Mike O’Sullivan is a smart guy. Originally an economics academic at Oxford and Princeton, he has most recently been the Chief Investment Officer at Credit Suisse.
He’s also the author of a great book, published in 2018, called ‘The Levelling’.
This book takes a comprehensive look at how economic, historical, financial and geopolitical factors are currently shifting and reshaping the globalised bi-polar world that emerged post-WW2 and ran up to the end of the Cold War in the late 80s/early 90s.
In place of this geopolitical bi-polarity, O’Sullivan suggests, the post-globalisation world will increasingly be built around coordinated ‘blocs’, established according to shared worldviews, economic operating systems and, crucially, moral values.
Specifically, he writes:
“Geopolitics will be dominated by three significant players: China-centric Asia, the Americas, and Europe. India may constitute a fourth pole, but its time has not yet arrived”
The potential for these ‘blocs’ to become success players in the international system can be assessed (at a fundamental level at least) according to two key criteria:
coherent mass
coherent method (i.e. a ‘way of doing things’)
In a recent assessment of how these blocs are developing according to the above criteria, O’Sullivan observes:
1) Coherent Mass
Economically: Europe, US and China already have a critical mass economically and financially (e.g. single markets, currencies)
Diplomatically: Europe is becoming increasingly coordinated post-Brexit; China has a clear international strategy in play, while the US is an established player
Industrially: the recently evolved Bidenomics (US), Strategic Autonomy (EU) and more established state-driven entrepreneurship in the case of China, confirms clear industrial strategies in the main blocs
Militarily: all three are nuclear powers with sizeable armies
2) Coherent Method
Europe - a liberal social democracy with increasingly coordinated policies
China - well established social contract between the Chinese people and the communist party (i.e. ‘Chinese Dream’)
US - well established market-led democracy (not without fragility of late)
So far, so good.
Where is the UK?
Astute readers, however, will have noticed the UK is not featured within O’Sullivan’s four dominant blocs.
In an interview with The Economist in 2019, O’Sullivan explains:
“Mid-sized countries like Russia, Britain, Australia and Japan will struggle to find their place in the world, while new coalitions will emerge, such as a ‘Hanseatic League 2.0’ of small, advanced states like those of Scandinavia and the Baltics"
It can easily be argued that the realities of this statement are particularly notable.
For example, in a Post-Brexit (and post-COVID) context the UK has seen significant structural challenges, such as its ability to integrate itself back into a global, but fractured, system; strained relations with the US and China (even if European relations have thawed since Johnson’s premiership); and an economy struggling to reset and find its feet.
Equally, we have seen an uptick in newly created ‘mini-blocs’ (‘building blocs’?) such as the ‘Med Group’, the ‘Three Seas Initiative’ and more recently the freshly created ‘Celtic Forum’
Bringing this blog post back to the Isle of Man, at Reayrtys we argue that for Mann to continue to grow and remain prosperous we need to be acutely aware of the re-shaping of global order and the threats, but also opportunities, it creates.
Not only that but we need to ensure we are taking proactive and strategically planned steps to ensure we are maximising all the available opportunities for our island, it’s economy and society; while defusing any emerging risks or threats on the horizon.
Taking O’Sullivan’s analysis at face value we would argue that the Isle of Man’s current unidimensional international relations approach, relying primarily on Westminster and established connections (and increasingly leveraging Whitehall staffers to plug gaps on Prospect Hill) is highly risky given the direction the world is heading.
Similarly, the Isle of Man finds itself within a geographical space with closely aligned neighbours (historically, culturally, linguistically and economically) who are forging ahead as part of the new Celtic Forum mini-bloc - something Chief Minister Alf Cannan has seemingly rejected joining.
Not only that, but our nearest neighbours include one EU member state, and at least two UK devolved administrations with policy agendas more closely aligned with the European Union than the UK, putting them much more with in the gravitational pull of one of the emergent global blocs O’Sullivan writes about.
Looking further afield, but staying within the constitutionally similar Channel Islands, we see here too Jersey and Guernsey are years ahead of the Isle of Man.
As we wrote about earlier this year the Channel Islands are building a network of international engagement offices within their nearest neighbour, France, and they’re seeking greater entrustment from the UK Government to act more autonomously and establish more bilateral relationships with strategically important countries looking forward.
Things must change.
The Isle of Man urgently needs to rethink its position on the global stage. We need to stop thinking diminutively, that is: stop thinking that we are ‘a small island with a correspondingly small influence’ (as one senior civil servant put it to Tynwald’s CLAJ Committee earlier this year).
Instead we need to identify and accept the fragmenting and reshaping global system and decide where we want to fit in - and then go all out to make that a reality.
And we’re not alone. As the global scramble for economically advantageous positions gets underway, we have friendly connections all around us in the Irish Sea, and also further south in the English Channel, working to achieve similar aims.
The new international system may not be globalised, but it remains global and heavily interconnected. And it is increasingly multipolar.
To thrive in this environment the Isle of Man need a multidimensional approach to international relations focused on:
Clear, strong international ambition at all levels
Focused clarity of our own autonomy and the potential for strategic action this brings
Mapping and coordination of strategic alliances, deployed effectively and at scale.
We won’t get to this overnight.
But as the Chinese proverb goes: the best time to plant a tree was 20 years ago. The second best time is now.
At Reayrtys we have already been making connections, undertaking research and analysis and developing recommendations across these areas.
Meanwhile, new initiatives are being launched which we believe the Isle of Man should be joining.
Instead, we sit and either wait (our international relations strategy is now six months overdue) or seemingly reject new opportunities (it’s almost laughable that Cornwall County Council chose to attend and engage with an international political and economic forum while the Isle of Man Government chose not to).
The Isle of Man needs to act now, if it is not to start falling further behind.
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