Eurasia Group Top Risks 2024

Ian Bremmer Cliff Kupchan
President Chairman
1 The United States vs. itself 6 No China recovery Red Herrings

2 Middle East on the brink 7 The fight for critical minerals US-China crisis
3 Partitioned Ukraine 8 No room for error Populist takeover of
4 Ungoverned AI 9 El Nino is back European politics
5 Axis of rogues 10 Risky business BRICS vs. G7
Ian Bremmer Cliff Kupchan
President Chairman
2024. Politically it’s the Voldemort of years. no opportunities for peace and no prospects
The annus horribilis. The year that must not of escape. Deep political divisions over the
be named. conflict run throughout the Middle East and
across over one billion people in the broader
Three wars will dominate world affairs: Muslim world, not to mention in the United
Russia vs. Ukraine, now in its third year; States and Europe.
Israel vs. Hamas, now in its third month; and
the United States vs. itself, ready to kick off at And then there’s the biggest challenge in
any moment. 2024 … the United States versus itself. Fully
one-third of the global population will go to
Russia-Ukraine … is getting worse. Ukraine the polls this year, but an unprecedentedly
now stands to lose significant international dysfunctional US election will be by far the
interest and support. For the United States in most consequential for the world’s security,
particular, it’s become a distant second (and stability, and economic outlook. The outcome
increasingly third or lower) policy priority. will affect the fate of 8 billion people, and
Despite hundreds of thousands of casualties, only 160 million Americans will have a say in
millions of displaced people, and a murderous it, with the winner to be decided by just tens
hatred for the Russian regime shared by nearly of thousands of voters in a handful of swing
every Ukrainian that will define the national states. The losing side—whether Democrats
identity of tens of millions for decades. Which or Republicans—will consider the outcome
is leading to more desperation on the part of illegitimate and be unprepared to accept it. The
the Ukrainian government, while Vladimir world’s most powerful country faces critical
Putin’s Russia remains fully isolated from the challenges to its core political institutions:
West. The conflict is more likely to escalate, free and fair elections, the peaceful transfer of
and Ukraine is on a path to being partitioned. power, and the checks and balances provided
by the separation of powers. The political state
Israel-Gaza … is getting worse. There’s no of the union … is troubled indeed.
obvious way to end the fighting, and whatever
the military outcome, a dramatic increase in None of these three conflicts have adequate
radicalization is guaranteed. Of Israeli Jews, guardrails preventing them from getting
feeling themselves globally isolated and even worse. None have responsible leaders willing
hated after facing the worst violence against and able to fix, or at least clean up, the mess.
them since the Holocaust. Of Palestinians, Indeed, these leaders see their opponents
facing what they consider a genocide, with (and their opponents’ supporters) as principal
eurasia group TO P R I S KS 2 0 24
adversaries—“enemies of the people”—and will cause more unsolvable conflicts in the
are willing to use extralegal measures to years ahead—the only questions are where,
ensure victory. Most problematically, none when, and how destabilizing. And whether
of the belligerents agree on what they’re the resulting crises help fix the underlying
fighting over. problem with our “geopolitical recession” or
only serve to make it worse.
Climate change has long been considered
by many our greatest global challenge, but *
the world is on the road to responding—
collectively, even though too slowly—because There are plenty of bright spots. Most of the
everyone understands the nature of the rest of all those elections, especially the big
problem. There is too much carbon (and ones (India, the European Union, Indonesia,
methane) in the atmosphere, with a lot more Mexico), aren’t troubled at all. And then there’s
coming because it’s necessary for economic a big issue you might find surprising since it’s
growth, leading to long-term damage to less gloomy than usual: The US and China will
biodiversity and affecting everyone but be the adults in the room this year. With all the
mostly the poorest. None of this remains fighting going on in the world, the two biggest
controversial: it’s just a question of who economies aren’t looking for reasons to start
compromises how much—and who pays what another conflict, despite the lack of trust and
and when. We have a pretty good sense of mutually unaligned political and economic
where we are heading accordingly. systems. US-China tensions don’t even make
the Top Risks list, in part because the Chinese
Not so for any of the major conflicts driving economy and the US domestic polity are
geopolitical risk this year. The terms of so troubled and distracting. Geopolitically,
confrontation are not shared: not the the world’s most strategically consequential
narratives, not the history, not even the basic bilateral relationship has become a cleaner
facts of the ongoing fighting. And in all three dirty shirt.
