Over the past eight years, the global economy has weathered one shock after another, from trade tensions and the pandemic to bloody wars in Ukraine and the Middle East. This has ushered in a new era of geopolitics and fragmentation, facilitating investment and trade flows in new ways.
Indeed, a notable outcome of how the global economy is being reorganized is that companies and countries are reallocating capital and building new relationships. We reveal how more than 100 countries around the world are taking advantage of this changing landscape.
Some argue that this new situation signals the end of globalization. But that’s probably too simple. In fact, globalization is rapidly changing its shape. The large economies that have emerged alongside pro-Western nations led by the United States and rivals led by China and Russia refuse to take sides and profit as a result.
Last year, Bloomberg profiled “Connectors.” It is made up of smaller countries like Mexico and Vietnam, and acts as a bridge between the two countries, leveraging trade ties with both rival blocs.
This year, we want you to meet a larger group of countries: the 101 economies we call the New Neutrals. These are countries that consistently stay out of geopolitical contests, at least judging by their stance on the United Nations vote, which many economists have begun to monitor as a measure of geopolitical alliance.
They are important in that, as a group, they account for more than half of the world’s population and almost one-fifth of its economic output. But the important point is that these new neutrals benefit economically from their hedging stance. In particular, there has been a significant increase in foreign investment in new factories and other projects, which represents a long-term bet by companies and investors.
There are certainly qualifications and questions. Thanks to China’s exports and Russia’s energy resources, the pro-China-Russian bloc’s share of the new neutral countries’ trade is increasing. The inward-looking United States is also attracting more foreign investment thanks to industrial subsidies and trade barriers.
