6 min readFeb 7, 2026 07:12 AM IST
First published on: Feb 7, 2026 at 06:45 AM IST
My mind is in a whirl. Not because I follow US President Donald Trump on social media. But because I have difficulty wrapping my head around the diverse and divergent signals emanating from the world around me. Davos 2026 has concluded. The theme of the forum was “a spirit of dialogue”. And yet, as 3,000 of the world’s academic, business and political elite reflected on this theme, the US aircraft carrier USS Abraham Lincoln was positioning itself to launch a missile attack against Iran, Russia and Ukraine were lobbing bombs against each other, Sudan was racked by genocidal civil conflict, India faced an increasingly fractious neighbourhood, and China held a live-fire missile test in the South China Sea around Taiwan. The forum will be remembered for the contrasting global visions outlined by Canadian PM Mark Carney and Trump. However, what will also be noted is that both were impelled by the reality of a fragmented world order and the primacy of national interest. Against such a backdrop and in an effort to clarify my thinking (and identify the forces, I believe, will influence our future), I share my interpretation of some of these signals.
Bilateral, multilateral, plurilateral, minilateral — these are four commonly used descriptors of the present world order. They presume concert amongst sovereign nations within a framework of accepted rules of engagement. This framework has now shattered. As such, “transactionalism” and “hierarchism” may be better descriptors. International relations will be transactional. It will be driven by national self-interest and not by ideology or principle. More pertinently, the level of interest in carrying out such transactions will be determined by a country’s position on the “power” pecking order based on national military, economic and technological capability. The strength of the gravitational pull of countries will be in direct correlation to their ranking. This is why the civil conflict in Sudan has attracted scant international attention, and Greenland received more attention in Davos than the global problems of climate change, poverty, pandemics and green energy — issues of planetary significance that transcend national borders.
I expect the Oxford Union to hold a debate sooner or later on a quote mistakenly attributed to Winston Churchill — “democracy is the worst form of government except for all the others”. The question is being increasingly asked whether there is much of a difference between the democracy practised by claimants of democratic governance and all the others. This is especially so because it’s increasingly becoming evident that electoral success comes predominantly to those whose campaign has been based on identity (“right-wing”) politics and populist (“left-wing”) economics. In this context, it is important to point out that the leaders of some of the most powerful nations in the world are now in their 70s or are even older — the US, Russia, China, India, Iran, and Turkey. There will likely be a change of leadership in these countries over the next decade. Who will succeed them and what the impact will be within and between nations requires reflection.
China and the US stride the globe like colossi. They compete and cooperate. They confront but also conciliate. No grand bargain is in the offing, nor a Thucydidean clash. The rest of the world wants access to their markets and technology, but does not want to be drawn into their strategic orbit and face the risks of dependency. This said, the elephant that never leaves the room is China. There is no international seminar or conference in which China is not the subject of discussion. There is a surfeit of China “experts” and reams are written on its strategic intent. But uncertainty overhangs all such commentary. The country remains “an enigma wrapped in mystery” for few have primary insight into its polity. This is why China is and will remain in the strategic crosshairs of all countries, including the US. It will be the benchmark of comparison and success. It will be the competitor to beat.
AI captures well this strategic rivalry. I recently read an excellent article by the former US national security advisor, Jake Sullivan, in Foreign Affairs , ‘Geopolitics in the age of Artificial Intelligence’. He asked, “Is China truly racing for the (AI) frontier or is it putting its resources elsewhere on the assumption it can imitate and commodify later?” In other words, is China on the same race track as the US? He suggested that the US develop scenarios of alternative futures in China and test the robustness of its strategies against each such future. His article is about AI, but I took from it a deeper message. The “cold war” between these two hegemons will be the defining influence of international geopolitics and geo-economics, now and in the future.
An increasing number of commentators on finance hold the view that technology stocks are overvalued, that they are burning cash with little prospect of generating a sensible return. I recollect the dot-com bubble of 1995-2000. Similar warnings were issued, but the herd instinct was too strong. I also remember the financial crash of 2008. Here, too, red flags were raised, but they were ignored. I am no expert, but I do worry when fundamentals are overlooked. And vested interests occupy the chairs of judge and jury.
Finally, energy. Here, unlike technology, fundamentals are driving the market. Structurally, oil supply exceeds demand, and so despite the collapse of the Venezuelan petroleum industry, the sanctions on Russian oil exports, the threat of bomb strikes in Iran and mudslinging between Saudi Arabia and the UAE, the price of oil has held relatively steady. The consequence is the narrowing of the competitive corridor between fossils and renewables. This corridor may narrow further if predictions about supply constraints of intermediates required for green energy prove accurate. S&P Global Energy projects a 10-million-ton shortfall of copper — the “metal of electrification” by 2040. The pace of the green transition remains indeterminate.
The writer is chairman and distinguished fellow of CSEP Research Foundation
I recollect the dot-com bubble of 1995-2000. Similar warnings were issued, but the herd instinct was too strong. (Illustration: C R Sasikumar) 
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