he world is moving toward crisis and a state of "geopolitical
depression" as the presidency of Donald Trump accelerates divisions
among citizens and the unraveling of the global order, risk consultancy
Eurasia Group warns.
Liberal democracies are suffering from a deficit of legitimacy not seen
since World War II, and today's leaders have largely abandoned civil
society and common values, Eurasia Group says in its annual assessment
of top geopolitical risks. The breakdown in norms opens the door to a
major event that could rock the global economy and markets.
"In the 20 years since we started Eurasia Group, the global environment
has had its ups and downs. But if we had to pick one year for a big
unexpected crisis — the geopolitical equivalent of the 2008 financial
meltdown — it feels like 2018," said Eurasia Group President Ian Bremmer
and Chairman Cliff Kupchan.
U.S. global power is "sputtering to a stall" as the Trump philosophy of
retrenchment and unilateralism sows confusion among both allies and
rivals, Eurasia Group says. The world now lacks leadership to steer it
through the impending crisis.
"'America First' and the policies that flow from it have eroded the
U.S.-led order and its guardrails, while no other country or set of
countries stands ready or interested in rebuilding it … significantly
increasing global risk."
Here are Eurasia Group's top risks in 2018:
In the absence of U.S. leadership, China faces less resistance in
setting the international standards in trade and investment, technology
development and the value of noninterference in other countries'
affairs. This could force businesses to adapt to a new set of rules and
may increase tensions with the Asia-Pacific region's more democratic
powers.
The world has become more dangerous because there is no global power to
underwrite security and many subnational and nonstate actors can carry
out destablizing actions. Cyberattacks and terrorism are two top risks,
but there is also the chance of a miscalculation leading to conflict as
North Korea continues to test ballistic missiles in a region full of
U.S. allies and as the United States and Russia back rival factions in
Syria.
The United States and China are racing to dominate areas like artificial
intelligence and supercomputing, setting up a battle to supply other
countries with civilian infrastructure, consumer goods and security
equipment. This could lead to a fragmented tech space in which China and
countries in its sphere of influence seek to control the flow of
information and the United States guards against foreign investment in
American tech companies.
The United Kingdom is moving toward a phase of its separation from the
European Union that will bring more difficult negotiations, including
designing a border for Northern Ireland and finalizing the U.K.'s
divorce bill. Prime Minister Theresa May needs to clarify the U.K.'s
goals to reach a deal with Europe, but as she reveals her hand, her
leadership may be challenged by rival political factions with
contradicting priorities.
Countries are using nontraditional measures — bailouts, subsidies and
"buy local" requirements — to protect intellectual property and
technology, a trend that can be called "protectionism 2.0." This could
lead to a surge in protectionism, a more complex and contradictory
regulatory environment, and resentment among countries whose policies
are seen to target one another.
Read more: 2018 may bring disastrous geopolitical event, says Eurasia Group
