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Hold us accountable: Our biggest calls for 2023
Every year, Eurasia Group releases its Top 10 geopolitical risks for the year ahead. You’ll see the 2024 edition next Monday. But an honest analyst looks back at past forecasts to see (and acknowledge) what he got right and wrong, and I’m going to do that here and now.
Here’s the 2023 full report. To remind you, our Top 10 risks for 2023 were:
- Rogue Russia
- Maximum Xi
- Weapons of Mass Disruption
- Inflation shockwaves
- Iran in a corner
- Energy crunch
- Arrested global development
- Divided States of America
- TikTok boom
- Water stress
Let’s take these one at a time …
1. Rogue Russia
Our top risk last year was that the war between Russia and Ukraine would be no closer to resolution and that Russia would be on track to become the world’s most dangerous rogue state.
Check and check.
Another year of brutal fighting brought hundreds of thousands of casualties – and barely budged the war’s frontlines. Russia, still led by a president considered a war criminal in the West, now faces even more sanctions, and it has therefore drawn closer to Iran and North Korea to procure much-needed military supplies from both.
Russia has also picked up the pace of cyberattacks on Ukrainian targets and continues to target cities across the country with airstrikes. Putin has kept Russia’s asymmetrical attacks incremental to avoid escalation and exacerbating divisions in the West, but Russian disinformation attacks are picking up in support of Kremlin-friendly politicians and political parties inside NATO countries.
For 2024, Putin will have new options. More on that next week.
2. Maximum Xi
This call fared well too. We expected Xi Jinping’s consolidation of political power to create big economic and policy challenges through increasingly arbitrary and capricious central decision-making. We saw that most dramatically early in 2023 when a sudden U-turn from the world’s tightest zero-COVID policies produced a bad hangover for the Chinese economy.
Making matters worse, the expected economic bounce-back hasn’t materialized, and the unpredictability of government decision-making led to growing capital flight and a sharp turnaround in foreign direct investment, weakening the economy further.
In fairness, Xi Jinping responded to the economic weakness later in the year with a friendlier and more open foreign policy than we feared. Relations with the United States and Europe have been far better managed in recent months.
Do we expect that trend to last in 2024? We’ll tell you much more about that next week too.
3. Weapons of Mass Disruption
Here’s where I think we were furthest ahead of the curve. A year ago, very, very few political leaders were actively thinking about the disruptive power of artificial intelligence. Now, the hopes and fears are front and center in every region of the world – but especially for decision-makers in America, China, and Europe. The UN is on the case now too.
We learned this year that new AI tools represent a unique technological breakthrough with implications for every sector of the economy. They’re already driving a new phase of globalization. But they’re also creating serious risks because AI will enable disinformation on a massive scale, fuel public mistrust in governing institutions, and empower demagogues and autocrats in both politics and the private sector. More on that next week too.
4. Inflation shockwaves
Here our forecast mainly missed the mark. We expected that inflation at levels not seen in generations would lead to a restrictive policy stance by major central banks, reducing global demand and causing financial stress and social and political instability. We were thinking mainly of countries already under pressure, but we considered the United States vulnerable too.
The US did experience a banking crisis of confidence following the collapse of Silicon Valley Bank and First Republic in 2023, but stronger-than-expected growth and continued low unemployment helped contain the fallout.
The global impact was less than we expected. Yes, China underperformed, but Europe absorbed the shocks created by the transition away from imports of Russian energy, and overall US performance stuck close to the “Goldilocks” scenario of slow economic cooling while avoiding recession. The risk of a major financial crisis was avoided.
With hindsight, inflation deserved to be on the list, but not at #4.
5. Iran in a corner
This one cut both ways in 2023. On the one hand, as we expected, there was no breakthrough with the Biden administration to restore the Iran nuclear deal, and that led Tehran to step up uranium enrichment and stockpiling. It also upped its military cooperation with the Kremlin, particularly with drone transfers that boosted Russia on the battlefield in Ukraine.
