THE GREAT TRANSITION – An attempted shift towards autonomy

Recent years have been characterized by increasing geopolitical volatility, growing tensions between the USA and China, Russia’s war in Ukraine, and growing assertiveness of middle powers that have implied a transition from a unipolar to a multipolar world. Furthermore, governments face geo-strategic challenges posed by rising inflation, energy security, and climate change- which have no easy solutions. We see nations looking inwards to ameliorate their economic woes rather than relying on the forces of globalization to achieve the most efficient outcomes.

Under such circumstances, the question arises whether the era of progress through liberalized global trade and ever-increasing globalization that seemed inexorable, ended? Or is it rather that countries’ approach to “globalization” (Globalization 2.0) has evolved to incorporate more parameters, such as economic self-sufficiency? Can corporations still distinguish geopolitical risks from economic risks in their decision-making? How is the rise in protectionist and nationalist policies redefining populism? Are our supply chains resilient enough to support an inward looking world? And more importantly, what will the geopolitical power distribution look like in 2023?

These questions have no concrete answers but a conversation on these issues is important as these changes in geopolitics and geoeconomics have significant consequences for businesses and global trade in general.

Deciding the right strategy is of acute importance for both governments and corporations in order to ameliorate the risks associated with geopolitics in the coming years.