COVID-19 and global political risk

COVID-19 and global political risk

On January 6, we wrote about the annual Global Top Risks report from Eurasia Group, our parent company. At the time, there was not yet a single confirmed death from COVID-19 in China or anywhere else.

That was 11 weeks ago.

You can now read a coronavirus-related update to that report, which details the many ways this global pandemic has altered the world's biggest political risk stories.

Some highlights…


Back in January, Eurasia Group's Top Risk #1, titled "Rigged!: Who Governs the US?" argued that the legitimacy of the 2020 US elections will be widely questioned, given that political polarization in the US has become so intense that millions of Americans now believe that courts, federal agencies, the media and US political institutions like the Federal Reserve have no credibility.

Coronavirus has made this problem worse by forcing a number of upcoming primaries to be postponed and making it nearly impossible for candidates to campaign. It's not clear if the party nominating conventions will take place. But most importantly, the coronavirus itself has become a bone of partisan contention in ways that hamper the unity that is needed to defeat it: a recent poll shows that Democrats see the threat in much more urgent terms than Republicans. Meanwhile, some Republicans have charged that media coverage of COVID-19 is a ploy to discredit Donald Trump.

Top Risk #2, titled "The Great Decoupling," detailed how the US-China rivalry would cause the two countries to decouple their economies from each other, not only in strategic technologies like semiconductors, cloud computing, and 5G, but in broader trade and investment too. COVID-19 has given fresh urgency to Western companies' efforts to cut China-dependent supply chains.

Top Risk #3, titled simply "US/China" focused on the growing likelihood of clashes over national security, influence, and political values. Sure enough, the coronavirus crisis now has President Trump and other US officials referring to COVID-19 as the "China Virus," since it originated inside China, while some Chinese officials claim that actually the US planted the virus in Wuhan. In a better world, COVID-19 might have encouraged the US and China to work together to contain the threat it poses. But for now, each side's approach to coronavirus is stoking acrimony with the other.

We encourage you to read the full report, because it also includes Eurasia Group's updated thinking on how COVID-19 can aggravate US-EU tensions, overwhelm India's public services and worsen sectarian tensions, undermine governments in Iran, Iraq, and Syria, inflame public anger in Latin America, and add one more area of unpredictability and political pressure in Turkey.

On all these subjects, here's a video of Ian Bremmer in his own words.

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What We’re Watching: Biden and Putin chat, Scholz takes the reins in Germany, Remain in Mexico returns, Pécresse enters the French fray, Suu Kyi learns her fate

World War III or nah? US President Joe Biden and his Russian counterpart Vladimir Putin are set to speak by phone on Tuesday, as the crisis surrounding Ukraine gets dicier by the day. Russia has massed more than 100,000 troops along its border with the country, and the US is warning that Putin is gearing up to invade soon, though the underlying intel isn’t public. No one is quite sure what Putin’s up to with this stunt. Is he trying to pressure Kyiv into moving ahead with the lopsided (but probably best possible) Minsk peace accords of 2015? Or is the Kremlin seeking a broader NATO commitment not to expand further? Or does Putin actually want to invade Ukraine? Either way, Biden has his work cut out for him. Putin is clearly more comfortable risking lives and money to preserve a sphere of influence in Ukraine than the West is, so the US president has to be careful: don’t set out any red lines that NATO isn’t willing to back, but also don’t push the situation into a broader war that no one (ideally) wants.

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Demonstrators hold flags and placards as they march to protest against the coronavirus disease (COVID-19) restrictions and the mandatory vaccination in Vienna, Austria, December 4, 2021.

40,000: At least 40,000 people joined protests in Vienna on Saturday against new lockdowns and vaccine requirements, the second week in a row the city has seen mass demonstrations of this kind. Amid a surge in new cases, the Austrian government announced that a nationwide vaccine mandate would come into effect on February 1.

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The Graphic Truth: Who misses tourism the most?

Countries that rely hugely on tourism and travel dollars have already been reeling from the pandemic, as lockdowns and new COVID variants cause people to avoid airports and stay home. Now the omicron variant is scuttling holiday travel plans that many were hoping would infuse fresh cash into their struggling economies. So who is most concerned about these disruptions to the tourism industry? We take a look at economies that saw the biggest boost from tourism dollars from 2008-2019, and how that changed in 2020 as a result of the pandemic.

Ian Bremmer interviews economist Larry Summers on GZERO World. Summers served as the Treasury Secretary under President Clinton and as the Director of the National Economic Council under Preisdent Obama. He sounded the alarm bell about inflation back in February 2021 when few people were talking about it. Part of the reason prices are rising so much today, Summers says, is because the Biden administration made the political decision to do "too much stimulus," a big mistake in his view. Summers discusses how supply chain problems are also contributed to the highest levels of inflation in the US in 30 years.

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Australian Open - First Round - Melbourne Park, Melbourne, Australia - January 21, 2020 China's Peng Shuai in action during the match against Japan's Nao Hibino

The Women’s Tennis Association this week decided to suspend all tournaments in China, over doubts that the country’s star player Peng Shuai is safe and sound. Peng recently disappeared for three weeks after accusing a former Vice Premier of sexual assault. Although she has since resurfaced, telling the International Olympic Committee that she’s fine and just wants a little privacy, there are still concerns that Peng has been subjected to intimidation by the Chinese state.

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Carl Bildt, former Prime Minister and Foreign Minister of Sweden, shares his perspective from Europe:

How is Europe dealing with new omicron version of the pandemic?

Well, I mean the big issue isn't really that one, the big issue if you see the havoc that is created in several European countries at the moment is the delta. The delta is making impressive strides, particularly in countries that have a slightly lower vaccination rates. So that's the number one fight at the moment. And then we must of course prepare for the omicron as well.

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Caravan of Taliban soldiers with guns held upright

Listen: With the US gone and the Taliban back in control, Afghanistan faces a long winter. Mounting food insecurity and a crumbling economy have left many Afghans feeling abandoned. The international community could help solve this humanitarian crisis, but can they trust the Taliban?

Ian Bremmer sat down with journalist and author Ahmed Rashid to learn more about the Taliban today. Few people know more about the Taliban than Rashid, who wrote the book on the group — literally. In the months after 9/11, his critically acclaimed 2000 study Taliban became a go-to reference as the US geared up to invade Afghanistan and knock the militant group from power. Twenty years later, how much has the group changed since the days of soccer-stadium executions, television bans, and blowing up world heritage sites?

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