Trends in the Evolving International System
Date:
Wed 05 Mar 2025 0945h
IMF High-Level Forum
Panel — Trends in the Evolving International System
Panelists — Chia Der Jiun, Mari Pangestu, Danny Quah, Sayuri Shirai
Moderator — Thomas Scholar
I made three points in my opening statement.
ONE // Multilateralism is fraying … TWO // … but not all the reasons are the obvious ones. THREE // What can the international community do?
In greater detail:
- Once-valuable models now out of date:
a. Fragmentation but will hold together because decoupling is just too costly. Decoupling is costly in the aggregate, but for the same reason that the China Shock is not nullifed by comparative advantage, the cost of decoupling will not suffice to hold together the global economy. b. Geopolitical rivalry is driving apart the global economy into two camps and we need to re-calibrate for a Cold War-type setting. No, we are no longer in the throes of a Kennedy-esque moment “long twilight struggle” between democracy and freedom, on the one hand, and authoritarianism and tyranny, on the other. We’re not in a world where Americans should be worried about the other side threatening everyday Americans’ way of life or undermining America’s way of government. Instead it’s a world of Mearsheimer hegemonic competition - it’s not even US-China. c. Geopolitical rivalry is disrupting multilateralism. Multilateralism is tottering not because of geopolitical rivalry but because it is a hugely rewarding international system that is unwieldy and is too much of a global public good. The people paying for it no longer see it worth their while even if they acknowledge the accuracy of what economists say about multilateralism being good for everyone. How to fix? Later but to get in two quick observations: a. Affordability problem. Incentive problem.
b. Larger players affordable (Great and Middle Powers). Incentive problem (not solved by Middle Powers if the Great Powers abdicate)- Multilateralism. Good for everyone but also costly, with unevenness across those who bear its burden. Multipolarity
- Explicit collaboration - MOUs, explicit contracts, treaties - more difficult if not impossible
- Unlike the Cold War; this time it’s directionless. For those who are now disruptive, everyone is fair game. No ideological opponents. No friends, partners, treaty allies. Although not a perfect description, useful to put on the table: a. more hegemonic rivalry—(John Mearsheimer) “Most Americans do not recognize that Beijing and Washington are following the same playbook, because they believe the United States is a noble democracy that acts differently from authoritarian and ruthless countries such as China. But that is not how international politics works. All great powers, be they democracies or not, have little choice but to compete for power in what is at root a zero-sum game. (…) It motivates China today and would motivate its leaders even if it were a democracy. And it motivates American leaders, too, making them determined to contain China.” b. (Elbridge Colby) the US needs to “prevent a hostile hegemonic power from gaining ascendancy over the Asia-Pacific region” because allowing the worst to happen would severely constrain US freedom of actions and future prospects”. c. than ideological competition (Kennedy’s “long twilight struggle between democracy and freedom, on the one hand, and totalitarianism and tyranny on the other).
- How do Third Nations - those not frontline - navigate this world? a. Third Nations, by definition small states. Reasons for not handing over to Middle Powers (“apart from being lesser, how will Middle Powers be different from Great Powers?”) b. Seek “inadvertent cooperation” - doing the right thing even if it’s for the wrong reason; c. Nudge away from Epic Fail / Prisoners Dilemma outcomes d. Build pathfinder multilateralism e. IMF provides financial firepower, legitimacy in judgement, and authority as honest broker