REUTERS/Mike Segar

The world has moved into a new and unsettling geopolitical phase. It is not just multipolar, but multiconceptual. There is no longer any assumption—as there had been in the post–Cold War phase, framed by so-called New World Order and Washington Consensus thinking—that norms and institutions exist towards which the world’s major powers might converge. This creates new risks and uncertainties: rising military tensions, economic and commercial disruptions, and destabilizing feedback loops between changing international relations and countries’ domestic political conditions. 

International relations now play out in increasingly diverse ways: beyond conventional military build-ups, these include new cyber sources of hard and soft power, reconfigured trade and investment linkages, proxy conflicts, changing alliance dynamics and potential flashpoints related to the global commons. Assessing and mitigating risks across all these theatres of potential conflict will require careful horizon scanning and crisis anticipation by state and non-state actors alike. Actors with a global presence are likely to have to become increasingly adept at calibrating their responses across divergent political and legal systems. 

Four related developments stand out as potential sources of disruption over the short and medium term. The intensification of strong-state politics is affecting both large and small states, while global norms are eroding and tensions growing between major powers. These two trends fuel two others: increasingly aggressive geo-economic agendas and the mounting pressures faced by small states.

State-centred politics 

At a time of geopolitical flux, re-establishing the state as the primary locus of power and legitimacy offers governments—and citizens—an increasingly attractive strategic anchor. In particular, nationalist agendas and the external projection of a strong state can be an effective strategy for governments seeking to redress perceived international humiliations, past or present. In China, for example, President Xi Jinping calls for “the great rejuvenation of the Chinese nation” to put the country’s “century of humiliation” firmly behind it. In the United States, President Trump seeks to “make America great again” after decades of being “taken advantage of.” 

Widely differing variations on the state-centred theme can be seen around the world: among these are Emmanuel Macron’s effort to restore France’s standing with his “Jupiterian” presidency; the United Kingdom’s desire to “take back control” by leaving the European Union; stronger nationalism in Japan under Shinzo Abe; Vladimir Putin’s focus on rebuilding Russia’s international status from the rubble of the Soviet Union; the erosion of pluralism in Turkey as Recep Tayyip Erdogan bridles at his domestic and international opponents.

The intensification of nationalist and strong-state narratives creates risks both domestically and internationally. The profile of these risks will vary in each case, depending, among other things, on the way in which power is obtained and asserted, and on the ends towards which it is used. One domestic danger is that the interests of non-state actors will suffer. If the protection and projection of state power becomes more central to policy, then the rights or protections enjoyed by individuals, businesses and civil society groups become more contingent on leaders’ perceptions of the state interest and—sometimes seen as the same thing—consolidation of their own personal power.¹ There are numerous instances to point to, along a spectrum of widely varying severity. An extreme example is the flight of Rohingya people from Myanmar. Other recent examples include the purge in Turkey following the attempted coup in 2016 and clashes over the separation of powers in Poland.²

Internationally, two main risks arise. First, the danger of miscommunication and miscalculation between states is heightened by the absence of a clear rules-based international order or a settled balance of power. Concern about possible conflict involving North Korea is a prominent example: the volatile clash between the strong-state instincts of Donald Trump and Kim Jong Un during 2017 has created uncertainty about the strength of the norms created by decades of work to prevent nuclear conflict.

A second international risk relates to states interfering in the domestic affairs of other states. There are a growing number of incidences of states projecting their power in ways that directly encourage or exacerbate problems inside other countries’ borders. This kind of interference may foment instability within the “target” state, including violent reprisals or the eruption of civil conflict. By undermining the non-intervention principle set out in the UN Charter, it also ratchets up the risk of retaliation and a slide into interstate conflict. Interference in the affairs of non-Western states has been one reason for the erosion of the US-led rules-based order; however, the wheel has turned and non-Western countries now appear to be increasingly active in this area.³

Major-power tensions

The intensification of strong-state politics has the greatest disruptive potential among the world’s major powers: relations between them are changing, mostly for the worse. As each of these states becomes increasingly assertive of its own interests, consensus is fraying on the rules that govern their interactions and the directions in which the world might converge. As a result, there is evidence of a general breakdown in trust and an erosion of respect for global norms designed to govern peaceful international interactions. 

The United States has become less willing to act as enforcer of global norms at the head of a dominant coalition. This reflects, among other things, divisions within the United States over whether the benefits that flow from this global enforcer role are sufficient to justify its costs. As a result, rising and resurgent powers calculate that actions that may breach international law (UN Charter), the law of the sea (UNCLOS) or international humanitarian law (Geneva Conventions) can achieve objectives without incurring unacceptable costs in terms of opposition or punishment. The emergence of cyberspace as an unregulated battlefield has also created new ways to advance state interests, allowing interference in domestic political or economic affairs that might be considered acts of aggression if pursued by other means.

Strong trade and investment connections between the United States and China mean that, whatever their differences, a significant level of economic interdependence remains central to their relationship. However, as China exercises increasing power in the Western Pacific, confidence in the capacity of the United States to determine outcomes in the region is being gradually undermined. As has been seen in the North Korea crisis, the danger that long-term strategic rivalry could spill over and harm economic relations is becoming more real.

China’s determination to press territorial and maritime claims, and its extension of the Belt and Road Initiative (BRI), have triggered responses among neighbouring powers. Japan and India, for example, are exploring more structured forms of strategic cooperation in both economic and military affairs. This initiative could become more significant if additional partners—such as Australia, the United States, or even European states—were to take part. However, most of these countries are currently cautious and would be wary of allowing such a hedging policy to cause tensions with China.

