The exercise of Strategic Foresight

Contemporary times are witnessing multidimensional and eco-systemic shifts encompassing societies, economy, politics, and governance, pushed by multiple drivers, both structural (as climate change or the economic and political changes linked to the end of the liberal order) and contingent (as for the Covid 19 crisis and the scale reached by the Ukrainian conflict). These dynamics challenge the capacity of adaptation, if not the very existence, of the diversity of organizations moving in a context of fast and thorough transformation. This is certainly true for International NGOs focused on humanitarian assistance, development work and the promotion of human rights.

As employees of a major Child Right Italian INGO, we are being guided by IARAN in a process of strategic transformation with the goal to achieve a better strategic vision and define a role fit for the future, consistently bringing value added to the life and rights of children in Italy and worldwide. To do so, we are implementing the foresight-based approach, exploring potential future contexts and how they may change between now and 2030.

The process is based on a thorough collaborative approach, involving roughly 100 staff, and providing the conditions for the collective intelligence of the organization to express itself. Through a PESTEL analysis over 100 variables have been defined and then prioritized using an Impact – Uncertainty Matrix (MIU) to identify 12 key drivers that may impact children in Italy and the world within 2030.

Drivers have been analyzed by internal experts to produce driver documents (called “driver Files”) which will be further enriched by external experts, and which will then provide the basis for the design of the scenarios.

What are we learning?

The exercise is enriching, it allows us to diverge from the day-to-day work of a major INGO, and to use what we know – and learn what we don’t yet know – to create analysis and reflections on topics which are the core of our work or have the potential to be systemic and tangent to the way we operate.

Working through the strategic foresight methodology is allowing space, time – and a structured methodology - to design a systemic thinking approach to what we do. It is allowing to briefly stop, look at the past, at the present and the future that may come, and plan – becoming more consciously acting, instead of only quickly reacting to external stimuli.

By working together, we are breaking silos, enhancing collaboration between teams who may not normally work together, creating linkages both related to the specific content of the exercise and in our current work. This is an investment to our future ways of working and to the way we look at ourselves as INGO, as a team, and within wider structures and systems which may deserve better coordination and collaboration with.

This may be challenging also a “protagonist” approach that INGO have been carrying for the last decades, strengthening the systemic role we have as part of a complex system in which we must position ourselves with humility and strength, while recognizing the strengths and opportunities of those surrounding us.

The exercise is indeed challenging hierarchical dynamics and decision-making as the collective intelligence of the staff is driving thinking and reflection and will be driving some of the strategic choices of the organizations.

An example of a Driver File

What follows is the summary of the Driver File related to the variable “Geopolitical Shifts” which has been developed by the writers with the mentoring of IARAN. The variable refers to the global political landscape and how the way it is changing may impact the distribution of power and influence in the future.

The text below also provides an example of the structure of a Driver File and offers an understanding of how this structure provides the basis for foresight thinking on the potential developments of the variable.

The Driver File includes:

An essential background review of the relevant changes which characterized the variable. In our case, since the foresight perspective was aiming at 2030, it made sense to focus our background mostly on events and dynamics of the last decade.

Identification of the main trends characterizing the variable in the present moment. This step, based on the awareness of the variable historical trends is still based on actual ongoing phenomena and will provide the basis for coherent foresight thinking on future trends.

Potential disruptors. In our case, we included the realm of foresight as the present trends are reviewed in terms of potential development with the consequent impact on the variable. It is to note that it has been relevant to keep in mind that we were aiming in our analysis at a 2030 scenario. The disruptions were then necessarily bounded to be potentially taking place in the years from now to 2030.

These potential disruptions highlight the complex and interconnected nature of geopolitical shifts towards 2030. They underscore the need for proactive strategies to mitigate risks and leverage opportunities in the changing geopolitical landscape.

The three previous steps of the analysis (background, present trends, identification of potential disruptions) provide a consistent ground of reference for the development of hypothesis for the future.

DRIVER FILE: Geopolitical shifts

I. Identification

Description: The Geopolitical Shift refers to the evolving global political landscape characterized by a redistribution of power and influence. This shift brings with it potential threats and challenges to democratic systems, including the potential erosion of civil liberties, the rise of populism, and increased authoritarian tendencies. These changes are reshaping the geopolitical landscape, creating new dynamics in international relations and global governance.

