From Globalized Balkanization to Decentralized Globalization

January 09, 2023

About the author:

Brian Wong YueshunPh.D. candidate, Oxford University; Columnist, Hong Kong Economic Journal; TI Youth Observer



When the term “Balkanization” was first coined, it was deployed to describe the disintegration of territories formerly held by the Ottoman Empire into a number of smaller nations and states throughout the course of the 19th century.1 It has since morphed into a term that categorically describes the breakdown of large, multi-ethnonational states, into smaller nation-states or territories governed respectively by ethnically homogenous populations.2 A product of balkanization is increased entropy and fragmentation in the regional political order, paving the way for further destabilization and contestation between competing factions – jostling for not necessarily the right to lay claim to the throne of dominance, but the right to defend themselves against external interference. 



Globalized balkanization is the new norm. 

We live in an era where international relations are – in my view – best described with the phrase globalized balkanization. There are two terms to unpack here – the metaphor of balkanization, and the caveat and addendum of it being a global phenomenon. 


On the balkanization front, if we substitute the loosely defined “global order” for the large state, and the various “spheres of interaction” of like-minded countries, grouped in broad coalitions or loose pacts, as the smaller states, the parallels would become strikingly clear: the post-Cold War, neoliberal consensus is gradually giving way to regional blocs – blocs that converge partially with one another in some respects, diverge in others, and even clash over some.


Consider, for instance, an EU that is increasingly seeking to maintain internal unity by preserving some degree of strategic autonomy with regards to the United States – and with tactical engagement with China on issues of common interest. Recent visits by German Chancellor Olaf Scholz and President of the European Council Charles Michel to China have spoken to the importance of chartering a European future that can work constructively with China, set aside ideological divergences, and collaboratively engage one another in brokering and maintaining regional peace. This reflects a subtle yet significant departure from the trenchant, critical rhetoric adopted by perhaps the more transatlantic aligned members of the European community. 


As for “globalized” – and a crucial distinction that must be established between the here-and-now and the world 40 years ago, is that there exists a substantially greater proliferation of regional blocs that possess sufficiently robust gravitas to carve out spheres of operational and decisional autonomy for themselves. The EU and the U.S. are by no means wholly aligned actors – as evidenced by recent tensions over the latter’s handling of the war in Ukraine, whilst it would be imprudent to assume that Russia and China hold a non-existent “alliance” – the two possess a relationship of proximity, yet such proximity does not suffice in rendering them formal allies.3 Throw into the mix ASEAN, the Gulf states, the MERCOSUR, and the Indian Subcontinent, and it’s clear that we’ve ended up with a relatively multipolar order.


Obviously, certain poles – especially America – remain dominant above others. Yet that misses the wider point – that balkanized factions and super-coalitions of states are increasingly ubiquitous, and unlike forty years ago, non-alignment between “blocs” is not an option. Indeed, even in their renewed pitches for non-alignment, Indonesia and India have found themselves serving increasingly as poles in their own right towards which nearby powers have gravitated, especially in the wake of the ongoing war in Ukraine. The Gulf states, with their distinctive edge in energy production and green transition, have emerged as increasingly important players not just in the Middle East and North Africa, but on the global stage. This is in part demonstrated by the rapidly warming ties between China and Saudi Arabia, as the two countries seek to establish genuine energy multipolarity. 


The lines demarcating the borders between blocs are increasingly clear – whilst in the post-Cold War “Belle Époque version 2,” it was the Ricardian logic of comparative advantage and specialization that came to structure the alignment and dealignment of countries qua economies; such laws no longer bind as vigorously as we enter the third decade of the 21st century. Battle lines are precipitously drawn along politico-ideological lines – chiefly, lines of ostensible divergences over values, beliefs, and commitments, which reflect undergirding geopolitical considerations. Realism has won again, but has learned to masquerade itself using the constructivist form – through rhetorical gadgets such as “common principles of democracy and freedom,” “shared fate,” “universal values” or “national sovereignty.” The political machinations of the selected few wielding disproportionate power over the masses through media and governmental controls, have yet again prevailed. 


