Why the world's 'middle powers' need to work on a common economic agenda

It was perhaps inevitable the suite of incredibly effective vaccines developed by the world’s richest nations would be used in those countries first. Left waiting, the ‘middle powers’ must reflect what can be done to enhance their own citizens’ health and economic fortunes in the age of the pandemic and beyond.

The World Economic Forum’s Global Risks Report, in partnership with Marsh McLennan, spells out what happens when middle powers leave themselves vulnerable – either through a sense of perceived dependence on the world’s richest countries, or historic reliance on aid, or to multilateral bodies led by the superpowers.

COVID-19 has not only claimed millions of lives, but it has widened long-standing health, economic and digital disparities between the developing and developed world. These are not only difficult for the citizen, but challenging for the global economy.

Shared practices

They represent a risk to global stability and socio-economic growth. The middle powers must work together to create platforms for cooperation, shared best practice, innovation and investment that provide their economies with greater resilience.

Lessons can be learned from the success of the superpowers; the vaccine rollout success illustrates what can be achieved when humanity comes together. Shared human, social and economic goals are transformative, with the potential to mitigate risk and create fairer societies.

Multilateral bodies in the developed world – the European Union for example – work best when they share values and economic objectives. Easing trade between nations by breaking down structural barriers is one important route towards these ideals of economic and geopolitical stability. The GCC is a case in point.

Better outcomes

Trade collaboration, not least in the GCC, delivers enhanced regional stability. This is a critically important dynamic for economic growth and job creation – factors that contribute to inward investment and economic maturation. When countries achieve economic stability, they attract capital and talent – the obvious precursors to growth.

Trade finance between middle powers is also part of that journey, funneling capital towards SMEs and export capabilities across developing markets. Examples include the Arab-Africa Trade Bridges Program, which works to unleash the potential for sustainable intra-and-extra-African export markets.

Such programmes bolster trade between middle powers and in doing so support SMEs, entrepreneurs and businesses seeking investment opportunities in those locations. These outcomes serve to enhance stability through the enrichment of value chains and the sustainability of supply chains across industries.

Middle power morass

Despite the clear opportunities for economic growth, there are concerns amongst middle powers that COVID-19 will dampen nationally focused agendas to stem economic losses, technological transformation, and changes in societal structure.

However, while these issues warrant concern, there is greater strength through unity – the middle powers (which include advanced and emerging economies) represent a greater share of the global economy than the US and China combined.

Policymakers must resist temptations to look inwards. Even in the face of issues - like vaccine nationalism - middle powers must champion multilateral cooperation in trade, diplomacy, climate, security, and global health. When they work together and speak with one clear voice, the middle powers succeed - as have the superpowers.

Multilateral strength

That singular voice can also apply to areas where there is no voice. Where transnational challenges lack successful global governance structures, such as regulation of cyberspace and digital information flows, there is no good reason why middle powers should not lead inclusive partnerships to earn back trust where it has declined.

Ad hoc and informal arrangements around shared goals – such as COVID-19 vaccines, digital and cybersecurity partnerships, and climate change mitigation and adaptation – can contribute to resilience between states. Such arrangements are already emerging. For example, France and Germany’s Alliance for Multilateralism addresses issues such as disinformation, misinformation, and gender equality.

Such moves represent a commitment to stability that provides businesses with the confidence to innovate and invest. Middle powers must welcome private sector players as part of this journey towards stability and growth by creating a new dynamic of state and non-state actors.

Public-private partnerships and interventions from government financial institutions can also add to national and multilateral strength as businesses seek opportunities across borders.

We must never forget that larger countries have put in motion significant resources to ensure vaccine rollout in the developing world. Canada, Germany, Italy, Sweden, and the UK have pledged nearly $1 billion to a financing mechanism that will support 92 low-and middle-income countries to access a vaccine.

Enormous opportunities lie ahead for the middle powers to step up, step in and create new solutions and a new approach to building better opportunities and outcomes for all of the world’s nations – so that they are not left behind when the next global crisis hits.