cases, we are creating generations of incensed
people prepared to dig in and battle for as long The wild card, more than ever, is technology—
as it takes. Maybe an end to the fighting can specifically, artificial intelligence. The upsides
come when one or both sides are exhausted will start materializing more dramatically as
… but the prospects of a sustainable peace? In new applications find their way into every
Europe, in the Middle East, and in America, major corporation across every economic
we’re not remotely close. sector. And as hundreds of millions of people
begin to upskill themselves in their jobs, AI
We call this a G-Zero world, a world without will become a copilot before it takes over your
global leadership. Where the United States, the job. But the technology is also developing
world’s sole remaining superpower, doesn’t far faster than the ability to govern it, and a
want to be the world’s policeman, the architect technopolar world for artificial intelligence
of global trade, or the cheerleader of global means crisis response and reaction will come
values. And no other country is prepared to only after things break … let’s hope in 2024
take that role for itself. We now see three those things aren’t that big.
major confrontations that are the direct result
of our G-Zero world. By its nature, the G-Zero And now, our top risks.
eurasia group TO P R I S KS 2 0 24
1 The United States vs. itself
While America’s military and economy remain exceptionally strong, its political system is
more dysfunctional than that of any other advanced industrial democracy … and in 2024 faces
further weakening. The US presidential election will worsen the country’s political division,
testing American democracy to a degree the nation hasn’t experienced in 150 years and
undermining US credibility on the global stage.
The US political system is remarkably divided, and its legitimacy and functionality have eroded accordingly. Public trust in
core institutions—such as Congress, the judiciary, and the media—is at historic lows; polarization and partisanship are at
historic highs. Add algorithmically amplified disinformation to the mix, and Americans no longer believe in a common set
of settled facts about the nation and the world.
The two major parties’ likely presidential candidates are uniquely unfit for office. Former President Donald Trump faces
dozens of felony criminal charges, many directly related to actions taken during his term in office, most critically including
his efforts to overturn the results of a free and fair election. In any stable, well-functioning democracy, the 2024 contest
would be principally about those. The United States is presently far from that. On the other side of the aisle, President Joe
Biden would be 86 years old at the end of his second term. The vast majority of Americans want neither to lead the nation.
This division will worsen in the run-up to the election. From the moment he secures the nomination (not guaranteed, but
overwhelmingly likely), Trump will hijack Republican and American politics, as even the most reluctant of Republicans
in Congress—and most conservative media, activist groups, and monied interests—will fall in line with him. His policy
eurasia group TO P R I S KS 2 0 24 4
Americans’ confidence in political and social institutions continues to decline
Please tell me how much confidence you, yourself, have in each one—a great deal/quite a lot (%)
The Supreme Court The church or

Congress The presidency
organized religion
80
70
60
50
40
30
32%
20 27% 26%
10
0 8%
1973 2000 2023 1973 2000 2023 1973 2000 2023 1973 2000 2023
The public schools Newspapers Television news News on the internet
80
70
60
50
40
30
20 26%
10 18% 16%
14%
0
1973 2000 2023 1973 2000 2023 1973 2000 2023 1973 2000 2023
Source: Gallup
pronouncements—however outlandish—will shift the efforts are unlikely to overturn the electoral process, they
national narrative and shape the policy direction on Capitol may well disrupt it. And they are sure to persuade many
Hill and in statehouses across the country before a vote of Trump’s supporters to doubt the election outcome’s
is cast. The result will be even more policy extremism, legitimacy—a problem that will be exacerbated by AI-
division, and gridlock. fueled disinformation and social media echo chambers
(please see Top Risk #4).
Knowing he faces prison time if he loses in November,
Trump will use his online pulpit, control of the Republican In a world beset by crises, the prospect of a Trump
Party, and friendly media to delegitimize both the system victory will weaken America’s position on the global
that is prosecuting him and the integrity of the election. stage as Republican lawmakers take up his foreign
His victim narrative and preemptive claims of fraud will policy positions and US allies and adversaries hedge
find a receptive audience of Americans who agree, putting against his likely policies. US support for Ukraine will
implicit pressure on Republican state governments and face stronger headwinds on Capitol Hill, straining the
election officials to manage the election in ways that transatlantic alliance and leaving Ukrainians and their
would benefit him (such as by purging voter rolls more frontline European supporters in the lurch. Kyiv will take
liberally or tightening voting restrictions). While these increasingly reckless actions to make what gains it can
Biden and Trump are both uniquely unfit for office.

