We are living in a G-Zero world, where neither the United States nor any other country is able to meet the challenges of global leadership anymore, according to Ian Bremmer in his new book, “Every Nation for Itself: Winners and Losers in a G-Zero World.”
Bremmer says the United States is paralyzed by its “endless partisan combat” and growing federal debt, the European Union is dealing with its own debt crisis and Japan is busy cleaning up from an earthquake, tsunami and “nuclear meltdown.”
Addressing a small crowd at the Greenwich Library Sept. 27, the acclaimed geopolitical analyst discussed the current state of uncertainty in global affairs and the possible outcomes of living in a G-Zero world.
The event was hosted by the World Affairs Forum, a nonpartisan organization in Stamford, and sponsored by U.S. Trust, a private wealth management branch of Bank of America.
Bremmer, president of the Eurasia Group, is also the author of “The End of the Free Market,” “The Fat Tail: The Power of Political Knowledge for Strategic Investing,” and “The J Curve: A New Way to Understand Why Nations Rise and Fall.”
Without leading world nations, it will be harder to keep peace, reverse climate change and feed growing populations. But it will also have profound effects on the global economy, he said.
International balance of power, which historically has been determined by “military might,” will be determined by “economic muscle” instead, Bremmer says, leading to a surge in global protectionism.
Countries will likely impose tariffs to protect local businesses and farmers against lower-cost competition, and there will be more commercial agreements between individual countries with new limits and trade barriers with countries outside of the agreement.
The movement to bring home offshore operations and jobs ”“ a movement that is particularly strong in Fairfield Country ”“ is one example of protectionism already starting to take place, he said.
The multinational companies that are able to adapt to these changes and exploit the opportunities they provide will be the ones that come out ahead, he said. For instance, banks, hedge funds and private equity firms will likely be shifting their focus to emerging markets that have less regulatory reforms.
Echoing Bremmer”™s statements, Fairfield County U.S. Trust Market Investment Director Andrew McGrade said investing tactics for high-net worth individuals has changed drastically in over the past few decades.
Where there used to be a “home bias” of investing only in known companies, there now is an emphasis on navigating the global economy. Emerging markets with growing middle classes are promising areas of investment, he said.
