Geo-Economics and Politics

By 2030, what will regional governance look like?

Children walk into the Pacific Ocean in Santa Monica, California October 4, 2014.

Image: REUTERS/Lucy Nicholson

Yasar Jarrar
Professor of Business and Global Society, Hult International Business School
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Regional Organisations

Throughout history, regional governance was based on nation states working together for their mutual security and prosperity. But the world is changing fast. Dr Yasar Jarrar, Visiting Fellow, Mastercard Center for Inclusive Growth, United Arab Emirates, and senior partner, THC (Dubai) and a member of the Global Future Council on Regional Governance, says we're likely to see a "pop-up culture" of regional governance emerge as cities and ideologically linked groups take centre-stage.

Why is regional governance such an important topic?

The world’s established institutions of international governance – such as the United Nations, the World Bank, and the World Trade Organization – are not working well. And even though everyone agrees that they need reform, the system seems to have hardwired itself into cement.

Meanwhile, the rapid social changes being brought about by the Fourth Industrial Revolution are creating pressures that need to be managed by some form of international cooperation. Regional governance looks like our best bet; it has the potential to be more agile, innovative, and responsive. But what form will it take, and how can we make it work for the best? That’s far from clear, so we need a place to discuss possible scenarios and the issues that arise.

What emerging trends are currently shaping regional governance?

Historically, regional governance has tended to be based on nation states in geographical proximity cooperating for their mutual security, archetypal examples being the European Union, Gulf Cooperation Council and ASEAN.

That’s changing in many ways. Trans-national cooperation is being driven more by trade than defence. In the age of digital connectedness, and with physical travel becoming more effective and efficient, geographical proximity is becoming less important than shared interests or ideology. In parallel, the “unit” of connectedness at a regional level is changing. Nation states are becoming less important: sub-national entities such as cities and states are taking centre stage, as our sense of identity seems to be becoming more tribalistic.

In the future, there will be more of an amorphous, pop-up nature to regional governance: initiatives will be set up to pursue particular purposes, and these will be easily disbanded. Technology is also making it possible to take a more bottom-up approach to regional governance. Instead of everything having to be led from the top of the pyramid, by meetings of heads of state, regional cooperation can emerge from people engaging in social and cultural exchange.

How do you anticipate regional governance might look by 2030?

Imagine, say, 16 local government entities from around the world – an American state, an Indian state, an Australian state, and so on – deciding that they’re going to come together to trade using Bitcoin, and setting up an agreement to make trade flow more smoothly between them. And it’s easy for others to join, or for any of them to leave if they decide they no longer want to play.

I think the idea of a “region” will have become more virtual by 2030, and the players will be “tribes” who perceive they have a common identity – that may be a belief in capitalism, or a shared religious outlook, or a commitment to cutting carbon, or any other forum of shared belief or interest. I can also foresee multinational corporations having an increased role, for example with virtual regions more closely reflecting supply chains.

Technology will increasingly make it possible for these virtual regions to meet, share and trade even if they’re not geographically proximate, and to govern themselves in a more bottom-up way.

Could such structures entirely supplant global and existing regional governance institutions?

We’ll always need global-level bodies to define the broader rules of the game – how do we try to avoid wars and breakdowns of the global financial system, and so on. Even if they’re fossilized, these institutions will still have a role to play.

To the extent that conflict remains a physical phenomenon, geographically-based mutual defence structures won’t go away, either. But as wars will increasingly be fought in cyberspace, virtual regional governance bodies will be able to adopt cyber defence functions. You could imagine the hypothetical alliance of Bitcoin-using local government entities, for example, collaborating to keep their online systems secure.

Will nation states be able to resist this vision of a future in which power slips away from them?

Many people will not see it as in their current interests for power to shift towards overlapping, ad hoc tribal alliances, but it will happen, whether we like it or not. It’s like Napster – you can choke the first instance of a new way of doing things, but you can’t stand against the tide forever.

I’m not promoting this vision of regional governance, by the way – I simply don’t believe there will be much anyone can do to stop it. The only question is how to make it work better.

And what should we be doing to maximise the benefits of adaptive regional governance?

The Council will have many issues to consider: what happens to universal human rights, for instance, in a world of virtual regional governance structures? Or suppose fascism makes a comeback, and multiple fascist entities come together in online regional cooperation, how should we respond?

I don’t know the answers to these questions. But I know what we shouldn’t do: we shouldn’t defend the current model of international cooperation until it becomes too late to shape the new one.

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