Most Americans want neither to lead the nation
before the next president takes office, while hopes for a to disqualify Democratic electoral college votes. While
definitive end to US aid in 2025 will stiffen Russia’s resolve none of these efforts is likely to succeed, they will inflict
to keep fighting (please see Top Risk #3). In the Middle East, damage on already low public confidence in the integrity of
Trump’s prominent support for Israel and willingness to America’s democratic institutions.
bomb Iran for transgressions will embolden Israeli Prime
Minister Benjamin Netanyahu and limit Biden’s political Barring an unlikely Democratic landslide, Republicans
space for policy maneuver. Pressure from congressional are poised to see a Biden win as illegitimate, alleging
Republicans, meanwhile, will make it politically harder— either that the election was “stolen” or that politically
albeit not impossible (please see Red Herrings)—for Biden motivated investigations made it more difficult for
to preserve the “thaw” with China this year. The shadow Trump to campaign. They will see Trump’s incarceration
of Trump will lead US allies and adversaries to brace for during the Biden administration as Democrats jailing the
his return to office, with destabilizing consequences long opposition leader for political purposes. This could create
before Inauguration Day. an unprecedented political crisis, destroying the remaining
trust in federal institutions Republicans still have and
If Trump wins the election, Biden will concede. But while leading to calls for Biden to pardon Trump the same way
Democratic leaders may be less likely to claim the election Gerald Ford pardoned Richard Nixon to avoid national
was “rigged” than the former president, they will still treat disunity. While large-scale violence is less likely in this
Trump as illegitimate, believing he should be in jail and is environment, America’s political divide would deepen, and
unfit for office. Some congressional Democrats will likely the nation’s fragmentation into red vs. blue states, cities,
vote against certifying his election on the grounds that and towns would accelerate.
he is not qualified to serve under the 14th Amendment,
undermining trust in American electoral institutions. The And then there’s the tail risk (unlikely but plausible) that
response in major cities would be a repeat of the massive you’d rather not think about: What if the world’s most
street protests during the 2016 presidential transition, but in powerful country is unable to hold a free and fair election
a country even more bitterly divided and with an opposition on 5 November? Efforts to subvert the election could come
coalition more convinced that Trump 2.0 beckons the end from cyberattacks, deep fakes and disinformation, physical
of American democracy. Whether driven by extremist attacks on election process and oversight, and even
elements, clashes with counter-protesters, or opportunistic terrorism to disrupt voting on the day. There’s no more
bad actors, widespread violence is a real (and indeed nearly geopolitically significant target than the upcoming ballot—a
inevitable) risk. The danger will intensify over the course softer and more vulnerable target than most homeland
of a Trump administration as he pardons those arrested for security challenges—with plenty of foreign (and more than
storming the Capitol on 6 January, allowing them to return a few domestic) adversaries that would love nothing more
to their quasi-militias and organize against what they see as than to see more chaos in America.
elite leftist institutions.
The United States is already the world’s most divided and
If Trump loses, he won’t accept defeat. Instead, he will do dysfunctional advanced industrial democracy. The 2024
everything in his power—legal or illegal—to contest the election will exacerbate this problem no matter who
outcome and impugn the legitimacy of the process. He wins. With the outcome of the vote essentially a coin toss
has fewer options for challenging the results than he had (at least for now), the only certainty is continued damage
as president in 2020, owing to the passage of the Electoral to America’s social fabric, political institutions, and
Count Reform Act and the fact that he’s not the incumbent. international standing.
But that will not stop him from trying—especially when he
faces the prospect of prison time. Trump will allege mass
fraud once again. He will incite widespread intimidation The election will test
campaigns against election workers and secretaries of
state in both red and blue states, demanding that they American democracy to a
“find” extra votes for him. He will lean hard on Republican
governors to submit slates of Republican electors in states
degree the nation hasn’t
Democrats won. And he will pressure Republican senators experienced in 150 years
and representatives to object to states’ slates of electors
Trump: The final season?
What if he wins again?
