Rising geopolitical tensions risk becoming another force for global divergence, according to a report released by the World Economic Forum (WEF).
As competition between the United States and China is increasing, China’s growing military prowess is changing the balance of power in the Western Pacific.
The US is strengthening Pacific-focused alliances in response, most recently with the Australia–UK-US (AUKUS) security pact.
Other states, such as Russia and Turkey, are also showing a greater ability and willingness to project power abroad.
Meanwhile, key global and regional powers are testing the limits of international law and cooperation by conducting military exercises in tense areas, such as the Russia–Ukraine border and the Taiwan Strait.
After describing the previous cases, the same report (The Global Risks Report 2022) highlights that competition is intensifying in newer dimensions and geographies, as is evident in the militarization and use of weapons in space and in the developments in cyberspace, where already acute tensions between governments affected by cybercrime and governments complicit in its commission will continue to rise.
Competition is also increasing in the exercise of “soft power.”
For example, according to the report, China’s vaccine diplomacy, external financing strategy, and economic recovery (its economy is expected to have grown 8% annually by 2021) have allowed it to continue expanding its influence throughout the developing world.
Brazil, Indonesia, Mexico and Turkey are among the top buyers of Chinese Covid-19 vaccines, with net debt payments to China rising 62% in 2020.
Developing countries may increasingly look to China for financial, technological and scientific support to thrive in the post-pandemic economy.
Geopolitical tensions are spilling over into the economic sphere.
For example, India and Japan implemented protectionist policies during the pandemic.
Finally, the report adds that Western companies in sensitive sectors such as technology are finding it increasingly difficult to do business in China and Russia, and Western countries themselves are restricting.