization of the world economy. As a theoretical and practical basis for the formation, the principles of the Washington Consensus of 1992 were laid, which are focused on:
Maintenance of fiscal discipline (minimum budget deficit);
Priority of healthcare, education, and infrastructure of the economy among public spending. Subsidies to enterprises should be kept to a minimum;
Reduction of marginal tax rates, expansion of the scope of taxable subjects;
Liberalization of financial markets to maintain the real interest rate on loans at a low but still positive level;
Free exchange rate of the national currency;
Liberalization of foreign trade (mainly due to lower rates of import duties);
Reducing restrictions on foreign direct investment;
Privatization of state enterprises and state property;
Deregulation: removing barriers to entry or exit from the market; does not affect other aspects—restrictions for reasons of security, environmental protection, consumer protection, supervision of financial institutions, and others;
These provisions in themselves are quite progressive for the development of economies, but the positive effect from them on the economies was short-term by the standards of world development, since the minimum deficit for all countries, including developed, it turned out to be quite difficult to provide. The competitiveness of economic entities in developing countries began to decline, and due to their integration into global value chains, mono specialization began to be assigned to them which excluded the diversification of activities. Growth in the number of jobs initially grew, but subsequently led to the developed countries’ migration.
Developing countries fell into even deeper debt dependence on the developed ones and international organizations. According to the International Development Association (IDA) of the World Bank, at the end of 2021, the external debt of the poorest countries amounted to $9 trillion, which is more than double the amount a decade ago. Higher interest rates and slower global growth risk provoking debt crises in a large number of countries. About 60% of the poorest countries are already at high risk of a debt crisis. At the end of 2021, debt service payments from IDA countries on the long-term public and publicly guaranteed external debt amounted to $46.2 billion, equivalent to 10.3% of their exports of goods and services and 1.8% of their gross national income (GNP)). These percentages have increased significantly compared to 2010 when they were 3.2% and 0.7%, respectively.
In 2022, IDA countries’ payments to service their public and publicly guaranteed debt are projected to increase by 35% to over $62 billion, an unprecedented high burden in the past two decades. China will be the primary beneficiary of 66% of debt service payments from IDA countries based on bilateral agreements [14].
For developed countries, the deindustrialization of national economies is clearly indicated (e.g., US economy),2 the formation of belts of “dying urban agglomerates” in the past of industrial centers, the growth of employment in the service sector, necessitating the need for higher education among the ever-growing masses of the population, have clearly been identified. At the same time, the process of depopulation in developed countries with the success of building a society of consumption and the spread of the ideology of egocentrism, cosmopolitanism, and atheism led to the moral, ethical, and spiritual degradation of the societies of developed countries and the substitution of the concepts of the meanings of human existence.
At the same time, the role of state regulation began to decline sharply, exacerbating the problems of poverty, disproportionate development of the strata of society and territories. Poverty “working” in developing countries and partly in developed countries has become an integral part of sociopolitical life. And the COVID-19 pandemic has exacerbated the problems created in the global economy, in connection with which the Human Development Report for 2021–2022 < Uncertain times, unsettled lives> published for the first time that the Global Human Development Index (HDI) has been falling for two consecutive years in 9 out of 10 countries [15]. This drop exceeds the decline since the global financial crisis or at any time since the HDI was first published.
In fact, a system of a three-level world economy was built where a certain level of specialization and functionality was assigned to each sector. (Figure 2).
Figure 2.
Scheme of formation of the world economy in the conditions of monopolarity. Source: Developed by the author.
The introduction of information and communication technologies in the daily life of people should have contributed to the activation of the interaction of citizens and the development of civil society, on the one hand, but on the other hand, to form uniform criteria and mentally significant values for people in all countries which will ensure the possibility of developing a network social management system and bring the networkization of management into international relations.
The monopolization of ICT focused on the development of social and communication interaction of citizens in the hands of large monopolies, made it possible to introduce censorship into the content, which was most clearly manifested in 2022. At the same time, the affiliation of Meta Platforms (Facebook), Twitter, etc. with the United States makes it possible to implement ideological determinants that the US establishment considers basic for maintaining its dominance.