Trump’s 2016 upset was met with horror from the American unable and unwilling to check Trump’s executive excesses,
left and concern from allied world leaders, but generally with impeachment and removal off the table even under
positive reactions from American business leaders and a Democratic Congress. While a conservative Supreme
optimism from global financial markets, which saw the Court, one-third of whose members were appointed by
lower taxes and deregulation of a Trump administration as Trump, would remain independent, it would have limited
a net positive for the US economy. The response next time power to enforce its rulings against a renegade president,
around would be significantly more troubled, as a second setting up the potential for a constitutional crisis the likes
Trump administration would have fewer guardrails than of which America hasn’t seen since the end of the Civil War.
the first, reduced fiscal space, and more radical policy
divisions among US states following eight additional years The decentralized nature of the US system would remain a
of polarizing politics. counterweight to dysfunction in Washington, as a weaker
federal government would devolve power to the states and
A second Trump administration would take steps to allow a free market of competing political and economic
consolidate executive power, weaken checks and balances, strategies to flourish. The flipside of this decentralization is
and undermine the rule of law. Trump would try to that red and blue states would continue to grow polarized,
capture federal institutions by purging thousands of civil not just on policy but increasingly in terms of who they
servants he sees as obstacles and replacing them with attract to live, do business, and invest. This would create
inexperienced loyalists. Much of a second Trump cabinet a fractured business and investment environment that
would be senior Republicans: Former cabinet members would be difficult for companies to navigate as policies
Nikki Haley, Robert Lighthizer, and Mike Pompeo—known and regulations diverge from state to state and their
as capable within the broader policy community—are all choice of location becomes an implicit political statement
likely to return. Key policy risks from the cabinet would (please see Top Risk #10).
include trade protectionism—with goals of broad-based
10% import tariffs and stripping most favored nation status Foreign companies would have a harder time understanding
from China—and unpredictability from the Department of the political geography of America and spend more time
Defense, where appointed leadership will be comprised of trying to get on the good side of Trump’s political apparatus.
political loyalists more like Mike Flynn than Jim Mattis. At Relationships across the federal government—and
the same time, a core of Trump’s policy advisers in the White particularly with Republicans who have Trump’s ear—would
House (including the likes of Steve Bannon, Stephen Miller, become essential for foreign governments, even more so
and Kash Patel) would have virtually no relationships with than they were in the first term. And investors are likely
elite business leaders or foreign dignitaries—and limited to see massive opportunities in deregulated industries but
willingness to prioritize an audience with them. grow increasingly concerned about the US fiscal picture.
Having gutted the “deep state,” Trump would be less However positively markets may view its concrete policies,
constrained to break the rule of law. His first order of a second Trump presidency—with all its personalistic,
business would be to weaponize the FBI, the Justice authoritarian, and mercurial tendencies—would deal
Department, and the IRS to block proceedings against grievous harm to US democracy. It would also begin to
himself and his allies and persecute his political enemies. raise foundational questions about the long-term stability
Biden and his family would be in the crosshairs, but how of the US as an investment destination, the trustworthiness
far this revanchist McCarthyism goes—to opposition of its financial promises, the credibility of its commitments
lawmakers, media figures, donors, critics—is a question of to foreign partners, and the durability of its role as the
enormous import, especially in its signaling importance lynchpin of the global security order.
to determine behavior across the political spectrum, at
best chilling political dissent and at worst squelching it
nearly entirely.
Trump would take steps to
consolidate executive power,
There would be little remedy at the federal level to restrain
a second Trump administration if it acts lawlessly. A weaken checks and balances,
divided or Republican-controlled Congress would be and undermine the rule of law
2 Middle East on the brink
On 30 September 2023, National Security Advisor Jake Sullivan said that “the Middle East is
quieter today than it has been in two decades.” He jinxed it. Just eight days later, Hamas’s
terrorist attacks shook the region to its core, jolting the world out of its complacency on the
Palestinian issue, shattering Israel’s sense of security, and turning the Middle East into a
powder keg.
To be sure, there’s still a lot of truth to Sullivan’s claim: Iran and the Gulf states are the closest they’ve been in years
thanks to the China-brokered breakthrough between Riyadh and Tehran. Qatar and the Gulf Cooperation Council fixed
their problems. The ceasefire in Yemen holds. Syria is back in the diplomatic loop. The Abraham Accords remain up and
running. And yet … everybody forgot about the Palestinians.
Now, one thing is certain: The region is no longer quiet, and it won’t be for ages. There is a network of deterrence
relationships—Israel and the US on the one hand, Iran and its proxies on the other, and the Gulf states in between—that
has so far contained the war to Gaza … just. No country wants a regional war to erupt. But the powder is dry, and the
number of players carrying matches makes the risk of escalation high. The current fighting in Gaza is accordingly likely
to be only the first phase in an expanding conflict in 2024.
