New world order: a great opportunity for the South

The pace at which the international context is changing keeps us in a constant state of anxiety and uncertainty. The US trade war, the expansion of the BRICS, the climate crisis, the rise of leaders with authoritarian aspirations, the race for technological dominance, the loss of relevance and autonomy of the EU, geopolitical tensions, cuts in humanitarian aid, inflation, and more, have accelerated the trends of deglobalization and protectionism. Is this perhaps because Western and US dominance over the world order is changing?

These events do not reflect isolated crises, but a real structural change in the global economic order. The question is no longer whether the West is losing its hegemony, but what the new balance of power will look like. Here are some keys to understanding this:

Money and the power of the dollar:

The US dollar is the world’s most important currency. Most international trade and central bank reserves are denominated in this currency. Its value is not backed by gold or any other physical asset, but depends on global confidence in the US economy. That is why it is called fiat currency, which comes from the Latin “let it be done” or “let it be done by decree,” meaning that it can be printed out of thin air. This dominance allows the US to have cheap debt and block companies, individuals, or entire countries from the global financial system, suffocating their economies without the need for military intervention.

However, such power exists not without its problems. According to economist Yanis Varoufakis, the US faces a paradox: it has a strong dollar, which allows it to remain the world’s reserve currency, but as a result, its products are more expensive and less competitive in the global market. To counteract this paradox, President Trump has implemented protectionist measures, such as raising tariffs and forcing negotiations for other countries to increase the value of their currencies to balance trade. However, these strategies and inflation are weakening confidence in the dollar and accelerating the search for alternatives. For example, China and Russia have become the largest buyers of gold to back their reserves and currency, and initiatives such as the Digital Euro and Bitcoin seek to offer alternatives to the dollar’s dominance in the global financial system.

Added to this is the fact that organizations such as the International Monetary Fund and the World Bank have imposed policies that often favor the financial markets of the major powers rather than supporting the development of indebted countries. Thus, debt becomes a mechanism of economic domination rather than a tool for development for countries in the Global South. In the case of Colombia, for example, public debt already accounts for 64.9% of its GDP, and the interest paid annually on its external debt alone could finance half of the country’s education budget. This would worsen if the dollar rises due to tariffs, as the debt would also rise, implying fewer resources for social investment.

Dilemmas for the economic and environmental future

Global power is not only played out in politics or control of money, but also in control over natural resources and autonomy in managing them. Economist Dani Rodrik poses two “trilemmas” about the future of globalization-sovereignty and economic-environmental issues that are very useful for analyzing current dynamics.

On the one hand, the economist argues that no country can have sovereignty, democracy, and economic integration at the same time; it must prioritize two of these options and give up the third. The alternatives are: giving up democracy, as in the Chinese model, which can generate rapid growth and influence in trade, but at the cost of sacrificing fundamental freedoms and human rights; second, a model that privileges sovereignty and protectionism without losing democracy, which could strengthen local industry but isolate the country from the world, which can be a recipe for crisis, as Argentina demonstrated between 2001 and 2015; and, finally, the last option would be to cede part of sovereignty, as in the European model, where free access to markets and technology is allowed, and democratic policies exist, but which can generate dependence in strategic sectors and thus lose autonomy.

This trilemma, which once seemed only theoretical, now defines the changing world. More and more countries are seeking to maintain their sovereignty without losing economic integration, but this has led to the rise of authoritarian regimes. For countries in the Global South, the best strategy may be to take advantage of the rivalry between the US and China to renegotiate better trade agreements. In order not to have to give up democracy or sovereignty, we would have to be more selective with our integration. South Korea and Taiwan have been successful in this regard, managing to industrialize with selective protection strategies but with technology transfer, thereby reducing their dependence on imports. Colombia should apply measures in sectors with comparative advantages such as cocoa, the main ingredient in Swiss chocolate, which we reimport at a higher price, or in the textile industry, which is affected by massive imports of poor-quality Chinese clothing.

On the other hand, Rodrik also proposed a new trilemma related to the economic and environmental future: it is not possible to simultaneously combat climate change, strengthen the middle class in developed countries, and reduce global poverty. One of these objectives will always have to be sacrificed.

The first scenario suggests that the middle class in the North, by maintaining high levels of consumption (particularly of goods produced in developing countries), sustains the demand that drives global growth, which contributes to poverty reduction. However, this same pattern of consumption drives resource-intensive and polluting production practices, which exacerbates environmental damage, especially in countries in the South where working conditions also remain precarious.

In the second scenario, if the fight against poverty and climate change is chosen, the middle class in the North would be called upon to reduce its level of consumption, especially of imported goods, pay more for ethically produced products, and accept more redistributive fiscal policies to finance ecological transition and global justice. This would require huge transfers of resources from the North to the Global South, which would generate political resistance in rich countries, leading to more authoritarian and xenophobic leaders in the North.

The third scenario proposes a path that prioritizes environmental sustainability without changing the high consumption and comfort patterns of the most developed countries. In this scenario, the North gives the appearance of sustainability because it reduces its local emissions, but in reality it continues to benefit from an unequal global structure, externalizing ecological and labor costs to the South.

These countries have imposed strict environmental regulations, but without offering emerging economies access to affordable green technologies. At the same time, they refuse to open their markets to manufactured goods from the Global South, maintaining their competitive advantage by importing only cheap raw materials, which destroys local competition in developing countries where there are unfair free trade agreements. This leaves developing countries trapped in an extractive model, such as Colombia, with no viable alternatives for cleaner and fairer growth.

The tensions of these trilemmas reveal that the current world order is unsustainable, both ecologically and politically. The South, in turn, must stop imitating foreign models and build its own future, based on its identity, its knowledge, and a new institutional framework that prioritizes food, energy, and technological sovereignty. Here, South-South cooperation is key to strengthening our own innovation and reducing dependence on traditional powers. It remains to be seen what type of government will be most effective in managing our natural resources. Hopefully, it will not be plutocracy or techno-feudalism.

A new order from the South

The power of old development formulas lies in happiness as a commodity and consumption as a status symbol, motivating the world to work beyond the satisfaction of basic needs to position artificial identities. To move forward, we must break this narrative of the North and stop consuming its symbols. The paradigm is shifting: global demand is moving toward products with high cultural value, sustainability, and a positive impact on communities. The question is whether the North is willing to pay a higher price for this.

While this storm for control of the old order continues to intensify in the North, the Global South has a historic opportunity to redefine its role in the global economy with its natural and human wealth. If it manages to consolidate a sovereign development model based on sustainability, technological innovation, and regional cooperation, it could lead the construction of a new, more equitable multipolar economic order centered on nature and human rights, without the ambition to recognize a single leader and master of the world. The key question is not whether the old order will fall, but how much destruction it will try to cause before accepting its fate.