In the absence of an international “policeman”, differing political and economic systems will compete for supremacy. The ability of non-state actors, including terrorist groups, to influence regional developments will rise, as the ability of a chaotic international system to impede their activities declines. Shifting centres of power will refashion almost every aspect of domestic and international economic affairs. International competition will intensify as countries, businesses and workers lose the secure niches that they enjoyed in the past. Population decline in industrialised countries, and the explosive population growth in India and elsewhere in the developing world, will alter the global equilibrium, accelerating the wider distribution of economic and military power. These changes present threats and challenges for the well-being of people everywhere, and it is likely that the retreat of American dominance will lead to intense ethnic and nationalistic conflict. Elizabeth Stephens is head of credit and political risk advisory at JLT.
Today’s world lacks leadership, in part because President Obama’s foreign policy is designed to minimise new commitments abroad which might obstruct his ambitious domestic policy agenda. But when has the world enjoyed a golden age of stability? The Cold War never pushed the Americans and Soviets into direct conflict, but it provoked wars in every corner of the world. A triumphalist post-Cold War Washington could not prevent genocide in Rwanda. It took years to end the war in ex-Yugoslavia. It could not contain the growing threat from Al-Qaeda, despite warning shots fired in Kenya, Tanzania and Yemen before 9/11. The Iraq war failed to stabilise the Middle East; the Bush administration did little to defend Georgia from Russia in 2008. We are living in a G-Zero world. But this is not simply the product of a US “retreat”: Europe remains focused mainly on the Eurozone, while China and other rising powers are occupied with complex domestic reform challenges. Willis Sparks is a director in Eurasia Group’s global macro practice.