Why some countries are not taking sides in global conflicts

For the past eight years the global economy has been facing a series of shocks – from trade conflicts and the pandemic to bloody wars in Ukraine and the Middle East. This has led to a new era of geopolitics and fragmentation, which is pushing investment and trade flows in new ways.

Indeed, one striking consequence of the restructuring of the global economy is that companies and countries are redistributing capital and forging new relationships. We explain how more than 100 countries around the world are taking advantage of this changing landscape.

Some argue that this new situation signals the end of globalization. But this is arguably too simplistic. Instead, globalisation is simply rapidly changing its form. Emerging alongside rival blocs – one US-led and pro-Western and the other led by China and Russia – is a large family of economies refusing to take sides – and profiting as a result.

Last year, Bloomberg introduced you to the “connectors,” a small group of countries like Mexico and Vietnam that are exploiting trade ties with both rival blocs and serving as bridges between them.

This year, we want you to meet a larger group of countries, 101 economies we’re calling the “new neutrals.” These are countries that consistently stay out of geopolitical conflict, at least as measured by their stances on the UN votes that many economists are starting to monitor as a measure of geopolitical alliances.

As a group, they’re important because they make up more than half the world’s population and about a fifth of its economic output. The main thing, though, is that these new neutrals are benefiting economically from their hedging stance. Above all, they’re seeing a significant increase in foreign investment in new factories and other projects that equate to long-term bets by companies and investors.

There are certainly qualifications and questions. Thanks to Chinese exports and Russia’s energy resources, a growing share of the New Neutral’s trade is with China and the pro-Russian bloc. Thanks to industrial subsidies and trade barriers, inward-looking America is also attracting more foreign investment.