There is an African saying – when elephants fight, the grass gets trampled. The weak get hurt every time the powerful fight. They never asked for the conflict in the first place. 

Coming back from the Emerging Markets Forum in Paris last month, and observing the annual corporate lovefest in Davos (World Economic Forum), it became obvious that the rift between the superpowers is widening by the minute with the Ukraine War. 

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Talking face to face with old and new friends after more than two years of lockdown behind masks reminded me that there is no substitute for personal contact to get the vibes of how people really feel about issues. Virtual zoom meets can never replace relaxed conversations over dinner, coffee and a glass of wine. 

Much of the “dialogue of the deaf” between the warring elephants is due to the fact that during the pandemic, leaders and their key advisers have distanced themselves into their own bubbles, not getting good feedback on what is really happening on the ground. This is why big mis- judgements are being made, and will still be made. 

Pre-pandemic “back channels” have virtually disappeared. These are low-key meetings between top advisers to key rivals who can talk freely with each other and get good readings on what areas of compromises and avenues of negotiations are possible. Away from TV cameras and paparazzi, one could have serious discussions without being trapped by the need to repeat simplistic “you evil-me good” sound- bites for the home market. 

The big picture looks messy but is clear to anyone who takes a long historical view, paying proper attention to how individual decisions or accidental events can change the course of history. 

With Europe and Russia totally preoccupied with the Ukraine war, and the United States is driven by domestic politics, high inflation and random shootings, plus China struggling with Omicron, JPMorgan Chairman Jamie Dimon has warned that we must brace for an economic “hurricane”. 

Since large elephants (big countries and large corporations) will somehow survive this hurricane, what are we, the small fry, going to do to avoid being someone’s lunch? 

The maxim that all politics is local remains true even in a global world. The global timetable is always set by local electoral timetables, whether the votes are free or not. Without a clear win on Ukraine (creating Biden as a war-winning President), the Democratic Party is likely to lose its slim majority in the US Senate and probably in the House by the November mid-term elections. Consequently, the Biden Administration may become a lame duck for the next two years to 2024, hurt by high inflation and continued domestic squabbling. Since leading Republican presidential candidates are even more hawkish than Democrats on China, no serious reset of US-China policies is likely for the next six years. 

Over the same timeframe, the European economy (the third most powerful economic grouping) will still be plagued by the Ukraine war or post-war rebuilding, estimated to cost at least $600 billion, rising with every day that it continues. At the Davos meeting, German Chancellor Olaf Scholz gave a clear signal that Germany will end its reliance on Russian energy and switch to alternative sources. This means that Germany, as the largest European surplus economy, will have to write huge cheques, not just for her own restructuring, but also to bail out deficit EU members that are struggling with debt overhang and economic recovery. 

In short, with elephants still preoccupied by war or pre-war in the next six years, the priorities for dealing with urgent global issues, such as climate warming, global debt distress, international monetary reforms etc. will be low. The rest of us, namely the business sector and billions in the emerging markets, will all have to make our own contingency plans. 

Business leaders use the Davos forum to shape their medium to long-term strategies, which was why a big debate was on whether there will be de-globalization and de-coupling. My view is that the global reset is actually towards glocalization – simultaneous reconfiguration of global supply chains and more local efforts at resilience on food, energy, water and essential infrastructures such as internet and payment flows. The weaponisation of finance and media has shaken all policy-makers to the core. Both the Internet and money payments can be switched off at will. No small country wants to be so vulnerable to the whims of big powers. 

Scholz was one of the few European leaders who remembered and appreciated that in the global conversation, emerging countries like India, Indonesia, Brazil, Mexico, Argentina, South Africa and Senegal, matter. ASEAN leaders are still muttering about being summoned to Washington DC to be lectured by President Biden, with peanuts ($150 million) in development aid to be shared amongst ten ASEAN members. ASEAN has always preferred peace and development to take sides in big power fights. 

Given such complex circumstances, corporate captains will really want to hedge their bets, by retaining their supply chains in countries where domestic markets matter, but ensuring that they are fully diversified in terms of supply and revenue sources. Such collective self-preservation must mean that costs and inflation will go up, adding to global woes. In the end, consumers pay. 

What should the small people (local communities) do in such circumstances? Surprising, during the pandemic, localization of food production and distribution turned out to be much more resilient than expected. Local food producers and markets create more jobs, more food and more domestic value-added than relying on global supply chains. Local communities are re-discovering that they can help themselves and not be over-reliant on dysfunctional governments. 

In sum, global fragility arose because there was a seismic shift towards inter-connectivity and concentration in big bottlenecks that could fail because of big power conflict. But global resilience occurs when the masses (the small) are strong and resilient, rather than over-dependent on fragile supply chains or miserly aid from big powers. The systemic whole cannot be strong when the bottom masses are weak. Trade is still better than aid, but if the strong will not look out for the weak, they must look out for themselves. 

One should reflect that the grass survived long after warring dinosaurs disappeared. Food for thought, especially in times of scarcity and war. 

(The writer is a Distinguished Fellow, Asia Global Institute, University of Hong Kong and a former financial regulator.)