A Fragmented World: Douglas Arner’s Key Themes for 2025 and Beyond

Feb 132 min read

LOOKING BACK LOOKING FORWARD (JAN 2025)

Multipolar Mercantilism: Sustainability and Finance in a Fragmented World (1)

This blog is based on LBLF - January 2025 Episode

Every year, Douglas Arner’s Looking Back Looking Forward series highlights the critical themes shaping global finance and geopolitics. For 2025 and beyond, Arner introduces the concept of “multipolar mercantilism,” a world where no single power dominates. Instead, rising players like China, India, and the Global South compete fiercely in a fragmented landscape defined by competition, a focus on competitiveness, potential conflict, and selective cooperation. These dynamics are reshaping global finance, with competing financial and currency systems taking center stage.

Arner identifies three core themes driving this transformation: fragmentation vs. globalization, technology, and sustainability.

He predicts intensified competition in technology, driven by advancements such as artificial intelligence, which are poised to redefine global dynamics. On sustainability, Arner emphasizes the growing impact of climate risks, natural disasters, and the race for energy technologies that address both climate challenges and economic competitiveness.

In their paper, FinTech and the Four Horsemen of the Apocalypse (2), Arner and his co-authors examine how global finance is increasingly shaped by four existential crises—plague, war, famine, and disaster—metaphorically referred to as the "Four Horsemen." These crises highlight the critical role of financial technology, globalization, sustainability, and systemic resilience in transforming the global financial system.

The paper emphasizes how digital finance—encompassing artificial intelligence, blockchain, digital currencies, and mobile payments—has become a key driver of financial inclusion and resilience in times of crisis. It explores the balance between innovation and regulation, focusing on how adaptive regulatory frameworks can mitigate risks while fostering opportunities. Furthermore, the authors discuss how digital finance supports sustainable development, financial stability, and global efforts to address systemic challenges such as climate risks and economic inequality.

Drawing from these insights, Arner’s Looking Back Looking Forward underscores the tensions between globalization and fragmentation, while highlighting sustainability and digital transformation as central to future competitiveness and resilience.

These themes—fragmentation, technological innovation, and sustainability—remain central to the financial and geopolitical landscape. Arner’s insights, both in his reflections and academic research, offer a valuable framework for understanding the complexities of this evolving, fragmented world.