Meanwhile, Russia has used its policy in Syria to reposition itself as a leading foreign policy actor, with the ability to shape military outcomes and geopolitical balances. Russia’s relations with China have improved, but those with Western powers have deteriorated: Russia’s policies towards Ukraine have been seen as an unacceptable breach of the post–World War II order and have galvanized a Western coalition around a policy of individual and sectoral sanctions. Among other things, this has led to renewed debate in the European Union about the need for increased military capacity so that the bloc’s defensive stance is less dependent on US policy.⁴

Smaller-state disruptions

Shifting relations between global and regional powers is creating increased uncertainty for smaller states—an under-appreciated source of geopolitical risk. Smaller states tend to benefit from the predictability that comes with rules-based order and they are among the most affected when rules erode and major powers jostle for position. These countries are particularly vulnerable to the weakening of security alliances they may previously have relied upon, as well as to subtle or overt pressures to adapt policy or strategy to conform to the interests of a major power or regional hegemon.

The dilemma faced by smaller states, as they assess how best to recalibrate relations with larger states, was illustrated in Singapore last year. Mindful of China’s growing power and recent developments in Qatar, some warned against overestimating Singapore’s room for manoeuvre: “small states must always act like small states.”⁵ Others responded that Singapore should “stand up for the autonomy to define and pursue our own national interests rather than have them defined for us, even if this displeases major powers.”⁶ This is not an isolated example; an increasing number of smaller states face similar challenges. Last year, Bhutan found itself at the centre of a stand-off between India and China;⁷ Lebanon is exposed to changing dynamics between regional powers in the Middle East; the annexation of Crimea has left Ukraine perched between two mistrustful power blocs; and a number of smaller EU states are concerned about whether the eventual departure of the United Kingdom will affect decision-making to their detriment.

Compounding their exposure to changes in the geopolitical environment, smaller states are more vulnerable to potential second-order effects such as refugee and migration flows resulting from conflicts or recessions in neighbouring countries. For example, Syrians who fled between 2011 and 2015 are estimated to have increased Jordan’s population by 25%. And smaller states’ finances are vulnerable to even the possibility of geopolitical risks, because nervousness can lead to lower inward investment and to governments feeling compelled to divert revenues into precautionary increases in security-related spending. 

Smaller states are not always passive objects of geopolitical disruption: they can also be its source or conduit in various ways. A weak or collapsing state can become a locus of instability that radiates disorder or pulls in larger neighbouring states: Libya and South Sudan, for example, have caused instability in neighbouring countries, notably via flows of refugees and weapons. Elsewhere, for some years the near-collapse of the Greek economy was an ongoing source of existential risk for the Eurozone. Smaller states can also amplify geopolitical risk by actively asserting themselves on their neighbours: this can be seen in extreme form in the North Korea crisis, where tensions are particularly acute both because the government fears annihilation and because of the unique dynamics of its position relative to China and the United States.

REUTERS/Lee Jae Won

Geo-economic risks

Increasing geopolitical fluidity and intensifying strong-state policies increase the risks associated with economic interactions between states. States have always used tools of economic policy and diplomacy to pursue their geopolitical goals. While globalization was ascendant, many believed that economic connectedness—Western companies and consumers benefiting from low-cost manufacturing, which simultaneously pushed forward emerging-economy development—would contribute to a gradual convergence of states’ outlooks and goals, reducing the likelihood of geopolitical tensions. However, confidence in the mutuality of benefits has weakened. This is particularly true among Western countries, where the strongest geo-economic trend of recent years has been the erosion of support for globalization and growing support for protectionist policies. It is notable that two of the states that have traditionally been among the firmest advocates of global economic integration, the United Kingdom and the United States, have seen the most dramatic uncertainties emerge around their trade-related policies.

In other parts of the world, plans to extend and deepen networks of economic corridors are spurring huge investments in infrastructure. By far the most ambitious is China’s Belt and Road Initiative (BRI): launched in 2013, it spans more than 60 countries and involves investment plans totalling a reported US$900 billion.⁸ However, there are numerous other such corridors, most of which connect Asia and Europe. They include the China Pakistan Economic Corridor (CPEC); the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC); the International North-South Transport Corridor (INSTC), which links India, Iran and Russia; and the Asia-Africa Growth Corridor (AAGC),⁹ a joint initiative by India and Japan.

Proponents of these infrastructure plans argue that they will foster peaceful relations by creating new links and patterns of cooperation. However, the ambitiousness of some of these plans has raised concerns that they might exacerbate rather than prevent tension. The geostrategic interdependence they create—both through the physical presence of assets and people on the ground and through patterns of increased indebtedness, which is a potential source of vulnerability for lower-income countries in particular—are more durable and difficult to unwind than mere trade agreements. This raises questions about potential implications if relationships between corridor partners were to sour in the future.

Some have argued that criss-crossing the Eurasian landmass with a latticework of economic corridors could undermine the stability of the region’s state system: “connectivity does not necessarily presage a more peaceful world … Eurasia is cohering into both a single trade and conflict system.”¹⁰ One potential trigger for disruption related to economic corridors might be pushback from a country that feels its sovereignty is being undermined. In early 2017 there were signs of this in Sri Lanka, where violent protests erupted at a ceremony to mark the start of construction of a Chinese special economic zone.¹¹ Another potential trigger might come from economic corridors crossing contested territory—CPEC, for example, runs through Gilgit-Baltistan, a part of Kashmir that is administered by Pakistan but claimed by India.

There remain strong incentives on all sides to avoid triggering trade wars, just as there are for all forms of conflict—but the risk of domestic political factors spilling over into disruption of the global trade system has risen sharply in recent years. Trade-related tensions could also create distractions and divisions that hamper the unity of regional or global responses to other geopolitical risks that might crystallize in the evolving confluence of strong-state politics, major power tensions and small-state disruptions in an increasingly disordered world.