Amid growing geopolitical tensions and rising economic uncertainty, many governments are no longer focusing on the absolute benefits of global cooperation, but are increasingly concerned that they are gaining less than others, according to Munich Security Report 2024.

Prioritizing relative payoffs may well spur lose-lose dynamics – jeopardizing cooperation and undermining an order that, despite its obvious flaws, can still help grow the proverbial pie for the benefit of all, said the report in its Executive Summary.

The transatlantic partners and like-minded states now face a difficult balancing act.

On the one hand, they have to brace for a much more competitive geopolitical environment, where relative-gains thinking is unavoidable, according to the global report.

On the other hand, it said, they have to revive positive-sum cooperation, without which more inclusive global growth and solutions to pressing global problems can hardly be attained.

In absolute terms, the period after the Zeitenwende brought about by the end of the Cold War was a story of success.

The risk of great-power war seemed remote, multilateral cooperation flourished, democracy and human rights spread, and global poverty declined, the report mentioned.

The open, rules-based international order that emerged allowed the “pie” of global prosperity to grow substantially, it said.

The contemporary Zeitenwende, however, points in a different direction, as pessimism has crowded out the optimism of the early post-Cold War era.

Amid increasing geopolitical rivalry and a global economic slowdown, key actors in the transatlantic community, in powerful autocracies, and in the so-called Global South have become dissatisfied with what they perceive to be an unequal distribution of the absolute benefits of the international order, said the report.

From the perspective of many developing states, the international order has never delivered on its promise to grow the pie for the benefit of all, it said.

China, perhaps the biggest beneficiary of the liberal economic order, and other autocratic challengers feel that the United States is curtailing their legitimate aspirations and are forcefully pushing for an even bigger share of the pie, according to the report.

And even the traditional custodians of the order are no longer satisfied, as they see their own shares shrinking.

People in all G7 countries polled for the Munich Security Index 2024 expect China and other powers from the Global South to become much more powerful in the next ten years, while they see their own countries stagnating or declining.

As more and more states define their success relative to others, a vicious cycle of relative-gains thinking, prosperity losses, and growing geopolitical tensions threatens to unroll.

The resulting lose-lose dynamics are already unfolding in many policy fields and engulfing various regions.

At their extreme, relative-gains concerns take the shape of zero-sum beliefs – the conviction that another actor’s gains necessarily entail losses for oneself.

This thinking is nowhere more pronounced than in autocracies’ quests for their own spheres of influence.

And Europeans can no longer reap the peace dividend, having to spend more on their own defense and in support of Ukraine, said the report.

Many observers fear a similar escalation of violence in the Indo-Pacific where different visions of order are clashing in an increasingly zero-sum fashion, said the report.

China’s growing militarization of its maritime periphery is already raising fears that Beijing is trying to convert East Asia into its exclusive sphere of influence, according to the report.

Geopolitical tensions are also transforming globalization.

States around the world are increasingly pursuing economic security against coercion rather than maximizing mutual gains, said the report.

As a result, capital and trade flows are beginning to fragment along geopolitical lines, it said.

“De-risking” economic relationships could reduce vulnerabilities and thus the potential for conflict among rivals.

But a fragmentation of the world economy would also involve significant costs, especially for low-income countries.

There is thus a real risk that more and more countries end up in a lose-lose situation, which is no longer about who gains more, but only about who loses less, according to the report.