In recent years, a structural rupture has emerged in the cohesion of the West, pointing towards a new geoeconomic world order. This is blog post 5 on the systemic shift, and on how middle powers and the Global South in practice choose between system models based on “values-based realism”.
This rupture is shifting the foundations of the global order, which since the Second World War has been based on institutions and rules, and thereby on predictability. The United States acted both as a central actor and as guarantor, as this aligned with its own interests. However, Trump’s MAGA approach assesses the net benefits differently. As a result, the model is now unravelling as a consequence of a deliberate strategic realignment.
The result is an emerging multipolar structure without a shared normative architecture.
The contours of a new world order are outlined in six blog posts
This system shift towards a new geo-economic order is outlined across six blog posts:
- The system shift (from rules to power)
- The erosion of institutions (UN, IMF, etc.)
- The US from system architect to system actor
- The two competing system models: China and the EU
- Middle powers and “value-based realism” - this blog post
- Financial power and the risk of divergence
The preceding posts described the systemic shift, the institutional consequences, and the three system-defining economies. This post focuses on the actors that in practice shape the new order: middle powers and the Global South.
Systems are shaped by great powers, but success is determined by partner countries
The emerging multipolar structure is the result of the aggregation of many decentralised decisions by partner countries. This applies in particular to the Global South, as well as to middle power economies such as India, Indonesia, Canada, Australia, Vietnam, Saudi Arabia, Türkiye, Brazil, and a range of African growth economies.
The key point is that the process is bottom-up. Partner countries therefore make choices based increasingly on concrete and situational interests rather than aligning with predefined value systems.
They cannot dominate the system alone, but they shape it in practice through their choices of partnerships. These choices determine which system models gain traction.
Partner countries therefore seek positioning rather than alignment
During the Cold War and the subsequent unipolar period, many countries were relatively clearly aligned with one bloc, often out of necessity.
Today, the situation is different, as alternatives exist. Most countries therefore seek to avoid exclusive alignment in order to maintain flexibility. They build relationships across systems and adjust them sector by sector. As Mark Carney expressed in Davos, reflecting the concern among many middle powers:… if we’re not at the table, we’re on the menu”.
This means that security, trade, technology, and finance do not necessarily follow the same geopolitical trajectory. Countries may therefore be closely aligned with the United States in one domain, while engaging with China or the EU in another.
This fragmentation is a central driver of the new order.
“Values-based realism” is the governing logic, implying that …
In Davos, Alexander Stubb described this approach as “values-based realism”. The concept reflects that countries continue to operate with values and political preferences, but prioritise concrete economic and strategic interests in their decision-making.
It is not a rejection of values, but a reweighting. In practice, this means that partnerships are formed where they deliver tangible benefits, and that value differences are managed pragmatically. Long-term alignment is thus replaced by situational choices.
… geoeconomic considerations become decisive
In the absence of a stable institutional framework, geoeconomic considerations become decisive. For middle powers, this primarily concerns access to markets, security of supply, attraction of investment, and access to technology.
- China often offers scale, financing, and infrastructure.
- The EU offers regulatory stability and market access.
- The United States offers security, technology, and capital.
For partner countries, choices therefore become functional rather than ideological or value-based.
Alliances thereby become more modular
As a consequence, alliances change in nature, becoming more sector-specific, shorter in time horizon, and less anchored in shared values.
Cooperation is formed around concrete projects, value chains, or technologies rather than broad political communities. This increases flexibility, but reduces stability.
In this system, great powers compete not only directly, but indirectly through middle powers. It is their choices of trade agreements, investment partners, and technological standards that determine which systems gain wider adoption.
System competition thus becomes, to a large extent, a competition for alignment.
Global specialisation nevertheless imposes structural constraints
Middle powers do not operate freely. Their choices are constrained by existing trade patterns, geography, security dependencies, and financial linkages. As a result, positioning is often incremental rather than radical.
Overall, this points towards a more network-based global structure. Instead of a hierarchy dominated by a single actor, a system of overlapping relationships emerges, where the strength and nature of connections vary.
This is not a stable equilibrium, but a dynamic state in which relationships are continuously adjusted.
Overall, the new order implies a shift in corporate priorities
Middle powers are not merely adaptive actors in the new order; they actively define it. Their collective decisions determine which value chains emerge, which technologies diffuse, and which institutions are preserved or bypassed.
For companies, this implies that:
- market access will increasingly depend on local and regional relationships
- strategies must be adapted to multiple concurrent system logics
- flexibility and optionality become more important than optimisation
The future trajectory will therefore depend not only on the strategies of great powers, but equally on how middle powers choose to navigate between them. What may appear as ad hoc state visits are often attempts to build strategic redundancy across as many scenarios as possible. In this process, historical conflicts are temporarily set aside or downplayed.
To be continued and concluded in the next blog post on financial power and the risk of divergence.