| TRENDS THAT IMPACT GLOBAL GOVERNANCE: The
backdrop for navigating the new international reality
by Félix Peña
English translation: Isabel Romero Carranza
We are transitioning into a different world. This
transition will be characterized by a continuous dialectic tension between
the forces that drive towards convergence and those that lead to fragmentation
among and within nations. It is still not possible to forecast which forces
will finally prevail in each region. It is a world in which nations will
have to find their own direction and their own way of navigating if they
aspire not to become losers. Because, unquestionably, at the end of the
road there will be winners and losers.
The main reason behind this diagnostic is that in
today's world and in that of next years no nation would seem capable,
or even willing, to assume a collective leadership in an individual manner,
such as some nations did in the past. This is a world in which, additionally,
no club of nations (none of the"G"variations) would seem to
suffice in order to face with effectiveness, efficiency and legitimacy
the most pressing issues of the global agenda -or even those of the multiple
regional or inter-regional agendas-.
The upcoming G20 Summit in Los Cabos faces precisely the challenge of
demonstrating that it can gather the political impetus needed to confront
the unbalances that have characterized world reality in recent years,
both in finances and in trade. The fact that the Doha Round is still paralyzed
after so many G20 Summits is quite significant.
More connectivity and diversity, more difficulties
in providing public goods that guarantee reasonable global and regional
governance guidelines, more involvement of non-state actors -for example,
citizens and urban middle-class consumers; transnational social and production
networks- will be other factors that will condition in the future the
global economic competition and, thus, the international trade of goods
Each one is on its own. This is a blunt way of describing the criteria
that seems to prevail in the new international economic reality. That
is to say, in the transition from a collapsing world order to one that
may still take a long time to finally emerge and, above all, to consolidate.
Quite soundly Ian Bremmer points out right from the title of his book
-listed as recommended reading of this Newsletter- this characteristic
of a world in which each country must find its own direction and its own
way of navigating it so as not to become a loser. Because, as also hinted
by the title of the book, there is no doubt that there will be winners
and losers at the end of the road. This is something that history has
taught us well enough.
The main reason for such diagnostic is that in today's world no nation
would be capable, or even willing for that matter, to exercise individually
a collective leadership such as some nations did in the past.
This is the case of the U.S., a country that has not ceased to be a great
power, indeed the main military power, and will probably continue to be
so for a while. However, it is very likely that a heavily indebted Washington
will have, for many years to come, an agenda dominated by local economic
issues with the inevitable social consequences, many of them with clear
implications in values and political behavior.
The same situation applies to Germany, France, the United Kingdom and
other countries of the European Union. Everything indicates that in the
next years their energies will be focused on preventing the collapse of
a European construction that is showing evident signs of weakness. Additionally,
it is a construction that has become vulnerable to the effects of disturbing
trends towards the radicalization of the internal political front of some
countries, which seem to be affected by an end of their illusions. The
case of Greece illustrates this point. However, it might not be the only
one and not even the most difficult to handle.
At the same time, as indicated by Bremmer, it is also possible that the
great emerging countries -or re-emerging ones such as China and India-
will be focused for a very long time on consolidating their own development
and modernization processes, which sometimes show signs of economic, social
and political weakness. It is very unlikely that these countries will
have any interest in wasting their energies in their respective international
fronts if there is no pressing need for it. Unless, as has happened before
in history, their respective leaderships eventually yield to the temptation
of seeking external factors that help them preserve -or so they imagine-
the necessary national cohesion.
The abovementioned confirms the diagnostic by Jean-Claude Guillebaud
in his book "Le Commencement d'un Monde" (Seuil, Paris 2008),
where he observes a metamorphosis towards a decentralized world and towards
what he calls a "crossbreed modernity", a world with all sorts
of mixing. This same subject is tackled in a book by Amin Maalouf, "El
desajuste del mundo. Cuando nuestras civilizaciones se agotan" (Alianza
Editorial, Madrid 2009), a necessary read in order to understand current
Precisely, the notion of a polycentric and interconnected world is one
of the main ideas of an in-depth report recently published by the European
Union Institute for Security Studies (EUISS) chaired by the prestigious
Portuguese intellectual Alvaro de Vasconcelos (see the reference in the
Recommended Reading section of this Newsletter). This report analyzes
in particular three main trends that are currently emerging and that would
contribute to shape the global system towards 2030. These are: the empowerment,
which contributes to the sense of belonging to a unique human community;
a greater tension in relation to the objective of sustainable development;
and the emergence of polycentrism characterized by shifts in power from
the national states to individuals and different types of transnational
networks and by growing governance gaps, in the measure that the institutional
frameworks of inter-state relations fail to answer appropriately to global
Such governance gaps evoke the second part of the title of Ian Bremmer's
book which we mentioned before. It is precisely a reference to winners
and losers in a world he describes as "G-Zero". This would mean
a world where no club of nations (G7 or G20, but also G2 or other possible
combinations) can suffice to confront on its own, with effectiveness,
efficiency and legitimacy, the most pressing issues of the global agenda
-or of the multiple regional and inter-regional agendas-.
On this regard, the upcoming G20 Summit of Los Cabos (Mexico, June 2012)
faces a great challenge since it needs to prove that it can still gather
the necessary political impetus to deal with the unbalances that have
characterized the reality of recent years, both in finances and world
trade. The recent difficulties of the financial institutions of some of
the countries that will be represented at the Los Cabos Summit and the
fact that the Doha Round is still paralyzed after several G20 Summits
are not irrelevant matters.
