The new global disorder
Season two of The Trump Show. Season three of Brexit Breakdown. Part five of Homicide: Australian PM.
2018 has been another eventful year – and not just on Netflix.
There’s also an edgy new French drama, Gilets Jaunes. A terrifying new Brazilian telenovela, Comandante Bolsonaro. Meanwhile a long-running German series, the Merkel Mysteries, has been cancelled. And much else besides.
Yet when historians look back at 2018, it is likely to be remembered as the year when the US-led liberal international order – the rules of the game that have prevailed since the end of the Cold War nearly three decades ago – crumbled.
Open markets are closing. Geopolitical conflict and populist nationalism are trumping global rules. Security alliances are fraying. American hegemony is slipping.
One reason for this is that the West in general and the US in particular are in relative decline, while the rest of the world and China in particular are in the ascendant.
But the biggest reason is, of course, Donald Trump.
The mercantilist, protectionist and unilateralist US president believes international rules and fixed alliances constrain America power, that he can screw better deals out of both allies and rivals by flexing US muscles, and that he needs to act now while the US is still dominant.
So he undermines the World Trade Organisation, launches trade wars against China and bullies bilaterally on trade.
He undermines traditional security alliances and uses them as economic leverage.
He’s pulling out of the Paris Climate Change agreement, seeking to sabotage the Iran nuclear deal
and using the dollar’s dominance to impose unilateral sanctions.
In effect, President Trump is blowing up the US-led system that his wiser predecessors created and sustained.
It is possible, of course, that Trump is a temporary aberration. Many people hope that the old order will be restored when he leaves office, hopefully in 2020.
But while they may disagree with Trump’s tactics, there’s now a broader consensus among American elites that an authoritarian China needs to be confronted and contained.
And unless China’s development is derailed, the global power shift is set to continue, limiting future US administrations’ ability to shape the world order, for good and ill.
More fundamentally, history highlights that when a declining hegemon is challenged by a rising power, the chances of conflict and chaos are high.
Even the least antagonistic geopolitical power shift, from the British Empire to the American Republic, led to the breakdown of the international system in the first half of the 20th century.
Fasten your seatbelts.
The controversial Global Compact
It’s against that unauspicious backdrop that 164 governments recently approved the new Global Compact for Safe, Orderly and Legal Migration, which was endorsed by the UN General Assembly yesterday.
The movement of people between countries is by definition an international issue – and as people increasingly move in all directions around the world, it is also a global one. Yet there is very little cooperation between countries on migration and hardly any international rules, except for refugees.
While the Compact is non-binding, it marks a step forward for international cooperation, as new OPEN fellow Rebekah Smith explained.
Yet Trump, predictably, together with Australia and several European governments have shamefully refused to sign. The Belgian government has even just collapsed because of it.
Xenophobic nationalists wrongly claim the compact tramples on national sovereignty by establishing an international right to migrate. If only.
Is Berlin the new London?
Over the past two decades, talented and hard-working people have flocked to Britain from around Europe and the world, with London becoming a pre-eminent global city.
But 2018 may be remembered as the year when this virtuous circle went into reverse. The latest quarterly immigration figures, for April to June, showed that more people left Britain for the rest of the EU than arrived.
Brexit uncertainty and the pound’s plunge are two reasons for this. But so too is government policy. This week the UK finally published its proposal for post-Brexit immigration. These would impose the same rigid, costly and unfair rules on EU migrants that currently apply to non-EU ones. (I explain why they’re so awful here).
On the same day, Germany announced a much more liberal approach to immigration.
EU citizens, of course, enjoy the right to move freely to Germany. And now the system for non-EU migrants is being opened up too.
Workers with a secondary-school diploma and German language skills will be able to move to Germany without a job offer for six months and stay if they find a job, as university graduates already could. There are no income thresholds or preference rules for German workers. Rejected but tolerated asylum seekers can also stay if they have a job. The new law is subject to parliamentary approval next year.
Perhaps the biggest cost of Brexit is that many Europeans will no longer be able to move to Britain, or want to. And Germany is likely to be the biggest beneficiary. As a Londoner it pains me to say so, but Berlin may be the new London.
2019 will see some form of resolution to the Brexit conundrum: an orderly withdrawal from the EU, a chaotic no-deal or perhaps a second referendum resulting in no Brexit at all. While I would be delighted if Britain remained in the EU, my base case is that as the clock ticks down to 29 March, the threat of no deal chaos will ultimately persuade Parliament to approve the EU exit deal.
For now, the psychodrama continues. As I explained for CapX, the biggest Brexit divide is now between pragmatists who are willing to accept a deeply unsatisfactory exit deal to avert no-deal chaos, and players who are willing to risk no-deal chaos to achieve their various ends (hard Brexit, no Brexit, a general election).
2018 has been a year of consolidation for OPEN.
We were saddened by the loss of Peter Sutherland and Jean-Pierre Lehmann, two founding members of our Advisory Board, who both passed away last Christmas.
And we were delighted to welcome Ratna Omidvar and Kate Hampton to our Advisory Board, alongside Erik Berglof, Bill Emmott, Mike Moore and Dhananjayan (Danny) Sriskandarajah.
OPEN has developed a new partnership with the Centre for Policy Development, an Australian think-tank that focuses on long-term policy research. Their Settling Better report on improving employment outcomes for refugees dovetails with OPEN’s work on refugee economic empowerment and we are now working together on refugee entrepreneurship, with both an Australia-specific and an international study due to be launched in the first half of 2019.
Following on from OPEN’s work with Tent on refugee employment, I spent a week in New Zealand in August with Host International, an Australian NGO, to raise awareness of refugees’ huge economic potential and encourage employers to hire them.
We also covered lots of other crucial topics.
Jack Graham explained how immigrants can help revitalised depressed communities such as Dayton, Ohio, and highlighted how Canada and Australia are taking advantage of anti-immigrant policies in the US and the UK to attract more talented foreigners.
Iana Dreyer made the case for giving settled migrants the right to vote.
Hippolyte d’Albis, Ekrame Boubtane and Dramane Coulibaly presented their new research showing that asylum seekers aren’t an economic burden to Europe.
And in a piece for Project Syndicate I argued that the biggest reason why politics in the West is in such a mess is because most Europeans, Americans and, yes, even Canadians think they will be worse off in future – and explained how to overcome the corrosive politics of pessimism.
Have a great break and a Happy New Year.
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