What Are the Global Risks to Watch in 2020?
Let’s face it — we have a lot of baggage going into 2020. Consider the trade wars, tech wars and chronic proxy wars in places like Afghanistan and Syria; plus we have so many extremist strains, natural disasters, a global refugee crisis, Brexit, the North Korean threat and so on. These are factors that pose a recurring threat to our stability — that’s global risk in a nutshell. But what else should we be concerned about in 2020? Here are a few risks to watch for, based on the fourth annual joint project with my NYU graduate students and crowdsourced consultancy Wikistrat where I’m a lead analyst:
1) The US-Iran Butterfly Effect
As you know, US President Donald Trump shocked the world with the Jan 2 drone attack killing Iran’s most powerful military commander, Qasem Soleimani. And yet this unilateral act shouldn’t be so shocking — President Trump’s rhetoric has been highly confrontational on Iran from day one. The question is: will this lead to full-on war? Unlikely, even after Iran’s Jan 7 counter-attack on US interests in Iraq and decision to ignore the JCPOA nuclear deal. But look for proxy wars or shadow wars in this region to noticeably worsen, especially where US troops are positioned. This will undoubtedly be the year of heightened instability in the Middle East. Is there a winner in this conflict? Maybe just ISIS in Iraq, as US troops move away to refocus on the Iranian threat (and could Iran’s long-time rival, Saudi Arabia, be enjoying this?) It could also be positive for Russia and China, as the US likely prioritizes the Middle East for now over great power competition. And North Korea may also feel this is an opportune time to assert itself, perhaps feeling ignored by President Trump.
2) Internet Shutdowns Deepen the Global Democratic Crisis
We said this last year — and we are saying it again. 2018 was definitely the year of the autocrat (or faux democrat), but 2019 was too. In fact, there was a more rapid decline in democracy globally for the second year in a row, according to the World Justice Project’s 2019 Rule of Law Index. Certain leaders (e.g. India’s Modi, Hungary’s Orban, Turkey’s Erdogan) aggressively pursued their agenda and, in some cases, shut down the Internet (122 times to be exact), costing the global economy $8.05 billion last year. This trend is unlikely to reverse itself in 2020. And the voice of autocrats and extremists may continue to overshadow that of others. Sensitive groups (e.g. minorities and refugees) will continue to suffer as we struggle with questions like: are we globalists or nationalists — do we care about the other? And is democracy really still the best system?
3) The Angriest Year Yet for the Citizen Protester — a Global Spring Perhaps?
Yes, we said this last year too. Citizen protests have surfaced globally recurrently since the Arab Spring began back in 2011, focusing on everything from austerity policies in the EU to corruption in South Korea and Brazil, education policy in Chile and the #metoo womens movement globally. But 2019 felt like the angriest year yet for the tech-armed citizen protester: consider the protests against tax hikes in France, controversial laws in Hong Kong and India, corruption in Bolivia, a Whatsapp tax in Lebanon and so on. 2020 will likely be the next phase of our global spring, as tech-armed citizens keep pushing back. The greatest challenge for most political leaders and governments will continue to be how to regain the confidence of an increasingly angry citizenry — or perhaps to consider if there is a better political system ahead of us.
4) A Global “Wave of Debt” Finally Crashes into the Global Economy?
Even if global recession fears have momentarily eased for 2020, there are obviously still serious economic risks like the trade war and the decoupling of the tech sector (which will have long-term implications we can’t yet fathom). But could this also be the year that the global debt crisis finally implodes? The World Bank and IMF certainly think so, insisting governments do more to manage their debt. The question is do governments today have the capacity to tackle this issue? Not really. According to the World Bank, this crisis could be much worse than the Latin American crisis of the 1980s, the Asian financial crisis of the 1990s and the global financial crisis of 2007–2009, with the debt to GDP ratio having increased by more than half in the 2010–2018 period — and this includes both government and private sector debt. We’ve been warned.
