Arancha Gonzalez Laya is Dean of the Paris School of International Affairs, Sciences Po and a former Foreign Minister of Spain. You may follow her on Twitter @AranchaGlezLaya.
The world is going through a period of structural transformations. Changes that began long ago have accelerated in recent times, leading to a period of unprecedented volatility. Although we know what we are leaving behind, we still don’t see the contours of a new international order.
Two main forces are driving the current changes: the power of scientific and technological progress and the return of power as the structuring factor of international affairs with the rise of geopolitics. These forces are at work in an interdependent world and are creating friction and fractures. Four main fractures are emerging: (1) open rivalry between the United States and China, (2) a point of no return for many of the world’s most fragile ecosystems, (3) a growing gap in human development, and (4) a fragmentation of the global governance landscape.
Understanding how we got here will help in shaping responses to avoid the risks of fragmentation.
The Power of Scientific and Technological Progress
The world is seeing unprecedented scientific and technological progress that is helping us address previously insoluble problems. These advancements include cancer treatment, HIV-AIDS cure, vaccine development against COVID-19, and new avenues to cure malaria using mRNA technology. Quantum processing is turning astrophysics, engineering, and national security upside down. Research in advanced materials may help us to develop synthetic fuels cutting the need to consume fossil fuels and helping us decarbonize much faster. Not to mention advances in artificial intelligence (AI), including ChatGPT, which not only narrow the gap between humans and machines, but risk putting out of work teachers and even diplomats! Jokes aside, it is clear that there is no historical parallel in the pace, magnitude, and velocity of the change we are witnessing.
With these technological transformations come opportunities as well as several challenges. Take AI, for example. It is increasingly present in our societies: it plays roles in facilitating credit scoring in the banking sector, helping law enforcement agencies through facial recognition, better analyzing healthcare data, and more efficient targeting of humanitarian aid. But new AI technologies also generate disinformation and fake news that penetrate public debates and influence politics. These tools have the power to increase political tensions and public polarization, thus posing a serious risk to the functioning of our democracies. AI, especially in military application is being extensively used in the war in Ukraine to better target objectives. But it is also the new flashpoint in the Sino-American rivalry. It is therefore urgent to regulate the use of these technologies. The gradual deployment of augmentation technologies in both civil and military contexts requires guidelines, both at the national and international levels. The Sino-American rivalry over technology in the military field requires guardrails that will provide greater national security while ensuring the functioning of market forces in civil applications. A new international framework on data governance is also urgently needed to ensure accountability, ethics, and transparency. The question is how such regulatory efforts should be undertaken. If it is done in a fragmented manner, it will have severe inflationary costs, as the International Monetary Fund has warned. According to a recent report by the organization, technology fragmentation alone can lead to losses of up to 5 percent of GDP. It would be preferable to try a cooperative approach. One such example are the efforts undertaken by UNESCO to develop a set of recommendations on the ethics of AI.
The Return of a Power-based International Order
The second factor shaping the international landscape is the return of power-based politics. We are witnessing the pivot from a rules-based to a more power-based international order.
This is what we see at play in Russia’s invasion of Ukraine. This is not the first time that we see an attempt at redrawing the internationally agreed borders of a country, and unfortunately, it will not be the last. But what is happening in Ukraine with the rejection of a rules-based order by Russia, a permanent member of the UN Security Council, which is in possession of nuclear weapons is symptomatic of a wider trend.
This is also what we see at play between China and the United States. Power politics is also at the heart of a new nuclear proliferation race that is starting to appear on the horizon. After a long period of imperfect management of nuclear threats, the world has returned to a period of expansion in nuclear actors. The unsuccessful attempt at curbing Iran’s access to the nuclear weapon will pressure other countries in the region to do the same. A similar evolution could be expected in Asia where the North Korean buildup will undoubtedly put pressure on neighbors to follow suit.
The two versions of power, that of scientific and technological cooperation, coupled with the use of power to influence and shape international affairs, are creating frictions and even fractures in an interdependent world.
Open U.S.-China Competition
The precarious balance between the United States and China is giving way to an open competition for hegemony: a new era of great power competition. This competition centers around technology and national security issues but will increasingly spill over into economic prominence issues. After the fall of the Berlin Wall and the implosion of the Soviet Union, the United States became the world’s “benevolent hegemon,” leading to a period of expansion of liberal democracies and market economies. Some authors at the time spoke about the end of history. For those of us working in international trade, we knew it wasn’t the end, it was merely a parenthesis.
