Davos 2012: The Rise of Regions in a G-Zero World

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Even with its influence in decline, the EU model of regional cooperation is still the most highly developed in the world, and the evolution of its governance structures, rules, institutions and power dynamics that emerge from the current crisis will likely be looked upon with great interest by those contemplating regional alliances of their own. It is the most formal regional grouping in the world, built on strong institutions, and also on voluntary membership. Organization runs along economic and political lines. While the eventual shape of the EU is currently more uncertain than it has been for decades, there is already increasing doubt that the EU will remain as concerned with equality for smaller countries, which may, as a result, find themselves less influential. While this smaller decision-making dynamic may result in some discomfort for smaller countries, enhancing this more realistic approach to decision-making could, in the end, allow the European Union to ultimately emerge stronger and with greater international influence. But it is a long road from A to B.

In the wake of the sovereign debt issues plaguing the Eurozone, it may seem logical for others to avoid increased regional integration to watch events unfold. However, we are seeing just the opposite. In October 2011, Vladimir Putin reiterated his call for a Eurasian Union, built on the existing platform of the Customs Union trade group with Kazakhstan and Belarus. He announced his grand ambition for "an even higher integration level in the Eurasian Union." This, however, betrays just how informal and involuntary Eurasian regional integration remains. Russia has been known to play the role of regional hegemon, using overt pressure in bilateral dealings with its neighbors. It has demonstrated its willingness to do so by attempting to bully Ukraine into the Custom Union. The key integrative forces revolve around security concerns, as Russia attempts to pool power; these, in turn, tie into shared energy concerns in the region.

In the Middle East, there has also been a call for more unity, from Saudi Arabia that wants to make its Gulf Cooperation Council (GCC), the political and economic union of Middle East Arab monarchies, the predominant regional grouping. It could evolve into a more influential organization with an outsized role in regional politics and beyond. The GCC played an integral part in responding to the Arab Spring, specifically within member states such as Bahrain, and it has expressed the willingness and capacity to fill some of the void left by a United States that is unwinding its commitments in the region and increasingly focusing its attention domestically and on Asia. Down the road, the GCC's could chip away at remaining US regional influence, or set a course at odds with core US interests more broadly. The organization is willing to evolve and grow; it has recently invited Morocco and Jordan to join its ranks.

But regionalization has many question marks in the wake of the US drawdown from the region. The vacuum of power is being filled by sectarian interests, where a host of powers, namely Iran, Saudi Arabia, and Turkey will jockey for influence.

Asia is the most problematic regional grouping in the longer term, with too many powerful actors with diverse interests for anyone to emerge preeminent. The existing institutions reflect this power struggle. The Shanghai Co-operation Organization (SCO) was originally designed to build confidence around issues of border security, as well as a means to enable Central Asian energy supplies and to provide a larger market for Chinese goods. China certainly has the capacity to cement a regional sphere of influence that would directly challenge US economic and security interests in Asia and have knock-on effects for the global economy. But where the lines of influence would be drawn remains to be seen, as China jockeys with neighbors who want to hedge against its influence with US security promises. The slow process will signal what is to come and impact other regional organizations such as the Trans-Pacific Partnership (TPP) in the nearer term.

Despite the various degrees of integration and success that we will see from region to region, it is important to put the pieces together and determine the global picture that emerges. What sort of international collaboration is feasible within this "multi-track" regionalism? Where will it most critically fall short?

Global organizations such as the UN and the WTO have an inbuilt mandate to address problems that require international solutions: climate change, weapons proliferation, trade protectionism. Regional organizations are far less likely to take up global causes - which will likely be even more neglected in the new, regionalized world. For this reason, a world of regional groupings clearly pales in comparison to a viable global political system. But such a system is gone and not coming back for the foreseeable future.

Regional models are second-best to a world of effective global governance, as they are clearly preferable to raw nationalism as an alternative, and reflect the broader diffusion of international power. Nations recognize the better-than-nothing viability of such a model, which is prompting the moves toward regional integration that are already underway.

But the new system raises a host of thorny questions. What does this mean for globalization, as geographical connections become increasingly vital in shaping multinational connections? How detrimental will the rise of regions be when it comes to global issues that require broad, consensus-driven governance? Who wins and who loses in such a world? What kind of regional groupings, nations, or even corporations stand to gain?

Gravity in global affairs may be returning after a topsy-turvy, power-reshuffling decade, but gravitational forces and pulls will work differently as financial elites, heads of state, multinational firms, NGOs and others sort out how best to maximize their situations in a revised global system that still waits to be understood and calibrated. This will be the next task for those dubbed "Davos Man" by Huntington.

From January 25th to 28th, the World Economic Forum discussions will revolve around these global order questions, and the answers will reveal characteristics and behaviors of an emerging world of new regional models.

Has a decade of distractions ended?

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Presented by

Ian Bremmer & Steve Clemons

Ian Bremmer and Steve Clemons are both members of the World Economic Forum’s Council on Geopolitical Risk. Bremmer is President of the Eurasia Group. Clemons is Washington editor at large at The Atlantic.

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