The financial crash of 2008 and the business disruptions from the COVID-19 pandemic served as stark reminders of the agony brought by economic recessions. As these crises recede into history, the world is now grappling with a different kind of turmoil: a geopolitical recession. This new challenge threatens to upend global order, as established frameworks of international relations and diplomacy are increasingly questioned.
At the World Economic Forum’s Special Meeting on Global Collaboration, Growth, and Energy for Development in Saudi Arabia, Forum President Børge Brende highlighted the gravity of the situation.
Political scientist Ian Bremmer, founder of the consulting firm Eurasia Group, asserts that the world is already in the midst of this geopolitical recession. Bremmer identifies the rise of China and the Global South, alongside the decline of European and Japanese economic power, as driving factors in this shift. The ongoing trade tensions between the United States and China exacerbate these geopolitical frictions. Moreover, recent events such as Russia’s invasion of Ukraine and renewed conflicts in the Middle East contribute to the growing sense of a geopolitical recession.
Karin von Hippel, Director-General of the Royal United Services Institute for Defence and Security Studies, emphasized the need for a new approach to global challenges
As leaders convened in Riyadh, there was a consensus that drifting further into isolationism and protectionism would only deepen the geopolitical recession. Faisal Alibrahim, Minister of Economy and Planning of Saudi Arabia, stressed the importance of closer geopolitical ties. “Fragmentation is not the best solution,” he warned. “When we find common ground and work together, we arrive at a simple truth: global collaboration is not optional. It is essential at this critical juncture for human development, for a convergence of cultures, and the idea that we are all in the same boat.
Kristalina Georgieva, Director of the International Monetary Fund, echoed this sentiment, urging leaders to adhere to proven policies to foster economic growth. She called for a return to the internationalism that facilitated recovery from past world wars and financial crises.
The concept of a geopolitical recession highlights a world where the old power structures are crumbling, requiring new frameworks of governance and cooperation. As global leaders debate the path forward, the emphasis is on fostering collaboration and adapting to the evolving global landscape to avoid further instability and conflict.
