The melting “icebergs” of geopolitical risks should not be cause for comfort or complacency. A new form of international competition and the rules of the game associated with it are emerging. It is important for Russia not to be left on the sidelines of this process, writes Valdai Club Programme Director Andrey Sushentsov.
We often have to deal with the consequences of global political events that we have no ability to influence. These include pandemics, currency collapses, sanctions, and the conflicts experienced by neighbours on our borders. These and other sudden events foster fatalism.
However, one can and should think clearly and objectively about global risks — at least in order to understand how the “ocean currents” of world politics are arranged and from which side an “iceberg” may be expected to appear.
Every January, MGIMO analysts present their forecast of key political risks for the coming year. Our new International Threats 2021 forecast focuses on the key political issues that will determine the development of global events in the coming months. Let’s name three key ones.
1. Will the political transition in the USA be peaceful?
The seizure of the US Congress building by supporters of President Donald Trump on January 6 was a shock to the American political system. The 2020 elections showed that Trumpism is the new constant of American politics. If not for the pandemic, Trump would confidently won the US presidential election. Joe Biden will begin his presidency, inheriting not only the consequences of the pandemic, but also a low degree of legitimacy in the eyes of half of the population. However, the Democrats who gained control of the White House and Congress have begun to squeeze the Republican agenda out of public politics. This threatens to further radicalise the positions of the respective parties.
The American economy has not yet noticed this conflict. The stock market showed little reaction to the January 6 riots in the American capital. Much more important to investors are the environmental priorities of the Biden administration, which can shift the priorities of the global economy significantly.
2. Will China remain cautious or respond to US provocations?
Deng Xiaoping’s stratagem “Hide your strength, bide your time” is again becoming relevant. In the documents of the Fifth Plenary Session of the CPC Central Committee, which determined the guidelines for China’s development for the next 15 years, the word “security” is found more often than “openness” or “innovation”. It is the interests of the stability and security of the political system that will dictate China’s foreign policy prudence.
Security is understood in Beijing as the absence of systemic risks affecting the country’s modernisation. The focus of attention of the Chinese elite is no longer limited to GDP growth rates and other economic indicators. Having accumulated industrial, military and technological power, China acutely felt a new vulnerability — having integrated into the world trade and financial system, but without playing a leading role there, Beijing became highly dependent on the United States. The abrupt change of course in Washington will hit China’s development plans hard.
3. Will Germany push its version of the Green Deal into the EU?
Germany’s strategic goal is to transform Europe into a climate neutral continent by 2050. This is an expensive and ambitious project: from the outside, it is often called environmental madness. However, the result of Germany’s Green Deal will be a new economic and ecological landscape for the EU with German business playing a leading role, thereby setting production standards.
For Berlin, this is the optimal leadership strategy. Not wanting to compete with other major players in its ability to project strength, Germany is betting on the formation of a new “green” economy, where it will set its own rules by asserting itself as a pioneer and technology leader. The expectation is that not only China and Russia, but also the United States will have to abide by German recommendations.
We see that the “ocean currents” of world politics are turning towards environmental priorities, as reflected in international systems of standards, government regulation, economic opportunities and sanctions policy. The melting “icebergs” of geopolitical risks should not be cause for comfort or complacency. A new form of international competition and the rules of the game associated with it are emerging. It is important for Russia not to be left on the sidelines of this process.
The struggle of states for dominance can be seen as a struggle for a place in the future order. Or as the choice of an investment strategy: in which asset to invest resources, in order to receive dividends in the future. The United States, China and Russia are investing in both military power and technology. However, there are other countries that choose either military power (Turkey) or technology (Germany) as a key asset. We believe that next year will bear the first fruits of all three strategies.