The manifested outcomes are clear. I have written elsewhere that financial balkanization is threatening to cause the splintering of the world into disparate tectonics and circulations of capital, debt and loans, investment, and even – eventually – trade of core goods and services.4 Cultural and people-to-people exchanges have been vastly dented by allegations of ostensible espionage and infiltration.5 Supply chains are being rewired in the name of “national security” and legitimized through daintily titled processes of “friend-shoring”6 and “near-shoring” (hint: distance does not equate costliness, but how could economists protest in the face of political pressures?).7 The pandemic is thus both an epitome and culmination of the partially latent, partially manifest forces pressing for selective decoupling and recoupling by political leaders – driven in turn by a mixture of domestic populism and ideological fixations. 


This is not to say that globalization is dead. Globalization remains alive – though perhaps not kicking and not particularly well; those championing it must nevertheless reckon with the fact that considerations pertaining to national security, geopolitical interests, and identity politics have come to increasingly dominate discussions pertaining to supply chains and macroeconomics. Yet we must not be bushy-eyed about the many predicaments that balkanization presents – to be explored shortly. 



Deconstructing the causes of globalized balkanization

How did we get here? 


A brief detour is needed. Trade, as a share of global GDP, peaked in 2008 at the beginning of the Global Financial Crisis.8 Yet this oft-cited “proof” for de-globalization fails to take into consideration the fact that globalization could also play out via labor outflows and inflows, as well as investments and injections – via capital markets – into corporations, funds, and start-ups. So perhaps the answer should be rephrased: trade has become less global since 2008. After all, the trade openness index suggested that trade openness peaked in 2008, at 60.1, and has gradually slumped to a 57.2 since then.9


What this factual nugget indicates is a more fundamental truth – that the economic dividends of unfettered globalization, the kind of continuous, sustainable expansion in trade flows and circuits that had prevailed for two decades after the fall of the Berlin Wall, are now fluttering out. Global trade growth is losing its glow – as the marginal productivity and welfare improvements under its occurrence are gradually dissipating. Whispers that the Golden, Gilded Era of trade- and capital-induced economic growth shall come to an end have begun circulating amongst private investors and high net-worth individuals – there is thus private disillusionment towards globalization. More publicly and on a mass level, the amplification of preexisting inequalities, the reinforcement of oligopolies and monopolies, and the accruing of resources and wealth to the hands of the few, have in turn compounded the public disillusionment towards the same processes. Gone are the days when it would be a walk in the park to sell the faux equation, “globalization = prosperity for all.” Countries are turning inwards, or, indeed, towards like-minded and dependable complementary partners, to redress long-standing financial and economic deficits and imbalances within their economies.10 Globalization remains instrumental in many regards – but is no longer viewed as the panacea to domestic problems: the can can’t be ceaselessly kicked down the road, and one must face the music. 


Yet this does not suffice in explaining the rollback of globalization – especially in instances where economic rationality would point to the need for more, not less, integration and collaboration with international partners. Even if we take the above point as a given, it should point to a world where globalization is halting – not one where barriers are being propped up, sometimes with vast monetary and current account detriments to those erecting such barriers. Tariffs and protectionism, surely, must have an economic rationale – or so one would think.


This is where the second reason for this increasing balkanization of the world order kicks in – the return of ideologically infused geopolitics and national security considerations, which have both shifted politicians’ understanding of costs (e.g., interference by external actors via mechanisms such as financial decoupling and coercion, targeted sanctions, and resource blockades is now a cost that is to be pocketed into consideration), and benefits (e.g., the realization of some whimsical, rigidly stipulated state doctrine or ideological commitments). Considerations previously dubbed to be exogenous and peripheral to economic and trade calculations, have now taken central stage in this modus operandi that vacillates between face-saving escalation and risk-mitigating de-escalation. The lines between bluffing and signaling are increasingly blurred. Leaders of countries have once again opted to speak in riddles of “values” and “norms” – as if they had existed, as if they were real, even if many of such normative rhetoric was but a weapon of the clever yet cynical political elite. 


