_The international order has lagged dangerously behind shifting global power dynamics. If leaders do not start addressing the contradictions soon, the most likely result is crisis or even conflict and even more dangerous contradictions.

_

The world turned a corner in 2019. The problem is that the world order didnt turn with it. This disconnect could have disastrous consequences.

The biggest global change has been the start of the Asian century. Today, Asia is home to three of the worlds top four economic powers (in purchasing power parity terms): China, India, and Japan. The regions combined GDPexceeds that of the United States and of the European Union.

The US is no longer even the most globalized power; that title now goes to China. Already a larger trading partner to more countries than the US, China is signing on to more free-trade agreements as well, including potentially the largest in history, the Regional Comprehensive Economic Partnership. The US, by contrast, is abandoning FTAs such as the Trans-Pacific Partnership, which Japanese Prime Minister Shinzo Abehas kept alive without the Americans. The US share of global trade continues to shrink.

The world order has not kept pace with these shifting economic dynamics. On the contrary, the US dollar remains the predominant currency for settling international trade. The US and Europe retain control of the two leading global economic organizations: the International Monetary Fund and the World Bank. And the United Nations Security Council the only body that can issue binding decisions for the UNs 193 member states is dominated by just a few, largely declining powers.

In theory, the easiest of these incongruities to address should be the inadequate influence of emerging powers like China in the IMF and the World Bank. After all, the US and Europe have already acknowledged including in the2006and2007G20 communiqus that the selection of senior management of the IMF and World Bank should be based on merit, ensuring broad representation of all member countries.

Yet the anachronistic gentlemens agreement that has kept an American at the head of the World Bank and a European leading the IMF has proved stubbornly resilient. In 2007,Dominique Strauss-Kahnbecame IMF managing director, succeeded by another French citizen,Christine Lagarde, in 2011.

Six years later, Lagardedeclaredthat the IMF could be based in Beijing by 2027, if growth trends continue and are reflected in the Funds voting structure. After all, she noted, the IMFs bylaws call for the institutions head office to be located in the largest member economy.

Yet, when Lagarde resigned from her post this year to become president of the European Central Bank, it was yet another European who took her place: the Bulgarian economistKristalina Georgieva. Likewise, the World Bank presidency passed fromRobert ZoellicktoJim Yong Kimin 2012, and then to David Malpass this year. Future historians will marvel at the imprudence of the old powers shameless refusal to share control of global institutions.

And yet the US and the EU are not the only ones working to safeguard their clout. In the UN Security Council, the five permanent members (P5) China, France, Russia, the United Kingdom, and the US also pay lip service to the need for reform, but consistently obstruct progress. Complicating matters further, additional countries attempting to get a permanent seat on the Council are facing resistance from their neighbors: Pakistan is blocking Indias bid; Argentina is blocking Brazil; and Nigeria is blocking South Africa. Given these dynamics, the UN Security Council will be even more difficult to reform than the IMF or World Bank.

But, again, failure could be disastrous. If the Security Councils composition is not updated, the body could lose its credibility and moral authority. If the African Union or India (each with over a billion people) refused to abide by Security Council decisions essentially the decisions of the P5 the international communitys most important body wouldnt have much recourse.

To avert such an outcome, the Security Council should adopt a 7-7-7 formula. The first seven would be permanent members Brazil, China, the European Union (represented by France and Germany), India, Nigeria, Russia, and the US each of which represents a different region. The second seven would be semi-permanent members, a rotating selection of 28 countries, based on population and GNP. The remaining 160 countries would rotate into the remaining seven seats.

The most difficult incongruity to resolve will be that between Americas declining leadership and its currencys role as the leading international reserve currency. Today, more than 40% ofcross-border paymentsand 90% of foreign-exchange trading is settled in US dollars. This reflects decades of trust: the US had deep markets, strong institutions including efficient courts and an independent central bank and it did not use the dollar as a tool to advance its own interests.

But, since 2017, US President Donald Trump has been aggressively undermining the international communitys trust in the dollar. He haspressured the US Federal Reserveto lower interest rates in order to deliver short-term economic growth as he campaigns for re-election. And he has weaponized the dollar, labeling China a currency manipulator andinstructingthe US Treasury to put more countries including close Asian and European allies under surveillance.

Trumps behavior has raised the hackles not only of adversaries (Russialeadsa new de-dollarization trend), but also of key allies.Jean-Claude Juncker, the outgoing European Commission president, has pledged that the euro would become an active instrument of EU sovereignty. It is also telling that France, Germany, and the UK in collaboration with China and Russia have created the Instrument in Support of Trade Exchanges (INSTEX) to bypass US sanctions on Iran.

But, in a sense, Trump has done the world a favor by making undeniable what was already obvious. If world leaders do not start addressing the contradictions plaguing the world order soon, the likely result is crisis and even more dangerous contradictions.

Kishore Mahbubani, Professor in the Practice of Public Policy at the National University of Singapore, is the author ofHas the West Lost It?andthe co-author with Jeffery Sng ofThe ASEAN Miracle: A Catalyst for Peace. He was selected as one ofProspectmagazines top 50 world thinkers in 2014.