The process of gradual reform and opening of the Chinese economy under President Deng Xiaoping accelerated with China’s entry into the World Trade Organization in December 2001. By the time the financial crisis struck in 2008, the Chinese economy had become systemic, which is why when China decided to keep its market open and avoid engaging into high level protectionism, China helped the world exit the financial crisis.
In 2018, American President Donald Trump imposed massive tariffs on Chinese imports and released a new National Security Strategy that labeled “great power competition” and not “terrorism” as the primary focus of U.S. national security.
President Joe Biden’s new national security strategy, released in 2022, highlighted “China’s intention and capacity to reshape the international order and tilt it to its benefit.” This has led to a new cybersecurity strategy and the adoption of export controls to curtail China’s access to advanced semiconductor technologies.
The United States has defined its relationship with China with a tryptic: cooperation in areas related to global public goods; competition especially in the economic sphere with the objective to ensure a level playing field; adversarial especially where there is a direct impact on national security. However, the line between these three dimensions is becoming increasingly blurred. Security, dominated by zero-sum game mentality, is increasingly permeating the economic and trade spheres and mistrust is growing. The relation is tilting towards adversarial containment resembling that of the cold war era but with two main differences: allies are not completely aligned and interdependence in today’s world is much greater, and hence more difficult to manage.
China, for its part, has made significant advances in technology in the last decades, but faces tremendous domestic growth challenges, changing demographics and a more hostile external environment. Navigating this moment is daunting for a President who has just been re-elected as head of the country and party and has accumulated personal power only comparable to that of Chairman Mao—reducing domestic checks and balances.
The competition between the United States and China has become a global phenomenon, with every country becoming an expert in analyzing the dynamics of the relationship. As the two countries continue to jostle for power, it remains to be seen how this will impact the global order and the new balance of power that will emerge. In the meantime, the world must find ways to manage this fractured landscape and prevent conflicts from escalating.
Climate Change as a Major Existential Challenge
The world is facing a second fracture: the fragile planetary environmental balance is tilting towards irreversible damage to some of the world’s most valuable ecosystems. Under the Paris Climate Agreement, countries agreed to take national action to limit the global temperature increase, if possible, to 1.5 degrees, and not more than 2 degrees Celsius. However, given the current trajectory, we will miss this target. We are on course to a climate overshoot. This represents a significant threat not only to climate, but also to prosperity, equity, and development. To address this issue, we need to take immediate action and implement more rapid and deeper emission cuts. Additionally, we must remove previous carbon dioxide emissions from the atmosphere and ensure their secure, long-term storage.
Today, China represents around 30 percent of the world’s emissions and the United States about 14 percent, with India and the EU following with single digit emissions. Technology can play a significant role in both reducing emissions and carbon removal and sequestration. The same can be said of geoengineering, even if it is in an incipient stage. This is where it is essential to first understand what the unintended consequences of solar radiation management could be before moving forward.
Every country must contribute to reduce emissions, but the Paris Climate Agreement has left countries free to choose how to address the issue, with the potential that national measures create negative spillover effects on others. Take the recent U.S. Inflation Reduction Act (IRA). While the commitment of the United States to addressing climate change is commendable, the “Buy America” measures it contains have created unfair competition for others such as Korea, Japan, and the EU. The risk is a global subsidy race to the bottom that would be greatly inefficient both from the economic and climate points of view.
It is therefore imperative to create a space for global dialogue about the interaction between trade and climate policies—a space that can avoid policy fragmentation, protectionist measures and unilateralism. Many developing countries have expressed serious misgiving in various WTO committees about what they perceive as “green protectionism.” It is therefore opportune that the WTO creates such a space for dialogue over effectiveness of domestic measures to fight climate change.
A Growing Divergence in Human Development
We are seeing a reversal in human development across the world. The COVID-19 pandemic has exacerbated the growing gap in standards of living, reversing the progress in human development made in the last three decades. The massive spending that was required to face the health, social, and economic consequences of the pandemic left many countries highly indebted and unable to finance the investments needed to achieve the UN Sustainable Development Goals. The situation has been further aggravated with the ripple effects of the war in Ukraine in terms of the prices of fuel, food, and fertilizers.