At the same time, globalization has led to a consistent decline in the functional role of the state, that is, its ability to ensure the security and progressive development of the country’s society, create an atmosphere conducive to business development, improve the welfare of citizens, their cultural and educational qualifications while simultaneously increasing individual social and public responsibility of citizens in the conditions of democratic and personal freedom development.
The progressive development of economic globalization in the world economy is evidenced by the indicator of economic freedom, annually calculated by The Heritage Foundation, USA, according to 12 main indicators of the development of national economies.
Thus, according to the said fund, the level of economic freedom in the world in 1995 was equal to 57.6%, 2007 – 60.1%, 2009 – 59.5%, 2011 – 59.7%, 2014 – 60.3%, 2015 – 60.4%, 2016 – 60.7%, 2017 – 60.9% and 2018 – 61.1%, 2021 – 61.1%, 2022 – 60.0 [16].
The index of economic freedom in the world economy was characterized by a fairly stable growth dynamics until 2021 which is evidence of the development of globalization processes in the world economy, but in 2022 it began to decline sharply.
So, for example, in the USA, in 2005 – 81.2% and further it began to decrease, and since 2018 – 76.8% to 72.2% in 2022, although back in 1995 it was 69.8%. In Germany, in 2005 – 69.8%, 2016 – 73.8%, and 2022.– 76.1%; in India: 2005 – 54.2%, 2015 – 56.2%, 2020 – 56.5%, and in 2022. – 53.9%; in China: 2005 – 59.7%, 2017 – 57.4%, 2020 – 59.5%, 2022 – 48.0%
Thus, there is an increase in state regulation in the largest economies of the world.
The effect of the opposition to the existing model of economic globalization is due to the lack of effective compensation for its losing states. The globalization of the world economy has created a complex system of the interdependence of companies from different countries on each other. Companies have shaped global supply chains, spawning an intricate web of production networks that supposedly “cohesive” the global economy. The components of this product can now be manufactured in dozens of countries. This desire for specialization has sometimes made replacement difficult, especially for standardized products or services. As production has become global and countries become more interdependent, no country can control all the goods and components that its economy needs.
An important characteristic of economic globalization is global value chains and horizontal cooperation, which are being developed in the context of growing economic freedom for entrepreneurship.
Global value chains are a factor in strengthening the globalization development of the world community since ensuring the internationalization of the creation of world GDP [17].
The development of vertical cooperation based on the involvement of companies and firms from developing countries in the process of creating a value chain, on the one hand, eliminates possible competition, on the other hand, increases the dependence on the company involved in the policy of the parent company. For TNCs, vertical cooperation is an opportunity to optimize costs, monopolize pricing policy in world markets, expand areas of influence, and developing the potential for diversification of activities, including distribution to noncore activities spheres.
In the early 90s of the last century, TNCs were the main driving force behind the globalization process. Among the world’s 500 largest TNCs, TNCs of American jurisdiction and origin of capital took the first place. It was precisely by subordinating the interests of American TNCs in the countries of the Asia-Pacific region that the United States conducted a lengthy negotiation process to develop an agreement on the Trans-Pacific Trade Partnership where the dominant idea was to fix in the articles of the Treaty the interaction of the parties according to the rules of the Anglo-Saxon legal system and the use of law enforcement practice of American courts in terms of consideration of disputes between corporations and the state.
In the top 100 nonfinancial TNCs, presented by UNCTAD in terms of foreign assets in 2015, the share of American corporations was 21%. According to the world’s top 100 nonfinancial MNEs, ranked by foreign assets, 2019, of the largest 32 companies, only one in Hong Kong (CK Hutchison Holdings Limited) engaged in retail, all the rest are European, American, and Japanese companies employed in the extraction of natural resources, automobile construction, and the production of tobacco products [18]. The role of the world’s largest companies in terms of revenue, according to the Fortune Global 500 reached $37.8 trillion, an increase of 19%, which is the highest annual growth rate in the history of the list. For the first time, the earnings of the Global 500 companies in Greater China (including Taiwan) exceeded those of the US companies on the list, accounting for 31% of the total [19].
