Regional Lab: Geopolitics, Geoeconomics, and World Order

In this scenario US-China tensions remain high – though both countries avoid war – and affect the stability of the region. The rivalry leads to a rise of militarization and economic alliances that compel Asian countries to become increasingly divided and take sides. At the local level, there is greater marginalization, as exploitation of resources increases due to the rivalry and formation of blocs. This leads to increasing intolerance and nationalism, giving rise to protectionist policies in many countries. The potential split in South-East Asia between the Greater Mekong region and Maritime South-East Asia creates weakened trade integration, and trade and supply chains are disrupted across the region. Geopolitical conflict also leads to cybersecurity warfare and technological bifurcation.

For this scenario, participants came up with strategic options that could resolve and alleviate its effects. The top three can be summarized as follows:

• Developing countries should use international platforms to voice their concerns. New international alliances should be set up among developing countries to focus on more bottom-up and non-traditional security issues around food, water, climate, and health.
• Multilateral regional institutions should be strengthened and leveraged to maximize countries’ benefits.
• Civil society movements should be created to build awareness of the negative impacts for the region of conflict, tension, and proxy wars.

In this scenario, China agrees to sign arms control treaties with the US, and US-China competition becomes less tense as both parties respect the international order. The disputes over the South China Sea and the Taiwan Straits are controlled, which leads to demilitarization in the region and the end of the regional arms race. Multilateralism is strengthened and drives global cooperation between the superpowers. China’s Belt and Road Initiative and the US’s Indo-Pacific Strategy co-exist within middle and low-income countries in the region, to boost regional economic cooperation. 

For the above scenario, strategic options are identified that could help maximize positive features of the scenario and avoid undesirable outcomes.

• Governments in the region should promote US-China engagements through non-contentious issues. This will increase the opportunities for both superpowers to engage and promote bilateral understanding.
• The positive features in Asian markets, such as resources and labour, should be utilized and leveraged by both superpowers to achieve win-win prosperity, against a backdrop of healthy competition.
• Cooperation between US-China-India and the regional blocs should be supported. As countries become more cooperative, the superpowers may join gain confidence, which could in turn lower the intensity of the regional arms race.

In this scenario, the US remains the security provider for the region, while China serves as the economic provider and disrupts relations between countries in the region. Regional peace and order still exist despite the economic disruption. There is greater regional trade and economic dependence and a proliferation of new economic institutions. On the technological front, some countries may benefit as others fail since technological advancement comes with cybersecurity challenges. The hegemony of the US dollar is weakened as countries begin rebalancing their basket of foreign reserves, starting a trend of de-dollarization. There is also an expansion of energy and infrastructure development in the region. However, investing in these infrastructures increases countries’ debt. More countries will form alliances, as the region is divided by the US-China rivalry, which destabilize the region further.

Participants came up with three strategic recommendations to veer towards the positive outcomes from this scenario.

• Governments should conduct a strategic realignment and reduce the economic reliance on superpowers. Governments should also increase engagement with other countries to create new economic partnerships. By doing this, they may be able to build collective economic leverage against external major economies.
• Governments should strengthen existing regional multilateral organizations. As a result, these will be able to expand on the regional peace and order to further the goals of the region.
• Governments should initiate more inclusive regional dialogues and also include the superpowers in the dialogues. This will allow US and China to engage more on issues that affect the region, which could ultimately lead to regional peace and order.

In this scenario, the US-China rivalry escalates into an outbreak of full-on conflicts in the region, which also see US and other regional powers directly engage with China. This brings the question of nuclear use to the fore. And, second-order effects come into play; supply chains are heavily disrupted, dual-use infrastructure is used primarily for military purposes, and investment into and trade with the region both reduce. Conflicts lead to significant flows of refugees within the region. Sovereignty of countries may become infringed when larger powers impose terms onto smaller aligned nations. Regional organizations such as ASEAN are rendered obsolete as alternative blocs of power start to form. Potentially, some countries see the rise of strong authoritarian leaders as the population look towards strong leaders in times of crisis. Ultimately, the governments of both superpowers come under great internal pressure, with China’s government disintegrating and widespread social chaos in the US.

Based on scenario above, participants identified three policy recommendations that governments could take to avoid undesirable outcomes.

• Governments should continue to hedge between US and China. This will hopefully avoid conflict as strategic ambiguity prevents major powers from going into conflict to change the status quo.
• Governments should adopt a non-alignment strategy. By playing in the middle, countries can engage in economic hedging allowing investments from both sides. The non-alignment strategy may also give both powers less incentive to go to war.
• If it is not possible to remain non-aligned, countries may want to choose a side which is able to provide them with the greatest benefit, and define their interests accordingly.

Dr. Mohammad A Razzaque is an expert on international trade and development issues with extensive senior leadership and management experience. He has vast experience of working on emerging issues in global trade, bi-lateral and regional trade deals, multilateral trade negotiations, geopolitical developments affecting international trade. Dr Razzaque serves as chairman of Research and Policy Integration for Development (RAPID) – a think tank based in Bangladesh.

Prof. Ummu Salma Bava is Professor and Jean Monnet Chair, Centre for European Studies, School of International Studies, Jawaharlal Nehru University, New Delhi, and Adjunct Professor, School of Conflict and Security Studies, National Institute of Advanced Studies, Bangalore, India and Guest Faculty, SS Foreign Services Institute, Ministry of External Affairs, Government of India, New Delhi.

Dr. Dinna Prapto Raharja is a senior policy advisor/consultant & academic, also a productive writer in international relations, social protection & human rights. She is tenured Associate Professor in International Relations & founder of an independent think-tank/consulting firm Synergy Policies.

Dr. Salma Malik is Associate Professor at the Department of Defence and Strategic Studies, Quaid-I-Azam University (QAU), Islamabad. She is also the Director of External Linkages at QAU and specialize in the areas of Conflict and Security Studies, and South Asian Affairs. Her areas of research interest include Conflict Management & Transformation, Human Security, Confidence Building, regional affairs, Kashmir, War, Arms Control and Disarmament.

Prof. Chung-in Moon is a Professor Emeritus at Yonsei University and editor-in-chief of Global Asia. He is also Vice Chair of Asia-Pacific Leadership Network for Nuclear Non-Proliferation and Disarmament (APLN).