II. Background

History: For several decades, global governance has been led by Western powers, structured around principles of open markets, liberal democracy, and human rights. However, recent years have seen increasing challenges to this status quo, with the rise of new regional governance poles, populism, authoritarianism, and threats to democracy.

After the Cold War, a predominantly unipolar order led by the West dominated the geopolitical landscape, steering global dynamics with a growing tendency towards liberal economic and societal approaches.

This has been accompanied by a decrease in the multilateral capacity of managing and redeeming controversies. In key conflict settings, peacekeeping operations face crises of legitimacy while states and populations have lost faith in UN peacekeeping missions, paving the way for rebel gains, mercenary deployments, or security vacuums[i]. Over the period 2010-2020 we saw a general decline in peace and security and human rights conditions around the world. The number of countries globally that are not affected by state-based conflict fell to its lowest level on record in 2020 and the performance of the system of peace-making, the success rate of peace agreements between 2005 and 2020 was half what it was between 1990 and 2005.[ii]

Between 2016 and 2021, the number of countries moving towards authoritarianism more than doubled those moving towards democracy. The struggle for global democracy reached a potential turning point in 2022, with the gap between countries registering overall improvements in political rights and civil liberties and those registering declines being the narrowest in 17 consecutive years of deterioration. The most severe setbacks for freedom and democracy resulted from war, coups, and attacks on democratic institutions by illiberal incumbents.

Economic growth has shifted political power alongside the decline of democracies. Over the last 30 years, more autocracies have developed, increasing their GDP to account for 46% of the global GDP. The share of world trade between democracies declined from 74% in 1998 to 47% in 2022 [iii]. Countries like Angola, Egypt, Philippines, Nigeria, Bangladesh, and Pakistan have substantially expanded their economic shares. China now holds 15% of the global trade share[iv]. Autocracies are becoming less dependent on democracies for import and export, making democracies twice as dependent on autocracies as they were 30 years ago. This shift increases their economic and political power and their influence on the broader human rights agenda. Seven rounds of Western sanctions on Russia from 2014 to 2023 may serve as a warning to autocracies and autocratising countries worldwide: export/import dependencies on democracies mean vulnerability to sanctions.

Hyper-liberalism has seen several unintended backlashes: Economic hyper-liberalism (free movement of goods, services, labour, and capital) has contributed to global economic growth but has exacerbated inequalities within countries. Political hyper-liberalism (in the form of "exporting democracy" through regime changes) failed to stabilize contexts such as Afghanistan and Libya. Pro-democracy protesters received widespread support from Americans and Europeans, regardless of their stance on social, economic, and institutional conditions. This support fuelled the hopes of those who moved and the fears of those who hosted, shifting their political views towards nationalism and nativism [v].

The contraction of traditional global governance over the last decade is leaving room for the development of new forms of regional governance based on economic relevance and/or identity. Here, Asia, particularly China, plays a central role. However, China's capabilities, while multidimensional, are increasingly centralized and may be stagnating, which could limit its global influence. The election of Donald Trump as US president in 2017 marked a milestone in terms of the trend towards populism challenging democratic systems and the waning US ambition to control global governance. The relative US power has diminished, allowing the military and economic power of China and other countries to grow gradually. This growth contributes to the development of a multi-regional governance landscape as the United States has faced backlash against its international activities and tolerated free riding on its security guarantees in Asia, the Middle East, and Europe[vi].

Different approaches have been taken by key geopolitical actors in managing the COVID-19 pandemic and the consequent recovery measures (fiscal stimulus in the US, Next Generation EU in Europe, zero-COVID in China). The consequences of these approaches are already visible today and will need to be monitored.

Slow but steady migration flows from middle, low, and high-income countries, both economic migrants and displaced people, are moving towards OECD countries, the UAE, and Russia. Migration modalities and flows have been impacted by technology, mobility restrictions (particularly during the COVID-19 pandemic), and to a lesser extent, conflict, instability, and climate change[vii].

Ecosystemic crises[viii], caused by combinations of environmental, political, and economic instability, compound human vulnerability. Over the past decade and a half, people worldwide have experienced a global financial slowdown. In 2022, with the impacts of the COVID-19 pandemic still reverberating worldwide, the war in Ukraine fuelled a new crisis, disrupting food and energy markets, worsening food insecurity and malnutrition in developing countries, and provoking high inflation rates. These prospects seriously jeopardize the potential for reaching the 2030 Sustainable Development Goals.