According to UNCTAD 2022 [20] analytical data, the foreign activities of TNCs, or currently called MNEs, are mainly concentrated in countries with the possibility of obtaining high incomes in all economic indicators. In low-income countries, the activity of MNEs seems to be concentrated in labor-intensive industries, mainly in the raw material segment, perpetuating the industrial backwardness of these regions. Middle-income countries matter relatively more in terms of tangible assets and employment opportunities than in terms of income and profits. The largest MNEs have about 30–40% in GVCs in the form of income from the concentration of investments and intellectual property rights. Investment centers have a relatively higher share in the profits of global MNEs than in the tangible assets and employment of global MNEs.
The analytical data of the IMF for 2022 [21] speak of the development of world trade transformation, indicating both the impact of the pandemic and the country sanctions imposed with enviable regularity by developed countries, including secondary sanctions contributing to the introduction of protectionism measures as a determining factor characterizing modern foreign economic relations.
The pandemic and sanctions led to a sharp drop in imports, and the lifting of quarantine measures is not synchronous with the restoration of goods and services imports. However, since 2020 there is a strong negative effect on foreign trade and the emergence of prerequisites for a global recession, moreover, stronger than in 1982 or 1991, and even 2008.
The inclusion of economies in GVCs helped mitigate the impact of supply chain disruption on foreign trade, but country-specific unilateral sanctions (including secondary ones) violate this mitigating effect GVCs have been able to adjust to the asynchronous pandemic, but there are still changes in market shares among the regions included in the GVCs [22]. The specialization of developing economies in the raw materials and labor-intensive segments led to the fact that the local population could either find employment in these sectors or migrate, since the higher education system, due to the promotion of its internationalization policy, became predominantly paid. At the same time, it is in the developing countries that the birth rate is growing, according to the UN, the highest growth rate was in 2022: 3.7% in Niger, Democratic Rep. Congo—3.17%, Angola—3.16%, and in the developed countries the highest in Sweden—0.97%, Germany—0.04%, France—0.09%, and in a number of the Baltic states it has a negative size [23].
According to the World Bank 2020 Poverty and Shared Prosperity Report, the Gini coefficient increases by about 1.5 points within 5 years of major epidemics, such as H1N1 (2009), Ebola (2014), and Zika (2016). While the effects of the COVID-19 pandemic are still being calculated, early estimates predicted an increase in the Gini coefficient of 1.2–1.9 percentage points per year in 2020 and 2021, indicating an increase in income inequality [24]. Growing inequality within a country contributes greatly to growing global inequality, but there are other factors at play, such as technological advances that have not benefited everyone equally, or inadequate redistributive policies that fail to adequately address disparities between those who are already provided, and those who are already provided, who remain trapped in low income or wealth accumulation due to systemic inequalities, such as gender or racial discrimination. Thus, the average level of the Gini Index is 41.41 in the USA, 63.03 in South Africa, and 53.43 in Brazil, with a world average of more than 60.0 in 2022, since the population in developing countries is higher than in developed ones [25].
The construction of such a model of the world economy on the foreign policy circuit was accompanied by the implementation and the system of network management promotion by the world community. To introduce a network system of relations, it is necessary to create unified and mentally homogeneous values for all countries, offering to replace national identity with the priority of individual personal freedoms realized in the freedom of gender choice, various sectarian beliefs and teachings up to the ideology of Nazism and fascism of societies that have this superiority over other peoples. In other words, the denial of one’s historical connection with previous generations, the exaltation of individual freedom, including aggressive advertising of individual gender choice, over morality and public ethics, the dominance of didactics in the educational process, as well as the loss of a sense of personal responsibility of a citizen to society—all these have become an integral characteristics of the process of social development unification. The process of augmentation, which is being actively promoted, including within the framework of the WEF in Davos, should ensure the accelerated formation of a standardized society in the world community while eliminating the excess mass of the population of the earth as it is unnecessary.
The most mature socioeconomic, social, and political formation for the implementation of network management tasks was considered the European Union, where the level of national state sovereignty should have been consistently reduced in favor of supranational regulation and management. However, economic globalization has led to the highest disproportionality of incomes between regions and countries, the standards of living not only of rich and poor countries but within the countries between different groups. And the influx of migrants to the developed countries provoked an increase in discontent and rejection of alien values by the indigenous population of countries, in connection with which centrifugal tendencies began to take place in the EU, including disaggregation of large state entities.3
However, not all regional organizations and associations agree to build relations following the example of the EU in particular, for example, the USMCA, supplementing the terms of the previously functioning NAFTA agreement, focuses on the development of the US-Canada-Mexico free trade zone, causing an increase in the level internal complementarity of production of components important for the countries of production. So, for example, components for new cars must be produced by 75% in North America; and wages of 40–45% of those employed in the automotive industry to be at least $16 per hour. Seventy percent of steel and aluminum for automobiles must be produced in North America, including melting and pouring it [26].