We also finished the year with serious concerns about an expansion of the regional war between Israel and Hamas, a conflict in which Iran would be a key player. Their various proxies in the region were already stepping up attacks on Israel and US forces in the region as 2023 came to an end.
But the positive surprise was a breakthrough we didn’t foresee — brokered by China — between Iran and Saudi Arabia. That diplomatic opening has facilitated better economic relations, and following the outbreak of war, leaders of the two countries have been in regular communication, helping to stabilize the region for now.
6. Energy crunch
This was the biggest miss in our 2023 top risks report. We forecast that supply-limiting geopolitical challenges coupled with higher global energy demand would push oil prices beyond $100 a barrel by the end of the year. But there was no energy crunch in 2023 because the wars and the best efforts of OPEC+ to bolster prices couldn’t outweigh reduced demand from sluggish economic growth in China or a dramatic expansion of US oil production despite its commitment to a faster and more expansive energy transition. Oil topped out just under $95 and quickly backed down. Despite the entirely unexpected risks in the Middle East, the price has lately bounced between $75-$80 per barrel.
7. Arrested global development
Though the pandemic is over, human development indicators overall continue to suffer, thanks to the Russia-Ukraine war, global inflation, climate change, the Israel-Hamas war, and a number of other military coups and conflicts in places like Haiti, Sudan, Ethiopia, and Armenia-Azerbaijan that receive very little attention from Western media.
The result is lower levels of economic and political security for most of the world’s population. This should have come higher on our list.
8. Divided States of America
Given the structural political dysfunction (ask former House Speaker Kevin McCarthy and the parade of his hapless would-be replacements) and the continued erosion of public confidence in US political institutions, this deserved to be on the list. Given the trajectory, we should have had it a little higher.
The 2024 election season is now in full swing, and in many ways, it is more problematic than in 2020. The international impact has so far been limited, and other governments are only just starting to grapple with the post-November uncertainties in US policymaking. More on that next week.
9. TikTok boom
Gen Z certainly became a bigger player in 2023, and not just on climate or issues of equality and identity politics. The Israel-Hamas war has created early challenges for the Biden reelection campaign, with both support for Palestinians and anger at the Israeli government becoming more intense as 2024 begins.
10. Water Stress
Water stress became more of an issue in 2023. Record rains made a big positive difference in the United States, facilitating a political deal for water-sharing in western US states and giving farmers a medium-term lease on life.
But other water-stressed parts of the world have experienced more pain. Northern Mexico remains in serious trouble. Agriculture and overall fiscal strain across Europe will require new political thinking. Sub-Saharan Africa now faces more starvation, especially in the Sahel and the Horn of Africa, adding to forced migration trends. Too many governments are focused only on crises, leaving longer-term plans for new institutions capable of marshaling long-term resources on the drawing board.
So, that’s my look back at 2023. Beginning next Monday, you’ll be reading much more about our expectations for a historically turbulent 2024.
Ian Bremmer: Why Rogue Russia was predicted as Eurasia Group's 2023's top risk
Evan Solomon: Risk number one in 2023, rogue Russia. Tell us why, Ian.
Ian Bremmer: Well, look at how unhappy Putin looks in that graphic, first of all, I mean, that drives a risk just by itself. Look, this is the biggest misjudgment made by any leader on the global stage since we've been covering this stuff in the 90s. Unfortunately for Putin, he has no way to claw back anything like his life pre-status quo ante in February 24th. I mean, at least the Cuban missile crisis you talk about there's this incredible chance of Armageddon and then both sides stepped back, and they were able to do business as usual. That can't happen, right? Putin, he's destroyed his military. He's got an economic position, a country which is being forcibly decoupled from the West, that's not coming back. NATO's expanding. Ukraine is now going to be the best trained, best armed, most effective intelligence, best army in Europe facing Russia. All of that is happening while Putin is failing at every one of his war aims.