The impact of the Ukraine conflict: The crisis in Ukraine threatens to push million more children across the world into hunger. Russia and Ukraine account for a significant amount of the world’s wheat supply, together exporting more than a quarter of the world’s wheat in 2019. The current violence is contributing to a sharp rise in global grain prices and the threat to the Black Sea Grain Initiative is further exacerbating the situation. Skyrocketing wheat prices will put millions of children in the world’s most fragile contexts, such as Somalia, Lebanon, and Tunisia, at risk of illness or even death due to hunger. The war triggered a massive shock to the global economy, especially to energy and food markets, squeezing supply chains and pushing up prices to unprecedented levels. In the Euro area the impact was mainly directly linked with energy and inflation rates while in other region of the world the impact was on food and basic services prices. Another critical aspect for countries in crisis worldwide is the potential re-allocation of global humanitarian assistance and funding for relief efforts to the Ukrainian crisis, which can reduce funding and support allocated for other countries in crisis elsewhere.[ix]

III. Current State

Present Trends: The global liberal order is in decline, and the world's powers are shifting. The liberal international order established by Western powers in the post-war era is experiencing a decline due to an international dispersion of power and political blowback from the distributive consequences of the freer movement of goods, services, and people that was a product of that order. The post-war structure has shifted from bipolarity to a unipolar moment at the end of the Cold War, to multipolarity today. With diminished U.S. power to drive forward a liberal international order, the world has begun to shift away from globalism, liberalism, and associated elements of a rules-based order[x].

Challenges to democratic systems: There is growing concern about the erosion of democracy and its potential impact on economic systems. The rule of law and democracy are crucial to capital markets, and threats to democracy are also threats to the private sector. There is a growing divide in public opinion about democracy, with a significant portion of the population expressing support for authoritarianism[xi].

Populism and authoritarian tendencies: Driven by the slow turn of the global economy, austerity policy, persistent inequality levels, and demographic diversification, the feeling of resentment of citizens towards the performance of democratically elected government has been exploited by populist political actors, with the prevalence of nationalistic and authoritarian identities. Survey data indicate that the proportion of people who agree with the idea that having a strong leader who does not have to bother with parliament or elections has been consistently growing in recent years. [xii]

Mass protests on the rise: The number of protests around the world more than doubled between 2017 and 2022, sparked by a wide range of issues. While people’s ability and willingness to publicly protest is a sign of functioning democracy, it is also a warning. Governments’ failure to effectively respond could damage the legitimacy of the democratic model. [xiii] The role of youth-led activism in this framework is relevant. While it can contribute to highlight the contradictions of the reactionary drift and to voice a demand for democratic participation, when disengaged from constitutional change processes, it can fuel participation to undemocratic upheavals or affiliation with violent extremisms[xiv].

'De-dollarisation' in trade: The US dollar is losing stakes of global monetary economy. Trading with local currencies found new impetus following the sanctions placed on Russia and with the growing new regional orders. There is also the greater use of national currencies (most notably but not only, the Chinese Yuan) via de-dollarization as well as the, for instance, BRICS “R5 currency project”[xv] that if launched would mark a key transformation of the global financial system[xvi].

Multiple regional orders: Europe, the US and more generally the G7 are shifting from promoting a globalized model, based on a shared approach to democracy and free market, to securing strategic areas of influence and supply chains. On the other hand, the expansion of the BRICS grouping highlights the Global South’s political will to raise their capacity of influence, with China and India competing with one another to lead the BRICS[xvii]. In this changing international balance, Europe is losing its influence in the Global South, including in Asia. Regional and domestic order are and will be affected and driven also by access to resources, for instance those needed to respond to the multiple ecosystemic crisis affecting the world, or even those needed by countries to implement technology advancements will play a role alongside others in the trade – power economical balances and discourse (including those about sanctions[xviii]).

COVID-19 social and economic recovery: In the US, GDP and domestic spending bounced back (and increased) to pre-COVID times, narrowly followed by the EU, thanks to fiscal stimulus in the US and financial aid to small and medium enterprises in Europe. In China, economic recovery is significantly slower than expected and marked by record-high youth unemployment and shrinking credit demand. This is accompanied by a renewed awareness of the power of the authority to significantly alter people and businesses' life, because of the severe zero-Covid restrictions[xix]. This stagnation could potentially limit China's role as a geopolitical powerhouse.

