Regional Mercantilism
Regional Mercantilism
This fourth scenario is marked by high energy prices, weak growth, and global disharmony. Economic weakness in the United States and Washington’s failure to come to grips with its long-term problems results in gradually diminishing respect for its model of democratic capitalism. The leading alternative, Beijing-style state capitalism, has its own set of problems but at least it offers populist leaders a politically attractive rallying point. The scenario sees a long period of growing protectionism, slowing trade growth, and more regional trade arrangements. Even as world economic growth slows, energy prices rise perilously due to faltering supplies. The shale revolution fizzles because of technological and environmental problems, Middle East production peaks, new oil production areas in Africa are hampered by political instability, and renewable energy is available only at very high prices. Some of the regional powers, in particular Brazil, South Africa, Indonesia, and Iran do relatively well, but they are not able to exert much influence beyond their immediate neighborhoods. All powers turn inward to confront heightened domestic conflict brought on by low economic growth and rising income inequality. The result is a multi-polar world defined by regional groupings in competition, none of which are very attractive to the other as examples for escaping weak growth.
Keywords: High Energy Prices, Weak Growth, Global Disharmony, Mercantilism, Regionalism, Multipolarity, Supply Disruption
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