Davos WEF 2022: Adam Tooze On India's New Role In The Post-War World Order

The world is an "incredibly precarious" position right now amid the Russian war in Ukraine, an "on-edge" economy and a potentially new economic and political world order in the offing, according to Adam Tooze.

Nothing has scared Tooze as much as the "atomic, nuclear sabre-rattling" seen in February in direct response to the West's sanctions on Russia, the professor of history at Columbia University told BQ Prime's Menaka Doshi on the sidelines of the World Economic Forum 2022 in Davos.

"I don't see a good outcome to that crisis," he said. "Many of us are hoping for a Ukrainian victory, but how we square with the possibility of making peace with Russia, which at some point we'll have to do; I do not know."

The economy, is "hugely on edge", Tooze said. "Interest rate hikes, inflation hikes in both food and key energy inputs -- we know the pressure this is going to exert on the most vulnerable in rich societies and in economies which are fragile and heavily indebted in dollars," he said. "This is a real test in multiple senses of the ability of elites all over the world to govern, to speak of the world order."

The U.S. and Western powers have made it clear that they will not accept an outcome in which Ukraine is defeated, Tooze said. "That's the first thing to anchor here. Beyond that, everything else is radically uncertain."

Tooze sees two possible scenarios developing from here.

• The Ukrainian military continues humiliating the Russian military and the latter backs out on exhaustion. "This would be an extraordinary victory for Kiev and it would pose the question of whether Moscow can live with that."

• Ukraine runs out of steam and Russia stabilises its position. "This becomes a scenario of attritional struggle. Some American strategists speak of this as an Afghanistan. Can the world economy live with the potential disruption of a prolonged slogging match in Ukraine? This is a recipe for a humanitarian catastrophe and the collapse of Ukraine's economy, leading to a permanent disruption to both energy and food markets."

Though the West's vision of ensuring a non-defeat scenario for Ukraine is "cast-iron", Tooze said, whether anyone has a vision for restabilisation is a question that remains unanswered.

The war in Ukraine has seen the emergence of India as a major economic powerhouse on the global stage since independence, Tooze said. "It is sitting between the two Cold War blocs. India's position is radically unlike anything we've seen before. The same can be said about China."

India has simply refused to line up with the Western stance on the war because it knows it has the bargaining power. "There was an entire ant trail of Western diplomats into New Delhi. Everyone wanted to talk all of a sudden."

Tooze said the smart thing to do then is to not commit. "Why commit? You're empowered by this decision."

India has made its position on global trade very clear. "It's not available for WTO or RCEP style deals," Tooze said. "It's a tough player with complex domestic politics in which there's very little to be gained by positioning itself as a liberal advocate of free trade."

A variety of challenges are emerging for Beijing, New Delhi, European countries and the U.S. among others. "The polycentrism which characterises our world is being manifested currently."

Tooze said the world is seeing nodes of leadership, in stark difference to the U.S.-dominated order seen in the last 20-25 years. "The emergence of major Asian powers, the proliferation of economic growth, the creation of the G20, which should really be G30," he said. "These are realistic adaptations to a world which is vastly more complex. We now have a world with series of power structures."

The current epoch, according to Tooze, is different. "Something radically new. Why shouldn't a world of 7.9 billion people not embrace that reality?"