This year might see a geopolitical crisis on the scale of this financial crash a decade ago, Eurasia Group warned in its yearly outlook.
Describing international political challenges as “daunting,” the New York-based political risk consultancy said that “if we had to choose 1 year to get a large unexpected crisis — the geopolitical equivalent of the 2008 fiscal meltdown — it feels like 2018.” The largest doubt surrounds China’s move to fulfill a vacuum as U.S. influence continues to decrease, stoking tensions between the two forces, ” said. That’s most possible to influence economics too.
“We see a lot greater fragmentation of the international market because governments are getting more interventionist,” Eurasia President Ian Bremmer said in a Bloomberg Television meeting with Tom Keene and Francine Lacqua. “Part of that is because the Chinese have an alternate model because of their investments and they’re increasingly likely to be seen as the most important driver of different markets around the world who will align themselves with Beijing than with Washington. ”
Here are some of Eurasia’s largest concerns in 2018:
President Xi Jinping’s successful consolidation of authority is assisting him to fulfill the gap created by U.S. President Donald Trump’s move away from Washington-led multilateralism. In areas such as investment and trade, technology and values, China is setting international standards with less resistance than ever before.
“For most of the West, China is not an attractive substitute,” Eurasia explained. “However, for most everyone, it’s a plausible alternative. With Xi ready and eager to offer that alternative and expand China’s influence, that’s the world’s largest risk this year.”
There are too many places where a misstep or misjudgment could provoke serious international conflict. Cyberattacks, North Korea, Syria, Russia and terrorism are a few of the risks that could trigger a mistake that leads to confrontation.
“We aren’t on the brink of World War III,” Eurasia explained. “However absent a international safety underwriter, and with a proliferation of subnational and non-state actors capable of destabilizing actions, the world is a more dangerous place. ”
Technology Cold War
As rapid technological advancements reshape the political and economic arrangement, the procedure will be messy. Fault lines incorporate a struggle for market dominance, fragmentation and also a race to get new technologies.
“As our cars, houses, factories, and public infrastructure start to generate mountains of data, and as connectivity morphs into augmented reality, a brand new generation of people will be ‘about the grid’ round the clock, with important implications for society and geopolitics,” Eurasia explained. “However until we arrive, it’s the world’s largest fight over economic strength. ”
Relations between the U.S. and Iran in 2018 will be a source of broad geopolitical and market risk. If the nuclear deal doesn’t survive the year, the Middle East might be pushed into a true crisis.
“Trump has it in for Iran,” Eurasia explained. “Rightly or wrongly, he sees the nation as the origin of much evil in the world. ”
Protectionism will make additional inroads led by populism, state capitalism and heightened geopolitical tensions. Governments are also intervening in the electronic market and innovation-intensive industries to preserve intellectual property and associated technologies.
“The growth of anti-establishment movements in developed markets has forced (sometimes, allowed) policy makers to change toward a much more mercantilist approach to international economic competition and to seem as if they’re doing something about lost jobs,” Eurasia explained. “Walls are going up. ”