The updated agreement as a whole does not imply strengthening state regulation, creating unilateral advantages for partners, but also does not allow the emergence of supranational regulation that would minimize the functionality of the governments of the participating countries.
The countries of the Middle East and the African continent, the states of Latin and South America, as well as states, such as China, Russia, and India, do not agree with the prospect of networking international relations and strengthening supranational regulation, analyzing the practices of the EU, seeing the current rather negative results for the society of the EU countries when imposing sanctions against Russia causing damage to their economies.
It is symptomatic that for the EU countries, national interests have been replaced by values that supposedly should unite society and ensure accelerated adaptation of migrants. However, the United States, as well as Great Britain, does not give up its national interests, retaining its substantiveness in the world community and not intending to lose national state sovereignty.
For the countries of the Anglo-Saxon system of values, the fear of losing their dominant position received its most obvious expression in the system of illegitimate sanctions that began to be imposed primarily on Russia, which, first in 2014 and then in 2022, opposed militarization and ethno-fascism in Ukraine.
In the words of an American professor of economics, President of the US Institute of International Economics A. Posen, “the sanctions imposed on Russia by the West jeopardize the supply of steel, palladium, and grain, as well as reject global aviation and exacerbate chaos in the shipping industry,” [27] in other words, the process of economic globalization is not only undermined but actually destroyed.
The countries of the collective West see a way out only in the creation of an “internal market of democracies,” [27] which should satisfy the needs of liberal democracies, it should be based on adequately educated people, on relevant ideas, while possessing material resources and wealth to satisfy the needs of developed liberal democracies, ensuring their sustainable development and dominance in the world community, as was the case throughout the entire twentieth century. At the same time, the sanctions policy for the United States has become “the main instrument of foreign policy, and not an auxiliary measure ...... The policy of multilateralism on the part of the US establishment in 2022 was focused in the area of sanctions pressure on the restoration of alliances with the United States and confidence in the global role of the United States.” [28]
Confrontation in modern conditions is associated for Europe with “leaving the former comfort zone and defining its own strategic interests, including the realization of its natural competitive advantage—belonging to the rapidly developing Eurasian continent.” [29]
Polycentrism excludes interference in the internal affairs of states, it is based on universal norms of inter-row law, and not on rules, it causes a constructive change in the activities of international organizations, restoring the mechanisms of structured cooperation, focusing on a progressive development perspective, excluding unfounded propaganda manuals, forming a zone of common responsibility for the future of the world, reviving the culture of dialog, joint political will for cooperation based on consideration of mutual interests.
The new world reality—polycentrism in the world order causes a revision of the nature of relations between states—from dominance and dictate, contempt and neglect to true partnership, to interaction based on noninterference in internal affairs, ensuring sovereignty and preserving the historical and mental identity of the people and nations.
In relation to polycentrism, we believe it is legitimate to speak of the de facto end of the era of the Western-centric world community and the formation of a genuine multilateral community. In such a system of relations, universal human value orientations are supported by international legal norms, it does not have the right of the strong to dictate their norms to other states and rewrite international legal norms, replacing them with rules that meet the interests of the exclusively dominant side. Polycentrism is a partnership of sovereign subjects of international relations.
A multipolar world is an alternative to monopolar one, polycentrism is more in line with the provisions of the Westphalian system and is based on the presence of several independent and sovereign centers for making strategic decisions at the global level. G-20 countries, which are sovereign actors of international law and fully realize their missions as states in front of their societies, can be considered as such fields/centers.
These centers must be able to defend their full-fledged sovereignty in the face of a direct invasion by a potential adversary at the material level. At the same time, polycentrism excludes the formation of blocs or alliances in order to “be friends against anyone.”
