The international balance of power has shifted, according to a report published today by the Global Agenda Council (GAC) on Geopolitical Risk of the World Economic Forum, from a world order dominated by the G7 free market democracies to one in which emerging market states enjoy much greater economic and political clout. Many of these states hold quite different views than leading industrialized states on how the global economy should operate and on the proper role for the state in economic development. "The result is a vacuum of leadership that will complicate efforts to restore confidence in global economic growth following the most significant market meltdown of the past seven decades," according to the report.
The new order will provide the following opportunities:
- for emerging markets Brazil, Turkey and Indonesia to play a larger role in international politics
- for "rogue" states like Iran, North Korea and Myanmar to avoid international isolation
- for resource-rich African countries to benefit from new economic relationships
- for international companies and investors to profit from their understanding of these changes.
Some of the challenges include increased nationalism in both developed and developing states, increased potential for West-East tensions, and greater state intervention in the economy by other developed and developing nations.
Ian Bremmer, chairman of the GAC on Geopolitical Risk and president of Eurasia Group, said, "As the world's top decision makers gather at the World Economic Forum annual meeting in Davos, it is crucial that we understand the new political environment in which we now find ourselves, post-financial crisis. Last year in Davos, the focus was on the recovery. This year, the recovery is underway, but it is being led by countries that have sharply differing views on how the global economy should be run."
Nader Mousavizadeh, GAC member and Chief Executive of Oxford Analytica, added, "As the emerging powers take advantage of a more fragmented global marketplace, we are likely to see governments everywhere increasingly integrate economic and political interests, sharpening rivalries and heightening the risk of protectionist measures."
"Achieving a new, inclusive global social contract with key stakeholder states and super-empowered global NGOs will require a rethink of what institutions are anachronistic and which are vital in the next global order we are shaping," said Steve Clemons, GAC member and founder of the American Strategy Program at the New America Foundation.
The full report may be found at http://www3.weforum.org/docs/WEF_GAC_GeopoliticalRisk_Paper_2011.pdf.
Part of the Network of Global Agenda Councils, the GAC on Geopolitical Risk is comprised of thought leaders from academia, government, business and other fields to capture the best knowledge in geopolitics and integrate it into global collaboration and decision-making processes.
The members are:
Ian Bremmer (Chair), President, Eurasia Group, USA
Thomas P. M. Barnett, Senior Managing Director, Enterra Solutions, USA
Katinka Barysch, Chief Economist, Centre for European Reform (CER), United Kingdom
Jeremy Bentham, Vice-President, Global Business Environment, Royal Dutch Shell, Netherlands
Steve Clemons, Director, American Strategy Program, New America Foundation, USA
Steve Dobbs, Senior Group President, Fluor Corporation, USA
James F. Hoge, Counsellor, Council on Foreign Relations, USA
Robert Kagan, Senior Fellow, The Brookings Institution, USA
Bilahari Kausikan, Permanent Secretary, Ministry of Foreign Affairs, Singapore (Mr. Kausikan's contributions to this document represent his personal views, not those of his government.)
Lee Chung-Min, Dean and Professor of International Relations, Graduate School of International Studies, Yonsei University, Republic of Korea
Nader Mousavizadeh, Chief Executive Officer, Oxford Analytica, United Kingdom
Gary Mueller, Chairman, Cerebellum Capital, USA
Volker Perthes, Director, Stiftung Wissenschaft und Politik (SWP), Germany
Dmitri Trenin, Director, Carnegie Moscow Center, Russian Federation
Wang Jisi, Dean, School of International Studies, Peking University, People's Republic of China
Contact: Martin Nagele, [email protected]
Alexsandra Lloyd, [email protected]