-OpEd-

PARIS — Here we are amid a global rise in military conflicts and political tensions — wars in the Middle East, Ukraine, the exclusion of Russia from the G8, conflicts in the South China Sea, Argentina's debt default, among others. A century after the start of World War I, the planet seems to have succumbed to geopolitical dysfunction, with the new emerging powers front and center.

For the following three reasons, the major risks then are also geopolitical, and more specifically economic.

First, the emerging countries, however motley, do subscribe to a common vision of the world. They belive Western countries have dominated the world economy for too long, all the while imposing their vision on the rest of the globe.

The humiliation of China after the Opium Wars, European colonization, and finally American domination symbolized by the monetary supremacy of the dollar have all left their marks. The BRICS countries are united in questioning a global order that dates back to 1945. China and Brazil are aggregating new powers (South Africa, Nigeria, Indonesia, Mexico, Vietnam) as they continue to contest Western supremacy. At the next UN Climate Change Conference, to be held in Paris next year, rich countries that want to decrease greenhouse gas emissions will face a China determined to defend its right to develop freely.

Second, the formidable growth of the BRICS countries over the past decade — and particularly China emerging as the world’s second-largest economy — has turned the old economic order on its head. The reservoirs of growth and liquidity are now in the emerging countries. With the exception of the United States — which has advantages such as a growing population, the dollar as global currency, and an unmatched entrepreneurial climate (witness Google, Amazon, Facebook and Apple) — the Western world is experiencing relative decline in its economic, demographic and geopolitical situation.

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Mercosur and BRICS presidents in 2014 — Photo: Casa Rosada

While China's Central Bank has $2,500 billion in liquidity ready to be invested in the world, Western countries are saddled with explosive sovereign debt that severely hinders their growth prospects.

Finally, the accumulation of geopolitical risks essentially mark — in the absence of a real Cold War — at least a cool war. This cool war reveals, on one hand, fundamental fractures inside the countries themselves, such as the South China Sea conflict between China and Vietnam, or the religious wars between Sunnis and Shias in the Middle East.

On the other hand, it is playing out against a backdrop of globalization, which means that the BRICS countries are confronting Western nations on economic and financial ground. The creation of the BRICS New Development Bank, designed to compete with the International Monetary Fund and the World Bank, demonstrates this.

Since 2008's global financial crisis, the world has been experiencing profound change. The reality is that it's no longer enough to try and "plug the gaps." A new world in which the ascension of emerging powers is accorded the greatest importance must be created.

Perhaps a new global governance body, responsible for world public property such as water and climate, should be organized. At the outset, this organization could include members of the G20 along with associated countries. It could be subject to a basic agreement with new emerging powers on global issues such as the World Trade Organization, currency and climate.

More than ever, the West must be inventive to build world leadership with the emerging nations and thus avoid a "cool war" between North and South.

*Daziano Laurence, senior lecturer in economics at Sciences Po, is a member of the scientific board of the Foundation for Political Innovation.