The threat of Jihadism and affiliation with extremist groups: We are witnessing an unprecedented spread of violent jihadism on the African continent combined with a growing tendency towards affiliation with related groups. Identities such as Da’esh, Al-Qaida and their affiliates, amplify grievances and intercommunal tensions (often arising from food insecurity) as a means of mobilizing recruitment and fostering anti-government sentiments.

Ecosystemic dimension of crisis: The transboundary nature of more crises – the interconnection of global economic and trade dependencies, political ties, and even the ripple political effect on masses of crisis, are resulting in more and more global or regional destabilization.

Major players: Compared to 7 years ago, China and Russia have emerged as credible military and economic threats to the US. The Russian invasion of Ukraine highlights Moscow’s growing dependence on Beijing, with the two countries sharing a common goal of contesting the US-led world order and giving impulse to geopolitical shifts dynamics at the global level. The rapid growth of the Chinese economy, driven more recently by the ‘Made in China 2025’ strategy and the Belt and Road Initiative (BRI), is seeking to connect China to other economic centres in Asia and Europe via overland and sea routes. In the Middle East, Iran, Saudi Arabia, and Turkey are significant regional stakeholders. While Egypt has long been considered the cultural centre of the region, it has been far eclipsed by the economic and political power of Saudi Arabia and other gulf countries. Turkey, meanwhile, is a key stakeholder for the conflicts in Iraq and Syria. India’s rise is welcomed by many neighbouring countries for its perceived non-invasive tradition (with the notable exception of Pakistan with which tensions are likely to stay high). With a strong diaspora and a predilection for soft power strategies, India appears as the regional leader and a serious alternative to both China and Japan’s influence in South Asia and to China and Russia’s interests in Central Asia. At the same time, structural and political limits to India’s ambitions shade this projection and should maintain the country’s primary focus on internal affairs. East and Southeast Asia are home to some of the world’s most influential (and newest) regional structures. ASEAN, the Asian Development Bank, the Shanghai Cooperation Organisation, and the Asian Infrastructure Investment Bank are just some of the organisations that are active in the region.

Actors Involved: Major actors include nation-states, international organizations, non-state actors like multinational corporations, the UN, NATO, The Security Council and all the member state cooperation and coordination organs, as well as individuals with significant influence.

IV. Potential Disruptions

Economic Slowdown and Erosion of Democratic Norms: Persistent economic slowdown could exacerbate the erosion of democratic norms. Economic conditions will be a significant driver of the rise of populist nationalist movements. Austerity and protectionist policies at the national level may create hardships for the middle and lower classes. The rise of nationalistic parties could undermine initiatives to build greater economic and political integration. As major world powers focus attention and resources domestically, support for supranational institutions may be reduced[xx].

Inequality and Political Influence: The diverse income distribution within countries, exacerbated by a decade of slowly growing inequalities, will mean that segments of populations with higher income will have more influence over political choices. This could fuel mass protests from lower income groups which feel distanced from political drivers[xxi].

Rebalancing of International Powers: With the weakening of US international political influence, China may confirm its new role as a leading power in international geopolitical dynamics, becoming a driver of a new “order” from a normative, legislative, monetary, and economic perspective[xxii] &[xxiii]. However, its increasing centralization and potential for stagnation could act as counterforces to its global influence.

Migration and Political Discourse: The trend of migration and the rise of disinformation about migration may impact recipient countries of economic migration (OECD, Saudi Arabia, and other emerging economies). This could result in more restricted migration policies as a matter of political discourse rather than collecting the economic benefits (and needs, as populations age) deriving from immigration.

Differential Recovery from COVID-19: The differential social and economic recovery from the impact of the COVID-19 pandemic will contribute to the definition and/or consolidation of dynamics of geopolitical shifts, slowing down China's potential of geopolitical dominance both economically and in terms of governance lead[xxiv].

Global Trade Monopoly and Concentration: About 40% of global trade is ‘concentrated,’ mainly due to economy-specific factors. For this variable analysis, it is relevant to highlight the role of trade control and infrastructural relevance potentially acquired by China. The success of initiatives such as Made in China 2025 and the Belt and Road Initiative could expand the markets for Chinese products and bind countries that are rich in raw materials to its economy[xxv].

Rising Relevance of Violent Extremist Organizations: With China investing heavily in Africa, French and American counter-terrorism forces retrenching, and Russia positioning Wagner private military contractors (or other emerging military or trade international actors) as an alternative in several African sub-regions, the erosion of trust towards democracy will find its expression in affiliation to extremist groups. This phenomenon, already relevant and increasing, could meaningfully determine Africa's political landscape and development[xxvi].

