“You have the watches, but we have the time.” The Taliban often referred to this old Afghan saying when discussing their fight against the Americans. Ultimately, they were proven correct.
After almost two decades of conflict, an insurgent army from one of the world’s poorest nations inflicted a decisive military defeat on the US, the global superpower that upholds the unipolar world order.
The US government’s total failure in Afghanistan—the longest war in American history—signifies a crucial moment and turning point in world history. The Soviet Union collapsed about two years after the Red Army was defeated and withdrew from Afghanistan.
As we approach the second anniversary of the American retreat, could a similar fate be in store for the US? While nobody knows the future, there is an excellent chance that the colossal failure in Afghanistan could accelerate the unravelling of the geopolitical power of the US and the shift to a multipolar world order.
Afghanistan’s strategic position has always made it a coveted prize in the Eurasian landscape. As shown in the image below, Afghanistan is situated in the centre of Eurasia, at the crossroads of China, Iran, and Russia—the three primary challengers to the US-led world order.
This central location is why Afghanistan has enormous geopolitical importance and why the US desired a strategic military presence there. The US military’s presence in Afghanistan was a strategic roadblock to Russia, China, and Iran’s goal of creating a powerful geopolitical group in Eurasia that could challenge the US-led world order.
However, with the Taliban forcing the US military out of Afghanistan, the door to a more coherent geopolitical alliance in Eurasia is now wide open. In short, failure in Afghanistan is a geopolitical disaster for the US.
For at least the past decade, China, Russia, and Iran have been working on an impressive plan to connect Eurasia—even while the US military was in Afghanistan. This trend will likely speed up now that the US military is no longer physically in its way.
Here’s what they have been working on…
China, Russia, and Iran are constructing a vast network of land-based transportation infrastructure, making the US Navy’s control of the oceans less significant.
China’s New Silk Road project is central to this new system. It aims to bypass the US financial system and the US Navy’s control of sea routes. The project, planned to be operational by 2025, includes high-speed railways, highways, fibre optic cables, energy pipelines, seaports, and airports.
These Eurasian powers are also establishing alternative international organizations for financial, political, and security cooperation, separate from those central to the US-led world order, institutions like NATO, the World Bank, SWIFT, and the IMF.
Some notable examples include the Asian Infrastructure Investment Bank (AIIB), launched by China in 2014 and is an alternative to the IMF and World Bank. The Eurasian Economic Union (EEU), a Russian-led trading bloc created in 2015, allows for the free movement of goods, services, capital, and people among its member countries.
Lastly, the Shanghai Cooperation Organization (SCO) focuses on military and security collaboration between its members. If current trends continue, it will result in greater economic, political, and security collaboration among the three main Eurasian nations—China, Russia, and Iran—at the expense of US geopolitical interests.
This scenario is exactly what Zbigniew Brzezinski worried would make the US “geopolitically peripheral.” It spells the end of the unipolar world order. In short, we are on the path to the emergence of an alliance of powerful Eurasian countries and a multipolar world order.
As the world order changes, I think there are two prominent investment outcomes we can bet on.
Outcome #1: The US Dollar Will Lose Its Privileged Position
The decline of America’s geopolitical influence is another enormous headwind for the US dollar.
Suppose the world thinks the US military is the ultimate backstop of the US dollar. What does it mean for the US dollar’s credibility when a ragtag group of insurgents from one of the poorest countries can defeat the military which backs it?
If the mighty US military couldn’t secure its partners in Afghanistan, how can it protect its other allies? Taiwan, South Korea, Japan, Western European countries, and the Gulf Arab states are likely pondering this. It wouldn’t be surprising to see them make security arrangements with US adversaries—such as China, Russia, and Iran—that exclude the Americans.
Outcome #2: Commodity Supply Disruption
The end of the unipolar world order means transitioning to a multipolar global trade regime—with serious implications for commodities. As I see it, there will be two main geopolitical blocks.
First, there are the countries part of or allied with the West. I’m reluctant to call this block “the West” because the people who control it have values antithetical to Western Civilization. A more fitting label would be NATO & Friends.
The other block consists of Russia, China, Iran, and other countries favourable to a multipolar world order. Let’s call them BRICS+, which stands for Brazil, Russia, India, China, South Africa, and other interested countries.
Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Saudi Arabia, Sudan, Syria, Tunisia, Turkey, the UAE, Venezuela, Zimbabwe, and numerous others have expressed interest in membership of BRICS.