Global risk roundup with Ian Bremmer
Political scientist Ian Bremmer says that despite a strong global economy and resilient financial markets, the likelihood of a big, unexpected crisis is creeping up. Speaking at a recent Schwab event, he highlighted some of the top geopolitical risks that could roil international relations in 2018.
Founder, Eurasia Group
More broadly speaking, the odds of a misstep or misjudgment provoking a serious international conflict have gone up. One clear hotspot is North Korea. Bremmer predicts that the likelihood of a war between the U.S. and North Korea is now about 10%. “That’s way too high,” he said. “Five years ago I would have said 1%, maybe less. It’s gone up a lot.” Russia is also increasingly problematic. In February, U.S. forces killed more than 200 contract soldiers, mostly from Russia, after they attacked a base in Syria held by U.S. and Kurdish forces. A week later, Russian President Vladimir Putin gave a speech in which he showed a video of Florida “getting nuked.”
“I don’t believe that we are really in more danger of a Russian military strike against the United States right now,” Bremmer said, “but I say it to you because [of] the potential for mistakes being made, especially when the Americans or Russians, Israelis, Iranians, Turks are all fighting in close proximity in and over Syria.”
Certainly no accident, Russia and North Korea played central roles in recent cyberattacks that infiltrated computer systems around the globe and caused billions of dollars in damages. Both countries are using their cyber capabilities in a bid to destabilize, while China is more risk-adverse and focusing its cyber efforts on stealing intellectual property. Either way, the United States hasn’t shown much competence in countering such attacks.
“The U.S. doesn’t feel like it has an ability to either deter or defend,” Bremmer said. “We’ve got great offense. We don’t really have defense.”
After the financial crisis in 2007–08, every global leader was keenly focused on addressing the systemic factors that precipitated it. “The world in 2009 felt pretty cohesive,” Bremmer said. Not anymore. Nearly every Western nation now is fixated on domestic issues. The United States is pulling back from international agreements. The British are trying to deal with the implications of the Brexit vote. And the Germans are “really complacent.”
This collective withdrawal is exacerbating worsening conditions in places such as Syria and Venezuela. Hundreds of thousands have died in Syria, and millions have sought refuge elsewhere, but it’s “not really our problem, right?” Bremmer asked. Last year, the average Venezuelan lost 19 pounds of weight, 92% of the population is undernourished, and the country is on the brink of default. But “our willingness to help the Venezuelans is zero,” he said. In the absence of help from abroad, more violence is likely.
With the U.S. and other Western powers retreating, China is filling the void—and giving others a model to emulate. China is consolidating power under an authoritarian leader, while the global perception of the attractiveness of Western liberal democracies is on the wane. For most of the West, China is not an appealing substitute. But for almost everybody else, it’s a plausible alternative. Turkey and Hungary are effectively becoming authoritarian states, and Poland is “kind of on that path,” Bremmer said. The result is a world more susceptible to conflict.
“It is inconceivable to me that over the next three to five years we’re not going to have a few of these things go off the rails,” he said. But don’t count the United States as part of this trend; U.S. democratic rule is well intact. When people inside the government object to orders and policies, they simply leak or drag their feet. “There’s no deep state in America; there’s a deep bureaucracy,” Bremmer said. “So I don’t believe that America’s heading towards soft authoritarianism under Trump.”
Erosion of institutions
Distrust in bureaucratic institutions is pushing much of the developed world into protest mode—to detrimental effect. Very few in Great Britain thought that voting for Brexit would really improve their lives, said Bremmer, but they did it anyway to “send a message that they thought they were being lied to about everything.” Such sentiment is growing, and it’s being fed around the world by structural inequality that is widening the gap between the haves and have-nots. Political institutions are coming apart across Eastern Europe and in Spain, Turkey, Brazil, and South Africa.
In the United States, many are questioning the legitimacy of the mainstream media, feeding the growth of conspiracy theories and political movements that were heretofore considered unpalatable. While public outcry in the U.S. is typically short-lived, Bremmer believes this global trend could lead to “market-negative tipping points” in countries where institutions are less resilient.
Global tech cold war
Trump’s latest tariff plan has raised concerns about a coming trade war between the U.S. and China, but the real threat is lack of cooperation on technology. China is investing significantly in artificial intelligence and other advanced technologies, and although its scientists may not be the same caliber as their U.S. counterparts, China has a big advantage in access to data. Few American companies have been able to crack the Chinese market, while Chinese-backed enterprises have been operating on U.S. soil with few constraints.
“We are heading towards a technology cold war between the Americans and the Chinese that will increasingly fragment the global marketplace,” Bremmer said. “That is a big problem, and I don’t think anyone is really focusing on it—the fact that some of the most important American companies are fundamentally only going to have access to a reduced portion of the global marketplace.”
This article is based on a presentation in March 2018. The opinions expressed are those of Ian Bremmer.
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