## The Middle Power Moment

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**Canonical URL:** [The Middle Power Moment](https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-the-middle-power-moment-n-k-singh)

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## Bibliographic details
- Authors: N K SINGH
- Published: June 2, 2026

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### Geopolitics and the global economic order
- The global economy is shaped as much by geopolitical rivalry as by markets: trade flows are rerouted by political calculus; capital flows are driven by trust rather than efficiency; technology "has become a weapon of war."
- Geopolitics affects:
  - Supply chains and energy security as anchors of national resilience.
  - Financial systems and preferred currencies becoming more segmented.
  - Multilateral institutions facing strategic controversy (example cited: "The US withdrawal from the United Nations Framework Convention on Climate Change and other global platforms").
- Emerging plurilateral reality: coalitions are smaller, issue-specific, often transient; influence derives from the ability to convene, bridge divides, and shape agendas rather than from economic size or military might.

### Role and responsibility of middle powers (including India)
- Middle powers can shape the global order by catalyzing plurilateral coalitions and convening pragmatic cooperation.
- Existing multilateral development institutions with limited or indirect US influence cited as alternative pathways: Asian Development Bank; European Bank for Reconstruction and Development; New Development Bank; Asian Infrastructure Investment Bank.
- Policy implication: middle powers must be "at the table, not on the menu"—actively shaping agendas especially where universal frameworks are eroding.

### India’s position and strategic reorientation
- India has become the world’s fourth largest economy, averaging 7 percent growth over the past decade.
- India’s commitments and capacities:
  - Committed to net zero emissions by 2070.
  - Committed to 500 gigawatts of non-fossil energy capacity by 2030.
  - Renewable energy already exceeds 50 percent of installed capacity.
- India’s attributes for leadership:
  - Large, diverse democracy with diplomatic traditions emphasizing dialogue and consensus.
  - Economic scale and recent leadership roles (e.g., presidency of the Group of 20) provide leverage to build bridges across fragmented blocs.

### Four common challenges facing middle powers
- Challenge 1 — Geopolitics in economic domains & climate transition:
  - India is the world’s third largest oil consumer and thus exposed to external shocks.
  - Developing economies require at least $310 billion annually for adaptation; current flows are only $26 billion.
  - Fiscal context: average fiscal deficit of emerging market economies is about 5.5 percent of GDP.
  - Macro policy need: reconcile transition costs via prudent fiscal policies.

- Challenge 2 — Excess capacity and trade dynamics:
  - In 2023, China produced 1,019 million metric tons of crude steel.
  - Excess global steel is projected to be 644 million metric tons.
  - Solar photovoltaic manufacturing will soon be twice as high as global demand.
  - Policy stance: calibrated protection of domestic industry from unfair competition while remaining integrated in global markets to shield against protectionism.

- Challenge 3 — Demographic divergence and migration:
  - Median age: less than 20 in Africa; below 30 in India.
  - Demographic contrast with shrinking populations in parts of East Asia and Europe.
  - Policy need: review traditional attitudes toward orderly migration; frame flows as an essential orderly response to global labor imbalances rather than a crisis.
  - Human capital caveat: younger demographics are a strength only if matched by skills and employment opportunities.

- Challenge 4 — Technology, digital inequality, and skills gap:
  - Only 1 percent of 14- to 18-year-olds in India have received formal skills training.
  - Businesses will need 1.25 million professionals in artificial intelligence by 2027.
  - Global investment context: $877 billion in global foreign direct investment is cited as the prize for attracting technology-linked capital.
  - Policy imperative: massive sustained investment in human capital and R&D to steer AI toward productivity and inclusive progress, and to avoid its use for surveillance and conflict.

### Path forward — strategies and policy recommendations
- Reform multilateralism by strengthening alternative pathways and pragmatic cooperation where universal consensus is lacking.
- Middle powers should:
  - Catalyze new coalitions among emerging market and developing economies.
  - Emphasize dialogue, consensus, and bridge-building across fragmented blocs.
  - Pursue calibrated industrial protection combined with global integration to manage excess capacity and prevent protectionist backlashes.
  - Invest significantly in skills, education, and R&D to capture a larger share of the $877 billion in global foreign direct investment and to meet AI workforce needs (1.25 million professionals by 2027).
  - Reconcile fiscal imbalances (average emerging market fiscal deficit about 5.5 percent of GDP) while mobilizing adaptation finance (need: at least $310 billion annually; current flows: $26 billion).

### Strategic outlook and concluding observations
- Fragmentation will persist but need not mean disorder; smaller, issue-specific coalitions can enable action.
- India’s choices will shape both its trajectory and the role of middle powers in the emerging global order.
- Opportunity: redefine the relevance of the Global South through inclusivity and by ensuring "all nations a seat at the table."

*The Middle Power Moment — N. K. Singh, June 2026.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-the-middle-power-moment-n-k-singh_