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Reviewing the Top Risks of 2020

Art by Jessica Frampton

On January 4, Eurasia Group, our parent company, will publish its annual forecast of the top ten global political risk stories. You'll get full coverage of the 2021 report right here in Signal.

But today we'll look back at the Top Risks list for 2020. You can read the full Eurasia Group report here and the brief summary I wrote for Signal here.

(Full disclosure: Ian Bremmer is my boss, and I've been working on Eurasia Group Top Risks reports for 16 years.)

When the 2020 Top Risks report was published, the coronavirus story was confined almost entirely to Chinese social media. Little did the report's authors, Ian Bremmer and Cliff Kupchan, know that the story that would truly change the world hadn't yet generated much attention outside of hospital workers in Wuhan, China.

And yet… to a remarkable degree, COVID-19 mainly exacerbated the risks that did make the Eurasia Group cut. In fact, the full report was updated in March to account for the global impact of the virus.

Top Risk #1 — titled "Rigged: Who Governs the US?" — centered on the worry that doubts about the legitimacy of the US election would undermine American democracy. Bremmer and Kupchan argued that "Trump will be tempted to sow doubts about the integrity of the election," and that "after the election, the vote could be contested on grounds of tampering, procedural flaws, and/or historically low turnout."

The voter turnout point was off, but the rest of that forecast was prescient, and COVID played a crucial role in shaping the election outcome and in raising doubts about how the vote was conducted. Fortunately, the authors were also right that the "long-term durability of US political institutions" was not at risk, as US courts and the smooth functioning of the electoral college have limited the post-election turmoil.

Top Risks #2 and #3 both focused on relations between the United States and China. The central argument was that the decoupling of the US and China in the technology sphere (Risk 2) would "lead to a more explicit clash over national security, influence, and values" (Risk 3). These processes were well underway before January of last year, but COVID sharpened these differences by giving the US and Chinese leaders powerful new political incentives to sharpen their finger-pointing. COVID had another effect: It encouraged China's President Xi Jinping to become more aggressive on Hong Kong's legal autonomy and other sensitive issues while a distracted world fought to contain the virus.

If there's a major miss in the 2020 report, it's at #8 on the list. That risk – called "Shia Crescendo" – predicted that "feckless US policy in Iran, Iraq, and Syria will drive regional risk." It's worth noting that the report was published just days after the US assassination near Baghdad of Qassim Suleimani, an Iranian general and national hero. But Iran's response has remained muted in 2020, in part perhaps because Iran hoped that Joe Biden would win the US election and move quickly in 2021 to rejoin the Iran nuclear agreement, bolstering Iran's economy.

I encourage you to read the full 2020 report to decide for yourself where Bremmer and Kupchan were right and wrong, and we'll soon turn the page with a new report that looks forward to 2021.

Khant Thaw Htoo is a young engineer who works in Eni's Sakura Tower office in the heart of Yangon. As an HSE engineer, he monitors the safety and environmental impact of onshore and offshore operations. He also looks out for his parents' well-being, in keeping with Myanmar's traditions.

Learn more about Khant in the final episode of the Faces of Eni series, which focuses on Eni's employees around the world.

On his first day as president, Joe Biden signed a remarkable series of executive orders. Boom! The US rejoins the Paris Climate Accord. Bang! The United States rejoins the World Health Organization. Pow! No more ban on immigration from many Muslim-majority countries. Biden's press secretary reminded reporters later in the day that all these orders merely begin complex processes that take time, but the impact is still dramatic.

If you lead a country allied with the US, or you're simply hoping for some specific commitment or clear and credible statement of purpose from the US government, you might feel a little dizzy today. The sight of an American president (Barack Obama) signing his name, of the next president (Donald Trump) erasing that name from the same legislation/bill, and then the following president (Biden) signing it back into law again will raise deep concerns over the long-term reliability of the world's still-most-powerful nation.

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Ian Bremmer discusses the World In (more than) 60 Seconds:

Biden's first scheduled call with a world leader will be with Canada's Justin Trudeau. What's going on with the Keystone Pipeline?

Well, Biden said that that's it. Executive order, one of the first is that he will stop any construction or development of the Keystone Pipeline. This is of course an oil pipeline that would allow further oil sands oil to come to the United States. The infrastructure is significantly overstretched, it's led to backlogs, inefficiency, accidents, all the rest, but it also facilitates more energy development and keeps prices comparatively down if you get it done. So, there are lots of reasons why the energy sector in Canada wants it. Having said all of that, Trudeau, even though he's been a supporter of Keystone XL, let's keep in mind that he did not win support in Alberta, which is where the big energy patch in Canada is located. This is a real problem for the government of Alberta, Canada is a very decentralized federal government, even more so than the United States. The premier of Alberta is immensely unhappy with Biden right now, they've taken a $1.5 billion equity stake in the project. I expect there will actually be litigation against the United States by the government of Alberta. But Trudeau is quite happy with Biden, his relationship was Trump was always walking on eggshells. The USMCA in negotiations ultimately successful but were very challenging for the Canadians, so too with the way Trump engaged in relations on China. All of this, the fact that Trump left the nuclear agreement with Iran, the Paris Climate Accords, WHO, all of that is stuff that Trudeau strongly opposed. He's going to be much more comfortable with this relationship. He's delighted that the first call from Biden is to him. And it certainly creates a level of normalcy in the US-Canada relationship that is very much appreciated by our neighbors to the North.

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Kevin Sneader, Global Managing Partner at McKinsey & Company, provides perspective on what corporate business leaders are thinking during the global coronavirus crisis:

Should businesses be pessimistic or optimistic about 2021?

It's easy to be gloomy about the year ahead when faced with the realities of a cold, bleak winter in much of the world. Add to that lockdowns across Europe, surging case numbers and hospitalizations, and dreadful events in the Capitol in the US to name a few reasons for pessimism. But I think there is a case for optimism when it comes to this year. After all, it's true to say that it's always darkest before the dawn, and my conversations with business leaders suggest there are reasons to be positive by 2021.

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Renowned tech journalist Kara Swisher has no qualms about saying that many of the country's social media companies need to be held accountable for their negative role in our current national discourse. Swisher calls for "a less friendly relationship with tech" by the Biden administration, an "internet bill of rights" around privacy, and an investigation into antitrust issues.

Swisher, who hosts the New York Times podcast Sway, joins Ian Bremmer for the latest episode of GZERO World, airing on public television nationwide beginning this Friday, January 22th. Check local listings.

The GZERO World Podcast with Ian Bremmer. Listen now.


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