After the Cold War ended in 1991, the world entered a period of rapid globalisation and liberalisation. The financial crisis of 2008 ushered in a new era that does not seem to have a precedent. Surveys point to geopolitical risks today exceed those seen during the Cold War. Globalisation has given way to an era of restricted trade regimes, and multilateral institutions have been abandoned to facilitate this new order. In their place, many “minilateral” arrangements are being worked upon among countries. “This latest phase of increasing fragmentation was not caused by a sudden collapse of international institutions, but by a steady build-up of frictions over the last 15 years. These include the increasing use of tariffs, export bans, and investment restrictions, as well as new migration and capital controls,” says the IEP report.
It also states that besides the above changes, the two superpowers—the US and China—have been losing their respective political influence since 2015. At the same time, there is a rise of “middle level powers” that do not align with superpowers. This is reflected in rising geopolitical risks and conflicts. The IEP report says: “This shift has intensified competition in the Global South, where middle powers vie for influence alongside superpowers through aid, investment, and security partnerships, a trend that fuels proxy involvement and has contributed to a 175 per cent increase in internationalised intrastate conflicts (defined as ‘where an external state provides troops to one side of an intrastate conflict’) since 2010.” And there is no propensity to achieve peace. According to the IEP, “Peace agreements have fallen sharply since the 1970s when 23 per cent of conflicts finished with a peace agreement, compared to just four per cent in the 2010s.” With this, military expenditure has been rising continuously since 1991. After Russia’s invasion of Ukraine in 2022, many European countries have been spending huge amounts on the military.