So, what's going to happen in 2023? Well, first, Putin is going to fail on the ground in Ukraine, and it might be worse than that, Ukraine, for him, Ukraine might be able to retake a lot of the land in counter offensives that the Russians have taken, maybe even threatening to retake Crimea. Russia will increasingly not even be in a position to punish the Ukrainians the way they have in the last couple months because Ukrainian air defenses will get a lot more effective, especially when the Patriot missile system is stood up. So, what can the Russians do unless the country's going to give up? Unless they're going to simply sort of surrender, which I don't expect.
And so, the outcome is likely to be that Putin's going to escalate. An escalation means that the war is increasingly going to hit NATO, asymmetric attacks, cyber, fiber, pipeline, disinformation, espionage. In other words, rogue Russia is going to look to NATO the way rogue Iran has looked to the Middle East. Russia will become the most powerful rogue state that the world has ever experienced.
Prigozhin's exit shakes Putin's regime
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here and quite a weekend.
We have just gotten through an unprecedented turn of events challenging President Putin in a way that he has not since he's taken power in that country. Mr. Prigozhin, the head of the Wagner Group, built up directly by President Putin, he is solely responsible for Prigozhin's success and power and wealth, and then essentially declaring war against the Kremlin, moving his forces to within dozens of kilometers of Moscow. And then, at the last moment, "cutting a deal" brokered by Belarus's President Aleksandr Lukashenko. He is today still, to the best of our knowledge, a free man. But for how long? It's hard to imagine that's sustainable.
This is a man who has done a lot of fighting for the Russians on the ground in Ukraine, sending his troops into a meat grinder, as it's been referred to in Bakhmut, some of the only territorial gains that the Russians have had in the last six months. Lionized for that by Russian state media on billboards across the country over the past months, but also increasingly insubordinate, both in his public willingness to go after the Ministry of Defense, the forces, the command structure on the ground, and, in particular, Minister of Defense, Sergei Shoigu. And then, over the last week, when Shoigu said that all Wagner forces and all paramilitary forces had to sign direct contracts with the Ministry of Defense, in other words, they'd be rolling up to their authority. And Prigozhin said no and then Putin directly said, reiterating that order, "Have to sign. Those orders have to become conscripted under contract under Shoigu."
Prigozhin again said no. Put him in an impossible situation. He was essentially dead man walking if he was going to say no. And he said no. Of course, he wasn't in much better of a situation if he said yes, because then those troops no longer report to him, and that is his power base. So he ended up turning around from Ukraine and sending his troops first into Rostov uncontested, head seat of the Southern Military District where the command center for the Ukrainian offensive has been for the Russians. And then up towards Moscow. So that explains why he did it, but much harder to explain why he suddenly backed down and why he's still alive today. Why he backed down I think has more to do with the fact that he didn't have any support inside the Kremlin. I mean, while this was all going on, there were no defections among Russia's military leadership. There were no defections inside the government. There were no defections among Russia's key oligarchs.
Prigozhin is not only a creation of Putin, but is also outside the power structure. So inside the power structure, you don't have a lot of people saying, "I'm with him. I'm with stupid." And so he marches towards Moscow in an utter move of desperation but doesn't have the ability to beat the forces, or doesn't think he does, that are loyal directly to Putin and are accountable directly to Putin defending Moscow. And so then when he is offered a deal, he takes the deal. But I mean, anyone that believes that a deal offered by Putin after this level of personal challenge and embarrassment to the Russian President. People have been assassinated and jailed for a lot less in what they do to the all powerful, or previously all powerful Russian President.
So why is he still alive? And there I think it's a matter of timing. It's the fact that the Russian government has been fighting against this Ukrainian counter offensive, and if they were to have a fight against Wagner right now, and keep in mind the Ukrainian counter offensive hasn't gone very well, but most of the troops aren't involved yet, they have 11 plus trained and equipped divisions, trained by the US, by the UK and allies, only two and a half of them are already involved in the fighting, which means that Putin knew a lot more was coming. And if Wagner's not available, and the Chechen Kadyrov group, another paramilitary that has declared full loyalty to the Ministry of Defense, was pulling back to fight against Wagner and the MOD forces are going to need to be used for that as well.
