Increasing Threat of Worldwide Chaos as West Descends into Internal Strife and Conflict

The Western-led global economic order had a bad 2023. Surprisingly, the primary cause was not the emergence of an alternative order led by China, as some had anticipated. Instead, it was internal stress that led to more doubts around the world about its effectiveness and legitimacy.

But a new international order is unlikely to emerge anytime soon. Instead, as more and more countries decide to self-insure by building alternatives to the Western-led order, the global economy risks increasing fragmentation, eroding America's leadership role, and accelerating a system-wide shift toward disorder.

To be sure, doubts about the Western-led economic order began long before 2023. Over just the past 15 years, its credibility and smooth functioning have been undermined by policy missteps that resulted in a series of disruptions. These include the 2008 global financial crisis; growing weaponisation of trade and investment sanctions; unequal distribution of COVID-19 vaccines; central banks' mischaracterisation of inflation as "transitory"; and consequences of aggressive interest-rate hikes.

The multilateral system has been further undermined by its inability to tackle urgent global challenges such as climate change and overwhelming debt in Global South nations. As these pressures intensify, Western-dominated institutions are increasingly viewed as ineffective or insufficiently inclusive.

Two developments this year fuelled widespread frustration with this system: Russia's successful evasion from suffocating sanctions which were meant to restrict their access to SWIFT payment systems and cap oil export prices; And America's controversial role in the Israel-Hamas conflict raised questions on West’s commitment towards basic human rights & compliance with international laws.

Despite crippling sanctions against Russia for invading Ukraine – including limiting the use of SWIFT payment systems - Russian technocrats managed ad hoc trade & payments schemes minimizing the damage done domestically while funding war efforts abroad indicating limited success for sanction regimes under Western-led economic orders.

America’s involvement in the ongoing Israel-Hamas war exposed inconsistencies regarding adherence to basic human rights & international laws. As per UN Secretary-General António Guterres, the lack of protection for non-combatants in Gaza; the collapse of Gaza’s health system; the record death toll among United Nations' humanitarian staff, and threats to civilians due to widespread starvation, disease & civil disorder are alarming.

Millions globally believe Israel's response to Hamas has gone too far with 153 countries voting in favor of a ceasefire at the recent UN General Assembly vote. Countries have expressed concern over the impunity with which Israel has been allowed to ignore international law and bomb civilians - a situation described as "hell on Earth" by Philippe Lazzarini, Commissioner-General of the UN Relief and Works Agency for Palestine Refugees in Near East.

These developments question the effectiveness & legitimacy of Western-led order accelerating the transition from a unipolar world towards multipolarity. Middle powers increasingly asserting themselves encourage smaller Western-aligned nations to contemplate becoming “swing states”.

Western powers should confront this threat head-on focusing on mitigating the risk of further fragmentation while forestalling rapid descent into disorder by strengthening existing multilateral architecture starting with the International Monetary Fund (IMF) & World Bank – focusing primarily on voice representation; dismantling appointment processes benefiting Western interests; modernizing operational procedures.

Reforms are crucial for the survival of the Western-led order that served the world well since WWII ended. Failing the current framework will not result in a China-anchored new system but more global disorder inhibiting the collective ability to tackle complex growing challenges long-term impacting everyone negatively short term.