“Politics as we knew it is over.”
That’s the conclusion of Eurasia Group president Ian Bremmer’s new paper, “After the G-Zero: Overcoming fragmentation,” produced for the International Monetary Fund.
The paper explores Bremmer’s idea of a “G-Zero” world, or what he sees as the power-vacuum in global governance. Various geopolitical trends such as non-state actors, failed states, the Middle East’s fracture into a non-Westphalian order, and the fraying of the European Union have led to a more decentralized world.
One particularly interesting idea that Bremmer touches on in this paper is that while in the post-World War II world countries had opted to work together via global economic and political institutions such as the Bretton Woods System or the IMF, that trend is now reversing.
“Dependence on the outside world has become a perceived vulnerability,” writes Bremmer. “Autarky is not a new philosophy, but whereas it used to be the preserve of regimes such as Mussolinian Italy or hermit North Korea, its appeal today is spreading to countries that not long ago paid at least lip-service to engaging with the rest of the world.”
He continued:
"Today, Vladimir Putin casts his country's isolation as an opportunity, while Iranian Supreme Leader Ali Khamenei calls for a 'resistance economy' as the economic benefits of the post-sanctions era have yet to materialize. Reactionary voices in disparate countries have begun sharing lessons in 'economic patriotism,' seemingly unaware of the paradox that economic solidarity among mercantilists represents."
Taking it a step further, Bremmer argues that one possible catalyst for this shift might be Washington's increased use of the so-called "weaponization of finance," which he previously defined as "the use of carrots (access to capital markets) and sticks (varied types of sanctions) as tools of coercive diplomacy." As for why that's the case, he points to two specific reasons:
Such actions come with a major drawback: they incentivize other states to pull away from the US-led international economic order. Perhaps the most notable example is the China-led Asian Infrastructure Investment Bank. (In fact, Canada recently applied to join the AIIB, leaving the US and Japan the only two major economies still not in the club.) The US' frequent use of sanctions might also "drive a cycle of conflict," as other actors are inspired to do the same. He points specifically to Russia and Europe's struggles over Ukraine, as well as Saudi sanctions on Iran and Lebanon.
"In fact, this invitation to replicate US sticks has sometimes even been attributed directly to Washington's actions, as when one Chinese academic remarked that 'taking a cue from the US' practice, China can [sic] use the security exception clause [of the WTO] to reduce the export of some important materials to Japan,'" Bremmer wrote.
Nevertheless, the second part of Bremmer's overall thesis is hopeful: Although the game has changed, world leaders can theoretically once again look at the global economy as a cooperative and positive-sum game.
But he notes that this would require major powers to tone down some of their messages, such as US rhetoric that "America's interest is in combating China's Asian influence rather than in seeking mutually beneficial trade gains," Europe trying to market the TTIP as an "economic NATO," and Turkey leveraging the refugee crisis "for political gain."
"The question going forward will not be whether nations around the world are able to save global governance," he wrote in the overall conclusion. "It is whether they actually want to."