A period of great uncertainty lies ahead for Europe and indeed the world now that the pillars of the liberal international order created by the West in the 20th century are subsiding, attendees at the annual ULI conference in Paris heard last week.
Global risks include rising nationalism, violent radicalism and mass migration, according to Dr Robin Niblett, CMG, director of Chatham House, in his opening address. ‘These are the biggest challenges Europe faces today.’ The geopolitical stage may have changed dramatically since the recent election of Donald Trump as US president and the looming Brexit in the UK, but that’s just half the picture, Niblett added. ‘It’s the uncertain uncertainties that we have to worry about.’
In the past century, the international order was dominated by liberal economics and the opening up of new markets to trade, but this rested predominantly on the leadership and strength of the US, Niblitt argued. ‘The pillars are subsiding, it’s now America First because the Americans have been losing out of the liberal order.’
Until now, the EU has been the benchmark and avant-garde of the liberal international order in its drive to create greater economic opportunity, Niblitt continued. ‘But the EU is now stalled and no longer pushing the edges. Now it’s just trying to hold on to what it’s got. There’s a battle going on in the soul of the EU. It’s a battle about integration versus inter-governmentalism.’
Rise of new challengers
Another key factor undermining the pillars of the liberal international order is the rise of new challengers including China, India, Russia and Iran. ‘The strong nations will try to dominate their regions,’ Niblitt noted. ‘If you then end up with arms races, we will slip back into the competitiveness of the 20th century.’
There is also positive news, he said. ‘The realities of interdependence are here to stay. Middle classes have emerged everywhere in the 20th century. That has been the biggest phenomenon, that populations have caught up with GDP growth.’
And there are other reasons for optimism, he added. ‘We all live on one planet and China has emerged as one of the leading drivers of the Paris agreement on climate change. That’s very promising.' Another reason for optimism is that the information revolution is exposing inefficiencies around the world and in that way contributing to improving welfare, he added. ‘The upside matches or exceeds the downside.’
According to Niblitt, a key question is whether a new equilibrium can be found in the wake of all this geopolitical upheaval. ‘Can we co-exist? Can liberal and illiberal states get along? Can they agree not to change each other but to find a way to get along? I think we are heading for a period of uneasy co-existence.’