Article

How We Got to the Archipelago World

Published

2nd March 2019

The brief moment of global solidarity that followed the attacks of September 11th when we were “all Americans,” in the words of Le Monde, seems as improbable as it is distant. Barring a global catastrophe, the world is unlikely to unite again as it did on that day – and not just because of the conduct and course of the wars of 9/11 in Afghanistan and Iraq. A deeper – and more radical – shift is at work in the politics of the global economy. A fragmentation of power, capital and ideas is creating a new map of the world – with lasting implications for investors and policymakers alike.

The evidence is everywhere. Europe beginning to roll back key aspects of the free market even as it manages yet another bail-out of Greece; the failure of the Copenhagen climate change negotiations; a Doha trade round dead in all but name; the emergence of new global governance structures, such as G-20; the flows of macro-finance investments between emerging markets combining state and business interests; China’s “going out” strategy upending traditional vectors of global capital and influence; an Arab Awakening as much defined by its diversity as its aspiration for accountability and legitimate government; the resurgence of nationalist, populist movements across rich and poor parts of the world; a proliferation of hybrid economic and political systems defying old categories of left and right, liberal and authoritarian.

Conventional thinking holds that all this is a threat to an otherwise well-ordered global order – or that it reflects a zero-sum shift from West to East, U.S. to China, democracies to dictatorships. For large parts of the world, of course, the existing global order seemed less well-ordered than designed to perpetuate – by any means necessary – dated power structures of the mid-20thcentury. Equally, to see this merely as reflecting an all-embracing power shift to the East (as observers both Eastern and Western do) ignores the fact that pivotal powers such as Turkey, Brazil, Indonesia and Nigeria are charting distinct paths aimed above all at economic independence and national power – beyond ideological labels.

Instead, what we’re seeing is an emerging world of sovereign states vertically integrating national interests across the public and private sectors – and then going out strategically to compete for resources, growth and job creation. Having previously understood global interdependence as a reason for horizontal integration across markets and regions, states as diverse as Finland, Saudi Arabia, Japan and Mexico are now pursuing distinct, often bilateral, strategies for economic and political security. This is the new dynamic of global competition – one with implications as profound as they can seem contradictory.
 
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. Across the Middle East, citizens are deploying technology and new-found communications tools to demand consent in how they’re governed without losing their ability to see their values and traditions reflected in the fabric of their societies. In Latin America, state-owned corporations are working hand-in-hand with governments to pursue inclusive growth of a kind that holds promise beyond what was achieved by structural adjustment programs imposed by Western-dominated multilateral institutions.
There is an undeniable logic here. After all, it was never credible that climate change threatened each country or region in the same way – or to the same degree; that an overleveraged West threatened the global economy as much as it did its own dominance over rising powers; that the attempts of rogue states acquiring weapons of mass destruction represent an equal threat to states large and small, West and East. And now the narrative has been broken. Where you stand really is a function of where you sit – for states and people alike.
 
Today, after a six-month period of sovereign debt crises, tsunamis, nuclear disasters, revolutions, uprisings, and military interventions (and the list could go on), 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. The old stability was as much an illusion in Mubarak’s Egypt as it is in a global economy structured for the benefit of a few dominant, but deeply indebted, powers.
 
For the West, negotiating this new mosaic of power will require a mix of pragmatism, modesty, innovation, and strategic patience. It means, at times, partnering with Chinese investments in Africa instead of trying to convince its leaders that they have more to gain from yet more conditional aid. It means, at other times, accepting that an Egyptian government more legitimate and accountable in the eyes of its people will chart a course less pliable to Western demands. It means looking at a successful, modernizing Muslim country like Turkey and understanding that there is far more to gain by engaging with its growing influence than in lecturing it on the character of its politics, as long it remains a constitutional democracy.
 
Above all, it means focusing on management of the structural drivers of global growth and development – including energy, commodities, inflation and, yes, climate change – in ways that address the ways they affect different countries in different ways. The locus of legitimacy has returned to the nation-state, and as new powers gain the economic and political power to assert their interests, no solution that isn’t both global and national will be successful or sustainable.
 
A multi-speed global economy – with diverging long-term growth profiles – will increasingly be mirrored by a multi-dimensional global politics. This is a Great Game worthy of the name and the winners will be those states and corporations increasingly seeking their own success irrespective of traditional boundaries of geography, ideology, interest and alliances.
 
Welcome to the Archipelago World.
 

Overview

Confident decisions in a complex world

The Firm

Archipelago world

Macro Advisory Partners (MAP) was founded in 2013 on the vision that globalisation was shifting from a story of integration to one of fragmentation. Our Founder and CEO Nader Mousavizadeh first described this new global landscape as an ‘archipelago world’ – a new order characterised by fragmenting power, capital, technology and ideas.

Navigating the archipelago world requires a new compass. 
 

What we do

To look beyond the complexities of a fragmenting global landscape, we must widen our lens.

At MAP we empower our clients with a clear and comprehensive understanding of how the political, policy and economic drivers of this fragmenting world will impact the success of your business, now and in the future.
 
As a MAP client, you engage with a diverse global network of MAP partners and senior advisors – among them corporate leaders, strategists, diplomats, policy makers, and academics – who will help you interpret, plan for and pivot around the geopolitical and economic forces impacting your business. 
 
Whether it is US-China relations, supply chain resilience, tech regulation or the global energy transition, our strategic counsel provides solutions for every business and investor.
 
By drawing on our judgments of how macro factors shape your business we help you navigate the risks and opportunities ahead so you can make the kind of confident decisions for growth and investment that will determine your future success.  
 
 

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