These centers/fields for making and ensuring the implementation of decisions will not be guided by the universality of the standards, norms, and values developed by Western countries. At present, they are proclaimed in the form of “an Anglo-Saxon democracy and liberalism” and an absolutely unregulated free market and parliamentarism, which meets the interests of the creators of “world democracy,” but not all countries of the world community. At the same time, the human rights of “liberal democracies,” interpreted through the prism of individualism and cosmopolitanism while refuting universal human morality and moral ideals that allow humanity to maintain its vitality, have become a tool for destroying the identity of societies, destroying the cultural and moral values of the peoples of the world, and their spiritual perfection in modern conditions.
In the conditions of polycentrism, private property and market conditions of management, democracy, and parliamentarism will develop and adapt to the historically established socio-mental, ontological foundations of the existence of nations and peoples and be regulated based on national interests. At the same time, on the outer contour, the basic provisions will be the international law, developed and observed by all participants in international relations, regardless of region and territory.
Polycentrism is based on ensuring the full-fledged national sovereignty of existing nation-states, in particular, the G-20 countries declared not only at the legal level, but also actually confirmed by the existing strategic, economic, military-political, technological, etc. potential character. In the twentieth–twenty-first centuries, there was a disaggregation of state entities under the pretext of their democratization (e.g.,Yugoslavia), gaining independence and ensuring the rights of citizens, and therefore ensuring full sovereignty for these small states seems to be quite a difficult task. In this regard, the process of attracting small and medium-sized states to larger ones in their region in the form of creating integration associations, various groups, and coalitions on a voluntary basis, with the abolition of their national, even sectoral, sovereignty seems unacceptable. In this regard, the principle of state sovereignty of the Westphalian system of international relations is preserved, but the system itself will certainly develop.
At the same time, multipolarity is not a chaotization of international relations, it does not negate multilateralism, but rather clearly builds the level of responsibility to the societies of individual countries. Polycentrism excludes the formation of a world government globalized in all components of human life, including culture and the spiritual development of a man and the world system.
Multipolarity opposes the attempt to form a single decision-making center by a club of satellites in terms of promoting the order and rules of the United States and its democratic gender preferences, the level of sub-state networks, NGOs, and other civil society actors. Only the state is able to represent and ensure the progressive development of its societies, all the other named subjects pursue their goals and solve their tasks, only fragmentarily associated with the missions of the state as an institution for ensuring social development.
Multipolarity is conceptually different from the system of international relations identified as multidimensional, multivector, or multilateral, elevating the principles, approaches, and methods of interaction into substantive characteristics of the world community. Polycentrism is based on the principles of relationships between the subjects of international law, based on the equal expression of will and respect, recognition of national sovereignty and the right of nations to self-identification in the world community, on the tolerant perception of all subjects of international relations, on respect for international law and established world order after the Second World War.
Multipolarity is a system of relations in the development of the world community, based on the dynamics of the national economies’ development, freedom of decision-making by states, including exit from an international organization or integration entity, if this is in the national interest. Multipolarity presupposes that the actors of the world community are states and that they preserve their economic and political sovereignty.
In other words, full-fledged sovereignty and national interests, if there is a desire to negotiate, but not to dominate. One and the same state, if it corresponds to the task of national development and raising the population standard of living, sustainable development, and elimination of income disproportion between the population groups of the country, has the opportunity and the right to freely participate in various integration associations or international organizations. All this determines the observance of the principle of an interstate building of relations within the framework of integration associations and international organizations.
Thus, polycentrism does not deny private property and private entrepreneurship, which are the movers of national economies. But it is the state that should ensure a favorable business climate, the inviolability of the legal environment, and the security of business and put national and foreign entrepreneurs on an equal footing, contributing to the development of initiative and the implementation of talents in entrepreneurial practices.
The state is responsible to its society for the security of existence and social justice in society, preventing high levels of income disproportion and the absence of social elevators for citizens of their countries. At the same time, the rights of individuals are guaranteed by constitutions and other acts of states that are equal in significance to constitutions (in the USA, e.g., the Bill on Human Rights and the Declaration of Independence [30]). The intervention of foreign states in the internal affairs of sovereign actors in international relations excludes polycentrism, including under the pretext of protecting minorities who, according to external expert assessment, are insufficiently provided with rights against the indigenous population.
