From ‘black swans’ to ‘gray rhinos:’ Navigating an era of global instability

December 5, 2024

Conflicts and crises in Ukraine, the Middle East, and beyond fuel uncertainty and could create political and economic disruptions with global ramifications, experts say

Key Takeaways

The world is experiencing more conflict now than at any point since World War II. There’s the Russia-Ukraine War, the ongoing conflict in Gaza, as well as violence in Sudan, Burkina Faso, and Ethiopia, among others. The instability caused by these conflicts extends beyond the nation’s borders, with ripples felt worldwide.

Johns Hopkins professors recently gathered at the Hopkins Bloomberg Center to discuss shifting global dynamics and how the United States should prepare.

Rising geopolitical uncertainty

David Arase, a professor of international politics at the Hopkins-Nanjing Center based in China, framed current global challenges as a shift from rare, unpredictable “black swan” events to more common, looming “gray rhinos.” These risks, while significant, are not unforeseeable and stem from policy decisions made in key regions, particularly China and the United States. Arase highlighted how these decisions, such as China’s internal political shifts under Xi Jinping, are altering the lives of young Chinese people, including his students.

“I’ve seen them go through various adjustments to living in this new normal, this new, more politicized world,” Arase shared at the Hopkins Bloomberg Center conference on crisis and conflict. “And it’s very sad because they have experienced … in their childhood, teens, freer access to the outside world, the ability to travel, and now all that is sort of shutting down, and I think they don’t see a way to escape it.”

These shifts in governance are reshaping the international order, too. Arase stressed that such policy decisions, whether in China or elsewhere, have direct consequences on global stability, often exacerbating tensions in the already volatile Indo-Pacific. In turn, this geopolitical instability increases the probability of economic disruptions and conflicts that may significantly affect global supply chains and financial flows.

The fragility of lean supply chains

Naser Nikandish, an associate professor of practice at the Johns Hopkins Carey Business School, discussed the vulnerability of lean supply changes, which focus on reducing waste, minimizing inventory, and streamlining suppliers. While these models work well in stable environments, they lack the flexibility to respond effectively to global crises. Nikandish illustrated this fragility with the example of iPhone production, which requires contributions from 43 countries to produce a phone. A disruption in any one of these countries could be detrimental

For example, Nikandish discussed how the ongoing war in Ukraine, while seemingly distant from major semiconductor manufacturing hubs, had profound effects on the global tech industry. Ukraine, despite not being a direct supplier of semiconductors, produces 50% of the world’s neon gas, a critical component in semiconductor manufacturing, highlighting the interconnectedness of global supply chains anywhere in the world.

The role of multilateralism

Alessandro Rebucci, a professor and researcher of international finance at the Johns Hopkins Carey Business School, addressed the shifting dynamics of global power, emphasizing the inflection point the United States is at as an “unchallenged hegemonic power.” He said that historically, global powers such as Rome and the United Kingdom maintained dominance through openness and international and financial integration. Rebucci said that if a country isolates, and closes its economy, it loses its hegemonic power.

“More likely than not, we’re going to go down the vicious cycle, at least for a while, and we have a choice between peace and economic prosperity or conflict and crisis,” Rebucci said. “So the question that I want to leave to my panelists and to the audience is: If prosperity reduces the risk of war, what economic policies … can help to address current economic discontent in much of the Western world?”

Elayne Whyte-Gomez, a Costa Rican diplomat and professor of practice at the Johns Hopkins School of Advanced International Studies, shares concerns about the health of the international system. She emphasized how the international institutions that regulate state behavior provide essential goods and services that support global supply chains and planetary interconnection. These institutions have worked so seamlessly that their importance is often overlooked, but budget cuts to these bodies could destabilize international cooperation. Whyte-Gomez said it takes only one country that does not comply with international health regulations to thrust the world into chaos.

“Everything is interconnected, and everything is happening at the same time, and we are overwhelmed,” she said. “Not only because of the overlapping of crises and conflicts but also because we are still working with the policy frameworks that were created decades ago.”

She said that in the past few years, there has been a process by which governments and the United Nations have turned to seek advice from other fields, especially from the business field, in trying to incorporate strategic foresight and strategic planning that would allow us to anticipate crises.