The Transitional World Order: Implications for Latin America and the Caribbean

Russia’s invasion of Ukraine—indirectly underwritten by the People’s Republic of China (PRC) and with the Western response hampered by the threat of nuclear war—highlights a world transitioning away from the institutional, economic, and ideological order that has prevailed since the end of World War II. The transition will have significant and grave implications, and its dynamics are likely to be uneven, with the U.S. and democratic, market-oriented states likely to be some of the most adversely affected.

“World order,” if “order” is an artificial and imprecise yet useful label to understand a block of time in the complex interaction between states and other actors as their relative power shifts, and in the context of competing ideas about political, economic, and other forms of organization that come to dominate in different parts of the globe at different moments. Although the “world order” is thus constantly in transition, it is possible to identify when an alternative fundamentally challenges the dominant cluster of states, ideas, and institutions. The transition currently underway from the “liberal world order,” which has substantially prevailed since World War II, is a product of the rise of China and its largely inadvertent empowerment of a disparate group of other challengers with interests in seeing the weakening of the legacy international system. That shift has far-reaching implications that liberal nations can navigate but cannot easily “stop.”

The currently ebbing liberal order had two defining moments: first, the Allied victory in World War II facilitated the establishment of the current array of global economic and political institutions, such as the United Nations, the International Monetary Fund (IMF), and the World Bank which created the framework for the contemporary world’s economic and informational interdependence. Second, the U.S. “victory” in the Cold War replaced the main competing political-economic construct with a temporary, if imperfect, consensus, accelerating the process of “globalization” that flowered as a product of the information technology revolution which occurred concurrently.

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