The post-American world dawns in Davos: What Carney's funeral for the old order means for us all

It was one of the most brutally honest and consequential speeches of our time. In a moment of stark historical candor, Canadian Prime Minister Mark Carney stood before the global elite at the World Economic Forum in Davos and delivered not a critique, but an obituary. 

Declaring the post-World War II, rules-based order definitively dead, Carney's address was a seismic event in statecraft. More than a lament from a spurned ally, it was a profound strategic signal — a blueprint for how nations must navigate a world where the US has abdicated its role as a reliable guarantor. 

The speech's power lies in its brutal honesty, articulating what many have whispered but no major Western leader has stated so clearly: the era of predictable American leadership is over, and waiting for its return is a dangerous folly. 

Carney's pronouncement moves the global discourse from diagnosis to a call for action, operating on the grim premise that the US is now structurally capable of producing leaders who fundamentally reject the pillars of multilateralism and democratic solidarity that it once built.

The 'greengrocer's sign': A metaphor for a global fiction

At the heart of Carney's speech was a piercing literary allusion to the work of Václav Havel, the Czech playwright, dissident and former president. Carney invoked Havel's famous parable of the greengrocer from the essay The Power of the Powerless. 

In it, a shopkeeper in a communist state displays a propagandistic slogan in his window not out of belief, but because it is expected — a small act of complicity that perpetuates a system everyone knows is false. Carney's genius was in applying this dissident's critique of totalitarianism to the hypocrisies of the Western-led order itself.

For decades, Carney admitted, nations "knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient". The US and other great powers championed rules they themselves often bent. 

Yet, the alliance endured because the net benefits — constraint on raw power, unprecedented global prosperity, and the avoidance of great power war — were deemed worth the moral compromises. 

The greengrocer's sign stayed in the window because the fiction served a purpose. The current American administration, in Carney's framing, has not just torn the sign down; it has exposed the wall behind it as rotten. The pretense is no longer sustainable. 

By evoking Havel, a pro-Western dissident, to critique the West itself, Carney argued that the path forward begins with "living in truth" — a truth that acknowledges the old order's death and the urgent need to build something new without illusions.

The rise of the 'middle powers' and a new economic reality

Carney's prescription flows directly from his diagnosis. He calls for "middle powers" — nations like Canada, Japan, Australia, and major European states — to stop waiting and immediately prioritise domestic economic resilience. 

They must forge new, deeper ties with each other and with pragmatic partners worldwide to counter "economic intimidation" from both "allies and rivals". This is the speech's most consequential pivot: the explicit grouping of the US with other revisionist powers as sources of coercion. 

The weaponisation of tariffs and financial clout has proven to be as disruptive as traditional aggression, signaling a shift where trade policy becomes a primary tool of geopolitical conflict.

The response, therefore, must be an economic, diplomatic, and counter-balance. Carney hinted at an informal, flexible alliance of middle powers — not a rigid, treaty-bound institution, but a coalition activated as needed to defend sovereignty and open trade. 

This has direct economic implications: we will likely see the accelerated formation of parallel supply chains, bilateral trade pacts that exclude great powers, and shared investment in critical technologies to reduce dependency. 

In this new reality, stability and predictability become vital currencies. 

Carney presented Canada as a model — "a stable and reliable partner in a world that is anything but" — positioning it as a secure investment destination and a rules-anchored node in a fragmenting global economy. 

The signal to the global financial community and powerhouses is unmistakable: the old centres of gravity are shifting, and new, more dependable networks are being drawn.

Implications for the world: Navigating the volatile interregnum

The global implications of this shift are vast and unsettling. We are entering an interregnum — a volatile period between the death of one order and the birth of another. In this landscape, regional hegemons will find expanded space to pursue their interests, increasing tensions as the disciplining force of a consistent superpower fades. 

Multilateral institutions like the WTO will be hollowed unless middle powers pour new energy and resources into them, potentially creating parallel structures that exclude disruptive great powers. 

Furthermore, the credibility of all alliances is shattered. If America's longest-standing ally must publicly plan for life beyond its patronage, no security guarantee is sacred. This will trigger frantic reassessments worldwide, driving increased national armaments and a scramble for alternative partnerships. 

The economic dimension of this security shift cannot be overstated, as defense spending and industrial policy will become even more intertwined with national economic planning.

Specific challenges for emerging nations: The case of Bangladesh

For emerging economies like Bangladesh, Carney's new world is a landscape of both acute peril and potential opportunity. 

The peril is straightforward: they are now caught in a multipolar crossfire without the relative predictability of a single superpower patron. The loss of that protective cover is profound; alignment with the US-led order once offered some, however imperfect, shield against coercion by regional giants. 

Now, Bangladesh must navigate the competing pressures of China's Belt and Road Initiative and India's regional dominance with fewer external balancing options. 

Economically, the vulnerability can be acute. As middle powers turn inward to build resilience, development aid and preferential trade terms may become scarcer or tied to stricter political conditions. The threat of arbitrary economic coercion — from any quarter — rises significantly, jeopardising hard-won development gains.

Yet, within this danger lies a distinct opportunity. 

Middle powers, seeking to build a viable coalition, will need partners. A strategically located, economically dynamic nation of 170 million people becomes a prize to be courted. 

Bangladesh could leverage this to diversify its economic and security partnerships beyond its immediate region, gaining access to technology and investment from middle-power blocs eager to demonstrate the benefits of their new model. 

This requires a nimble and sovereign foreign policy, one that avoids over-dependence on any single power and invests deeply in its own institutional and economic strength. The goal must be to transform from a subject of great power competition into an active shaper of regional norms, using its demographic and economic weight to secure a favourable position in the nascent networks of the new order.

Living in truth after the funeral

Mark Carney's Davos speech will be remembered as the moment the diplomatic world stopped speaking in euphemisms. By declaring the old order dead, he has liberated nations from the exhausting pretense that its revival is imminent. 

The task now, in Havel's and Carney's terms, is to "live in truth". This means accepting that the coming decades will be defined by managed competition among networks, where economic security is inseparable from national security. For countries at every stage of development, the mandate is clear: build domestic resilience, cultivate diversified alliances, and champion the fragments of the rules-based system worth saving. 

The funeral is over. The difficult work of building a new house — with a new economic foundation — on uncertain ground has begun.

Sketch: TBS

Mohammad Omar Farooq is a professor and head of the Department of Economics at United International University.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.