Five Geopolitical Tipping Points from the CEO of Oxford Analytica

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Nader MousavizadehDuring his time spent as special assistant to U.N. Secretary-General Kofi Annan and working as a U.N. political officer in Bosnia-Herzegovina, Nader Mousavizadeh learned firsthand about the ways that world powers resolve their differences on the global stage.

Now, in his current role as CEO of Oxford Analytica, a global analysis and advisory firm, Mousavizadeh has continued to keep an eye on political, social, and regulatory developments world-wide, managing a network of contributors that monitor and analyze macroeconomic issues for a range of clients. Next week in Paris, Mousavizadeh will share his views on geopolitics with delegates at the fourth annual CFA Institute European Investment Conference in a session titled, “Geopolitical Risks and Investment Opportunities: The Emergence of an Archipelago World.”

As a prelude to Mousavizadeh’s presentation in Paris, here are five geopolitical tipping points gleaned from his monthly column for Reuters:

  • Current world powers must acknowledge the rise of the BRICs. In his Reuters column, “Who Fills the Global Power Vacuum?” Mousavizadeh noted that global leadership is in short supply, with “little doubt that the U.S. would not be returning to its pre-eminent leadership position any time soon.” With no one country — or even a group of countries — ready to step in and implement solutions for international crises, the power vacuum ends up being filled by previously overlooked nation-states that can now act unopposed. According to Mousavizadeh, “Rising powers like Brazil and Turkey are casting off decades of weakness and stepping into strategic vacuums left by failed Western-led strategies — in arenas as diverse as development, climate change and the Iranian nuclear challenge,” and as these countries get used to exerting their influence, they will become increasingly ready to wield it.

  • America must avoid being dragged down by an empire mindset. Last August, Mousavizadeh warned that the United States is “choking on the edifice of empire,” and if it continues to see itself as the global peacekeeper, it will continue to overcommit its resources and strain its credibility. Allowing other agencies to shoulder some of its existing burdens may allow the U.S. to refocus its efforts and regain its credibility. “A nation that thinks it can do anything will do everything — deploy its military to wars of questionable strategic value at a vast cost in lives and treasure; issue IOUs in the trillions to finance consumption; turn the advantage of international reserve currency status into a curse by spending far beyond what creditors are likely to tolerate in the long term; and sustain the fiction of entitlements that no serious observer thinks will be honored.”
  • The “dated power structures of the mid-20th century” are in trouble. As new players enter the global arena and the existing powers find their influence imperiled, Mousavizadeh warns of a “crisis of credibility afflicting established global institutions and powers.” He has had strong words for the U.N., saying that Security Council seats are distributed “anachronistically,” and noted that “voting power at the IMF and World Bank remains absurdly weighted towards European powers.” Mousavizadeh pointed out that while China is able to leverage $3 trillion in foreign exchange reserves, if it wants to support a wider global economic stabilization vehicle, it may not be eager to employ these resources on behalf of “an international system designed sixty years ago for the perpetuation of a certain power balance and the advantage of a certain set of countries not including China.”
  • Beijing cannot expect its future to mirror Washington’s past. However dominant China may become in world affairs, it should not expect to become the kind of global superpower seen in the 20th century. The same rising nations that are acting to address global issues in the absence of other forces are not ready to cede power to another foreign entity. In his column, “How We Got to the Archipelago World,” Mousavizadeh observed that “From South-east Asia to West Africa, commodity states are leveraging their economies to the Chinese demand driver without wishing to replace Washington’s dominance with Beijing’s.” It’s a theme that he revisits in a later column, reminding readers that “from Brazil to Indonesia, Turkey to South Africa, the rising pivotal powers are not looking to replace U.S. hegemony with Chinese dependency. In fact, as they focus on strategies of inclusive growth that sustain accountability and legitimacy, the mobile networked younger generations of these countries will continue to look to America as a model in many respects.”
  • Volatility today means resilience later. All of these observations paint the picture of a world in which there is less certainty and greater risk for everyone, but this may only be a transitional period. In fact, Mousavizadeh’s “Archipelago World” may offer more promise than the old one. According to Mousavizadeh, “it would be natural to see this emerging order as inherently unstable. Volatility may seem like the new norm, but we’re more likely seeing a turbulent transition to a more resilient, and more diverse, global economy governed by national interests.”

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