The World Economic Forum 2026 meeting witnessed a defining moment as Canadian Prime Minister Mark Carney delivered a speech that challenges the very foundations of global order.
Held in Davos-Klosters from January 19–23, the 56th World Economic Forum Annual Meeting brought together nearly 3,000 leaders from over 130 countries, including more than 60 heads of state and 850 corporate leaders.
Canadian Prime Minister Mark Carney’s address articulated a view that resonated widely across sessions: the rules-based international order is collapsing, and nations must adapt to an era of intensifying great-power rivalry.
Fading Rules-Based World Order
Naming the Reality
Canadian Prime Minister Mark Carney’s central message was unambiguous: the international rules-based order, that potentially sustained middle powers for decades, is collapsing. Rather than a gradual transition, he described the shift as “a rupture”, a fundamental break from the past that demands honest acknowledgement.
For years, countries participated in what PM Carney termed “rituals they privately know to be false.” They praised multilateral institutions, invoked international law, and celebrated free trade while recognizing that the strongest powers exempted themselves when convenient. This arrangement functioned largely because American hegemony supplied genuine public goods: secure sea lanes, financial stability, and collective security frameworks.
That foundation is now eroding. Great powers are increasingly weaponizing economic interdependence through tariffs, financial coercion, and supply-chain vulnerabilities. The Global Risks Report 2026, released during the summit, reinforced this diagnosis. For the first time in the report’s history, geoeconomic confrontation topped the list of short-term risks, with 18% of respondents identifying it as the most likely trigger for a global crisis.
Greengrocer's Dilemma: Living Within a Lie
Drawing on Former President of Czech Republic Václav Havel’s essay “The Power of the Powerless,” PM Carney illustrated the failure of the rules-based order through a powerful metaphor. A greengrocer displays a sign reading “Workers of the world, unite!” in his window. He does not believe in the slogan, but displays it anyway, to avoid trouble and signal compliance.
Former President of Czech Republic Havel described this as “living within a lie”: a system sustained not only by coercion, but by collective participation in rituals everyone knows are false. The system’s fragility becomes apparent when even one individual stops performing and removes the sign.
PM Carney extended this metaphor to contemporary international politics. Middle powers, he argued, must stop pretending that the old order still functions and confront the reality that multilateral institutions including the WTO, UN, and COP framework are under severe and sustained stress.
Middle Powers Must Adapt
If the old order is fading, the central question becomes how middle powers should respond.
Middle powers are nations that possess significant economic capacity, diplomatic reach, and regional influence, yet lack the military or economic dominance of superpowers. They typically occupy a space between great powers and smaller states, wielding enough resources to shape regional outcomes and contribute meaningfully to global governance, but not enough to unilaterally dictate terms of international order. Countries like Canada, Australia, South Korea, India etc. exemplify this category.
The World Economic Forum 2026 meeting highlighted a growing consensus among middle powers on the need to build greater strategic autonomy across energy, food, critical minerals, finance, and supply chains.
Positioned below superpowers yet possessing meaningful influence, middle powers face structural disadvantages when negotiating bilaterally with hegemonic states. Such negotiations are often conducted from a position of weakness, pushing middle powers to compete with one another to appear the most accommodating. This dynamic represents not genuine sovereignty, but its performance marked by quiet acceptance of subordination.
The alternative, increasingly acknowledged at Davos, is collective action. While great powers can afford unilateralism, middle powers cannot. Acting together enables them to forge a credible third path. When exercised collectively, legitimacy, integrity, and adherence to rules remain potent tools for shaping the international order.
Values-Based Realism: A New Framework
Balancing Principles and Pragmatism
Values-based realism emerged at Davos 2026 as a framework that seeks to reconcile ideals with constraints. It defends core principles such as sovereignty, territorial integrity, and human rights while recognizing that progress is often incremental, national interests diverge, and not all partners share identical values.
Countries adopting this approach engage broadly and strategically, accepting the world as it is rather than postponing engagement until an ideal one emerges. Relationships are calibrated so their depth reflects shared values, while influence is maximized through pragmatic engagement.
Building Domestic Strength
Crucially, values-based realism rests on material capability. Nations emphasized that principles without power lack credibility. As a result, governments are pursuing reforms to strengthen domestic foundations.
These include eliminating internal trade barriers, accelerating investment in energy, artificial intelligence, and critical minerals, and increasing defence spending. Such measures reflect recognition that strategic autonomy begins at home.
Variable Geometry: Coalition-Building for the New Era
Rather than waiting for traditional multilateral institutions to regain effectiveness, countries are increasingly embracing “variable geometry”, the formation of issue-specific coalitions based on shared interests and values.
This approach moves away from idealized multilateralism toward functional cooperation, assembling partners capable of acting together on concrete problems. Examples discussed at Davos included:
- Security coalitions supporting Ukraine or safeguarding Arctic sovereignty
- Trade initiatives bridging the Trans-Pacific Partnership and the European Union
- G7-led buyer’s clubs to diversify critical mineral supply chains
- Democratic cooperation on artificial intelligence to avoid forced alignment with competing technological hegemonies
Together, these overlapping coalitions form a resilient web of cooperation across trade, investment, and governance, providing flexibility in an increasingly fragmented world.
Conclusion
Davos 2026 marked a turning point. The erosion of the rules-based world order, the imperative of adaptation, the rise of values-based realism, and the spread of variable-geometry coalitions emerged as defining features of international relations for the coming decade.
The path forward combines domestic strength with coalition diplomacy among like-minded states. Great powers may dominate through scale, but middle powers and emerging economies possess something equally consequential: the capacity to stop pretending, name reality, build resilience at home, and act together.
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World Economic Forum 2026 FAQs
1. When is the World Economic Forum 2026 meeting being held?
Ans. January 19-23, 2026, in Davos-Klosters, Switzerland.
2. What does values-based realism mean?
Ans. Balancing core principles with pragmatic engagement and national interests.
3. What is the main theme of PM Mark Carney's WEF 2026 speech?
Ans. Fading of rules-based international order
4. What metaphor did PM Carney use from Václav Havel’s essay?
Ans. The greengrocer's dilemma
5. What are middle powers in global politics?
Ans. Nations with significant influence but lacking superpower dominance.