Additionally, at the interregional level, Latin American countries will
have the opportunity to appreciate and demonstrate that the club's diplomacy
expressed through summits still has the necessary validity to produce
effective outcomes or, at the very least, media related ones. We are referring
to the upcoming summits of the Ibero-American interregional space in Cadiz
(Spain, November 2012) and the Euro-Latin American interregional space
in Santiago (Chile, January 2013). At the moment and due to different
reasons, certain skepticism seems to prevail regarding the outcome of
each one of these summits.
With his usual brilliance, Philip Stephens from the Financial Times (in
his article "The great middle class power grab" of April 26,
listed as recommended reading of this newsletter) and inspired by the
cited report conducted by Alvaro de Vasconcelos, approaches another of
the factors that are surfacing in the new international reality. We are
referring to the issue of the empowerment of individuals and, more specifically,
of the middle classes. Some of the data he underlines are of great significance.
From the 8 billion people that will inhabit the world in 2030 about 4.9
billion will be middle class in terms of economic income. In 2030, 74%
of China's consumers will be middle class and in 2040, 90% of Indian consumers
will be middle class as well. Two-thirds of Brazilians will be considered
to be middle class by the end of 2030.
Moreover, these people will be middle class consumers and citizens that
will live in cities and, in many cases, big cities of over one million
inhabitants. They will be increasingly more educated and interconnected,
even at a transnational scale. They will be completely aware of the power
that they hold -or can hold- and it is logical to imagine that they will
attempt to use it. With their actions and their demands they will sometimes
surpass the deeds of governments. In some cases, they could become disoriented
and "outraged" at the same time. This is why it can be considered
that we are entering a stage of international relations in which, increasingly,
the States could lose their role at least as the main actors.
South America as a region is no stranger to these trends. According to
data from the United Nations, by 2030 the region will have about fifty
cities with more than one million inhabitants and several cities with
more than ten million citizens and consumers with expectations and consumption
patters characteristic of the middle class. What is currently happening
in Brazil is illustrative of this point. A recent book by Marcelo Neri,
of the Getulio Vargas Foundation (see the reference listed under recommended
reading at the end of this Newsletter) offers an interesting and well
documented analysis of the trends towards a significant growth of the
middle class -measured by the level of income- in the main economy of
The EUISS-ESPAS report is bluntly clear as to what some of the mentioned
trends reveal. So is the book by Ian Bremmer, among others. We have entered
a phase of transition towards a different world that will be characterized
by a continuous dialectic tension between the forces that drive towards
convergence and, simultaneously, those that lead to fragmentation. It
is still not possible to forecast which forces will prevail in each of
the regions of the world. What is unforeseeable and unimaginable will
be present for a long time. This will be a world full of uncertainties.
It is necessary to keep in mind as well that these tensions will not exclude
certain forms of violence, even innovative ones given the technological
advances, enacted by very different protagonists and not necessarily by
More connectivity and diversity, more difficulties to provide public
goods that guarantee regional and global governance guidelines, more prominence
of non-state actors -middle class citizens and urban consumers; social
and production transnational networks- will be some of the other factors
that will condition global economic competition in the future and, as
a consequence, the international trade of goods and services.
Moreover, it will be a competition marked by the rising of a third industrial
revolution (on this regard refer to the report by The Economist listed
as recommended reading at the end of this Newsletter) that will have an
impact on new modalities of value chains of transnational scope. These
will result from the multiple impacts of all kinds of technological innovations
in the development of novel forms of orchestration of productive chains
that will seek to satisfy a growing demand for personalized products and
services -"made to order or to the consumer's taste" - (combining
resources, technologies, creativity and highly qualified labor) coming
especially from the urban middle-class consumers. The report by The Economist
mentions a modality to be taken into account which is reflected, for example,
on the Web page
http://www.mfg.com/sourcing-showcase. It is the case of an "online"
manufacturing community that, as per the report, could be the equivalent
of a virtual industrial cluster.
Within the newly emerging international context the quality of the strategy
for the insertion in the global economic competition of each country and
of its businesses will become increasingly important. This includes not
only the right objectives, policies, instruments and roadmaps to navigate
the world of the future but also the quality and the density of the connectivity
with other nations and of the coalitions and alliances that are made.
Such as has been pointed out repeatedly by Professor Dani Rodrik (http://www.hks.harvard.edu/fs/drodrik/)
the quality of the domestic front is a key variable if the aim is to stay
on the wining side in the world of the future.
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GATS Perspective", World Trade Organization, Economic Research
and Statistics Division, Staff Working Paper ERSD-2012-09, Geneva, 27
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a G-Zero World", Portfolio/Penguin, New York 2012.
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and Nations", Viking, New York 2011.
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World - Global Trends 2030", European Union Institute for Security
Studies-ESPAS, Paris, April 2012, en: http://www.iss.europa.eu/.
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educación superior en América Latina", Anuies, México
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middle class", Financial Times, April 26, 2012, en: http://www.ft.com/.
Versión en español en El Cronista del 7 de mayo, en http://www.cronista.com/.
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Report Manufacturing and Innovation, London, April 21st, 2012, en: http://www.economist.com/.
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2012, en: http://www.wto.org/.
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Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More