In connection with the analysis, the transformation of economic globalization in the conditions of polycentrism is implemented as follows:
1. Based on the analysis of the economic freedom level, economic globalization is built into the framework of increased regulation by state bodies. States are forced to take on functions/missions that, in the framework of the Washington Consensus, were practically denied. In particular, within the framework of the implementation of national interests, trade transactions are carried out (including contrary to US and EU sanctions) in energy carriers with companies from Russia and other sanctioned countries (Iran, Venezuela). An accelerated transition in international settlements to national currencies, in connection with which the role of the dollar and the euro as the base transaction currencies of the last decade is falling. Thus, according to the IMF, the share of assets in US dollars in the reserves of central banks decreased by 12% from 71 to 59 (since the introduction of the euro in 1999). The share of the euro fluctuated around 20%, while the share of other currencies, including the Australian dollar, the Canadian dollar, and the Chinese yuan, rose to 9% in the fourth quarter of 2020 [31].
According to the analytical service of the US Congress, the dollar retains its dominant position as the world reserve currency and expediently creates a US digital currency to support the dollar in international payments. However, for the purposes of the progressive development of the US economy and its reindustrialization, the task is to take into account the benefits and costs for the economy, in foreign policy from the status of the dollar in the global economy, including given the technological shifts in the monetary and financial sphere. The United States plans to maintain a system of restricting access to US dollars and the financial system of individual countries in the context of “changing the undesirable behavior of foreign governments.” [32]
The significance of the national currency for the world economy is directly related to the place of the national economy in the global economy. The IMF indicates that in fact the share of US GDP (calculated at PPP) has a steady downward trend (about 16–17%), and the share of the dollar in world trade (less than 20% in global exports) is about 35% against 45% in 2013 [33]. This factor, together with the aggressive policy of sanctions pressure, will contribute to the gradual loss of the dollar’s leading positions in the world.
The Chinese yuan is ahead of everyone, that is, in terms of the turnover of interbank transfers—its share in the world is 1.68% as of December 2016 (according to SWIFT). The “twenty” currencies of this rating also included the South African rand (0.38%) and the Russian ruble (0.25%). The share of the yuan in foreign trade turnover is also higher than that of other BRICS currencies—it accounts for approximately 22% of China’s foreign trade. The Russian ruble is slightly behind (20%), so that the two currencies are well ahead of the currencies of India, Brazil, and South Africa [34], but in general, the share of the yuan does not exceed 3% [35].
2. The process of trans continentality in the detail of TNCs (MNEs) and the development of GVCs is gradually “curtailing” the interaction of partners within territorially close regions [36, 37]. In particular, a clear example is the strengthening of integration into ASEAN based on GVCs: the average share of imports of local products is 27%, and the average share of exported value added—direct participation in GVCs—25%.
Regional value chains in the Asian region play a key role. The degree of integration in different ASEAN countries is different: Vietnam and Cambodia are less involved in GVCs, and SMEs (TNCs) play a significant role. The number of firms engaged in direct import and export increases rapidly with size: while only 5% of small firms trade directly, for medium firms this number is about 30% [38].
In favor of the regionalization of the alignment of GVCs is the fact that the growth of world shipping costs, in particular, from Asia and the Pacific region to the United States and Europe. The level of mutual trade between the countries of Asia and the Pacific region as a whole since the end of 2020 is approaching 60%, significantly reducing mutual transactions with the countries of Europe and North America [39]. It is symptomatic that in Asia there is a process of gradual replacement of MNEs by European and US jurisdictions with national ones [40].
At the same time, political deglobalization, the weakening of international institutions, and the focus on “national interests” in science and technology create conditions for the loss of the benefits of globalization [41]. . In this regard, we believe that in the future, when a certain nationalization of business and research is achieved, the policy of nondiscrimination of foreign firms will be resumed contributing to international cooperation.
Concluding the study, we want to note that globalization as an economic process based on the internationalization of the creation of world GDP will not disappear and will develop. The world remains deeply interconnected; no region is self-sufficient [42].
