Risks and Fears in 2016

mazeOne of America’s most influential risk research firms, Eurasia Group, does not see another great war erupting; however, they expect the further decline of world economy and politics.
The president of the company, Ian Bremmer explains the main points of their most recent research, such as the one significant frontline within Europe: the battle between advocates of openness and closure. This year America ‘closes’, but at the end of the year, when the new president is elected, it will ‘open’ again. Until then, major political figures with unlimited power in their country, and independent technology and capital market moguls, who are demanding an entirely different political role, will cause  unpredictable fluctuations in politics, economy, and on capital markets as well.

Péter Zentai: Your report that said since the end of WWII, leading countries have not had to face so many challenges at the same time as now, has drawn much attention in the world media. Am I wrong if I assume that a global war is on our doorstep?
Ian Bremmer: According to our analyses, the strongest countries – in terms of military, politics and economy – are trying to avoid a new world war; they are reluctant to enter armed conflicts with global potential. However, it is clear, that in many aspects, the global order is becoming vulnerable.

Your study ranks the reasons of this situation. What do you think is the most significant risk of the next twelve months?
The significance and the scope of the alliance between America and Europe, the transatlantic partnership has substantially dropped. There isn’t a common priority, which would make the two countries an effective unit.
This year, America has become more inward-looking, while Europe is crippled by Russia’s intervention in Ukraine, and the refugee crisis. The transatlantic partners proved to be unable to cooperate in Syria and the Middle East.

Do we have to give up on a great European unity because it is impossible to achieve?
Actually, there is only one fundamental conflict in Europe: the conflict between the advocates of a closed and an open Europe, which is becoming more and more severe with unpredictable economic, financial and political consequences. This battle is fought both within and between countries. This is the reason why the UK leaving the EU became a possibility, just like reinstating the border controls between EU member countries too.

Recently, the greatest political challenge we face is the refugee crisis and the Saudi-Iran tension. The general Middle Eastern situation is also quite concerning, while economically, China’s internal problems having external effects is also a severe matter. What is your opinion on these issues?
China has become the only country with a global economic strategy, acting seemingly consistently according to it. This is why it caught the attention of global market and world political figures: China has become such a central ‘player’ that its growth rate slowing down and its currency fluctuating will significantly affect the future of world economy. We think that China is the third most severe risk factor of this year. However, according to our analysis, we believe that it will survive the crisis and will have been stabilized in every way by the end of the year.
In fourth place, based on risk and danger factors, it is the terrorism – with religious allusions – seeping out of the Middle East, because we think that absolute victory over it this year is hopeless. We can see more and more signs of the destabilization of Saudi Arabia, and the possible decline of the kingdom, together with Iran’s relative growth are posing exceptional security risks to the world.

It is surprising that technological developments are viewed as an independent and outstanding risk factor…
That is not quite accurate. The actual risk factor is those extremely wealthy people with relatively endless power in their own, mainly technological and capital market fields, who are wishing to embrace political ambitions. They have different ideologies and attitudes. The point is that they can become absolutely independent from governments, countries and political powers, and easily carry out their own agendas. By this unprecedented exercise of power, they can produce significant fluctuations in both world politics and global capital markets.

And we have not even mentioned the potential impact of those people that practically nobody stands in their way because they have developed total power in their countries…
In our risk-ranking, state leaders whom we designated ‘unpredictable’ take a significant place: Putin, Erdogan (president of Turkey), Porosenko (president of Ukraine), or the Saudi Crown Prince, Mohammed bin Salman, and other autocratic leaders. Any of them can act or carry out interventions without negotiations at home or at international levels first. Their sudden actions can be ‘life-threatening’ in terms of market and world political developments.

Is the United States, which used to be a superpower, ‘nowhere to be found’ this year?
America is quite preoccupied by the presidential elections this year. However, analysts at Eurasia Group are agreeing that in the end, people of America will not elect a president, who would seal their borders for Muslims, and support isolation.

Original date of Hungarian publication: January 11, 2016