/The complex geopolitics of our times offers us a big opportunity (via Qpute.com)
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The complex geopolitics of our times offers us a big opportunity (via Qpute.com)

The geopolitical puzzle that is unfolding is multidimensional and likely to operate at three levels. There are two superpowers (the US and China), traditional powers (G7), emerging players and important states recalcitrant to the traditional powers and moving towards the emerging superpower. As a force, globalization, in the new pandemic lexicon, is mutating. Thus, as Arindam Bhattacharya has shown, global trade is an incorrect barometer of globalization. The term needs to be understood differently, and understanding this new form of globalization requires us to make sense of the complex tapestry of geopolitics today.

While there are areas where global cooperation is possible, the source of the emerging discord is deep for two reasons. The superpowers do not agree on the underlying values on which agreements are built. The principles of governance, the purpose of the state, the concept of privacy and its extent, an understanding of ‘public good’, the rule of law, and the separation of the judiciary from the executive branch versus the former’s subservience to the latter. These are areas of fundamental difference between the US and China. This was true between the Soviet Union and the US too. But at that point, back during the Cold War, power was based on nuclear and military advantage, not on data and technology as it is today.

Today, the primary conflict is around technology and its growing primacy in life—business, health, education, financial services and payments, search, social interaction, entertainment, commerce. These are all areas where digital technology is becoming vital. Similar trends are clear in espionage and cyber warfare. Data being the basis of a lot of technology, the divergence on underlying values makes global cooperation in respect to data (all forms of it, be it for storage, use or sharing), technology (quantum computing, biotech and cyber), communications (5 G and beyond) and the standards around them thorny and difficult to resolve. As the divergence has resulted in an inability to agree on global standards for technology, superpower spheres of influence are likely to emerge.

This will not preclude other areas of global cooperation. Areas like climate change, health, space and possibly even nuclear weapons. Efforts at cooperation will be tough and would call for compromise, but at least the end goals are widely understood and the need for it well established. The need to address global warming is on every country’s agenda. Moves to contain the growth of fossil fuel usage by the introduction of carbon taxes, incentives for renewable energy and investments in storage are gathering pace. The 26th Conference of Parties (better known as COP26) of the United Nations Framework Convention on Climate Change provides a forum for deliberations. As for space, the private sector has gotten into this sector in a big way, there is cooperation on sharing international stations, and conflict does not seem likely. So too when it comes to pandemics, which are now recognized as a global risk and the world largely understands that we are not safe until we all are. Unless pathogens become an instrument of war, that is, in which case humanity will be in for a scary ride. Finally, the build-up of nuclear arsenals has slowed. All countries armed with such weapons recognize that their current stockpiles are enough to destroy the world and superpowers mostly use their influence to try and rein in countries that violate international protocols.

Competition in the traditional areas of globalization—tariffs, taxation, immigration and capital flows—will be more intense but predictable. The existing multilateral arrangements on trade may get replaced by regional or bilateral arrangements, but global trade will continue, albeit with some tensions. The G7 move for minimum global taxation signals cooperation. Capital will remain mobile, especially that which comes without strings attached. Immigration has gotten politically polarized as an issue in some parts of the world, but global demographics creates its own compulsions and will show no let up. Essentially, competition will get accentuated and global interests might be superseded by various national interests, but navigation will still be possible.

Countries will have to navigate complications created by increasingly antagonistic superpowers on a variety of issues. They will need to align themselves—even if not very firmly—with one side or the other, even as they seek some freedom to operate outside this framework. Technology will be a field where such liberty may not be feasible.

India needs to recognize the emerging world order and begin to actively navigate it, especially around technology. It will need to shed some of its traditional inhibitions and align itself. The country should work judiciously and take the lead in creating common technology standards for its bloc (hopefully with the US). The time is ripe for a Quad-plus formulation in creating data protocols, laying out ‘monopoly’ definitions for large tech firms, and forging standards for taxation, cyber coalitions and privacy. India should work to create institutions and fair protocols that allow for some give-and-take thereafter. The country must also avoid getting caught in the kind of standoff it is currently having with Big Tech (Amazon, Google, Facebook, Apple, Twitter). Both the US and India are concerned with many aspects of Big Tech, and creating joint standards for the democratic world will be an important move for India that could establish it as an important global player with less cost to itself.

The new globalization is enmeshed deeply in the geopolitics of our times. Bystanders will get left behind and their people will bear the costs.

Janmejaya Sinha is chairman, BCG India. These are the author’s personal views.

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