Countries are now waking up to the possibility that trading with other countries may not be an effective means of converting them – plausibly against the will of their own people – into an alien and transplanted system of governance. Correspondingly, many more are learning to grapple with the fact that trading partners could – overnight – opt to cut off all contact and flagrantly defy preexisting arrangements and agreements, all in the name of “morals” and “ethics” – ubiquitous in citation yet scarce in real supply in global politics.11



Towards a model of decentralized globalization 

We have every reason to be concerned. A more balkanized world is one where escalation in military conflict, potentially involving nuclear weapons, becomes more likely. It is also one that is undergirded by cost-push inflationary pressures – rendering consumer goods far less affordable and the livelihoods of the poor far more precarious than before. Most fundamentally, the undoing of decades worth of globalization, would instigate further internal strife and tensions, perhaps even civil war, amongst regions with weak governments and that have depended upon peacekeeping and aid from responsible stakeholders within multilateral institutions. Above all, balkanization would severely impede international efforts in tackling shared challenges – whether it be climate change, the rise of artificial intelligence, or, indeed, biosecurity and public health crises. No one – save for those who perhaps profit off selling arms or conspiracy theories, or both – should celebrate these despair-inducing shifts. 


There is no easy way out. I cannot proclaim to have the solution that can put a halt to this ongoing slide towards splintering, fragmentation, and innate geopolitical chaos. What I do strive to outline here, however, is effectively an outline for a new modus vivendi – one that takes the bulwark of globalized balkanization, and transforms it into a state of decentralized globalization. 


My thesis is this: only by loosening the grip held by “poles” over their “peripheries” and associated states, can we stymy the increasingly thinkable unthinkable – a total, full-out war between major players in the world.


It is imperative that states at the periphery of regional blocs should be granted more agency and ability to “say No.” Whether it be through establishing zones where countries from different ideological blocs and groups can still engage in proactive consolidation of ties and collaboration across geopolitical cleavages, or in more evenly distributing power and resources across members of the same bloc and reducing the concentration of influence in the hands of the few, these are vital processes that could ensure that blocs do not react or respond to perceived provocation in the same way that the countries at the start of World War I did.12 Malign balkanization can be converted into benign decentralization, provided that countries from disparate blocs can come to cultivate common grounds and broker more enduring guardrails on areas where they diverge. Such logic does not just apply to China and the U.S., but also to countries and institutions such as India and Pakistan, the EU and Britain (war remains unlikely between these two factions, but economic tensions would only continually escalate in the years to come), and factions within the Levant. Most countries in the Global South do not want to take sides in conflicts in which they have minimal stake – especially those that are pursued on grounds that are, to put it bluntly, asymmetrically, and unevenly applied to select countries. We must work hand-in-hand to facilitate genuine South-South collaboration that liberates, as opposed to prescribes, the peoples who deserve better. 


Cynics may accuse this proposal of being naïve and pollyannish. Indeed, these are labels that could easily be slapped onto any and all who refuse to subscribe to the kind of amoralistic realism espoused by certain experts in the field of international relations. Yet if we are to prevent balkanization from precipitating irrevocable damage to the world order, we must and should act. Indeed, statesmen at times of crises should have the courage to act, to lead, and to change – not just their people, but the world at large.



1. Pringle Robert, “Balkanization|Britannica,” in Encyclopædia Britannica, 2019,

2., accessed December 26, 2022, (this citation is not clear)

3. Brian Wong, “Xi’s Views on Russia Have Not Soured,” IAI TV - Changing how the world thinks, September 21, 2022,

4. Brian Wong, “The Era of Financial Balkanization,” Yale Journal of International Affairs, December 5, 2022,

5. Brian Wong, “Trying Times for Track II Diplomacy,” U.S.-China Perception Monitor, October 4, 2022, ./

6. Julia Kollewe, “Friendshoring: What Is It and Can It Solve Our Supply Problems?,” The Guardian, August 6, 2022,

7. Roslyn Layton, “The Security, Privacy and Supply Chain Problems of the Chinese Military in Your IPhone,” Forbes, April 15, 2022,

8. Deutsche Welle, “Has Globalization Passed Its Peak?,” DW News, April 3, 2022,

9. Douglas Irwin, “Globalization Is in Retreat for the First Time since the Second World War,” Peterson Institute for International Economics, October 28, 2022,

10. James A Fok, Financial Cold War (John Wiley & Sons, 2021).

11. Andrew Sheng, “As Major Powers Fight, the Rest of Us Must Learn to Help Ourselves,” South China Morning Post, June 4, 2022,

12. Samuel Williamson, “The Origins of World War I,” The Journal of Interdisciplinary History 18, no. 4 (1988): 795–818,







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