In the conditions of polycentrism on the outer contour of relations, the task becomes more and more obvious, using the advantages of the interconnectedness of national economies, to manage risks, and reduce unjustified dependencies, contributing to the growth of the society’s welfare and the progressive development. Almost all regions of the world import 25% or more (in terms of value added) of one type of resource or industrial goods that are needed for production needs or private consumption.4
Polycentrism involves ensuring national security by the state, and promoting indirect measures to increase national competitiveness and sustainable development. All this is currently generating an impact on the structure of some value chains. Since the production of semiconductors is one of the basic ones in the transition to a new technological order, for example, the United States, the European Union, South Korea, China, and Japan have announced measures to strengthen domestic value chains. Similar steps may take place in other countries in relation to technologies or the production of goods and services, to limit the flow of data that are considered critical to national strategic priorities. The United States, having begun to pursue a policy of reindustrialization of its economy [43], escalating the policy of trade protectionism, focusing it mainly on China, sees two ways for its economy to gain: import substitution and the transfer of production, including to the USA from Taiwan, although this is certainly a negative factor for the world global economic system [44].
In this regard, polycentrism allows you to resolve conflict situations on the basis of multilateral meetings by making decisions at the interstate level, on the basis of building an appropriate economic policy of states that is not focused on realizing their interests at the expense of others, especially the use of protectionism measures (up to then trade wars) to restore the economic potential of individual countries. In other words, it is multipolarity that should rule out confrontational confrontation and opposition, including in the form of trade wars or disregard for international legal norms in order to achieve the desired results. “Only the policy of interstate coordination and building relations on the basis of mutually beneficial partnership, including cooperation as a form of cooperation, while maintaining an open model of the functioning of national economies—a condition for ensuring progressive sustainable dynamics, including in the global economy as a whole. The globalization of the world economy has an objective basis. “Simply blaming economic globalization for the problems, the world is suffering from is not true and does not contribute to solving the problems. From a historical point of view, economic globalization is an objective requirement for the development of social productive forces and the inevitable result of scientific and technological progress and is not created artificially by individuals or countries. Economic globalization has become a powerful driving force for world economic growth and has contributed to the movement of goods and capital, the development of science, technology, and civilization, as well as the exchange between the peoples of different countries.
At the same time, economic globalization is a “double-edged sword.” When the world economy is in a recession, the global economic “pie” is not so easy to increase or even decrease, and the contradictions between both growth and distribution, capital and labor, efficiency and equity will become more visible, and both developed and developing countries will feel the stress and impact.
Polycentrism allows economic globalization to be more dynamic, inclusive, and sustainable, the states take the initiative and moderate management to release more positive effects of economic globalization and rebalance the process of economic globalization, taking into account national conditions, choosing paths and integration into economic globalization. It is polycentrism that will focus on justice so that different countries, different classes, and different groups of people can enjoy the benefits of economic globalization. This is the responsibility that the leaders of states entering the era of polycentrism will have to take on.
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Notes
Russia is the world’s 11th largest economy, and its role as the prime commodity exporter among emerging markets gives it a structurally significant position. Among advanced economies, only the United States, Canada, and Australia have a comparable footprint in global energy, agriculture, and metals markets. Moreover, since the end of the Cold War, more than two decades of advancing integration have made Russia a very open economy, with a trade-to-GDP ratio of 46%, according to World Bank data. Among the seven largest emerging markets, only Mexico and Turkey had higher shares in 2020 (78% and 61%). Source: [2].
See Table 1. Evidence of building a post-industrial economy in the United States occurred by reducing the share of agriculture and industrial production in the structure of GDP. This has also been the case in other developed economies.
See for details [10].
The Asia-Pacific region, including China, is the world’s leading exporter of products overall and the largest supplier of electronics, but it imports more than 25% of its energy needs, as well as critical intermediate goods, more than 25% of its minerals needs. . Mineral supply flows come from Australia, Brazil, Chile and South Africa, supplying the PRC. Europe and North America provide much of the advanced equipment and intangible know-how that supports the production of advanced electronics such as semiconductors. But Europe imports more than 50% of its energy needs, and as a major net exporter of pharmaceuticals, it depends on the Asia-Pacific region for critical supplies of active pharmaceutical ingredients.
Written By
Victoria Perskaya
Submitted: 24 December 2022Reviewed: 03 January 2023Published: 25 March 2023
Open access peer-reviewed chapter - ONLINE FIRST
