Boao Forum: The Tragedy of Multilateralism for the Global South

Boao Forum: The Tragedy of Multilateralism for the Global South

by
Danny Quah
Mar 2025

At Boao Forum 2025, I spoke on a panel on Modernization of the Global South.

I made three points on how, as small economies (whether in population or in spending power or both), members of the Global South now see the pathway to modernization being pulled out from under them.

ONE // When you are a small economy, you reckon you develop by focusing on improving the health of your people, giving your people skills, housing your people, improving your nation’s infrastructure. This is the “tablets, teachers, textbooks, and trains” route to modernization. It is difficult to see how any economy could consider itself developed if it hadn’t done these things. All these policies raise your production capacity. They expand your supply side. It’s how economies—ranging from Singapore through China—have developed.

Such supply-side strategy, however, can only be a necessary, not sufficient factor for economic development and modernization. But for the last seventy years it was enough because the other side—the demand side—always took what you supplied. Global demand was elastic. An increase in the supply side without matching demand does not create jobs; it just causes unemployment. But with the coming together of demand and supply, you also realized you gain more than proportionally through strength in groups, the larger the better.

TWO // No more. Global demand was elastic because of two things: globalization and multilateralism. That rules-based international system provided order and a level playing field so every nation had equal opportunity to improve itself. Multilateralism yielded benefits all around. But multilateralism was also expensive to maintain, with costs unevenly distributed. Now its original sponsors—the US and other rich, advanced, Transatlantic nations—no longer see gain for themselves to maintaining the international rules-based order. This has nothing to do with global hegemons being unaware that their benevolent leadership was of great value to the world: it’s just that that form of leadership doesn’t benefit them enough anymore. This is not right or wrong, or good or bad, or for us to approve or disapprove. Erstwhile hegemons changing their behaviour and pulling back is the smart thing for them to do when costs outweigh benefits. (In the talk I gave examples.)

Rich-country offshoring increased demand for production capacity, and thus created jobs in the recipient emerging economy. Conversely, rich-country onshoring reduces labor demand in recipient emerging economies and so, at the margin, will destroy jobs and raise unemployment there.

THREE // This is the tragedy of multilateralism: All international organizations eventually break down if what is expected to hold them together is goodwill, mutual exhortation, or a sense of duty. Conversely, international organizations endure if every member finds it to their benefit to continue to collaborate, i.e., if the organization is incentive-compatible. This is also why the Global South should not look to the Middle Powers to lead: Middle Powers will be no better than the Great Powers at this. Still-hopeful members, therefore, such as Global South economies, need to find combined strength elsewhere. I suggest looking to inadvertent cooperation, i.e., cooperation without collaboration, or more straightforwardly having those you engage with do the right thing even if it’s for the wrong reason. (In the talk I gave examples.)