Suddenly, the Ukrainians might have a clear ability to retake all the territory. So this was the worst possible time for Putin to go to war against Wagner. And perhaps that is the best explanation for why it is that they cut a deal. But the deal that was cut is not a deal that can't be broken. And, of course, now that the Wagner Group, their headquarters have been raided, it has been announced that all of their forces are going to sign direct contracts with the Russian Ministry of Defense. Prigozhin is, at least we believe, either headed to or in Belarus, probably in Belarus. Not a sovereign state. Intelligence, military, really under the control of Russia, just as Lukashenko primarily is. And so that means if Putin wants to take him out, it's more a matter of time than it is a matter of capability.
And I personally can't imagine that he's going to be with us for all that much longer. But a lot of damage has been done. The fact that around the world everyone has seen that when Putin has been challenged and challenged hard that the Russian forces did not stand up to the Wagner forces until they got close to Moscow. And they also showed that, at the last moment, Putin didn't use his forces against him, but instead let him walk away. That's a weakness for Putin internally that is being seen by the Russian people. It's being seen by Russian military elites and others. It's also being seen by other countries around the world.
The Chinese, supposed to be Russia's best friend, they didn't provide any military support for Putin when he was at his moment of greatest need. The Kazakhs, Russia sent over 2,000 paramilitary forces, parachutists, and others into Kazakhstan over a year ago before the Ukraine war was launched, because a coup occurred against President Tokayev. He really appreciated that support. He's there today because of that support. His willingness to support Putin, he said it was an internal Russian matter. So I mean, you look around the world right now, we have a very strong NATO, we have enormous support from NATO into Ukraine, and we have Russia pretty isolated on the global stage.
That's good for the Ukrainians, there's no question, and it's good for NATO's strategy, but it also increasingly gives Putin no outs. Someone considered a war criminal internationally and someone that now has been tested in a way he never expected to be by his own loyal former chef, the caterer, Prigozhin, who at least for now is in Belarus. This story is not close to over. Russia's stability is now a significant question in a way that it really was not just 72 hours ago, and I'm sure we're going to be talking about it quite a bit.
You go back to January this year. Our top risks as we look forward over the course of every year in terms of likelihood, imminence, and impact, number one, and not even close in any other risk that we've seen over the course of the 25 years that we've had Eurasia Group, was the idea of a rogue Russia. A Russia that increasingly has been decoupled from, isolated from, the advanced industrial economies of the world, and is acting out of a sense of risk acceptance and impunity. That rogue Russia risk has gone up significantly over the weekend.
That's it for me. I'll talk to you all real soon.
- Former Russian intelligence officer: Prigozhin's threat to Putin is “ludicrous” ›
- Prigozhin’s meltdown ›
- The man with his own army ›
- Prigozhin marches on Moscow: What we know, and what to watch ›
- What the war in Ukraine looks like inside Russia - GZERO Media ›
- Don't count Yevgeny Prigozhin out - GZERO Media ›
Xi Jinping's zero-COVID reversal |
If Xi Jinping had a theme song in China right now, for Eurasia Group analyst Anna Ashton it would be Canadian rapper Drake's "0 to 100." That's pretty much how fast he reversed course on zero-COVID.
And that explains why "Maximum Xi" — one man with total control over China — is Eurasia Group's No. 2 geopolitical risk for 2023.
The risk basically boils down to "maximum impunity and maximum potential mistakes," Ashton noted in a GZERO Live conversation about Eurasia Group's Top Risks 2023 report. In other words, China's leader is so powerful he won't be blamed for anything, even if he messes up badly.
Xi, she adds, is in a very strong position and Western media narratives that he was in trouble following protests over zero-COVID were overblown.
The US and China are moving into creating separate economic worlds for each other. And that won't be easy because the two economies are more closely linked than most people understand.
