We are at an ideological turn that is dismantling every risk dependency. An uncommon moment has arrived. The blocks that have taken us this far are incongruent with the modalities of work necessary to take us further. Old drivers are fading.
How do we plan a new beginning? Things have fallen apart and the core has collapsed. To prosper, in the 21st century, the world needs to excavate the old foundation blocks and build a more equitable dispensation. What is needed is a transformational approach to global development. One centred around a historic redistribution of wealth to poorer nations.
The drivers of progress and prosperity over the last three decades are fading fast, according to the 2023 World Bank report titled “Falling Long-Term Growth Prospects, Trends, Expectations, and Policies” edited by Kose and Ohnorge.
The geopolitical and security implication of this evolving ideological and structural environment is that fundamentals will be unearthed. Countries are already searching for new ways to reap the benefits of trade.
The vanishing momentum of global trade growth is lessening its role as a device of output and productivity growth. A possible pathway is to cut trade costs to boost exports and encourage imports in a fashion that is growth-enhancing.
A main characteristic of the burgeoning environment is the identification of risk dependencies. This new strategic economic priority is in keeping with a 5G Security Toolbox for the telecoms sector in the EU; the EU Chips Act; and the Critical Raw Materials Act.
All of these aim to reduce reliance on foreign rare earths needed for the green transition. The work of nations is now to remove every critical dependency. These new building blocks are preparing a ground that ditches long-held free-market ideals of geopolitics by combining economics and national security.
Latin America and the Caribbean must decide for themselves, and give themselves a means to decide. Anything else may create a situation of risk and dependency. This amalgam of combining economics and national security was once unthinkable.
The old modalities separated liberal trade policies from foreign politics. But that bifurcation has been tested, and the results are not what were expected. Adoration for the international rules-based order is palpably flagging. A deadlocked security council tilts on its own applicability.
Global regulatory systems and local bureaucracies are stressed to meet the moment. The pandemic’s impact, the unprovoked invasion of Ukraine, extreme and unseasonable weather, and the cost of living crunch, including energy, slow growth, and inflation shocks, are prodding an urgent rethink about how the world will work – and what will be the role of AI – in the coming decades.
AI will fundamentally remake every aspect of human life. Profound discoveries in medical sciences are not far off. The productivity boost to digital trade and open finance is incalculable. AI will help humanity to better address climate change, and de-school society with a connected core curriculum, tutoring bars, and a playlist to replace subjects.
AI will enhance and disrupt global strategic stability. It will uproot first principles and pose moral questions. AI will alter the speed, scale, and spread of disinformation, and will cross all borders.
No citizen or country will be untouched by AI. BRICS countries have agreed to launch the AI Study Group called the BRICS Institute of Future Networks. The Study Group on AI will expand cooperation on AI, and step up an information exchange and Technology Observatory to jointly address risks, and develop AI governance frameworks and standards that will make AI technologies more secure, reliable, governable, and equitable.
Almost everything we thought we knew about the world economy is under interrogation. Everything since the fall of the Berlin Wall including a belief in the unfailing superiority of open markets, trade liberalization, and the ineluctable rise of worldwide free market capitalism that took on the glow of inevitability and invincibility has been derailed.
What we understand now is that economic networks create imbalances and pressure points because states have varying resources, vulnerabilities, and capabilities, and that market overconcentration of critical technology networks can create choke points.
For some countries, it may mean no more free-trade agreements that result in the “export” of jobs and investment to lower-wage, lower-tax economies. Faith in the Western neoliberal model and the unfettered, free-market capitalism associated with Ronald Reagan and Margaret Thatcher is melting.
The Breton Woods model cannot carry the world any further. Leaders of the global north and south have already started to plan a new beginning in Paris. The aim: to deliver billions in funding, to help vulnerable countries address defencelessness, poverty, inequality, and debt.
Strangely, rounding of the Cape and Covid-19 have both laid the ground for new geopolitics. Both portals are identical in this. But in some ways, the latter erases many features of the former. Europe’s expansion overseas opened up fresh ground for the rising bourgeoisie.
Colonization, the opening of East Indian and Chinese markets, trade with new colonies, increases in the modalities of exchange and in commodities, propelled growth in industry and commerce. But the ground that Covid-19 has laid reverses most of that and puts a spotlight on risk dependencies by combining national security with economics.