At the beginning of 2012, we argued that the international system is undergoing a generational transformation — the kind that occurs every 20 years or so. The cycle we are now in started in 2008-2009, when global financial contagion exposed the underlying weaknesses of Europe and eventually cracked China's export-oriented economic model. The Middle East then began to deviate from its post-World War II paradigm with an attempted resurgence by Iran, the regional rise of Islamists and the decline of age-old autocratic regimes in the Arab world.
Generational shifts take time to play out and often begin with a period of denial as the forces of the international system struggle to preserve the old order. In 2013, that state of denial will persist in many areas. But we are more than four years into this cyclical transformation, and change is becoming more palpable and much harder to deny with every passing month.
In Europe, short-term remedies that are so far preserving the integrity of the European Union are also papering over the deep, structural ailments of the bloc. Rising unemployment, growing social discontent, declining competitiveness and the fundamental tension between integration and sovereignty in times of austerity will become more visible, even while the eurozone and European Union survive another year.
China is not so much in denial of its current predicament as it is constrained in its ability to cope with a dramatic shift from high export-oriented growth to more sustainable development of its interior. The shortened timeline for Beijing to make this transition raises the prospect of economic dislocations and social tensions that could place the Communist Party of China in a dangerously reactive position. China still has the tools to manage such flare-ups this year but will compensate for its inadequacies at home and increased U.S. attention to the region with growing assertiveness in its near abroad.
The diffusion of investment away from the Chinese coast will create unique opportunities for a spread of countries in Southeast Asia, East Africa and Latin America, regardless of whether these countries have yet to fully acknowledge the opportunity at hand. The emerging economies of the post-China world will take time to develop, but 2013 will be an important year in determining which are best positioned to fill the growing void left by China.
Change will be primarily violent in nature — and thus harder to miss — in the Middle East. Islamists will carry the momentum in the region but will also struggle to assert power against regional forces trying to preserve the old order. The unraveling of Syria and Lebanon will cut short Iran's regional ascent and relegate Tehran to the role of a spoiler in the Levant as Tehran turns its attention back to defending its core interests in Iraq.
The United States is also not immune to change. In this generational shift, and all the tumult that comes with it, Washington will be forced to learn the value of restraint in balance-of-power politics, preferring to lean on regional partners and encourage strategic competition as a way of preserving its own power.
The rules of the game are changing in the international system. In 2013, we will see that denial of that change is waning.