Read Eurasia Group's Top Risks 2023 report here.
Watch the full live conversation: Top Risks 2023: A rogue Russia and autocrats threatening the world
- The Graphic Truth: China's old vs. new zero-COVID ›
- Ian Bremmer: Zero COVID no longer works, and China will pay a price ›
- What We’re Watching: China's zero-COVID shift, Russia's fertilizer deal, Ramaphosa's corruption probe, EU's oil wrangling ›
- What We're Watching: China losing on zero-COVID, "winning" in Taiwan ›
The rogue Russian risk: will war in Ukraine ever end?
Vladimir Putin definitely did not have a good 2022. Will he be in trouble this year?
Not in the short to medium term, says Eurasia Group Chairman Cliff Kupchan. But that doesn't mean he's completely off the hook.
Putin should watch his back from the siloviki, the men in the security services.
Meanwhile, Kupchan plays down the odds that Belarus will enter the war in Ukraine, which he doesn't see ending anytime soon.
Read Eurasia Group's Top Risks 2023 report here.
Watch the full live conversation: Top Risks 2023: A rogue Russia and autocrats threatening the world
Ian Bremmer: the risk of AI and empowered rogue actors
For years, the conversation at the World Economic Forum in Davos, Switzerland, has mostly put artificial intelligence on the back burner. Not anymore.
We're now in a "transformative" moment for AI in terms of how the tech can disrupt the world in both good and bad ways, Eurasia Group President Ian Bremmer says in a Global Stage livestream conversation hosted by GZERO in partnership with Microsoft.
AI, he explains, can boost productivity for economic growth. But it can also be very dangerous when managed by rogue actors, which are more powerful now than they've ever been before.
Indeed, for Ian, AI tools "can become weapons in the wrong hands."
Watch the full Global Stage conversation: AI at the tipping point: danger to information, promise for creativity
Be very scared of AI + social media in politics
Why is artificial intelligence a geopolitical risk?
It has the potential to disrupt the balance of power between nations. AI can be used to create new weapons, automate production, and increase surveillance capabilities, all of which can give certain countries an advantage over others. AI can also be used to manipulate public opinion and interfere in elections, which can destabilize governments and lead to conflict.
Your author did not write the above paragraph. An AI chatbot did. And the fact that the chatbot is so candid about the political mayhem it can unleash is quite troubling.
No wonder, then, that AI, powered by social media, is Eurasia Group’s No. 3 top risk for 2023. (Fun fact: The title, “Weapons of Mass Disruption,” was also generated in seconds by a ChatGPT bot.)
How big a threat to democracy is AI? Well, bots can't (yet) meddle in elections or peddle fake news to influence public opinion on their own. But authoritarians, populists, and opportunists can deploy AI to help do both of these things better and faster.
Philippine President Ferdinand Marcos Jr. relied heavily on his troll army on TikTok to win the votes of young Filipinos in the 2022 election. Automating the process with bots would allow him, or any politician with access to AI, to cast a wider net and leap into viral conversations almost immediately on a social platform that already runs on an AI-driven algorithm.
Another problem is deepfakes, videos of people whose faces or bodies are altered to make them appear as if they are someone else, typically intended for political disinformation (check out Jordan Peele's Obama). AI now makes them so well that they are very hard to spot. Indeed, DARPA — the same Pentagon agency that brought us the internet — is perfecting its own deepfakes in order to develop tech to help detect what’s real and what’s fake.
Still, the "smarter" AI gets at propagating lies on social media, and the more widespread its use by shameless politicians, the more dangerous AI becomes. By the time viral content is proven to be fake, it might already be too late.
Imagine, let's say, that supporters of Narendra Modi, India's Hindu nationalist PM, want to fire up the base by fanning sectarian flames. If AI can help them create a half-decent deepfake video of Muslims slaughtering a cow — a sacred animal for Hindus — that spreads fast enough, the anger might boil over before people check if the clip is real, if they even trust someone at all to independently verify it.