These potential disruptions highlight the complex and interconnected nature of geopolitical shifts towards 2030. They underscore the need for proactive strategies to mitigate risks and leverage opportunities in the changing geopolitical landscape.

V. Future Prospects

Hypothesis 1: Western dominance twilight and the rise of multipolarity with caveats.

The decline of Western dominance is irreversible. However, this decline doesn't necessarily herald the rise of cohesive regional alliances like BRICS or the EU. Economic stagnation and political rigidity in emerging powers such as China, India, and even established entities like the U.S. and the E.U., constrain their global reach. These nations increasingly focus on internal issues, including escalating climate emergencies and surges in populist or nationalist movements. The world has transitioned to a multipolar landscape where power is fragmented across various states, non-state entities, and influential individuals shaping global policies and norms. This new order results in a complex and unpredictable landscape, fraught with intensified competition, potential for conflict, and volatile alliances. However, it also offers a fertile ground for unprecedented collaborations and partnerships.

Hypothesis 2: A new dawn: regional powers, blocs and new actors rising. Fueled by the ascendancy of emerging nations and the growing salience of regional concerns, alliances, and identities, regional powers and blocs are gaining prominence. Areas like Asia, Africa, and Latin America are taking the reins of their destiny, exerting greater control over regional affairs and playing pivotal roles in global policy-making. This shift creates a geopolitical landscape where regions operate based on their unique interests and values. Non-state actors and influential individuals now function within the framework of these regional or national interests, contributing to a reshaping of the geopolitical landscape. The decline in international governance opens up spaces for these new actors to redefine rules and norms.

Hypothesis 3: Geopolitical chaos and conflict with no room for innovation.

The geopolitical landscape is in a state of extreme volatility and unpredictability. The waning of Western dominance, coupled with the rise of emerging powers pursuing their own agendas, has created a chaotic environment. This instability is further exacerbated by global challenges such as climate change, rapid technological advancements, health crises, and economic downturns. Ideological entrenchment and political inflexibility, particularly in countries like China, severely limit the capacity for innovation and agile responses to these global challenges. The world teeters on the edge of chaos, with escalating tensions and conflicts making it increasingly difficult to focus on long-term solutions or innovations.

VI. Conclusion

The world is witnessing a profound transformation in its geopolitical landscape, a metamorphosis shaped by an intricate web of economic, political, and societal forces. While the decline of Western dominance and the rise of emerging powers like China are notable, these shifts are not without their caveats. Economic slowdowns, political ossification, and societal involution could act as counterforces to these trends. The relentless economic downturn, escalating inequality, and the gradual erosion of democratic norms are fueling the emergence of populist nationalist movements, thereby intensifying political instability. The recalibration of international powers, underscored by China's ascendency, is reshaping the mechanics of global governance. Other pivotal factors influencing these geopolitical shifts include migration patterns and associated political discourse, the uneven recovery from the COVID-19 pandemic, the concentration of global trade, and the rising prominence of violent extremist organizations. These shifts underscore the urgency for proactive and strategic responses. As we journey towards 2030, it becomes imperative for policymakers, businesses, and civil society to comprehend these shifts, anticipate potential disruptions, and formulate strategies to mitigate risks and harness opportunities.

The geopolitical landscape of the future is likely to be characterized by heightened complexity and unpredictability, necessitating agility, resilience, and innovation. Furthermore, the emergence of regional powers and blocs and the amplified influence of non-state actors challenge the traditional state-centric model of geopolitics, leading to a more multi-dimensional geopolitical landscape. This highlights the importance of nurturing regional cooperation, fortifying multilateral institutions, and engaging with a diverse array of stakeholders, including non-state actors, to address global challenges. In the face of potential geopolitical instability and conflict, the need to promote dialogue, cooperation, and the peaceful resolution of disputes becomes paramount. The geopolitical shifts towards 2030 present a complex tapestry of challenges and opportunities. By understanding these shifts and proactively responding to them, we can navigate the changing geopolitical landscape and strive towards a more peaceful, stable, and prosperous world.

VII. References

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[xxvi] Bacon, T., Austin, C. and Warner, J. (2022) A global strategy to address the Islamic State in Africa, ICCT. Available at: https://www.icct.nl/publication/global-strategy-address-islamic-state-africa (Accessed: 21 July 2023).