Panic in Geneva, as the multilateral liberal order begins to crumble, By Yusuf Bangura

Geneva may provide an interesting laboratory to study the effects of the collapse of liberal internationalism on employment and local economies. It has the largest concentration of international organisations in the world. It is home to such mega institutions as UNOG, the ILO, the WHO, the WTO, and the UNHCR. Indeed, the city hosts more than 40 international organisations and 750 nongovernmental organisations — creating a network that directly employs more than 30,000 people. Social life in the city may not be the same after four years of Trump’s presidency and European rearmament.

The Tribune de Geneve reported today that thousands of jobs in the city’s international sector may be at risk following Donald Trump’s decision to withdraw the US’ membership of key institutions, such as the World Health Organisation (WHO) and the Human Rights Commission, dismantle USAID, and suspend funding of critical programmes in organisations such as UNAIDs and the Global Fund that fights malaria, tuberculosis and HIV.

International organisations in Geneva are scaling down their operations and staff are losing jobs at a massive rate. The situation is so serious that the city’s employment office has set up a hotline to help those who’ve been affected by the mass layoffs.

Job cuts and cost rationalisations have always been a feature of life in Geneva’s international sector. Many organisations are not funded by member state contributions, but rely solely on voluntary contributions, which tend to fluctuate according to fiscal conditions in donor countries. And voluntary contributions have, over the years, become a key feature of the budgets of even well established inter-governmental organisations — exposing them to the changing aid policies of governments.

While international organisations have often coped fairly well with fluctuating aid flows, what’s currently unfolding poses a far bigger threat to the survival of multilateral institutions and their abilities to execute their mandates. The old order of liberal internationalism is crumbling, the international jobs market is unlikely to recover, and Geneva may be forced to adapt to new realities.

The Multilateral Liberal Order Upended

Two processes signal an end to the global order on which international life in Geneva has thrived. The first is Trump’s aggressive attack on liberal internationalism, or the United Nations system — a rules-based multilateral system of rights, humanitarianism, and open trade and investments, which the US and European nations crafted after World War Two. As the biggest economy in the world, the US played the lead role in financing that order. Despite a progressive decline in the US’ share of global funding over the years, it still remains the single largest funder of most international organisations and initiatives.

Trump and his MAGA group no longer believe that the liberal multilateral order serves US’ interests. They’ve adopted a transactional approach in trying to reorganise the world. Their new policy is that the US will no longer spend money on activities or programmes that do not generate immediate material benefits to it; it will use colonial era-type tactics to leverage its power and obtain what it wants from weak states; and it will try to recoup money that it previously spent on countries, if such countries wish for its continued support.

Under this framework, historical alliances or strategic commitments have become meaningless; the ideological rhetoric of defending liberty or the ‘free world’ is out the window; and multilateralism or UN initiatives are now seen as obstacles to the maximisation of US power and influence. As long as Trump and his MAGA group are in the White House, the financing of international organisations will continue to diminish, and the liberal or humanitarian values that underpin them will be eroded. Thus, the international jobs market in Geneva is unlikely to recover unless emerging great powers, such as China, or the EU acting as a bloc, take up the slack — which are both very unlikely.

The turning point in the EU-US rupture was when in February, for the first time in 80 years, the US sided with Russia and a few other authoritarian regimes (including North Korea and Iran) against its so-called democratic European allies on a General Assembly resolution on Ukraine, which condemned Russia’s invasion of that country three years ago. The US has also withdrawn military support, including intelligence sharing, from Ukraine.

European Rearmament: A Challenge to Social Europe and Global Humanitarianism

The second problem that threatens the liberal and humanitarian global order is the fever of rearmament that’s gripping EU policymakers. Speeches and actions by Trump and his White House group signal that the US no longer sees Europe as a strategic partner. Trump has ignored EU allies in trying to strike a deal with Putin to end the Ukraine war, on terms that Europeans see as a reckless capitulation and threat to Europe’s long-term security.