AI can also disrupt politics by getting bots to do stuff that only humans, however flawed, should. Indeed, automating the political decision-making process "can lead to biased outcomes and the potential for abuse of power," the bot explains.
That’s happening right now in China, an authoritarian state that dreams of dominating AI and is already using the tech in court. Once the robot judges are fully in sync with Beijing's Orwellian social credit system, it wouldn’t be a stretch for them to rule against people who've criticized Xi Jinping on social media.
So, what, if anything, can democratic governments do about this before AI ruins everything? The bot has some thoughts.
"Governments can protect democracy from artificial intelligence by regulating the use of AI, ensuring that it is used ethically and responsibly," it says. "This could include setting standards for data collection and usage, as well as ensuring that AI is not used to manipulate or influence public opinion."
Okay, but who should be doing the regulating, and how? For years, the UN has been working on a so-called digital Geneva Convention that would set global rules to govern cyberspace, including AI. But the talks have been bogged down by (surprise!) Russia, whose president, Vladimir Putin, warned way back in 2017 that the nation that leads in AI will rule the world.
Governments, the bot adds, “should also ensure that AI is transparent and accountable, and that its use is monitored and evaluated. Finally, [they] should ensure that AI is used to benefit society, rather than to undermine it."
The bot raises a fair point: AI can also do a lot of good for humanity. A good example is how machine learning can help make us live healthier and longer by detecting diseases earlier and improving certain surgeries.
But, as Eurasia Group's report underscores, "that's the thing with revolutionary technologies, from the printing press to nuclear fission and the internet — their power to drive human progress is matched by their ability to amplify humanity's most destructive tendencies."
- AI at the tipping point: danger to information, promise for creativity - GZERO Media ›
- Senator Mitt Romney on Tiktok: shut it down - GZERO Media ›
- Can the US stay ahead of China on AI? - GZERO Media ›
- Toxic social media & American divisiveness - GZERO Media ›
- Politics, trust & the media in the age of misinformation - GZERO Media ›
- Podcast: The past, present and future of political media - GZERO Media ›
- Can we trust AI to tell the truth? - GZERO Media ›
- Ian Bremmer: Algorithms are now shaping human beings' behavior - GZERO Media ›
- How AI can be used in public policy: Anne Witkowsky - GZERO Media ›
- AI's role in the Israel-Hamas war so far - GZERO Media ›
- UK AI Safety Summit brings government leaders and AI experts together - GZERO Media ›
- AI in the hands of evil masterminds - GZERO Media ›
- How is the world tackling AI, Davos' hottest topic? - GZERO Media ›
- This year's Davos is different because of the AI agenda, says Charter's Kevin Delaney - GZERO Media ›
- Podcast: Talking AI: Sociologist Zeynep Tufekci explains what's missing in the conversation - GZERO Media ›
- Why is TikTok being investigated by the EU over Romania's elections? - GZERO Media ›
Water will become very political in 2023, says Eurasia Group analyst
Perhaps the biggest surprise in Eurasia Group's top 10 geopolitical risks for 2023 is No. 10: water scarcity. But you should definitely pay attention to it.
The problem is that we take access to water for granted, says Eurasia Group analyst Franck Gbaguidi.
And while we've kept ignoring the issue, now the global population has hit 8 billion people. What's more, climate change is making water even less plentiful — and therefore more political.
Gbaguidi is not optimistic on the odds of global cooperation and forecasts four big things that might happen this year related to water.
Read Eurasia Group's Top Risks 2023 report here.
Watch the full live conversation: Top Risks 2023: A rogue Russia and autocrats threatening the world
- The rogue Russian risk: will war in Ukraine ever end? - GZERO Media ›
- David Miliband and Ian Bremmer discuss the Atlas of Impunity - GZERO Media ›
- The global water crisis and the path to a sustainable future - GZERO Media ›
- Water crisis: Preserving fresh water sources is crucial to survival - GZERO Media ›