Is it beginning of World War III?

Let us begin with a huge caution. What we present here is the most-frightening scenario. It may or may not happen, but more voices are articulating it openly. Billionaire-investor Ray Dalio recently wrote, “We are now in a world war that is not going to end anytime soon.” More importantly, this is not merely a military situation that involves geopolitics. It has engulfed large parts of domestic politics, global economics, large businesses, financial markets, global trade, currencies, and other assets. Like it or not, what we see now, from a perspective from the top, as opposed to the ground realities, is possibly the initial and cautionary beginnings of World War III.

At present, one thinks of the mini-wars across the various regions and continents as disconnected and unrelated ones. But look at them from a different angle. The Russia-Ukraine war involves the US and Europe. The Iran war has firmly put its stamp not just on America and Israel but most of the Middle East. West Asia is enveloped in several wars, which include those that involve Israel, Lebanon, and Syria, along with the one whose protagonists include Saudi Arabia, UAE, Yemen, and Sudan. In effect, North America, Europe, Asia, and the Middle East are already in the grips. Add South America (Venezuela and Cuba), and Arctic (Greenland), which are, or may be, subsumed.

“Together, these conflicts make up a very classical world war that is analogous to past world wars,” wrote Dalio. Other experts feel that at some stage, if China escalates territorial ambitions, and other nations take these mini-wars as opportunities to pursue their agendas, the disparate conflicts can converge, and ignite a true World War III. As mentioned before, it will consume businesses, and markets, as the “monetary order, some domestic political orders, and geopolitical world order are breaking down” like never before. Dalio feels that the conditions that “typically precede” wider world wars are in place.

The billionaire lays out the grand geopolitical chess board, and tracks the moves over the past few years by the various participants, or chess pieces. First, dominant powers weaken relative to rising powers. This may imply the decline of the US and Europe, relative to Russia and China, in a world that is truly multi-polar. Economic wars follow the political ones in the form of trade sanctions, tariffs, bilateral deals, and aims to support local businesses. “Critical industries and supply chains come under tighter government control. Trade checkpoints become weaponised. Military operations take over, and spread across continents as “multi-theatre conflicts increasingly

happen simultaneously.”

From a so-called multi-polar world, the world slowly but steadily transforms into a bipolar one, as was the case during the first two world wars. At present, two distinct sides are visible. America has its allies, although it keeps prodding and nudging them, and tries to undermine NATO, and European friends. In response, “China is aligned with Russia, and Russia is aligned with Iran, North Korea, and Cuba,” even as Russia tries to muscle its way into Europe, and China does it in Asia, Africa, and Europe. At some stage, South America will take a stand, especially after Venezuela, and if the US seeks Cuba.

But most of these alliances, even if firm, will be fluid, and change fast. In this scenario, the enemy’s enemy is a friend, or a smaller or less-crucial enemy is a friend when a more powerful enemy looms large. This explains the alliances between India and China, India and Russia, China and Russia, and the stance taken by Brazil and Japan. Thus, this world war may not even look like a world war. It will continue to mirror the present scenario of several mini-wars, which link up in bizarre ways, and pitch one side against the other, even as the composition of the sides keep changing rapidly, and without warnings. According to Dalio, the alliances will matter as much, if not more than, the battlefields. “It is quite easy to see objectively how the sides are lining up via indicators such as their treaties and formal alliances, their votes at the United Nations, their leaders’ statements, and their actions,” he wrote. But since the scenarios are flexible, this is not about the formation of blocs, like during the earlier world wars or Cold War, but an erosion of the order that was built over the past 70 years. Today, one sees the “might-is-right order with no single dominant power.”

Now, look at the future. Let us assume that the Iran war ends with America’s victory. After Venezuela, and if the US eyes Cuba, it will prompt Russia to occupy and demand more territory in Ukraine, and China to step up its intentions in the South China Sea, and Taiwan. If America withdraws, Iran will emerge stronger in the Middle East, and impose its conditions, which will give more encouragement to other nations like North Korea, Russia, and China.

This is why Dalio believes that the way the Iran war ends will not mark an end to the crisis.Whichever way the Iran war ends, it will be another input into the so-called ‘Big Cycle’ of global events, which will advance in different ways, depending on the outcome, and influence the future. The world war will take new shapes, escalate, and the next phase will lead to more conflicts, rather than less. Either way, more nations will enter the fray, or some nations may intensify their war efforts. As more nations link with each other, or distance themselves, a concrete line will differentiate the two sides. Nations will cross the line quite frequently, and the line may shift, but the marker will remain.

Statements like the Iran war will mean the end of a nation, or civilisation, will add to the chaos and confusion. Suddenly, the political and economic nuances will be lost, or get blurred, and ideological mindset, even if unclear and opaque, will be at the forefront. The mini-wars will acquire a larger-than-life image, and will involve either a fight for survival, tussle for revival, or a conflict for imperial. The balance of power, whatever remains of it, will break down. As Dalio explains, the world has transited from a pre-fighting stage to a fighting one, which is broadly comparable to the situations in 1913-14 (World War I) and 1938-39 (World War II). Even if the timing is not precise, as Dalio admits, a minor trigger may ignite the world. We are sitting on a huge heap of tinderboxes. All it needs is adequate light.