In 2012, the global coordinated response to the financial crisis and the post-9/11 security agenda are no longer the key drivers of global politics. The US has announced the end of the war in Iraq and a timetable for withdrawal from Afghanistan. Osama bin Laden has been assassinated and Al Qaeda has been largely incapacitated on a global level.

The remaining global systemic risks from the financial crisis come from Europe. But the world appears unwilling and financially unable to collaborate in solving the Eurozone’s sovereign debt woes, instead opting for Europe to address the issue largely on its own. In short, the G20’s role at the forefront of global leadership in the aftermath of the financial crisis has dwindled, and there is a growing shortage of collaborative international governance.Without the key “macro detours” of the past decade, such as the ones mentioned above, this lack of global governance is the driving force of global politics, and it comes with severe consequences that will be explored during the Annual Meeting in Davos.

In 2012, the Global Agenda Council on Geopolitical Risk will focus on the interplay between two distinct trends that build off one another – the weakening of global institutions, whose effectiveness in addressing current and future global problems is being called into question, and the largely concurrent rise of regionalism that holds the potential to affect the global power balance (see the Council’s 2012 Report).

In the period immediately following the end of the Second World War, global institutions were created to provide international governance based on global membership and vote-based decisions. The UN, World Bank and IMF, among others, all fit the bill. Today, these organizations function more or less the same, but the challenges they face have changed dramatically; global institutions are unable to keep up with developments.

The dearth of truly effective global institutions is part of a larger geopolitical trend, one in which the global agenda is increasingly influenced as much on a regional level as on a global one. To provide some leadership that extends beyond the national stage, there is a growing reliance on regionalism to stopgap this shortage of effective global decision-making.

What should we expect from this rise of regionalism? Expect increased regional efforts to address many issues – from finance, trade and energy, to military security and religious tensions. Regional institutions and affiliations will take on larger roles. The real challenge is managing the rise of regionalism in a way that it enhances, and does not impede, the pursuit of solutions to systemic and far-reaching global problems.

Will these trends result in a global power vacuum? Will regions cobble together a patchwork crisis response mechanism? What does the rise of regionalism mean for globalization and democracy?

Let the debate begin.

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