Rapporteur’s Report1

GREAT POWER RIVALRIES IN THE GLOBAL SOUTH:
NAVIGATING FINANCIAL AND ECONOMIC SECURITY ISSUES IN A MULTI-POLAR WORLD
Carnegie Corporation of New York
Konrad-Adenauer-Stiftung
Financial Services Volunteer Corps
Istanbul, Turkey
March 22-24, 2024
During March 22-24, 2024, the Financial Services Volunteer Corps (FSVC) organized an international
symposium in Istanbul, Turkey, funded by Carnegie Corporation of New York and Konrad-AdenauerStiftung (KAS). The symposium brought together 29 leading experts and practitioners ininternational finance and foreign policy from Africa, Asia, Europe, and North America to exchange
ideas, break silos and forge connections. The overarching topic of discussion was how great power
rivalries are impacting the Global South and the implications of these developments for the global
financial system. Specific topics included the growing importance of Global South countries amidst
increasingly competitive and divisive global power dynamics, current financial sector challenges, thestrategic importance of critical minerals, the increased use of sanctions, and building resilience amid
increasingly fractured global supply chains.
The 2024 symposium continued a series of conferences that FSVC has held over the past twenty-fiveyears, with principal support from Carnegie Corporation of New York. This series creates a platform
for experts from multiple fields and countries to share diverse perspectives on complex global
challenges, particularly those relating to the global financial system, and to discuss multi-faceted
policy recommendations to these international problems. A core concept underlying FSVC’s
symposia has been that the most intractable problems confronting the world today will require
multilateral coordination among key countries, disciplines and industries if they are to be successfully
addressed. These complex problems do not fit neatly into the silos of individual expertise, and thus
demand broad-based collaboration and earnest communication among experts and policymakers
alike.

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This Rapporteur’s Report was prepared by Zoe Kassinis, Senior Program Officer at FSVC. The Principal
Investigators for the symposium are Harry Harding and J. Andrew Spindler. Harry Harding is University Professor
Emeritus, Professor Emeritus of Public Policy and a Faculty Senior Fellow at the Miller Center of Public Affairs at the
University of Virginia; and Yushan Scholar and Adjunct Chair Professor at the College of Social Sciences of National
Chengchi University in Taipei. J. Andrew Spindler is the President & CEO of FSVC. A list of participants in the
symposium is provided in the attached annex.
FSVC is a not-for-profit organization whose mission is to help build sound financial sectors to support healthymarket-oriented economies in developing and emerging market countries. Additional information about FSVC can befound at www.fsvc.org.

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In 2024, there is widespread concern about the increasingly fragmented state of the international
system, underscoring the importance of the discussion about if and how great powers and the
Global South can cooperate to identify potential areas of mutual interest in tackling pressing issues.
Opening Remarks
It was noted that a key theme for this first symposium post-pandemic would be building backcoordination among countries and disciplines in the face of widespread polarization, concern andpessimism about the state of the world, against a backdrop where so many things are going wrong
in the international system all at once. The geopolitical and international financial system is
becoming increasingly complicated. Uncertainty and unpredictability surround issues of economicand energy security, climate change and the evolution of international financial institutions andmarkets.
It was suggested that we stand fully at an inflection point in world history which, now, more thanever, necessitates reflection. Policies are predictions of courses of action—for policies to work, someconditions have to be met (and things have to go ‘right’), but this is less often the case. Participants
were encouraged, over the course of the symposium, to recognize the assumptions and conditions
on which stakeholders are basing their actions and to take stock of what works and what has failed.
Participants were also asked to challenge the conventional theories and assumptions that shape theway we think about current policymaking, and to try and criticize our assumptions to come up with
better policy recommendations and responses.
Session I: Current State of the World – Various Perspectives
from Advanced and Emerging Economies
The panel kicked off with a quote from the 1930s which ironically captures the essence of today’schanging world. In 2024, the world is marked by a multitude of national and international tensions
which are all simultaneously unravelling and “the crisis consists precisely in the fact that the old isdying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”2
The overall discussion centered on challenges and key risks in the contemporary global landscape, as
well as how to ensure that the Global South benefits from its growing importance amidst
increasingly competitive and divisive power dynamics (i.e., figuring out how it can become a “race tothe top, not a race to the bottom.”) An overarching concern was that all key challenges facing theworld in 2024 require concerted multilateral coordination, and there is a risk that current institutions
are not up to the task.
Weak International Cooperation and Collapse of Rules-Based International Order: Cracks in the rulesbased international order are emerging. International multilateral institutions have proven incapableof addressing international security challenges like preventing war (e.g., in Ukraine and Gaza) or
effectively addressing climate change. It was argued that this has been unfolding for years; however,
the international community’s failure to stop Russia’s invasion of Ukraine brought this into harsher
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In this quote, Antonio Gramsci (1891-1937) is describing the crisis of liberalism in Europe, and the Italian state
specifically, during the transition of world order in the 1920s and 1930s. A century later, the world is once again
living an interregnum, poised between old powers and reluctant emergent ones.

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focus. The war in Ukraine has also brought unprecedented uncertainty to the world order.
Specifically, the future of U.S. global leadership and credibility has been called into question, as has
E.U. unity and common objectives. Recent G20 and BRICS summits reflected the change in the worldorder and new alignments of geopolitical power. Illustratively, one participant noted that, for India,
the recent G20 was critically important, and the country used it to bring to the forefront issues
plaguing the Global South such as clean energy, debt restructuring and technology investment.
More broadly, a participant suggested that today, great and emerging powers’ instincts are tocompete rather than cooperate, as was illustrated by international responses to the COVID-19
pandemic and the 2008 financial crisis. The risks of impeded international cooperation are grave inlight of increasingly worsening global problems like climate change, poverty and inequality,
pandemics, the rise of technology like artificial intelligence (AI) and the threat of nuclear weapons. In
particular, the panel raised concerns that the existential threat of nuclear weapons use is intensified
by Russia’s war in Ukraine. Major nuclear powers are modernizing their nuclear arsenals and, while
no leader has expressed intent to use them, Putin is quoted as saying “all weapons are made to be
used.”
Moreover, AI will have global implications. While it could yield positive trends, like a new phase of
global technologies (e.g., big data, security), it could also raise profound risks (e.g., loss of jobs due
to automation, spread of disinformation). Participants agreed that these challenges will require
multilateral coordination and international cooperation, but the world does not appear up to thetask, and there is a risk that existing institutions will not be able to respond effectively.
Arrested Economic Development: For 2024, the World Bank forecasts 3% global GDP growth andspecifically, 2% growth in the U.S., 1% in Europe, 4% in China and 6% in India. However, geopoliticaltensions can impact growth.
Global economic recovery from the COVID-19 pandemic was uneven. Many nations have returned
to normalcy (e.g., the U.S. has fully recovered); however, many major economies like Germany andthe U.K. are slipping into a recession and China is in economic decline. Other economies are facedwith the costs and trade-offs associated with the new and persistent problems of migration andclimate change. It was noted that, after decades of globalization and a rise in global standards ofliving, the majority of the world’s population is now faring worse, for example, in terms of education,
health and security indicators.
Demographic Issues: Migration is a polarizing issue in the U.S. and European Union (EU). There is
massive population growth across Africa and other emerging markets like India. However, even in
fast-growing Global South economies, economic growth is still insufficient to create jobs for young
people. In India, 6% growth has not created enough jobs and 24% of youth (under the age of 24)
are unemployed. This runs the risk of creating mass civil unrest, radicalization and ultimately, a
democratic disaster. The position of women in the Global South has also remained precarious. In
India, women’s workforce participation stands at approximately 30%, well below the global average.
Geopolitical Tensions: Arguably, both China and the U.S. are at risk of losing if their trade war is
protracted. If the geopolitical conflicts in Ukraine, the Middle East and North Korea persist, they will3

directly influence the global economic system. If any one conflict worsens, it runs the risk of further
economic harm. Russia’s war in Ukraine has caused severe economic challenges to the EU. Within
the BRICS, some countries benefit from great power rivalries and competition. However, there is also
a set of countries that has suffered, for example, through proxy wars or wars being exacerbated. A
rising question among Global South countries has become how they can effectively insulatethemselves from the fall-out of great power competition, but also try to benefit from it.
National Political Instability: Many African countries face high exposure to political risks, especially inthe “coup belt” of Sub-Saharan Africa. In the U.S., political partisanship runs the risk of eroding thelegitimacy of democratic processes and institutions. There is concern that the upcoming 2024
presidential election results will be contested, undermining the democratic process and raisingquestions about the legitimacy of U.S. foreign policy going forward. Participants voiced concerns
about how dramatically different the stances of the two U.S. presidential candidates are, and how
different the world will look next year depending on who is elected, in terms of U.S. relations with
China, Russia, NATO, the Middle East and North Korea, and climate change, among other issues.
Political polarization and extremist politics are also a reality across EU member states.
Perspectives and Key Issues from Different Countries and Regions: The overarching themes included:
uncertainty is encouraging and accelerating the diversification of partnerships; there is a rising trend
toward self-reliance; and, in forging new partnerships, it is important to understand the nuanced
perspectives of individual countries in the Global South and their social, political, cultural andeconomic differences.

Africa: Across West Africa, a series of military juntas recently toppled democratically elected
governments in countries like Burkina Faso, Guinea, Mali and Niger. Participants noted that many
local populations supported the coups and there were few, if any, demonstrations asking for the
return of democratic principles. This raised questions about the popularity and sustainability of
democracy as a political system across the continent. There is also growing frustration among many
Africans who believe that their countries’ relationship with the West is unbalanced and founded on
fundamentally unfair principles. For example, there are increasingly vocal critics of the West African
CFA franc, arguing that it impedes countries’ economic freedom as it is “controlled” by former
colonizers. It was suggested that the African population is supportive of “fresh, non-traditional”
partnerships. Specifically, in Africa, China is seen as an important infrastructure investment partnerthat delivers concrete, tangible results (e.g., physical infrastructure like roads and ports) which
provide economic opportunities and direct benefits to the population. For Western partners tocompete with China in the Global South, they have to help African partners see the relationship as“win-win.” However, there are a lot of challenges associated with these investments, including
endemic corruption.
In the Sahel strip, climate change has exacerbated suffering, including food and water insecurity andjoblessness. There is the risk that this desperation can be exploited by terrorist organizations andused as a foothold to expand their influence in the region. The U.S. could strengthen its
partnerships/influence with African countries by taking actions to mitigate and help local populations
adapt to the effects of climate change.

4North America (U.S.): Trust and confidence are critical in the U.S. economic system, but they are
waning. This has been underscored by recent bank failures such as the collapse of Silicon Valley
Bank (SVB) due to the loss of confidence of its depositors. The U.S. Department of the Treasury hastaken far-reaching actions to safeguard trust in the system by, for example, guaranteeing deposits at
SVB following its collapse. The debt issue is also becoming critical in the U.S. Over the last decade,the U.S. has almost doubled its outstanding debt. The federal budget deficit is projected to increaseby 63% over the next ten years, from $1.6 trillion this year to $2.6 trillion in 2034. Spending on
interest on U.S. debt is now the fastest growing part of the federal budget and in 2024, interest
payments on debt are set to exceed U.S. defense spending.
Over the past 70 years, the U.S. has provided an umbrella for global trade and encouraged theformation of inter-connected global supply chains. The world relied on U.S. openness to free trade
for the production and distribution of key products like fertilizer, electronics and chips. Now, as the
U.S. seems to be abdicating this role, it runs the risk of making it harder for raw materials to travel.
There are also broader geopolitical tensions challenging U.S. free trade such as recent Houthi attacks
on cargo ships which necessitated expensive U.S. military intervention.
Participants agreed that the upcoming 2024 presidential elections should be considered a serious
risk factor for the global economy, not just from the perspective of which candidate will win, butwhether the win is accepted. There is concern that an unclear win could open the door for
geopolitical actors to make disruptive moves and create serious risks.

EU: To effectively diversify its partnerships across the Global South, the EU will need to better
understand its potential partners and how to find common ground. It was argued that the innerprocesses of the EU, namely, the different (sometimes competing) interests of individual member
states may undermine its efforts to successfully develop trade relationships with countries in the
Global South. One participant noted the EU’s lack of common foreign economic policy and of one
common institution with this mandate which make it nearly impossible to design cohesive plans.
While the EU is often neither fast nor decisive in its policymaking, it is working on expanding its
partnerships. For example, the German Minister of Defense has travelled to countries in the Global
South like India and Saudi Arabia to discuss the potential of arms exports. After the COVID-19
pandemic, the EU has worked on re-strengthening its partnerships with Japan and Australia, andthere is also evidence of stronger interest from Malaysia, the Philippines and Thailand in partnerships
with the EU.

Southeast Asia: To hedge against U.S.-China rivalry, the EU is emerging as a favored mediator forcertain Association of Southeast Asian Nations (ASEAN) countries. As a partner, the EU offers
economic potential, the strength of its security architecture, and its rules-based systems of law andorder. However, there is hesitation among Southeast Asians about whether the EU will prove to be areliable partner as it is often too involved with its inner problems and does not focus enough on
Southeast Asia (a concern intensified following Russia’s aggression against Ukraine); and, the EU’s
approach to issues like climate change and human rights is not in line with the national interest of
many ASEAN countries. More broadly, ASEAN countries are diversifying their partnerships in theregion, for example through free-trade agreements, including with Australia.

5India: India is playing the middle ground between the great powers and aims to diversify andmaximize its partnerships. Its overarching objectives are: security, gaining its “rightful place” on theworld stage, self-reliance, and economic and technical transformation. It wants a multi-polar world,
because in a multi-polar world, it has a position, while in a bi- or tri-polar world, it is left out. It
considers itself a Global South country, but simultaneously, a “re-emerging” major power. India sees
itself as “non-West, not anti-West” and has expressed concern about Russia’s invasion of Ukraine,
but has not blatantly condemned Russia. It is concerned about the economic impact of Russia’s war,
including the rising costs of food, fuel and fertilizers.
India is one of the fastest growing global economies (over 6% GDP growth projected in 2024). It
aims to increase jobs in the manufacturing arena and to take advantage of Western de-risking from
China to attract more foreign direct investment (FDI), especially in the technology and manufacturingsectors. In thinking about India’s position in the US-China rivalry, it is important to focus on India’s
own rivalry with China. Following their border crisis, India increasingly sees China as an economic
adversary and key competitor for influence over the Global South.
Finally, participants emphasized the danger of underestimating the rising prominence of othercountries in the Global South. For example, companies de-risking from China are moving to Saudi
Arabia and the United Arab Emirates, and Turkey is in a similar position to India, where they stand tobenefit from the new prospective multi-polarity.
Session II: Current Global Financial Sector Challenges in Advanced and Emerging Economies
The session began with an overview of broad, key financial sector challenges in the Global South.
First, the trend of loss of correspondent banking relationships has continued since 2016. As a result,it has become increasingly difficult for banks in the Global South to access U.S. dollars and U.S. dollar
clearing, thereby undermining their access to the highly dollarized international financial system.
One participant noted that there are a handful of countries in the Global South that control minerals
critical to the “Green” transition and technology development that are now left with just one or twocorrespondent banking relationships with Western banks. If the relationships are terminated, thesecountries may shift to China and away from the West, with severe implications for important
industries.
In addition, attempts to promulgate Western financial market standards (e.g., Basel Capital
standards) across the Global South have put pressure on banks to adopt these strict standards,
including on smaller banks for which the standards were not initially intended. Next, an important
challenge plaguing countries in Africa is rising debt. In 2022, debt and interest payments around theworld amounted to an unprecedented US $450 bn. In 2023 and 2024, this number is expected torise by 40%. Finally, many Global South countries are “starved for capital,” with government
borrowing crowding out private lending to small and medium-sized enterprises that could serve asengines of economic growth and job creation.
The discussion then moved to an analysis of the economic situation of key global powers like China
the U.S. and Russia, and of the Global South. Key themes that emerged across panelists’ remarks

6included: the fundamental changes in global trading patterns, most notably the increased role of
China; debt is plaguing countries across the West and the Global South; the “Green” transition andhow to finance it/what materials will be needed is rising in importance; and, how crucial it is toconsider the nuances of each country within the Global South.

China: China is expected to grow by 2.6-2.7% this year, which is lower than the Chinese Communist
Party’s target of 5%, which is a cause for concern. The Chinese economy is slowing down and isfacing deflation. It aims to avoid the long-term recession affecting Japan and any financial crisis, but
has not promoted big stimulus measures.
In 2024, China is by far the largest manufacturing power in the world, and it has largely succeeded increating critical dependencies, including related to the rising “Green” transition. For example, 90% of
the world’s exports of solar panels come from China. One panelist noted that the “Black” transition(increased use of fossil fuels like oil and coal) was not dependent on one country (not even Saudi
Arabia) so the world is entering unchartered territory that is very unsustainable.
One participant noted that, from China’s perspective, the country is facing its biggest challenge since
its economic reforms in 1978. This problem is rooted in mounting external pressure resulting fromgeopolitical competition from the U.S. In the past, China depended heavily on external demand andexports to the U.S. and other Western countries. Now, it is facing a paradigm shift: it is continuing torely on Western demand but, at the same time, is responding to unprecedented domestic demand.
In addition, to cope with pressure from the West, China is shifting its export destinations to the
Global South. While demand from individual countries in the Global South is small compared to thatof individual advanced Western economies, the aggregate value of demand from the Global South isvery important.
The composition of China’s exports has also changed. In the past, including as part of the Belt andRoad Initiative (BRI), China focused on expensive infrastructure exports in the Global South. China nolonger has the same appetite for these types of exports, however, and its government-led
infrastructure investment is in decline. This is in part due to rising domestic debt and the associatedincreased budget deficit stemming from three years of its ‘Zero COVID’ policy. As China continues touse banks to implement state policy, there is a risk that loans for the BRI and the financing of stateowned enterprises may eventually impact consumers. The significance and prevalence of Chinese
private enterprise in the Global South is rising, however. Within China, private enterprises are lesswelcomed and are pushed abroad, most notably, to Africa. As a result, there has been an increase in
Chinese private sector-led investment in Africa, including in the mining and infrastructuredevelopment sectors. Finally, to tackle both its rivalry with the U.S. and fear of financial crisis, China’s
response has been industrial upgrading and shifting to a technology-driven economic development
model.

U.S.: The U.S. is projected to grow by 2% this year. One participant noted that this constitutes very
good performance as U.S. GDP represents approximately 15% of global GDP based on purchasing
power parity (PPP). Overall, since the last financial crisis, the efficacy of oversight and regulation ofbanks in the U.S. has improved dramatically, except in isolated cases like the SVB failure. The U.S.
labor market has proven very resilient despite the COVID-19 crisis. The country, however, is facing a7

profound debt burden that could become unsustainable if not carefully managed. However, anotherposited that modern economic theory suggests that budget deficits don’t matter. The U.S. is also
facing potential risk related to commercial real-estate vulnerabilities, but one participant suggested
that these could remain crisis “episodes” rather than become full-fledged crises.

Russia: Patterns of Russian trade are changing. Russian trade with Turkey, the UAE and other Global
South countries has increased. The performance of the Russian economy is very dependent on
natural resources.

Global South: Many participants emphasized the importance of making observations countryspecific and bank-specific to avoid reductive generalizations about a very heterogeneous group.
Factors which influence the success of individual countries within the Global South are varied anddifferent depending on the context. These include, for example, political and resource ownership
structures, corruption levels and the degree to which their central bank is interested in meeting
Western standards of know-your-customer (KYC) and anti-money laundering (AML) oversight.
The African economy is expected to grow at a rate of 3.4% this year; in 2024-2025, Africa will be thesecond fastest growing region in the world after Asia. One participant suggested that this is
insufficient, and that the region cannot witness the huge, necessary development it needs with only
3.4% growth. Africa is also the most vulnerable region in the Global South to enormous geopoliticalpressure. First, many African countries are “hostage” to spillover effects of the monetary policies ofadvanced economies set by the U.S. Federal Reserve and the European Central Bank (ECB) as manyof their currencies have been adversely affected by the recent strength of the U.S. dollar and Euro.
The majority of countries in Africa do not have strong crisis management policies and procedures,and this makes them extremely vulnerable to foreign exchange crises. They also have U.S. dollar orEuro-denominated debt which will become a seminal issue this year. There are huge volumes of 10year debt bonds (over $200bn in debt owed across the African continent) set to mature in 2024 andmany African countries will not be able to pay. China has major leverage across the African
continent as it is a major financier of these indebted countries. One participant emphasized that therates of these loans were very high initially and, when the debt is rolled over to future years, theconditions will worsen for African countries if they do not successfully re-negotiate the conditions.
Policy Considerations: Participants discussed possible policy considerations and potential solutions
to the global financial challenges identified. One participant noted how there is a fundamental lackof preparedness for the next financial crisis. Notably, the overall “toolbox” of traditional fixes
available to central banks is not as extensive as it was in past crises due to the broad use ofquantitative easing. As it is unlikely that there will be a decrease in banks’ quantitative easing
portfolios, banks will be limited by huge balance sheets in future crises. The budgetary capacity of
governments is further limited by high debt levels in many countries. As a result, the support
mechanisms available during the COVID-19 pandemic, where large amounts of money were
provided to firms and consumers (largely in the U.S. and EU) to avoid insolvency, will likely not be
possible in the future as there is insufficient capital across economies. Another participant
highlighted how, in the wake of the 2008 financial crisis, central banks took extensive measures tomake their economies more resilient to future crises. This has proven to be a double-edged sword

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as now economies would appear to be less sensitive to their own monetary policies, and it is harder
to affect change.
Another participant urged policymakers to bear in mind that geopolitical fragmentation andcompeting power dynamics will shape policymaking of Global South countries. It should not beperceived as the ideological power dynamics of the Cold War—there are no ideologies in today’s
fragmented world, decision-making is based on business interests and countries in the Global Southare seeking the best opportunities. For example, they are refining Russian oil and selling Indian
diesel to Europe.
When thinking about recommendations, one participant emphasized the reality of limited resources.
Therefore, it is important to be selective and targeted. One participant suggested that issues
affecting the Global South should become more prominent on the agendas of official international
forums such as the Financial Stability Board and Basel Supervisors Committee. Furthermore, debt
restructuring and debt relief are needed for many countries, and a participant suggested the creationof a pan-African debt re-negotiation platform to give them collective leverage to establish morefavorable standard terms and conditions. This will require closer coordination of relevant authorities(including central banks), not just regionally but globally. It was also suggested that there should be
more inclusion of (and cooperation with) the private sector in the building of market infrastructure.
Regulators and governments also need to look closer at the shadow banking sector, addressconcentration and sovereign risks, and review liquidity and capital buffers ahead of a future crisis.
Central banks should work with the private sector to digitize KYC systems and identify more efficient
strategies to facilitate cross-border payments.
Session III: Building Supply Chain Resilience Amid Persistent Great Power Competition,
Including Over Critical Minerals
In stark contrast to the early 2000s where great powers were committed to integrating andglobalizing supply chains, global supply chains are now fracturing. The U.S. government is vocal
about aspiring to de-couple and build its own parallel supply chains. Overall, however, participants
noted that this is not realistic. Supply chains, including in key industries like critical minerals andsemi-conductors, are interdependent and deeply integrated. Unlike the U.S.-Russia competition
during the Cold War, economic disentanglement of the U.S. from China is impossible.
Mining Industry and Critical Minerals Supply Chains: The African continent is the stage for great
power competition in mining. One participant argued that there is “no Global South” in the mining
sector, no ‘one size fits all’ as not all countries have the same and equally important geologicalendowments, and the investment climate varies by country.
Overall, mining operations often exist in high-risk, developing countries. Chinese miners areoutcompeting Western miners in Africa. At a practical level, a participant shared that, from mapping
the Democratic Republic of the Congo (DRC)’s cobalt supply chain from mine to market, it becomes
clear that it is impossible for the U.S., Japan and Europe to build a parallel critical mineral supply
chain as all key phases/components are controlled by China. There are many comparativeadvantages of Chinese mining companies, and more broadly of the state-driven business model

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compared to the financial market-driven model. First, China had the first-mover advantage in many
African contexts. For example, in the DRC, China had a 15-year head start on U.S. companies and its
control of a single mine alone accounts for 12% of the world’s cobalt supply. Second, Chinese
mining companies have a higher risk tolerance than American companies. Chinese miners are statebacked, with access to a huge amount of capital from state-owned banks and are insured by stateowned risk insurance companies. Western capital markets avoid risky jurisdictions, and this makes it
hard for American companies to raise funds for the development of any mining sector. One
participant noted that China’s risk appetite is waning, however, due to the persistence of intractablechallenges in Africa (e.g., kidnapping, corruption).
Further competitive advantages include the fact that there is total alignment between the corporate
sector (both private and public) and the government in China, whereas there is often no alignment
between the public and private sectors in the West. Furthermore, China has a longer-term outlook
for mining, compared to the West’s very short-term, profit-driven approach. For example, cobalt
prices in 2024 are 80% lower than in the previous year. From a Western profit-driven perspective, it
is not worth investing in cobalt today. However, China considers cobalt to be critical to national
security and is playing the long-game, looking at the 10- to 20-year potential of minerals like cobalt.
Overall, the issue of low mineral prices is undermining Western influence in mines in Africa. In
addition to cobalt, nickel and lithium prices have also decreased by 80% compared to last year as aresult of the slowdown in the electric vehicle (EV) markets across the world. This has led to a hugeoversupply of these minerals. Chinese mining companies in places like the DRC are acting counter tomarket interests, flooding the market with these minerals, putting further downward pressure on
their prices. China has taken advantage of these low prices to stock up their strategic reserves ofthese critical minerals (an area where the U.S. is lagging far behind), and to keep competitors out.
A participant noted that U.S. legislation that aims to create parallel, U.S.-controlled critical mineral
supply chains is often fundamentally flawed. For example, the Inflation Reduction Act (IRA) has done
damage to countries in the Global South like Indonesia where it is impossible to separate Chinesecompanies from the nickel supply chain as they are so deeply involved in all aspects of mining,smelting and selling. It is possible that this type of legislation may deepen the supply chain with
Chinese companies as countries like Indonesia cannot afford to set up parallel supply chainsinsulated from China.
In discussions about extractive industry supply chains and de-coupling from China, it is critical tokeep in mind the processing half of the supply chain. By 2025, China is expected to refine 90% of all
critical minerals. China dominates this half of the supply chain, and it is impossible for the U.S. todevelop processing centers on the scale needed to compete with Chinese processing plants.
Chinese processing plants are massively subsidized and emit huge amounts of pollution. The cost oflabor in China is also much lower than in the U.S., though wages are rising.
Semiconductor Industry: Semiconductors are a critical component of electronic devices and a prerequisite to advances in computing, clean energy, military systems, healthcare, communications andcountless other sectors. Semiconductors have risen to the center of the debate about supply chain
resilience. Taiwan dominates the semiconductor supply chain and 92% of all semiconductors are
made on the island. Taiwan is strategically positioned to continue to dominate this industry: they10

have a 40-year head start on other movers, the physical infrastructure (foundry, equipment) and thestrategic alliances with other countries for necessary inputs (e.g., with the U.S. on foundational
research, with Japan for chemical raw materials). The COVID-19 pandemic underscored the world’s
over-dependence on Taiwan for these essential components and its vulnerability to disruptions. The
West is concerned that these essential materials are concentrated in “China’s backyard” given
intensifying geopolitical instability, and Taiwan is navigating the challenges posed by the strategiccompetition between the U.S. and China. Despite U.S. efforts to on-shore semiconductor production
through the CHIPS and Science Act, doing so may prove too expensive and futile. U.S.-made chips
would also be significantly more expensive. The U.S. does have the lead in terms of a highly
educated workforce and foundational research in this industry, but the U.S. would have to invest
enormous resources. China also cannot catch up despite massive government investment as thetechnological know-how and fundamental patents for this technology are controlled entirely by theWest. Currently, China is stuck producing lower-end chips.
Rather than focusing on breaking and on-shoring the whole supply chain, which participants broadly
believed is impossible, one participant suggested that the U.S. focus on preventing leakages ofadvanced process technologies to China. This will become increasingly important in the next stageof chip development, including for AI and advanced chips. However, if the U.S. blocks China’s lowerend chips or access to technology, China has said it will retaliate through other important supply
chains they control (e.g., cobalt and other critical minerals). This retaliation would have severe
consequences on industries such as the automotive industry. Another participant noted that anadvantage of the Chinese political system is that it can make strategic decisions more rapidly andefficiently than the U.S. can.
It was suggested that, for the U.S. to retain technological supremacy over China in thesemiconductor sector, it must strengthen cooperation with its partners, Taiwan and Japan. The
current U.S. lack of coordination with international stakeholders is driving them closer to China, on
whom their growth largely depends. Countries in the Global South are also increasingly linked to thesemiconductor industry and want to play a part in this supply chain. For example, in Vietnam,
semiconductor testing and packaging are growing, and, in India, semiconductor hardware design is
ramping up. This raises questions about how the U.S. should engage its partners more broadly in
the Global South on the issue of semiconductors.
Emerging challenges like AI and climate change will force the international community to grapple
with questions about cooperation versus competition on existing and future supply chains. In
terms of recommendations about how to secure supply chains, participants suggested developing
regional blocs where there are common values. It was flagged that, for the U.S. to participate, itneeds to ramp up exchange and coordination with its partners, who are becoming increasingly
skeptical of U.S. leadership. For the U.S. to enhance its extractive industry footprint in Africa inparticular, it was suggested that the U.S. government and private mining companies coordinate
better and pool their resources in this effort; otherwise, China will continue to dominate the sector.
Another suggestion was that, given the interdependence of the U.S. and China, it is in the bestinterest of the U.S. to avoid pushing China so far that it would consider starting a catastrophic war.

11

Session IV: The Use of Economic Tools in Foreign Policy:
Intended and Unintended Consequences
The discussion about economic tools, such as public debt, tariffs, sanctions and new financial
technologies, centered around two key questions. First, to what extent can economic tools be“weaponized” in a context where great powers are deeply connected? Many participants agreed that
economic interdependence disincentivizes the use of tools like sanctions. Second, what are theunintended and unexpected consequences of the use of economic tools, and who are the winners
and losers in the “weaponization” of economic tools? All participants agreed that the “winners” and“losers” are not always those intended.
Public Debt: China has become the largest bilateral debt creditor in the world over the past 20 years.
Many countries in the Global South face the risk of debt distress. In Africa, in particular, there isconcern that many countries will default on their debt. Debt relief is needed. However, there is nointernational institution that includes all major creditors (public and private) to work on restructuring
debt transparently and holistically. It is a fundamental problem that China, the main player in current
debt re-negotiations, is not a member of the ‘Paris Club,’ an international group of major creditor
countries that aims to provide a sustainable way to restructure sovereign debt. China is reluctant toparticipate in international coalitions for debt restructuring as it prefers to renegotiate on a bilateralbasis to maximize its financial and political returns. This is not in the interest of debtors across the
Global South or the U.S. who will continue to lose influence if China’s position is strengthened.
Another participant suggested that, going forward, the international community should developtransparent and sustainable debt management oversight, solving problems as they arise rather than
waiting until they become so acute that countries need to fully restructure their debt.
Sanctions: Participants agreed that the main reason why sanctions are reasonably effective is because
many countries have implemented them together (e.g., U.S., EU and U.K.). The global dominance of
the U.S. dollar also gives more ‘teeth’ to sanctions. While their overuse or misuse may negatively
impact international willingness to hold or use the U.S. dollar, alternative financial market
infrastructures (e.g., Chinese renminbi, digital assets) are currently less developed and reliable. For
example, 20-40% of financial transactions in renminbi are exposed to settlement risk. The U.S. dollar
is therefore likely to continue to be dominant. The euro, however, suffered in the lead-up to Russia’s
invasion of Ukraine in 2022 as the majority of Russian trade was intermediated in euro (not U.S.
dollars) and the vast majority of the US $300 bn in Russian central bank assets seized is in euros (only
US $8 bn is in U.S. dollars).
To be effective, sanctions need to “hurt them more than they hurt us,” but participants agreed that
this has not necessarily been the case when considering Western sanctions on Russia. Participantsdisagreed on the extent to which these economic sanctions have been effective. To assess theireffectiveness, it is important to define the goals of the sanctions. The sanctions have beenmoderately successful if judged against the narrow and modest goals of: 1) making it harder for
Russia to implement its war by restricting its access to key components (e.g., chemicals, militaryequipment); and 2) reducing (but not cutting off) Russian natural resource revenues. As alreadynoted, US $300 bn in Russian central bank assets have been blocked around the world, and Russia islosing 10-15% of its yearly budget. From the oil price cap, Russia has lost US $30-50 bn in earnings,

12the equivalent of two to three months of production. To avoid sanctions, Russia has also had to takeon additional costs, for example, building up its fleet of 1,000 oil tankers which cost US $50 bn. This
money was not spent on military objectives.
In stark contrast, many participants voiced concern that sanctions have primarily failed as they havenot changed Putin’s behavior nor ended the war. At both the micro- and macro-economic levels, theRussian economy is succeeding. Specifically, the Russian economy as a whole is growing. One
participant commented that some of the sanctions requirements were not calibrated correctly.
Notably, the price cap established on Russian oil (US $60 per barrel) was higher than the floor priceused by the Russian government in the development of its budget (US $42 per barrel). Thiseffectively raised the ceiling of the Russian budget. In addition, one participant suggested that
Russia was ready and had built a “financial fortress” during the five years leading up to the war,
which has helped largely insulate it from sanctions. Some participants noted, however, that the
sanctions were designed to create more hardship for Russia than before (which is the case) and may
reduce Russia’s ability to conduct the war in the long run. Many participants then raised thequestion of when do you “un-sanction” or will sanctions be kept forever? Participants broadly
agreed that it is problematic to lack a plan or strategy to phase out sanctions.
The interconnectedness of the global financial system arguably limited the impact of Westernsanctions on Russia. Russia’s global influence over the natural resource sector (mainly over oil) held
the U.S., EU and U.K. back from taking more dramatic action on the price of oil out of concern about
the global price of oil. Moreover, no dual-use items (e.g., semiconductors) were sanctioned, eventhough this could have had a more consequential effect on Russia's war effort, as it could have hurt
U.S. industries. Participants generally agreed that, given the EU’s strong economic ties to Russia, it
became the major, unintended, loser of the current sanctions regime. The European economy issuffering due to the very high cost of energy. Another key challenge to the effectiveness of
sanctions is that certain sanctions designations are very complex and their implications not wellthought out. This creates inconsistencies and a credibility issue. Finally, the existence of alternative
financial channels (e.g., use of the renminbi for cross-border payments) has undermined theeffectiveness of sanctions by not fully preventing Russian cross-border trade and transactions withthe rest of the world.
Sanctions have encouraged great powers to engage more with the Global South, notably Central
Asian countries historically part of Russia’s sphere of influence. However, the positions taken by the
U.S. and Russia in engaging the Global South have been starkly different. Western countries tend to
threaten that countries must apply sanctions or face punishment. In contrast, the Russian approach
is often more pragmatic and seen as a win for the Global South countries (e.g., offering direct
benefits like cheaper oil). Many participants posited that Western countries may need to consider
using carrots (not just sticks) in their engagement with Global South countries on sanctions issues.
In a similar vein, participants raised the idea that public communication about the aim of sanctions
was not handled successfully. Many Ukrainians thought that sanctions would stop Putin and end thewar. From the Global South’s perspective, many countries believed that Western sanctions were toblame for their food, fuel and fertilizer challenges, and this built up resentment. Russia amplified this13

message. Partly a result of mismanaged communications, most of the Global South does not appear
to support sanctions.
Western sanctions are affecting Russia’s relationships with China and India. One participant notedthat very few Chinese companies and individuals are on the U.S. Treasury’s Specially DesignatedNationals and Blocked Persons (SDN) list. For the most part, Chinese firms have shied away fromblatantly violating Western sanctions against Russia as they do not want to jeopardize their position.
They have also not been sending as many weapons as they could to support Russia’s war. One
participant suggested that the major winner of the West’s sanctions regime is China as sanctions
have pushed Russia and other countries from the Global South closer to China. India has strong ties
to the West and does not want to risk violating sanctions but it has not openly supported thesanctions. Russia-India trade was increasing in the lead-up to the war in Ukraine, but India has faced
challenges in paying Russia for its imports of oil and weapons as they do not want to violate
sanctions. As a result, it is expected that Russia will stop providing goods and this will slow down
any economic ties in the long run.
Participants also discussed what China is learning from the ongoing sanctions and what effect, if any,
they are having on Chinese policymakers’ plans on how to handle future geopolitical tensions. Many
participants agreed that the same sanctions used against Russia could not be used against China as
China is a much bigger player with more interconnectedness and synergies across the world. It wassuggested that China may view Western sanctions as not working, and that this may embolden(rather than deter) their future aggression. China is also learning effective countermeasures and how
to insulate its companies. However, this will be difficult in practice given Chinese companies’ general
exposure globally. Western sanctions on Russia have also had the unintended consequence oframping up the building of the renminbi financial market infrastructure and strengthening its ability
to compete with Western payment systems. However, the Chinese Cross-Border Interbank Payment
System (CIPS) is still very reliant on the SWIFT payments system.
Two years into these sanctions, the focus is now on the effective enforcement of existing sanctions
rather than adding new designations, the use of “smart” (i.e., targeted, sectoral) sanctions, andincreased use of “secondary sanctions” (i.e., sanctions that will restrict third parties from trading with
Russian entities, even if these third parties are not American citizens or based in the U.S.). However,extraterritorial sanctions are illegal under international law unless passed by the United Nations
Security Council. Therefore, their use may raise questions about the legitimacy of U.S. actions at the
global level.
New Financial Technologies, Including Digital Assets: China is the furthest along in developing androlling out a central bank digital currency (CBDC). But there are many questions surrounding new
digital assets, including whether they are for domestic use to promote financial inclusion or if they
can be used internationally as an alternative to the U.S. dollar. One participant suggested that
CBDCs are dismissed in Washington, D.C., as it is not clear what problem they are solving: central
bank liabilities, and settlement and clearing mechanisms, are already digitized. It was suggested that
the U.S. Federal Reserve would be the last mover, to learn the lessons from other countries’
experiences. While there is need to lower the cost and increase the speed of cross-bordertransactions, from an American perspective, it is not clear that CBDCs are the way to do so.

14Participants were optimistic that new financial technologies have the potential to improve payment
rails across the Global South and that they can help address the loss of correspondent banking
relationships. It is not clear, however, what these new technologies will be and how countries willhandle privacy concerns surrounding new digital technologies.
Session V: The Current State of Relations Between the Great Powers and the Global South,
and Potential Opportunities
Overall, participants noted that for great powers to be successful in courting countries in the Global
South, they need to use “carrots, not sticks.” A key theme was that countries in the Global South are
increasingly adopting the practical, pragmatic approach of looking for the best deal offered by great
powers (i.e., the strategy of interest-driven “active non-alignment”), rather than considering
ideological arguments for alignment. They emphasized that the U.S. has broadly lost credibility as apartner to the Global South, while China has gained prominence as a reliable trade and infrastructure
investment partner.
Participants also debated the usefulness and value of the concept and term “Global South.” Many
participants argued that the term has a long history as an economic and geopolitical concept, used
to describe a set of heterogeneous countries around the world that represent the global majority
and that are often left out of great power politics. It is meant to be a frame of analysis throughwhich the international community can consider the grievances of the majority. Practically, as a bloc,
the Global South has the potential to strengthen the collective bargaining and the agency of thesecountries to exercise their interest at the global level. One participant rejected the term, suggestingthat it is reductive, homogenizing vast parts of the world that have profound differences. Anotherparticipant suggested that it may be constructive to shift the conversation to a discussion of “northversus south” to better capture commonalities, rather than “west versus south” in global politics.
Alliances among Global South countries are expanding (e.g., the potential expansion of BRICS). The
building of stronger south-south coalitions could raise their areas of concern to prominence and add
weight to their negotiations with Western powers. For example, it was suggested that Argentina,
Bolivia and Chile in the “Lithium Triangle” could strengthen their negotiating power by coordinating
their policies toward the trade of lithium. There are also “new players” working to build partnerships
with countries in the Global South. For example, the UAE is the fourth largest investor in Africa andhas recently committed to investing in the DRC’s critical mineral sector. Participants suggested that,beyond strong Global South countries banding together, they should also consider developing issuebased coalitions to advance their interests on the global stage. Some participants countered that
this may work for issues like climate change where there are common interests, but it may not be aseffective for critical mineral mining where countries have conflicting interests. Moreover, there wasconcern that the Global South as a group is too diverse in terms of economies, population andnatural resources. For example, India and China are part of the Global South when they want to be,
but are also investors, trading partners and extractors with different power dynamics than smaller
countries. This is an important factor when considering sub-sets of countries coming together tocreate solutions. For example, it was suggested that it may not be in the interest of other countries
in the Global South (except China and India) to expand the BRICS as this may consolidate the power15

of China and India rather than benefit the whole range of Global South countries. There is also therisk that conflicting ideologies may be divisive within such a big group of diverse countries.
Participants also discussed the end of unipolar U.S. influence over the international system. Manyargued that, while the U.S. is still dominant militarily, this is no longer the most important dimension
to global influence. The U.S. has made critical errors in its approach to the Global South (e.g., during
the war on terror and currently in its imposition of unilateral, far-reaching sanctions) and these havediminished its credibility among Global South countries. An alliance with the U.S. is often seen as
being conditional and dependent on the adoption of an ideology of values (e.g., human rights,
democracy) even if this does not ‘fit’ the local context. Participants argued that, in many countries in
the Global South, Western values are less popular than ever before. There is increased doubt that
democracy brings prosperity and, for many countries in the Global South, “democracy” is a longterm abstract goal when many struggle with immediate and pressing concerns such as poverty andsecurity. They are also witnessing a “crisis of democracy” in the West, including the rise of populism
and the far right. In addition, the U.S. seems to have reversed course with regard to open trade, tothe detriment of many countries in the Global South, retreating from trade agreements andweakening international institutions like the World Trade Organization (WTO) by blocking theappellate process.
In contrast, participants noted that Global South countries increasingly see China as more open thanthe U.S. to economic partnership, including trade. China is the top exporter to many regions of the
Global South, including Africa and Latin America. China also invests heavily in the Global South, andthis has had tangible benefits for these regions. For example, in 2008-2009, despite the financial
crisis in North America, no Latin American bank collapsed as Chinese investment was very strong
during that period. These regions have also benefited from Chinese-funded infrastructuredevelopment that U.S. companies were often unwilling to fund. One participant noted that the issueof scale matters for U.S. investment and that U.S. investors are not interested in funding smaller
infrastructure development projects. It was raised that countries in the Global South often feelcaught in the middle of U.S.-China tensions on issues such as infrastructure. For example, major
infrastructure projects led by Chinese companies that could have benefited local communities in
Latin America were cancelled (e.g., fiberoptic cables, bridges) as the U.S. disapproved. Someparticipants suggested that, while Chinese investment often has downsides, it is better than no
investment, particularly in the area of infrastructure development.
In the Global South, the pragmatic, business-oriented “active non-alignment” strategy has risen toprominence as a solution to overcoming the great power struggle and being forced to choose
between Washington and Beijing. “Active non-alignment” is predicated on the idea that Global
South countries should work with all powers to try and get the best deal out of all of them. There isevidence that non-alignment works. ASEAN (encompassing 10 countries and 650 million people) has
managed to position itself effectively on the diplomatic stage, in a way that Latin America and Africa
have not. A signature feature of ASEAN foreign policy is non-alignment and strategically managing
its relationship with both China and the U.S.
Participants suggested that the way forward for great powers in the Global South is to use “carrots,”
like infrastructure development and open trade. This would help the West compete more effectively

16

in the Global South against China, compared to its current policy of “sticks” (e.g., threat of sanctions).
To address its current reputation as an “unreliable” partner, the U.S. has to deliver on projects
promised and use the private sector as “ambassadors” of the U.S. Finally, participants encouraged
the U.S. to rethink its preaching to Global South countries about “values.”
Technical Presentations
The 2024 symposium included three technical presentations to provide participants with a deep diveinto the following key topics relevant to the theme.
BRI: From an Economic to a Political Rationale: Since its launch in 2013, China’s BRI has helped
deepen China’s relationships with countries in the Global South. The number of countries in the BRI
ballooned from 14 in 2014 to 152 in 2023, but Western countries have shied away from it. Notably,
Italy exited the BRI in 2023. In 2013, the aims of the BRI were economic, and included: 1) foster tradewith a range of countries to reduce dependence on the West; 2) reduce China’s growing excess
capacity through exports; 3) invest in manufacturing sites to benefit from specific locations; 4) create
institutions to support the BRI (e.g., Asian Infrastructure Investment Bank); and 5) develop common,
China-controlled standards in digital connectivity.
China’s economic goals from the BRI have evolved since the program’s launch. As the U.S. moved
from engagement with China to competition, China’s BRI projects became more geopolitical andsecurity oriented. China adopted the position of “champion of the Global South” and stopped
targeting Western countries. While overall lending and investment in BRI countries have decreased
in recent years due to China’s weaker economic situation, China has continued investing in strategic
projects (e.g., dual-use infrastructure like ports). China has also expanded the international use of
the renminbi and its new CIPS payment infrastructure to reduce exposure to Western sanctions.
Energy is a key sector in BRI projects. In the early days of the BRI, China focused on fossil fuels in
Russia and the Middle East but, over time, China saw economic and political benefits in building ties
with a wider range of natural-gas and crude-oil providers (e.g., Angola, Brazil). More recently, China
has increased focus on “Green” energy, with the value of overseas Chinese construction contracts foralternative energy projects (e.g., solar and wind farms) doubling in 2017 and increasing ever since.
Today, the nature of Chinese engagement of the Global South via the BRI has changed. There is a
shift from hard infrastructure development to technology, communications and pharmaceuticals.
China envisions building an “Information Silk Road” that includes the construction of cross-border
optical cables, transcontinental submarine cables and improved satellite communications. In 2023,
China invested over US $14.3 bn in BRI countries on batteries, car parts, EV manufacturing andtelecommunications. China’s new “big three” (EV, solar and battery) objectives indicate more focus
on critical minerals mining and technology-related investments going forward. One participant
noted that Chinese subsidies to BRI industries prevent Global South countries, for example in Africa,
from “moving up the value chain,” including in critical minerals mining.
Overall, China is enhancing its global power through the BRI, and China’s BRI-related investments incrucial sectors like energy and technology may, in the long-term, help China outcompete the U.S.

17

and other rivals in these sectors. The BRI is also helping China intensify BRI countries’ economic
dependencies and enhance its overseas military capabilities through dual-use infrastructure.
Participants debated the risks and benefits of Chinese investments in the Global South, andsuggested that their effects may largely depend on the capacity and governance of the governmentsin the Global South in their interaction with Chinese investors.
2024 U.S. Presidential Elections: In November 2024, U.S. voters will decide on the country’s nextpresident, all seats in the House of Representatives and one third of the seats in the Senate.
Everything is very closely divided. In the past two elections, Donald Trump’s percentage of the
popular vote stagnated at 46% even though he dominates the news. This indicates that, despite hisfame, he has not been effective in attracting new voters. However, several states are contentious andthere are varied paths to victory for each party. Furthermore, the 2016 presidential election
illustrated that a front-runner candidate can lose the elections by not targeting the right base.
In the Senate, the six closest races are in Arizona, Michigan, Montana, Ohio, Pennsylvania and West
Virginia. The Democrats have a structural problem this year, as these six most competitive seats in
the Senate are currently held by Democrats. In the lead-up to the election, the Democrats have 51
seats in the Senate, so are at risk of losing their majority. In the House, Republicans are defending aslim majority, and they are also “bleeding members” (e.g., recent expulsion of Representative Santos
and redistricting following the latest census). Four Republican seats could now go to the Democrats
due to redistricting. Of the 435 seats in the House, only 22 seats are considered competitive, as thewinners of the remaining seats can be predicted based on historical patterns.
For the presidential race, the three most important states in the electoral college are Michigan,
Pennsylvania and Wisconsin. For a presidential candidate to win the election, they must take two or
three of these states. Trump “overperformed” in these states in 2016, even though structurally thesestates were more Democratic than Republican, by positioning himself as the “fighter for theforgotten middle class” (e.g., on issues like restricting trade, building a wall to restrict immigration).
In 2020, Biden was successful in speaking to the middle class with his tactical messaging of “build
back better.” The task for Biden’s re-election campaign in 2024 is to look at how to target the voters
who voted for Trump in 2016, but usually voted Democrat, and think about how to keep this“forgotten middle class” engaged. Nevada will also be a key state in the upcoming election. The
first path to victory for the Democrats includes winning Michigan, Nevada, Pennsylvania andWisconsin. From an analytical perspective, Republicans will face greater challenges flipping thesestates that voted Democrat back in 2020.
Important issues to consider include Trump facing a potential felony conviction, which may
negatively impact his popular support, particularly among independent voters. Further, the Trump
campaign may run out of money due to his legal bills. There is also concern that both candidates areold, but neither party is likely to replace their candidate as it would be hard to predict how voterswould respond to them. In terms of issues, important wedge issues to watch in the upcoming
election are abortion and immigration. Voter turnout may be another determining factor. Biden
obtained 12 million more votes in 2020 than Hillary Clinton did in 2016; however, the binary choice
may dissuade voters who do not like either option. A third-party candidate could also be a key
factor in the elections. Robert F. Kennedy has positioned himself as the “fighter for the forgotten

18

middle class” and was polling at 20%. He would first, however, need to qualify for the ballot in eachstate as an independent, which is labor-intensive and not guaranteed.
Turkey’s Position in the Global Ecosystem and Economic Trends in Central Asia and theCaucasus: In the global ecosystem, Turkey is a “middle power country aspiring for a greater andmore autonomous role in global politics, with an imperial heritage which complicates its power.”
Turkey’s geostrategic position is unique, and simultaneously provides it immense opportunities andintractable challenges. It terms of geography, Turkey is strategically located at a crossroads and has
the potential to act as a conduit between Europe, Asia, Africa and the Middle East. As such, it has
been an important partner to the U.S. and EU both during and following the collapse of the Soviet
Union. Its physical location also offers it a natural supply chain advantage. At a political level, Turkey
has diverse relationships and group memberships. Turkey is a member of notable Western
institutions (like NATO and the Council of Europe), but also enjoys good relations with Russia andculturally identifies as a Muslim state so is a part of the broader coalition of Islamic countries. Turkey
is striving for EU membership, and Turkey-EU relations have developed in recent years on topics likemigration and engagement of Central Asia. Under President Erdogan, the country is embracing its“middle” status, adopting an opportunistic, pragmatic approach to managing global and regional
power dynamics.
The Turkish economy is US $1 trillion in size and brimming with potential. It has strong
manufacturing capabilities, is heavily diversified, and boasts highly developed industrial
infrastructure. The U.S. has become Turkey’s second top export destination. During and after the
COVID-19 pandemic, there was a window of opportunity for countries like Turkey to seize the trendof near-shoring and front-shoring, and attract investments previously concentrated in China. While
Turkey seized part of this business, it missed an even bigger part. For the EU, and Germany inparticular, Turkey has the potential to be a “supply chain bastion,” providing market access to theSouth Caucasus, and sustainable energy and connectivity in Central Asia. However, the Turkish
economy is currently facing challenges such as high inflation, a balance of payments deficit, concerns
about sanctions compliance and ineffective AML systems.
In the realm of great power politics, Turkey is striving to establish itself as a regional leader. Its
primary security concerns emanate from its own East and South. It follows a “neighbor policy”
whereby it has developed strong economic, political and security ties with its Caucasus neighbors
like Georgia and Azerbaijan. Azerbaijan has been the largest source of FDI into Turkey for the last
five years. Turkey and Russia are regional “strategic competitors” who selectively cooperate, andTurkey’s newfound influence over Russia’s “backyard” has further strained Turkey-Russia relations.
Turkey has also benefited from the war in Ukraine and Russia’s alienation by the Western financial
system as many multinationals that had been in Russia have since moved to Turkey.
Final Session: Summary Observations and Discussion of Practical Policy Recommendations
The discussions made clear that the world is at an inflection point. The pace of change in economics,
politics and technology has grown much faster in recent years, and the issues the world faces are
increasingly complex. To respond to these emerging complexities, the value of breaking down silos
and engaging perspectives from multiple areas of expertise is now greater than ever.

19

The rise of economic closeness and the trend of “securitization of everything” make countries
compete with one another, and may create many losers both among great powers and the Global
South. The world also is more fragmented and polarized than ever before. The wars in Ukraine andGaza, and humanitarian crises in places like Sudan and Haiti, underscore that there are many
countries suffering. Furthermore, there is a global rise in populism and autocracy, and this raises
questions about the future of international cooperation, including to tackle new challenges such as
AI, which is currently insufficiently governed. The U.S. domestic political context also isunpredictable, and this may dramatically impact U.S. foreign policy at a time when the U.S. is alreadyseen as an increasingly unreliable partner by the Global South and allies like the EU.
U.S. – Global South Cooperation: To restore its reputation as a “reliable partner,” the U.S. should try
to mitigate the unintended consequences of its policymaking (e.g., effects of sanctions, fracturing
supply chains). It must also do a better job of communicating its objectives (e.g., of its sanctions)and delivering on its promises (e.g., infrastructure projects). In addition, the U.S. should return to its
legacy of economic openness as political signals toward trade restrictions have the potential to harm
the Global South. Furthermore, there is a demand from the Global South to be heard. The U.S.
should respect that everyone has “values” even if these do not match those of the U.S.
U.S. – China Cooperation: The U.S. and Chinese economies are very co-dependent, and many
participants noted that it is unrealistic for the West to try to decouple its critical supply chains from
China (e.g., critical minerals, semiconductors). The question was raised of whether converging goals,
such as engagement in the Global South or combating climate change, could create common
ground and bring the U.S. and China together. The two countries must engage and effectively
communicate with one another as the rest of the world has too much to lose if they do not.
China – Global South Cooperation: To an extent, Chinese investment in the Global South hasdeveloped infrastructure, trade routes and access to markets. Local communities have benefited
from telecommunication networks and transport infrastructure. The BRI, however, has evolved to
become a mechanism through which China promotes its geopolitical “security” priorities. This raises
questions about to how beneficial Chinese investment really is to local communities. The BRI has
intensified the economic dependency of many countries in the Global South on China (as is madeevident by the worsening debt situation in many African countries). Many countries in the Global
South are prevented from “moving up the value chain” to more profitable positions as they areoutcompeted from the start by China. A participant noted that Chinese foreign direct investment(FDI) is the least job-creating in the world. It also is unclear whether China is transferring
technologies and know-how to local communities they enter, and there is the risk of exacerbatedcorruption in countries propped up by Chinese investment. The infrastructure projects China wasinterested in were beneficial to China, too, and could be used by China for military purposes in the
future.
Global Cooperation: From the perspective of the Global South, it is problematic to consider the world
an arena for competition among great powers, as this undermines the interests of the majority. The
future of the world order includes the Global South. The Global South comprises the majority of theworld’s population and markets that are growing quickly, and it controls increasingly critical mineral

20

resources. For policymaking to succeed, there must be greater representation of the people affectedby decision-making in decision-making fora. For example, as the world moves toward the ‘Green’
transition and climate change mitigation, this will come at a cost to many countries in the Global
South, and many are facing the most acute challenges. The international community must consider
how to actively involve Global South countries that will be affected by these challenges, and include
them in decision-making so that they do not suffer from the trade-offs. AI is another area where thisis increasingly important.
Great powers like the U.S. must gain a better understanding of the motivations and grievances of the
Global South. In many impoverished countries in the Global South, there is a conflict between shortterm goals (food, jobs, security) and what are viewed as lofty long-term ideological goals (striving for
democratic values). Great powers would do well to recognize this tension and focus on how to
improve quality of life in a tangible way (e.g., infrastructure and financial sector development,
opportunities for trade) and more importantly, in the way requested. It was noted that democracy
and promotion of human rights do not necessarily create wealth without access to markets, health,transport and public service infrastructure.
It is also imperative to build capable and resilient institutions within countries in the Global Souththat can effectively advance their people’s concerns and coordinate with partners. At the regional
and international levels, it is also important to develop effective institutions that can work to advancecommon goals.
While participants noted that the relationships that the U.S. has with both China and countries in the
Global South are fraught, they collectively agreed on the critical importance of thoughtful,
constructive dialogue and collaboration in this tense global context. In each of the areas noted
above, FSVC, as well as symposium participants, will strive to identify ways to advance these policy
recommendations and bring them to the attention of public officials and thought leaders.

21Annex II – List of Participants
Deana Arsenian, Vice President, International Program, and Program Director, Russia and Eurasia,
Carnegie Corporation of New YorkDavid Barboza, Co-Founder, The Wire Digital Inc., New York
Andy Baukol, Former Counselor, U.S. Department of the Treasury, Washington, D.C.
Chloe Cina, Partner, Morrison Foerster, London
Moez Dalloua, Regional Director, FSVC, Tunis
Aude Darnal, Research Analyst and Project Manager “Reimagining U.S. Grand Strategy,” Stimson
Center, Washington, D.C.
John L. Douglas, Senior Executive Vice President and Chief Legal, Risk and Compliance Officer, TIAA,
New York and Atlanta
Christian Echle, Head of Asia/Pacific Department, Konrad Adenauer Stiftung (KAS), Berlin
Alicia Garcia-Herrero, Chief Economist for Asia Pacific, Natixis; Senior Fellow, BRUEGEL; nonresident Senior Fellow at the East Asian Institute (EAI) of the National University of Singapore (NUS);
and Adjunct Professor at the Hong Kong University of Science and Technology (HKUST), Taipei
Robert Greene, VP of Patomak Global Partners (financial services consultancy) and Nonresident
Scholar at Carnegie Endowment for International Peace, Washington, D.C.
Qingyang Gu, Associate Professor, Lee Kuan Yew School of Public Policy, National University ofSingapore
Bruno-Julian Hamm-Puett, Research Fellow and Deputy Director, KAS Turkey
Ahmet Kasim Han, Faculty Member - Department of International Relations, İstanbul’s Altinbas
University; and Adjunct Professor – Strategy, Turkish National Defense University Atatürk Strategic
Research Institute
Harry Harding, University Professor Emeritus and Professor Emeritus of Public Policy and a Faculty
Senior Fellow, Miller Center of Public Affairs, University of Virginia; and Yushan Scholar and Chair
Professor, College of Social Science, National Chengchi University in Taipei, Taipei
Jorge Heine, Research Professor and Interim Director of the Frederick S. Pardee Center for the Studyof the Longer-Range Future, Boston University
Anne Kabagambe, Independent Director, Barrick Gold Corporation, Washington, D.C. and Kampala22

Emre Karter, Managing Director, Citi Country Officer, Turkey/ Head of Turkey, Transcaucasia &Central Asia, Citi, Istanbul
Chad Kilbourne, Managing Director, FSVC, New York
Sabine Lautenschläger, Board Member of DFSA, former member of Executive Board of European
Central Bank (ECB), Vice-Chair of the Single Supervisory Mechanism of the ECB (2014-19) and Deputy
Governor of Deutsche Bundesbank (2011-14), Germany
Wei Li, Professor of Economics, Associate Dean for Asia and Oceania, Director of Case Center andDirector of China Economy and Sustainable Development Center, Cheung Kong Graduate School ofBusiness (CKGSB), Beijing
Shirley Lin, Research Professor, Miller Center of Public Affairs, University of Virginia; Non-Resident
Senior Fellow, Foreign Policy program, Brookings; Adjunct Professor, Chinese University of HongKong; and Chair, Center for Asia-Pacific Resilience and Innovation (CAPRI), Taipei
Tanvi Madan, Senior Fellow - Center for Asia Policy Studies in the Foreign Policy Program, Brookings
Institution, Washington, D.C.
Angela Mancini, Partner for Asia Pacific, Control Risks, Singapore
William J. Mills, former Vice Chairman and CEO of North America at Citi, New York
Eric Olander, Co-Founder, China Global South Project, Ho Chi Minh City
Grygoriy Pustovit, Senior Specialist Advisor for Sanctions & Trade Controls, Deutsche Bank, Berlin
Sarang Shidore, Director, Global South Program, Quincy Institute, Washington, D.C.
J. Andrew Spindler, President & CEO, FSVC, New York23