A shifting global order marked by upended supply chains and unstable alliances is forcing so-called middle-power countries to chart new paths of survival.
Countries like India, Canada and the UK are grappling with how best to navigate a world in which intense competition between the US and China, ongoing wars and the explosion in AI have caused choke points to squeeze energy and tech supply chains.
The issue dominated conversations by government and business leaders on the second day of the Bloomberg New Economy Forum in New Delhi on Wednesday.
India’s External Affairs Minister Subrahmanyam Jaishankar told the gathering that middle power countries need to be proactive in engaging with each other and “figure out a way of moving the needle on issues of interest to them.”
Swiss and Canadian officials spoke about the need to diversify trading partners and build resilience in supply chains. Former UK Prime Minister Rishi Sunak said one survival strategy for nations was to use their competitive trade advantages to “make themselves indispensable.”
The challenge facing middle powers, often described as nations with global influence but not superpower status, has grown more acute in recent years as US President Donald Trump upended traditional alliances and institutions like the North Atlantic Treaty Organization weakened.
Earlier this year, Canadian Prime Minister Mark Carney called for such countries to band together in response to the breakdown of the so-called rules-based order led by the US.
Among the biggest challenges facing middle powers is the undermining of once-reliable supply chains. Trump’s tariff onslaught has strangled access for many countries to the world’s largest consumer market. Instability in the Middle East and the war in Ukraine have forced many nations to secure alternate energy and food supplies, while Beijing’s dominance in critical minerals and key technological inputs has created new headaches for CEOs and world leaders.
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“We are moved away from an era where barriers dropped, free flow of money, free flow of goods, to an era which is suffered and been inflicted by weaponization of everything possible,” Yuvraj Narayan, chief executive officer of logistics giant DP World, said at the Bloomberg event.
He highlighted renewed risks in major choke points from the Strait of Hormuz to the Panama Canal and the Strait of Malacca.
“Where I could have invested a billion dollars in supply chains in the era which has just ended, I am now going to look at investing almost double,” he said.
Swiss trade negotiator Helene Budliger Artieda said her country’s focus has been centered on resilience and diversifying contracts in the wake of such supply-chain disruptions, telling a panel on Wednesday that she’s been “very busy traveling around signing free trade agreements.”
“As a small country, we cannot avoid hurdles,” Artieda said. “We do not wish to manufacture everything in Switzerland. That will make no sense at all because we’re a small country in size with a mid-size economy.”
To make the point about being “indispensable,” Sunak turned to the example of the Netherlands, which effectively controls the market for the most cutting-edge chip manufacturing equipment. Germany, South Korea and Japan each also dominate crucial segments of the chip supply chain, he said.
“If you’re a middle power, finding those ways that you can make yourself indispensable — become a choke point,” he said.
For Canada, weaponizing its strategic advantages wasn’t an option, Foreign Minister Anita Anand said.
“The one thing I think is important, at least from a Canadian perspective — and I would like other middle powers to grab onto this idea as well — is that we will never utilize our competitive advantages as a weapon,” she said.
For Indian Commerce Minister Piyush Goyal, boosting self-sufficiency was the key. He said the strategy grew in urgency in the wake of the Covid-19 pandemic after India’s reliance on imported vaccines was revealed.
“Wherever we had placed orders for personal protective equipment or Covid kits or vaccines, we were let down miserably by all countries,” he said. India ultimately became a major vaccine manufacturer and exporter.
Artieda, the Swiss trade negotiator, put the strategy another way: “The most important thing is to keep calm and eat Swiss chocolate.”