Summary
The global order is undergoing a fundamental shift towards a ‘Neorealist Moment’, in which power politics has returned to the heart of international relations. Traditional multilateral frameworks are splintering into parallel systems aligned with geopolitical blocs. Economic and security policies are converging, and middle powers are confronted with uncomfortable choices regarding their alignment and autonomy.
This Policy Brief argues that middle powers cannot simply adapt to this environment; they must establish a collective presence by forming a ‘Third Pole’ coalition. Success requires pooling capabilities across four strategic pillars: Defence and Autonomy; Digital Sovereignty and Infrastructure; Social Cohesion; and Serving as a Beacon for ‘Third States’. In this Policy Brief, we set out high-level priorities for governments and international organisations to implement this strategy.
The Strategic Imperative
The assumptions that have underpinned international cooperation for three decades are collapsing. Economic interdependence has not constrained conflict, institutions have not transcended power politics, and shared challenges have not produced collective responses. Instead, strategic rivalry, contested norms, and weaponised economic ties define the current landscape. The United States (US) has withdrawn from its role as system guarantor while great power competition intensifies.
Yet, cooperation remains essential. Climate change, inequality, global health issues, financial stability, and technological governance require coordinated action that no single state can deliver. Global problems do not go away by simply disregarding them.
More importantly, the current rupture creates space for middle powers to build collective agency rather than accepting dependency on competing hegemons. Middle powers occupy a unique position, possessing sufficient capabilities to matter but lacking dominance to act unilaterally. This creates both vulnerability and opportunity. Whether in Africa, Europe, the Indo-Pacific, or Latin America, middle powers share common vulnerability to unrestrained power politics and a common interest in a rules-based order. By pooling their diverse capabilities, middle powers can unite and build a viable ‘Third Pole’; a new coalition offering cooperation without submission, genuine partnership based on mutual development rather than dependency. The window for action is narrow. The foundations of such a coalition must be laid now, or fragmentation can harden into permanent divisions and subversion. Middle powers must choose agency over adaptation. Mark Carney was right to highlight the high urgency in his widely noticed speech at the World Economic Forum in Davos.
The strategy we propose in this Policy Brief operationalises how such a ‘Third Pole’ can be created: through four pillars and four cross-cutting levers that can convert potential into geopolitical weight. Institutional Buildup and Financial Resources provide the foundational bedrock – codified structures and material backing that make the coalition credible. Mutual Trade and Economic Policy serve as dynamic accelerators – creating market scale to compete with superpowers’ internal economies while generating spillover effects that secure domestic cohesion and offer value-additive partnerships globally. Together, these levers allow to kickstart the development of a new system. Effective coalition strategy requires balancing hard and soft power. Hard power pillars (defence, digital sovereignty) provide material capabilities preventing coercion and establishing strategic autonomy. Soft power pillars (internal cohesion, beacon for third states) generate legitimacy, attractiveness, and political sustainability. Neither suffices alone because material capabilities without legitimacy invite resistance, and attractive values without capabilities invite exploitation (Figure 1).
Four pillars
Defence and autonomy
The security-economic nexus has fundamentally transformed cooperation. Receding US security guarantees mean reliance has become liability. Weaponised dependencies over rare earths, semiconductors, pharmaceuticals, or energy create strategic vulnerabilities that rivals exploit during crises. Technology and security have converged, with Artificial Intelligence (AI), quantum computing, and space capabilities representing simultaneous economic opportunity and military advantage. Middle powers must thus shift from passive security consumption to active contribution by pooling capabilities:
- Joint capability development
- Supply-chain resilience compacts
- Autonomous production capacity
Digital sovereignty and infrastructure
Technology governance has fragmented into competing US and Chinese ecosystems, forcing middle powers into dependency relationships. Export controls proliferate as states restrict access to dual-use technologies. AI represents the next fundamental infrastructure layer and General Purpose Technology (GPT). Current trajectories concentrate on development in superpower firms creating monopolies in collusion with certain governments, threatening the next wave of technological dependency. Data governance models diverge, fragmenting the digital economy. Middle powers must build genuine trustworthy alternatives by pooling capabilities to achieve market scale:
- Standards club
- Trusted data corridors
- Joint infrastructure investment
Social cohesion
External cooperation fails without internal cohesion. Populist fragmentation exploits legitimate grievances about inequality and dislocation to weaken support for international cooperation. Just transition anxiety creates resistance in affected communities as economies shift toward green and digital models. Erosion of trust in international cooperation fuels demands for protectionism that conflict with coalition strategy. Internal cohesion must be actively constructed through policies making transitions just and demonstrating cooperation‘s benefits:
- Just transition mechanisms
- Labour and social standards coordination
- Counter-fragmentation toolkit
A beacon for third states
Export and development finance has transformed into a geopolitical competition arena. Major powers use public financing as political influence tools, creating recipient dilemmas as they navigate competing financing sources with varying conditions. ‘Global South’ nations are wary of exchanging one hegemon for another. Progress on the United Nations Sustainable Development Goals (SDGs) has stalled or reversed as neorealist dynamics sideline global welfare concerns. Middle powers can offer genuine partnership based on rules and institutions rather than submission for states with likeminded or joint interests:
- Coalition finance platform
- Partnership framework
- Open architecture
Three design principles
Recommendations
For coalition member governments
- Accept fragmentation as structural reality
- Build coalition institutions immediately
- Pool financial resources
- Separate competitive from cooperative domains
- Establish verification mechanisms
For international organisations
- Acknowledge changed member state priorities
- Develop variable geometry
- Build bridges across geopolitical divides
- Enhance transparency and verification
- Prepare for scenarios, not forecasts
From Diagnosis to Agency
The ‘Neorealist Moment’ presents middle powers with a stark choice: accept dependency or build collective agency. Our Policy Brief outlines how strategic cooperation can be constructed through four pillars operationalised via institutional buildup, financial mobilisation, mutual trade, and coordinated economic policy (3I, i.e. innovation, infrastructure, and industrial policy). This is not a project to rescue the ‘West’ but to transcend obsolete dividing lines and forge a genuinely new coalition of sovereign agency spanning continents. It offers cooperation without submission – partnership based on mutual development rather than dependency.
The rupture in global order is not merely crisis but licence to innovate. The strategic task is constructing a framework that turns the ‘middle’ into the centre of gravity for a stable, just, and prosperous world. Success requires moving beyond diagnosis to decisive action. Middle powers must seize this moment or watch the window for collective action close quickly.
