Three ways to help the world

Make no mistake: We no longer live in a stable international rules-based order. The days of unipolarity and global liberalism are over, and we are now facing a confluence of shocks unlike anything most of us have seen in our lifetimes. No pilot is flying the plane: the closest thing we have to a cockpit, the G20, is fractured and deadlocked, despite Indonesia’s valiant efforts as this year’s president.

The international institutions, norms, and practices that we continue to rely on are increasingly being eclipsed by geopolitics. Whatever their rhetoric, China, Russia, and the United States have lost faith in global institutions, withholding their support whenever it suits their interests. While the European Union, Japan, the United Kingdom, Canada, and major players from the Global South continue to support multilateralism, global governance cannot really be sustained without the participation of the world’s largest economies and military powers.

Making matters worse, the world is facing at least eight systemic challenges simultaneously. As former Canadian central bank governor Stephen Poloz explains in his book The Next Age of Uncertainty, “when multiple long-term forces are acting together on the economy through time, and interacting with one another as well, the economy itself can behave erratically and appear unstable.” Under these conditions, predictions and conventional policy tools stop working.

The first major challenge is Russia’s war in Ukraine, which shows no end in sight (notwithstanding the Ukrainian armed forces’ recent gains). The tit-for-tat weaponization of economic linkages has generated a huge global energy shock that will aggravate deeper social and political crises in Europe and around the world this fall. While the G7, Australia, and South Korea have taken steps to freeze Russia out of the global dollar system and interbank messaging network (SWIFT), Global South powers have not joined the sanctions regime, leaving the G20 split on this issue.

Second, despite the Biden administration’s recent legislative breakthroughs, US democracy is in deep crisis. Most decision-making remains crippled by legislative gridlock and an activist Supreme Court, and extremism is on the rise. In a recent book, the international relations scholar Barbara F. Walter warns that many well-known indicators of impending civil war are flashing red in the US. A major survey published in November 2021 found that 30% of Republicans, and 18% of Americans overall, agree with the statement: “Because things have gotten so far off track, true American patriots may have to resort to violence in order to save our country.”

Third, China is at a fork in the road. The 20th Party Congress this October almost certainly will solidify President Xi Jinping’s rule and install key powerholders for the next five years or longer. We will then see whether the regime intends to double down on its nationalist mobilization and intensifying social control – including its economically disastrous “zero-Covid” policy, closed borders, and other restrictions.

Will China entrench its new isolation, or will it take some steps back toward international connectivity and economic liberalization? The answer to that question will determine the answers to many others. As matters stand, the US and Chinese political trajectories are fuelling a confrontational spiral that cannot end well for either side.

Fourth, after a period of remarkable unity in response to Russia’s attack of Ukraine, the EU is entering an extraordinarily risky period of intertwined energy, economic, and social shocks. Italians seem poised to elect a right-wing nationalist government later this month; French governance is divided; and eastern member states remain vulnerable to Russian threats.

Fifth, climate-related disasters are intensifying globally – and much earlier than expected. Across South Asia, the Pacific, China, Europe, Africa, and the Americas, heatwaves, droughts, wildfires, and mega floods are disrupting lives, reducing food supplies (which were already endangered by Russia’s war), and fragmenting societies.

Sixth, there are still deep post-pandemic uncertainties with respect to supply chains, energy and food markets, and inflation. It is anyone’s guess what global financial markets will do this fall, but talk of tighter financial conditions and recession is in the air.

Seventh, these food, energy, climate, and economic shocks are likely to trigger social and democratic breakdown in many parts of the world, especially if the G20 cannot agree on safety-net measures such as debt relief. Lebanon, Sri Lanka, Pakistan, and Ethiopia are already in the throes of political and socio-economic chaos.

- Bertrand Badré is a former managing director of the World Bank. Yves Tiberghien, Co-Chair of the Vision 20 Initiative, is Professor of Political Science and Director Emeritus of the Institute of Asian Research at the University of British Columbia.