Markets are growing, but the differences among citizens of both developed and developing countries are enhanced.
Liberal democracy less legitimate today than at any time since the Second world war, and the world order is falling apart. Over the last 20 years in international politics was full of turmoil and crises, but it seems that in 2018 will develop a special situation, fraught with unexpected crisis in geopolitical terms comparable with the financial crisis of 2008.
The risk of "geopolitical depression" creates the background for the top 10 risks in 2018, according to the research center of the Eurasia Group, engaged in consulting in the area of political risks, the founder and President of which I am.
As usual, there are a few "distractions" or risks, which, in our opinion, not as great as it seems at first glance.
1. The growing influence of China
At a time when Washington lacks a coherent and consistent policy, the Chinese government revised the environment of the country, set new rules, has developed the most efficient in the world global trade and investment strategy and uses Chinese technology companies to advance the public interest. Beijing invests and expands its influence, promising non-interference in the political and economic life of other countries, which is currently more inclined to join China, to focus on him and to imitate him. The global business environment must adapt to new rules, standards and methods. In 2018 it will become more likely us-China conflict, particularly in the area of trade.
2. The possibility of catastrophic incidents
Since September 11, serious geopolitical crisis was not, but today there are many areas in which the wrong action or the wrong judgment can provoke a serious international conflict. The most likely risk of an incident associated with the competition and conflict in cyberspace, the struggle over North Korea, miscalculations on the battlefield in Syria, rising tensions between USA and Russia and the spread of ISIS militants (an organization banned in Russia — approx. ed.) from Syria and Iraq.
3. Technological cold war
The fiercest in the world the competition is for the economic powerhouses in the development of new information technologies. The US and China will compete for supremacy in the field of artificial intelligence and supercomputing technology, and to fight for a dominant position in the market. The authorities of the countries of Africa, India, Brazil and even European countries must decide whom to trust and whose products and standards to adopt. The fragmentation of the common market technologies creates both market risks and risks associated with information security breach, especially given how domestic companies compete with global viruses.
4. Mexican factor
2018 will be the determining factor for Mexico, as the negotiations on the revision of the announcement of the North American free trade (NAFTA) has reached a critical stage, and voters choose a new President. The failure of the NAFTA negotiations would not mean cancellation of the agreement, but the uncertainty of its future too will have a negative impact on the Mexican economy, given the significant dependence on trade with the United States. As for the presidential elections to be held on the first of July, due to corruption scandals, the activities of drug cartels and slow economic growth increases public discontent with the authorities. The need for change is an argument in favor of Andres Obrador (Andres Manuel Lopez Obrador), which represents a fundamental shift away from investor-friendly economic policy.
5. Tensions between the US and Iran
Donald trump feels hostility to Iran. Nuclear deal in 2018, may remain in force, but there is a serious likelihood that it will be terminated. Trump will support Saudi Arabia and to pursue a policy of containment of Iran in Syria, Iraq, Lebanon and Yemen. USA will be more likely to apply sanctions against Iran for ballistic missile tests, alleged support of terrorism and violations of human rights. Iran will resist. If the nuclear deal will be disrupted, Iran boosts its nuclear program, and over the region again will hang the threat of strikes by the U.S. and/or Israel.
6. The weakening of the institutions
The government, political parties, courts, media and financial institutions that provide and support peace and prosperity, continue to lose public confidence, which affects their legitimacy. In 2018, the populism manifested in the vote for Pexit and the election of Donald trump, will give impetus antikomintern threat of populism in the developing countries.
The intensification of the movement against the establishment in the countries with developed market economies, politicians are forced to change the approach to global economic competition — they take an uncompromising stance, using tactics of the exhaustion of the enemy. The result is increasing isolation and alienation. Neo-protectionism creates barriers not only in manufacturing and agriculture, but in the digital economy and innovation-intensive industries. New barriers are less obvious: instead of trade duties and quotas, today's most preferred instruments such as "in-country" restrictive measures — financial aid programs, grants, subsidies and requirements to "buy local producers"
8. Differences in Britain
The UK has experienced serious problems associated with hard negotiations on the withdrawal from the EU and the risk of domestic political crisis. In terms of Brexia, the principle that "until everything is agreed, not agreed anything," will cause endless battles over small things between the two parties and among representatives of each of them. As for domestic policy, the control procedure of exit from the EU can be costly to the Prime Minister is to lead to the resignation. If this happens, then the place may probably come politician-conservative, occupying a tough stance that will complicate negotiations on the 50th article (of the Treaty of Lisbon — approx. transl.). Or after new elections, it will be replaced by the leader of the labour party Jeremy Corbyn (Jeremy Corbyn).
9. Identity politics in South Asia
Islamism in parts of South-East Asia serves as a source of local forms of populism, most notably in Indonesia and Malaysia. The dissatisfaction of the ethnic Chinese, who in certain countries, own a disproportionately larger share of wealth, recently increased sharply, especially in Indonesia. The persecution of the Muslim minority Rohingya in Myanmar has caused a humanitarian crisis. In India ahead of the elections in 2019, Prime Minister modi to strengthen the support can use nationalism, covering radicalized elements of society that seek to direct its impact on Muslims and Hindus from the lower castes.
10. Security Africa
In 2018 the negative effects of instability on the periphery of Africa (Mali, South Sudan, Somalia) will spread to the core countries (côte d'ivoire, Nigeria, Kenya, Ethiopia). The main threats are associated with militancy and terrorism. Foreign partners, which helped to stabilize weak States in the past, today confused. Kenya, Nigeria, Uganda and Ethiopia are faced with the need to allocate more funds for security at a time when governments need to cut costs, but the attacks may adversely affect the sentiments of foreign investors.
Distractions or insignificant risks
Have criticized the administration trump no special powers to give legal force to the destabilizing or any other policy. The Eurozone in 2018 will refuse political risk. The political conflict in Venezuela, apparently frozen, since President Maduro showed himself to be surprisingly resilient.
Ian Bremmer (Ian Bremmer)
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