Zarania After the Fall: What Does Losing a Superpower Rivalry Cost a Small State?
Zarania is a landlocked state of 18 million people. Between 1975 and 1990 it received roughly 200 million dollars a year in development assistance by alternately courting Moscow and Washington, and it used the rivalry to win a steel mill, a hydroelectric dam and a favourable price for its copper. In 1989 exports to the Soviet bloc were 46 per cent of total trade; by 1993 that share had fallen to 4 per cent, and its air force of 40 aircraft has no source of spares. The new government must choose between three paths: a security partnership with a Western alliance in exchange for basing rights and rapid economic liberalisation; membership of a regional economic union that requires a 70 per cent tariff cut and acceptance of a common currency; or continued non-alignment with bilateral deals with any buyer, including China and Iran, which offer cheap credit with no political conditions but want equity in Zarania's copper mines. Unemployment is 23 per cent, and tariffs supply 28 per cent of government revenue.
1. Explain what actually changed for Zarania after 1991 and what did not, using the idea of bargaining power.
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Judgement: what changed was the price of Zarania's loyalty; what did not change was Zarania's underlying weakness.
- Under bipolarity, a small state held an exit option: it could credibly threaten to defect to the other camp, and that threat had value because both superpowers were competing for clients. Aid was partly a rental payment for that option.
- When one pole collapsed, the market for that loyalty disappeared. There was no rival to defect to, so the rental payment stopped and finance was replaced by loans carrying policy conditions. The 200 million dollars a year was never a reward for good policy; it was a by-product of rivalry.
- What did not change: landlocked geography, dependence on a single commodity, a security vacuum, and the need for spare parts. These were always the real problems, masked by patronage.
The consequence is the important one for judgement. Zarania cannot recover its old leverage by nostalgia or by declaring neutrality. It must manufacture substitutes for the lost exit option: a regional organisation in which its vote matters, control of a resource others need, or a transit route. Otherwise 'non-alignment' becomes simply the absence of any offer.
2. Assess the three paths against the criteria of security, autonomy and development, and state which you would recommend.
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Judgement: I would take the regional economic union, but only with a negotiated transition period and an explicit debt ceiling on outside credit. A pure choice of any one path fails.
- Western security partnership. Strongest on security, weakest on autonomy: basing rights are hard to reverse, and rapid liberalisation imposed on an economy with 23 per cent unemployment will be socially explosive. Development gains arrive late and unevenly.
- Regional union. Best on development and on voice, because a common market gives Zarania a market larger than itself and a seat at a table where rules are made. The problems are arithmetic: tariffs are 28 per cent of revenue, so a 70 per cent cut opens a hole that must be filled by a common external tariff share or adjustment funds; and a common currency removes monetary policy at the moment Zarania most needs it. Both are negotiable as phased commitments rather than immediate ones.
- Bilateral deals with any buyer. Fastest relief, worst long-run risk. Cheap credit secured on copper equity is debt that converts into loss of control of the country's only export earner if prices fall.
The reasoning behind the recommendation: in a unipolar or loosely multipolar world, leverage comes from being inside institutions and from keeping options open, not from renting territory. So I would enter the union with a ten-year tariff glide path and an adjustment fund, and permit outside credit only below a fixed share of export earnings.
3. A minister says: 'Bipolarity is over, so non-alignment is meaningless.' Do you agree?
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Judgement: the minister is right about the slogan and wrong about the strategy.
- The Non-Aligned Movement was historically constituted by the Cold War: its founding purpose was to keep newly independent states out of a specific rivalry. That rivalry has ended, so the original rationale has genuinely weakened, and the movement's political weight is far below its 1960s peak.
- But the underlying strategy is not about the Cold War at all. It is about maximising a small state's autonomy and options when it has little material power. That problem is unchanged.
- The form changes. Where a state once played two superpowers against each other, it now manages several partners at once, hedging between a security guarantor, a large creditor and a regional bloc. The practice is better described as multi-alignment than as non-alignment.
- Nor is autonomy free. A state that joins every partnership and signs every credit line is not independent; it is committed everywhere. The discipline of non-alignment was selectivity, and that is the part worth keeping.
Conclusion: drop the claim that the label alone confers anything, and keep the criterion. Zarania should ask of each partnership whether it preserves a real decision for Zarania that Zarania would otherwise lose. That question outlives bipolarity.