FOREWORD

In the wake of the global financial crisis, we have come to a critical crossroads. We can now reflect on the events of 2008 and 2009 with enough distance to provide perspective—but we remain in a moment of transition as our global systems and institutions face challenges that are both fundamental and fast-moving. The need for a global agenda is beyond dispute. Our most pressing challenges must be addressed collectively if we are to overcome them.

The risk that geopolitical conflict will upset that agenda is more apparent than at any point in recent history. After decades characterized by accelerating globalization, we are now witnessing deglobalization. This dynamic is taking place alongside a broader shift in political and economic power from the developed to the developing world, expressed in the many bonds that connect us politically, economically, and socially. But the fact that globalization is no longer the worldwide norm and underlying driver of growth does not mean our world is any less interconnected. On the contrary, nations are becoming ever more interdependent. Increasingly, we share the same media of communication, seek the same natural resources, and face the same transnational threats, whether from climate change or nuclear proliferation. This divide—between the splintering of global governance and the increasingly hyperconnected world—is at the root of the challenges we face.

What are the implications of this phenomenon? What changes can we expect? We see a new regionalism that, in some cases, sharpens a wide range of international challenges, many of which are the focal points for our Global Agenda Councils at the World Economic Forum (WEF). This trend is both geographic and thematic, as governance, crisis response, and many vital geopolitical and economic questions will continue to receive less attention than they deserve—and will increasingly be addressed in a piecemeal fashion at a regional level.

We can say with certainty that political risk has returned with a vengeance. How we address the system’s failings of today will shape the world order of tomorrow.

The WEF was created in 1971 with a primary guiding principle—the Stakeholder Theory. This concept is based on the belief that a business must ultimately serve the needs not just of shareholders but of all stakeholders of global society. Which means that a business must also be accountable for its choices to employees, members of the supply chain, and anyone whose livelihood is tied to the firm’s continued prosperity.

In an increasingly interconnected world, looming political challenges must be interpreted in just this way. The interplay between issues that foster conflicts can amplify and perpetuate them, and it is important to recognize the ever-widening scope of countries, companies, institutions, and citizens that are exposed to seemingly isolated threats. In this vein, while this book represents a collection—rather than a comprehensive portrait—of the geopolitical risks we face, I hope that readers will find the connections between the various issues illustrated herein and come away with a broader sense of how these pieces fit together.

The ideas you find here reflect the insightful, forward-looking work of the Global Agenda Council on critical topics, drawing from our 2011 report on the changing world order and expanding on it to illustrate where the world may be headed. In short, this collection of essays is an attempt to gather the most pressing political risks we face “under one roof.”

In fact, this is the WEF’s core goal: to provide a high-level, trusted environment for discussion and informed debate, bringing together the world’s leading thinkers from a wide spectrum of industries. The Network of Global Agenda Councils that we launched in 2008 is a direct result of this initiative; it has become an integral part of our mission to identify key challenges—and to develop new ways of addressing them—in the post-crisis global order. Working with Ian Bremmer, Doug Rediker, and the entire Global Agenda Council on Geopolitical Risk has been a provocative and rewarding experience.

In today’s world, political and business leaders too often simply react to events rather than work to proactively address them. To overcome this, we must learn to better anticipate, mitigate, and respond to what comes next. That is the purpose behind this collection of essays. It goes without saying that this type of risk assessment will inform the WEF’s Annual Meeting agenda in Davos—and I am delighted to share these essays with you here.

Professor Klaus Schwab,

Founder and Executive Chairman,

World Economic Forum