The recent ET Now Global Business Summit, convening a panel on "Risk, Resilience and the New Global Order," offered a stark assessment of the global landscape. The consensus was clear: multipolarity is not a future state but a present reality. Yet, this fragmentation of power does not automatically translate into a new, coherent world order. The critical distinction, as noted by Fabian Zuleeg of the European Policy Centre, is between the mere existence of multiple power centers and the absence of agreed-upon rules to govern their interactions. This is not merely an academic distinction; it is the fundamental tension defining our current global environment.
The erosion of the post-war Pax Americana, with its US-built institutions like the UN, World Bank, IMF, and WTO, is not solely attributable to recent American actions. Ajay Chhibber, former UN assistant secretary general, rightly pointed out that "All empires... started rotting from within." This internal decay, coupled with other players—China being a primary example—"gaming the rules" of these institutions, has accelerated the breakdown. The shift in economic gravity is undeniable; the so-called 'north' commanded 60% of the world economy in 1990, now it’s down to 40%. This structural recalibration underpins much of the current turbulence, from the MAGA movement to European populism.
Klisman Murati of Pareto Economics introduced a more nuanced concept: not multipolarity, but "segmented polarity." This framing suggests that countries wield influence selectively across different domains—energy, technology, resources—rather than uniformly. Lumping them together as simply 'multipolar' offers a low-resolution view, one that fails to serve businesses and policymakers needing granular understanding. The implications for global public goods are severe. "Nobody is taking responsibility... agreements on trade rules, protecting the climate, the law of the seas," observed Vince Cable, former UK Secretary of State. This vacuum risks a further erosion of the very international cooperation necessary for collective security and prosperity.
“This wasn't about growth. It was about expectations.”
For nations like India, the imperative is to diversify and deepen trade ties beyond China. This strategic reorientation is not just about de-risking supply chains but about fostering resilience in a world where economic interdependence can be weaponized. While the "Global South" remains a highly diverse group, a subset of large emerging economies, particularly India, Vietnam, and Indonesia, are positioned to become significant engines of global growth, provided they maintain internal reforms and governance. India, having risen from 24th to 6th in Pareto Economics' Global Power Index over three decades, exemplifies this trajectory, challenging outdated labels that no longer capture its dynamism.
Europe's New Imperative
Europe, in particular, finds itself at a critical juncture. "Europe's holiday from history is over," Zuleeg declared, a blunt assessment of its newfound exposure to geopolitical realities. Resilience for Europe now encompasses a multi-faceted approach: bolstering defense against threats like Russia's hybrid warfare, securing energy independence after Russian gas was weaponized, and developing a common approach to competitiveness. The potential return of a less predictable US administration under Donald Trump further underscores Europe's need to assume greater responsibility for its own security and strategic autonomy.
The shift is palpable. Old certainties are gone.
The Unlearned Lessons of Crisis
Despite cycles of crisis, governments globally appear ill-prepared for what Vince Cable termed "gray swans, known unknowns." The lessons from past shocks—fiscal discipline, robust debt management, and independent central banks—are consistently under pressure, if not outright ignored. Many developed economies, burdened by significant debt and often politically constrained from implementing necessary fiscal adjustments, are in a precarious position to absorb new shocks. Regulators face constant pressure to "relax" banking rules, a short-sighted approach that invites future instability by weakening the very safeguards designed to prevent systemic collapses. The independence of central banks, a cornerstone of monetary stability, is frequently challenged, with the risk that monetary systems become perceived as mere mechanisms for printing money to solve political problems. This erosion of institutional integrity undermines market confidence and can trigger capital flight or inflationary spirals. The irony is that some emerging markets, having endured severe shocks in the past, have often been forced to implement stricter fiscal and monetary discipline, arguably leaving them better positioned to navigate future turbulence than their seemingly more stable developed counterparts. Their experience has forged a harder-won resilience, a practical understanding of limits that many developed nations, cushioned by decades of relative stability, seem to have forgotten. The continuous pushback against prudent financial management, coupled with a lack of collective responsibility for global public goods, creates a systemic vulnerability that will inevitably be tested.
The consistent warning from the summit is clear: multipolarity without credible rules will inevitably deepen instability. Resilience is no longer a niche concern but a core strategic imperative spanning security, energy, and economic competitiveness. The balance of power is shifting, and those who fail to adapt to this reality will find themselves increasingly exposed.