Today, over 50 countries are in debt distress, with 25 of them spending over 20 percent of their revenues on servicing the debt. And, although these countries may only represent the equivalent of 3 to 5 percent of global GDP, they are home to over 40 percent of the world’s poorest people. These countries also encompass 25 of the world’s most climate-vulnerable countries. Not only are these countries unable to service their debt, it is also that their debt burden has excluded them from capital markets, rendering them unable not only to provide basic public services, but also to invest in the climate adaptation, let alone the technological revolution. Failure to address the situation of these highly indebted countries is a risk of global ramifications that a fragile world cannot afford. We need a new international financial architecture.
Around 60 percent of the public debt is in the hands of the private sector: in banks, hedge funds, investment funds, and pension funds, reflecting the greater access that many developing countries have had in the last decade to capital markets. Meanwhile, 40 percent of the debt is held by sovereigns—chief among them China as well as EU member states and the United States, together with international financial institutions like the World Bank and other regional development banks. The solution to the challenge of over-indebtedness therefore requires international cooperation, preferably with all actors around the table.
A Fragmented International Order
The international order, patiently built over the last 80 years, essentially as a result of transatlantic cooperation, is giving way to a messy multilateralism, with growing tensions between east and west, but also between north and south. The previous unipolar world is giving way to a multipolar one. And even though the rivalry between China and the United States may make the world look bipolar, this would be disregarding the rise of many countries that today have “agency” and want to have a say on how to shape tomorrow’s order. Countries like Brazil, South Africa, Indonesia, Turkey, Saudi Arabia, India, Nigeria and many more represent a more multipolar world in need of a new international order.
What does this new order look like? For now, it is characterized by a growing disorder in which one can see a fork in the road. One school of thought is concerned with the weaponization of interdependence, particularly in the technological sector, and advocates for reducing it, and even decoupling if this is necessary to guarantee security. The inevitable consequence would be the fragmentation of the level playing field. International institutions like the IMF and the WTO have warned about the impact of fragmentation in fueling inflationary pressures, impacting payment systems, limiting the diffusion of climate technologies, and the severe impact this would have for all, especially the poorest and weakest countries.
Another school of thought emphasizes the need to build resilience, avoid excessive dependencies, diversify, and build reliable partnerships. This is the route that many global businesses have taken to de-risk their activities, especially after the COVID-19 crisis. Both admit, however, that decoupling will be inevitable in sensitive areas related to national security, for which clear guardrails will need to be set.
Both also admit that global public goods like climate, debt management, or pandemic preparedness require more international cooperation. The idea of grand design and big multilateralism seems difficult in the current situation, while focusing on specific issues is more likely to gather consensus.
This is what happened in July 2022 at the WTO, when an agreement was reached by all members—including Russia, China, Ukraine, and the EU member states—to reduce subsidies to over-fishing. This is the first time in the history of the organization that an agreement was reached to use trade rules to protect biodiversity.
The same can be said of the historic agreement on nature conservation reached at the United Nations Biodiversity Conference (COP15), in December 2022, in Montreal, Canada. Members of the UN made commitments under the Convention on Biodiversity to guarantee the protection of at least 30 percent of nature on the planet by 2030.
And this was followed in March 2023 by the agreement of UN member states on the High Seas Treaty, which will ensure the protection and sustainable use of marine biodiversity of areas beyond national jurisdiction. For the first time in history, rules will be in place to effectively govern the ocean, 99 percent of which has been until now ungoverned.
These three examples are no small feat and show that spaces exist to advance practical multilateralism.
A View from Europe
The European Union was built as a response to two devastating world wars triggered on its soil, stemming from extreme nationalism and power competition. “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.” These were the words of Robert Schuman in 1950, now known as part of the “Schuman Declaration.” Since then, the EU has expanded the objective of pooling competences together to bring collective prosperity and security. The EU was from the beginning a peace project based on democracy, solidarity, and economic interdependence.
Today, the EU should remain a peace project but, given the more hostile external environment, which is unlikely to change in the medium term, the EU needs to become more geopolitical. This means building its strategic autonomy, in particular in the areas of security and defense as well as in building an energy union. This means better balancing economic openness and national security. It further means strengthening the EU’s competitiveness, cohesion, and democracy. This also means better responding to the aspirations of many of its neighbors who want to join the European Union. And together with them invest in a European geopolitical community covering also European neighbors who want to defend a peaceful and cooperative continent while remaining outside the EU.
A stronger EU in a more cohesive neighborhood should invest more in its relations with the world, with the many countries around the world who don’t want international fragmentation but rather see the need to create spaces for cooperation, even at a time of heightened power competition. The EU should remain a champion for multilateralism not out of naivety, but because this is in its enlightened self-interest.