5) Nearing ‘Point of No Return’ in the Global Climate Crisis
We all know about the effect of climate change — as you read this, Australia is burning and Indonesia is flooding. The 2010s were the hottest decade on record, with the amount of CO2 in the atmosphere now at its highest level in human history. This is undoubtedly a global climate crisis. As the World Economic Forum put it in their 2020 Global Risks report, “climate change is striking harder and more rapidly than expected.” UN Secretary-General Antonio Guterres already warned the world in December 2019 that we are nearing the “point of no return.” Yet the UN’s two-week COP25 summit that same month in Madrid with delegates from nearly 200 nations failed to reach any agreement. Youth activists like Greta Thunberg are obviously an inspiration as they use protest to put pressure on governments — but will this really lead to sustained political change? For 2020, sadly, we have to expect more natural disasters that most governments will struggle to cope with as more climate refugees appear.
COUNTRIES TO WATCH
War-torn Iraq’s political risk escalated last year as citizens of both Shia and Sunni sects (including women) came together to protest government corruption and poor public services, even managing to oust their prime minister. But the protests have also focused on the US and Iran’s perceived influence in the country. The current US-Iran flare up has obviously made a very sensitive situation on the ground much more sensitive — especially with growing concern about an ISIS resurgence as US troops refocus on Iran (while also ignoring Iraqi calls to withdraw from the country). This will be a tough year, as Iraqi protesters fight for their future.
Yes, President Trump was impeached in December 2019, attacked Iran in January 2020 just weeks before his impeachment senate trial, and now has been reigned in by the House of Representatives’ war powers resolution. But could he still win the 2020 election? It’s possible. And yet it may not even matter — either way, the campaign itself, including inflammatory presidential rhetoric, will be ugly and impact both domestic and global stability. The legitimacy of the election results will be questioned by whomever loses and we’ll have renewed debates about Russian (and Iranian?) election interference via social media — but possibly never have any resolution.
Since June 2019, Hong Kong protesters have challenged China’s controversial extradition bill but now this movement has evolved into a broader call for democracy. The spillover to Taiwan, led by newly re-elected president and Hong Kong sympathizer, Tsai Ing-wen, is a notable concern for China (despite its disinformation campaign). But there is likely also concern about the slowing growth and rising inequality (note: there’s potential for US sanctions on China too over its treatment of the Uighur Muslim minority). Globally, this combination of a weak economy and growing inequality has led to youth-led protest movements — could this happen in some form in China? Seems unlikely (one index even suggests China’s government is seen by citizens as very trustworthy), and yet this is still something to track given global trends.
India won the diplomatic battle over Kashmir last year after its autocratic move to revoke this territory’s special status. But a controversial new citizenship law targeting Muslims (and other minorities) has unleashed major anti-government protests. As Eurasia Group put it, Prime Minister Narendra “Modi has spent much of his second term promoting controversial social policies at the expense of an economic agenda.” The World Bank expects India’s growth to decelerate to 5% — an 11-year low. Also note that India lost $1.3 billion last year alone for the government’s many internet shutdowns; how much will it lose in 2020? (And note that the shutdown in Kashmir is the longest in any democracy, though India’s court has now ruled that this is an “abuse of power”.)
The Venezuelan refugee crisis is set to be the world’s worst in 2020 — and the most underfunded in modern history, according to the Brookings Institution. The political and economic crisis continues into President Nicolás Maduro’s second and still contested term. Hyperinflation has hit 10 million percent. Since 2013, almost 5 million (16% of the country’s population) have fled Venezuela to neighboring countries like Colombia and Trinidad and Tobago, where they often face xenophobia and very poor living conditions; other countries like Ecuador and Chile have even imposed barriers to entry for these refugees. Like Yemen and Syria, this humanitarian crisis is just getting worse each year.
An obvious one but we need a reminder: tech. Yes, in 2020 we will be dealing with the same concerns about tech we’ve had in recent years — conflict over data privacy (read up on the new California Consumer Privacy Act) and compensation, potential election interference online, use of social media by extremists – and by political actors, internet shutdowns courtesy of government, and so on. Perhaps it’s good news that the father of the Internet, Sir Tim Berners-Lee, wants to reclaim his creation by proposing a social contract for the web? Let’s see.
But for now, big picture, this looks like another year of muddling through, with governments struggling to resolve any of these crises. What about you, Reader – what role will you play in tackling these global risks in 2020?