Globalisation Now a Zero-Sum Game, Warns Eswar Prasad

Eswar Prasad, a distinguished Professor of Economics at Cornell University, recently highlighted the fragility of the global economic and political order during his appearance at the World Economic Forum in Davos. According to Prasad, long-standing international institutions that once underpinned global cooperation are losing their credibility amid escalating geopolitical and economic tensions. This shift marks a departure from the previously more collaborative and integrative nature of globalisation, moving towards a more competitive, zero-sum dynamic where gains by one country may come at the expense of another.

Prasad pointed to China as a central figure in this evolving global landscape. The country faces significant challenges that complicate its role in the world economy, including internal economic adjustments and external pressures from trade conflicts and geopolitical rivalry. These challenges contribute to the broader uncertainty surrounding globalisation's future, as nations reassess their strategies in response to shifting power balances and economic priorities.

Another critical factor Prasad discussed is the transformative impact of artificial intelligence (AI) on employment and global institutions. AI technologies are reshaping labor markets by automating tasks and altering job structures, which could lead to significant disruptions in employment patterns worldwide. This technological shift also tests the adaptability and relevance of global institutions tasked with managing economic cooperation and addressing transnational challenges.

The implications of these developments are profound. The erosion of trust in global institutions and the rise of zero-sum thinking may hinder international collaboration on pressing issues such as climate change, trade, and security. Moreover, the economic adjustments prompted by AI and geopolitical competition require policymakers to craft innovative solutions that balance national interests with the need for global stability.

In summary, Eswar Prasad's insights underscore a pivotal moment in globalisation's trajectory. The interplay of geopolitical tensions, China's evolving role, and technological advancements like AI is reshaping the global order into a more fragmented and competitive arena. Understanding these dynamics is essential for stakeholders aiming to navigate the complexities of the modern global economy and sustain cooperative frameworks that have historically supported prosperity and peace.