The turning point in the EU-US rupture was when in February, for the first time in 80 years, the US sided with Russia and a few other authoritarian regimes (including North Korea and Iran) against its so-called democratic European allies on a General Assembly resolution on Ukraine, which condemned Russia’s invasion of that country three years ago. The US has also withdrawn military support, including intelligence sharing, from Ukraine.

European leaders have been rattled by these developments. Many believe that the US’ pro-Europe security guarantees in the North Atlantic Treaty Organisation (NATO) are no longer solid. France and Germany have been calling for strategic independence from the US. And countries that are in the cross hairs of Russia — the Baltic states, Ukraine and Poland — have been vocal in their support for concerted EU military support for Ukraine.

Many EU countries spend well below or just about the NATO requirement of 2 per cent of their GDPs on defence. European leaders committed a huge strategic blunder after the Cold War by continuing to rely on the US as the guarantor of peace and security in Europe. European defence spending was massively scaled down in what was seen at the time as a Cold War dividend, leaving the US to largely carry Europe’s military burden.

During the Cold War, it made sense for Europe and the US to be joined at the hip because Russia, under the Soviet Union, threatened both Europe and the US (both feared the spread of communism). However, at the end of Cold War, Russia was no longer a threat to the US. On the other hand, Europe shares a huge geographical space with Russia, which has the largest army in the region and nurses ambitions to extend its influence beyond its borders, especially in countries with large Russian minorities.

Realist theory in geopolitics predicts that the strategic policies of states are unlikely to be aligned if they face different threats in the world system. As such, Trump has simply hastened a rupture that was bound to happen at some point, even though more thoughtful leaders would have managed the transition better.

European rearmament will undoubtedly lead to some scaling back in social spending, including on international aid budgets, which are often easy targets during periods of belt-tightening. Already, the UK government has announced a cut in its aid budget from 0.5 per cent of GDP to 0.3 per cent of GDP (a massive 40 per cent cut) and has increased expenditure on defence.

It remains unclear how the new European defence architecture would work. The largest economy in the EU, Germany, is a military midget; and the UK, a military power of sorts, is not in the EU. Both France and the UK are nuclear powers, but there are doubts about their second strike capability against Russia, the biggest nuclear power by a mile in Europe. It is also believed that France and the UK can’t match the technological prowess of the US in air defences, ballistic missiles and military intelligence — all necessary to fight a conventional war with Russia.

France has offered to extend its nuclear deterrence to other European countries. But how credible is this offer? Will Germany go under France’s nuclear umbrella or massively rearm and develop its own nuclear programme? Can the EU craft a common defence policy — something it has not been able to do in sixty years. Are we, instead, likely to see the development of EU defence systems under multiple jurisdictions? What seems certain is that European countries will try massively to increase their defence spendings.

Such spendings are likely to be at the expense of social programmes. One of the distinguishing features of European capitalism is its huge welfare programme — the biggest in the world, which helped to maintain social cohesion and quality of life, as well as curb revolutionary pressures.

Europe spends a substantial amount of money on a variety of social programmes, such as employment benefits, pensions, health insurance, child support, and education. The average EU social expenditure as a per cent of GDP is about 27 per cent, with some countries spending more than 30 per cent. This is why European countries are often referred to as welfare states.

European rearmament will undoubtedly lead to some scaling back in social spending, including on international aid budgets, which are often easy targets during periods of belt-tightening. Already, the UK government has announced a cut in its aid budget from 0.5 per cent of GDP to 0.3 per cent of GDP (a massive 40 per cent cut) and has increased expenditure on defence. More cuts are likely in the UK and more countries are likely to follow the UK. The ‘guns versus butter’ issue is back on the European policy debate with a vengeance.

Conclusion

Geneva may provide an interesting laboratory to study the effects of the collapse of liberal internationalism on employment and local economies. It has the largest concentration of international organisations in the world. It is home to such mega institutions as UNOG, the ILO, the WHO, the WTO, and the UNHCR. Indeed, the city hosts more than 40 international organisations and 750 nongovernmental organisations — creating a network that directly employs more than 30,000 people. Social life in the city may not be the same after four years of Trump’s presidency and European rearmament.

Yusuf Bangura writes from Nyon, Switzerland. Email: Bangura.ym@gmail.com