Antonio Navalón
There are so many things going on at the moment and so enormous that it is difficult to measure the exact scope of each of the crises. On the one hand, there is the war in Ukraine; can you imagine the vacuum of strategic reserves that this conflict is creating for the parties involved? Little by little, the West is running out – not yet at alarming levels, but close to them – of a series of strategic weapons that are designed more for conventional wars than for a conflict such as the one in Ukraine, which could be classified as medium/low intensity. At the same time that we know that every day there are fewer and fewer missiles and fewer and fewer large pieces made to face ground offensives, we cannot get to know – although it is possible to have an estimate – the real cost in quantifiable terms, both in casualties and military infrastructure, that the permanent attacks launched on the cities and strategic points of Ukraine entail.
With all this, we do not know who could be in a position to withstand and continue to have sufficient arsenals to face the conflict in the event that, as everything seems to indicate, the war is prolonged. Worse still, we do not know who will be the first to overcome the temptation to fire inappropriate types of missiles that could have serious consequences as a result of losses, desperation, and internal instability. That is why it is so crucial that powerful countries like China act as mediators in this conflict and seek to find – before it is too late – a solution that will prevent it from turning into a generalized conflict with no clear way out.
From President Volodymir Zelensky to the forces of the Western countries involved, it is still surprising how little interest there is in ending the confrontation. That is why it is very important to take into account the significance of the possible mediation and intervention of the new China, that of Xi Jinping, which recently announced the largest increase in its military budget, investing around 225 billion dollars, the second highest in the world, only after that of the United States. But, in addition to the above, with Xi Jinping’s meetings with Putin and Zelensky, China is increasingly positioning itself as the great negotiator of the conflict and as a great global power capable of solving international conflicts. Because of this and the apparent indifference on the part of the Western world, it is essential that the Chinese lead what I hope – for the good of all – will be the talks and dialogues that will lead to a definitive ceasefire and peace. While military reserves are running low, a year of the Russian-Ukrainian conflict has passed, and there is still no light showing clearly where this confrontation, which has already caused enough damage in all senses, will end.
After a pandemic and witnessing various crises and what can be triggered by the exercise of power in the wrong hands, we have reached a turning point. As far as warlike confrontations are concerned, apart from talks and a possible redrawing of the maps of Europe – which would not be the first and I fear not the last time either – what is it really going to take to end the tension-raising situations between nations in a lasting way? If wars were the only danger facing the world, arguably, that kind of threat would be enough. However, to our misfortune, armed conflicts are not the only thing we face. To this, we must add the various latent crises and dangers, such as economic and financial instability, which, firstly, caused the pandemic; secondly, was aggravated by inflation and thirdly, we have been living with an unsustainable situation for a considerable period of time.
Regarding the economic and financial crisis, the bankruptcy of Silicon Valley Bank is only the first proof of the seriousness and the complicated panorama we are facing in this matter and, furthermore, this may explain a large part of the present crisis – although not yet very public – that a key State of the United States of America is going through. California has always been a fundamental part of the United States. Since it was annexed under the terms of the Treaty of Guadalupe Hidalgo in 1848, California – along with New York under the famous “Coast to Coast” – has been one of the two American linchpins. Something curious about both is their predominance of Democrats when electing their governors and the great racial and social diversity that walks their streets. Although in this regard, it is necessary to mention that California is one of the places where racial segregation is most evident. These are two states that have a fundamental role in the economic, social, and political development, considering the region of Silicon Valley and even at one point California becoming the ninth world economy, and what Wall Street represents worldwide, on the part of New York.
The bankruptcy of Silicon Valley Bank is many things. To begin with, it represents the crisis that the State of California is going through, which has ceased to be the golden chimera and the place where everyone wanted to be and belong. The bankruptcy of SVB – which had among its major clients a large number of venture capital funds and startups and even became one of the twenty largest banks in the United States – is also a warning that America’s internal economic and social balances are shifting on a different axis.
While Tesla’s original factory is in Fremont, California, the day Elon Musk announced he was moving his largest production facility within the U.S. to Austin, the Texas capital, a lot of things shifted. But, above all, this meant moving a fundamental part of the new economy – which is not simply based on algorithms or software structures – to a state as key and, at the same time, as connected and important in the development of CUSMA/USMCA/T-MEC as Texas.
No need to ask why Tesla chose to settle in Austin; the answer is very simple: the new structure of mass production of auto parts – thanks to nearshoring – is easier to place them across borders. All of this, as long as the Mexican government allows it. If so, it is also contributing to the creation of a political balance between Mexico and the United States, which is so necessary at this time.
For the time being, it seems that SVB’s bankruptcy is under control, although it appears to be only momentary. This being the second largest bank failure in the United States, I would like to recall that there has already been a similar case in the past, which was the failure of Lehman Brothers and later the collapse of the AIG insurance company, and which was the preface to the economic recession of 2008. The signs of the possible outbreak of the crisis began to be noticeable in 2007; however, in the absence of efficient intervention by both government entities and the private sector, the inevitable ended up exploding a year later, being the accumulation of bad actions and decisions implemented since September 11, 2001.
Right now, the most important question revolves around when the two big bombs of mass destruction – the economic and the missile bombs – which, it is worth mentioning, are already on the launching pad will explode. The question is when and if they will actually explode and how they might affect us. Meanwhile, the relationship between Mexico and the United States continues to strain. It seems that not since World War II and since the Russian interference in the elections that brought Trump to the White House have there been elections so vulnerable to foreign intervention as those to be held next year in our country. While President López Obrador had a very good relationship with the leader of the most radical Republicans, Donald Trump, it has not been the same case with Joe Biden since if the Mexican leader has sinned of something in terms of the relationship with him, it is of being soft.
Although it is not yet clear who will be the candidates that will seek to hold the Mexican presidency, what is very likely is that the Americans will be more than attentive and will possibly have something to do with who ends up wearing the presidential sash.
Further Reading: