Ian Bremmer: We are in a Geopolitical Recession

“Geopolitical recession” doesn’t exist as a defined term. But it should, according to Ian Bremmer. If relations among global powers were framed in economic terms, we would be in the “bust” phase of the business cycle, he said.

Bremmer is the president and founder of the Eurasia Group, a leading global political risk research and consulting firm. He was the keynote speaker at VettaFi’s Exchange ETF conference on February 6.

Geopolitical cycles are longer and harder to recognize than economic ones, Bremmer said. But the evidence of the deterioration in global relations is the Russian invasion of Ukraine, worsening U.S.-China relationships, the failure to address climate change, and increasing tensions in the Middle East, particularly with respect to Iran.

The institutions and architecture set up to deal with those issues – like the IMF, UN, and World Bank – are no longer able to respond because of the shifting balance of power. For example, Russia’s veto power in the UN Security Council – which it was given because it was victorious in World War II – prevents action in several areas, most obviously Ukraine.

Japan, which was defeated in World War II, has no such veto power.

“To recover, old institutions must adapt, or new ones must emerge,” Bremmer said. “In the interim, we will see more geopolitical conflict.”

Bremmer discussed three themes running through global relations – two of them negative and one positive.