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Saturday, 28 February 2015

7 Challenges to #Globalization & 5 lessons for geo-economics - from a @wef report

In the Introduction to the report Mark Leonard argues that "Geopolitical competition is reshaping the global economy and unravelling global power relationships and governance.  As tensions between great powers rage, the global businesses that once saw themselves as masters of the universe now feel like pawns in a game over which they have little control." 

He names the biggest conflicts as being Ukraine, China and its neighbours and ISIS and says the main battlefield is economic rather than military.

" The United States craves energy independence, China wants to stimulate domestic consumption, Germany wants to protect itself from the economic decisions of its neighbours, and Russia is trying to hedge against Western markets and the US-led dominated financial system."

"The biggest winners are states that are able to shape their own future – China, the United States, the European Union (EU). The biggest losers are international institutions and companies that cannot rely on the support of large states or the autonomy to hedge between them"

The report then goes onto to devote a chapter to each of the 7 challenges with different authors for each chapter

1) Economic warfare - by Karan Bhatia and Dmitri Trenin
2) The geopoliticization of trade talks -  by Takashi Mitachi
3) State capitalism 2.0 -  by Douglas Rediker
4) Competition for gated markets, not natural resources -  by Sergei Guriev and Hina Rabbani Khar
5) The survival of the biggest and hollowing out of the periphery - by Ian Bremmer
6) China’s infrastructure-driven alliances - by Parag Khanna
7) The decline in oil prices -  by Michael A. Levi

The final chapter by Mak Leonard concludes with 5 lessons for the world of geo-economics

1) States must develop their rules of the road for economic warfare
2) States must find the right economic role and pursue new forms of engagement.
3) Staying attuned to the “survival of the biggest” and the pooling of the weak.
4) Businesses can keep their eye on the global prize but play by new rules in the interim
5) A focus on key regional players and subglobal politics rather than worldwide institutions is necessary.

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