One path to escalation would be a decision by Israel to strike Hezbollah. Israel’s post-7 October security posture is defined
by a commitment to restore regional deterrence and address long-standing security risks, with a bias toward preempting
threats before they materialize. Top Israeli leaders have pledged to “remove” the threat from Hezbollah on their northern
border, and the war cabinet is debating an operation to push the militant group beyond the Litani river in southern
Lebanon as called for by UN Security Council Resolution 1701. That would lead to a showdown with Hezbollah. Israeli
Prime Minister Benjamin Netanyahu has his own reasons to keep the Gaza campaign going or start another one in the
will remain undeterred and continue to shoot. In doing
Bracing for conflict so, it could inadvertently kill US citizens, which would
US personnel in the Middle East Incidents involving shipping demand a stronger response from Washington. If the
vessels (Nov. 19 to Dec. 18, 2023)
Houthis stay on this path, strikes on their bases in Yemen
Eastern
Mediterranean SYRIA
are increasingly likely, bringing the United States and its
12,500 900 allies more directly into the war.
IRAQ
2,000
KUWAIT
Finally, Shia militias operating in Iraq and Syria have
10,000
I R AN systematically increased their attacks on US bases, with
JORDAN Tehran’s blessing but at least partially driven by local
3,500
ISRAEL political dynamics. These attacks are difficult to deter,
100
BAHRAIN and the possibility of unintended consequences is rising
4,500 accordingly. Risks associated with US casualties are
EGYPT (MFO) UAE particularly stark. Washington has made clear that any
500 5,000
SAUDI QATAR US deaths will lead to large-scale retaliation, and that Iran
ARABIA
2,500
10,000 will be held directly accountable.
O M AN
Red Sea All these pathways pose risks to the global economy. Most
SU DAN
4,500 YE M E N of the world’s largest shipping companies have already
Arabian Sea
suspended transit through the Red Sea in response to
and The Gulf the Houthi strikes, paralyzing a critical waterway that
Source: IISS estimates, Financial Times, Axios Visuals 1,200 sees 12% of global trade pass through it. Ongoing Houthi
attacks will keep freight insurance rates elevated, disrupt
north: avoiding ouster and possible jail time (please see global supply chains, and create inflationary pressure. In
box in Top Risk #5). addition, the closer the conflict comes to Iran, the greater
the risk of disruptions to oil flows in both the Red Sea and
If Israel were to attack preemptively, it would probably the Persian Gulf, pushing crude prices higher. Any moves
wait to do so until after the fighting ebbed in Gaza to avoid by Israel, the US, or others to block Iran’s 1.4 million
a full-fledged, two-front war (initial withdrawals of some barrels per day of oil exports via sanctions or military
Israeli troops from Gaza should be assessed accordingly). strikes would provoke retaliation by Tehran that puts
The US military would almost certainly provide support to larger volumes of oil and LNG exports from the region
the Israeli effort. Iran, in turn, would assist Hezbollah, the at risk (though the worst-case scenario, a closure of the
most important link in Tehran’s power projection strategy Strait of Hormuz, remains a very low probability).
in the Levant. A spiral of escalation could turn the shadow
war between the US/Israel and Iran into a kinetic one.
The Middle East is a
A similar spiral could be initiated by Hezbollah with the
backing of Iran if its leader, Hassan Nasrallah, thought the
tinderbox, and the number
level of Palestinian casualties in Gaza—or the West Bank— of players carrying matches
had become intolerably high. And if Iran believed that
Hezbollah was at risk of being existentially degraded, its makes the risk of escalation
level of support for the group would increase. exceptionally high
Houthi militants are also pursuing escalation. The Yemen-
based former rebels have a formidable arsenal of weapons The conflict will also widen existing global divisions and
supplied by Iran and are keen to boost their standing at disrupt politics. Anti-Israel sentiment is inflamed across
home and within the Tehran-backed “Resistance Front.” the Middle East, among Muslim populations around the
They have a longer leash—but also less protection—from world, and—increasingly—within the Global South. The
Tehran than Iran’s other regional proxies, and they are United States is currently as isolated globally in its support
more risk-acceptant. The Houthis have been launching for Israel as Russia was over its invasion of Ukraine. As
missile and drone attacks on Israel, US warships, and the war in Gaza drags on, the schism between Washington
commercial shipping vessels since November, threatening and the rest of the world will grow.
safe passage through the Strait of Bab al Mandab and the
Gulf of Aden—key transit waterways for oil and goods to Divisions will deepen within the US as well, where public
Europe, North America, and Asia. In response, the US opinion on Israel-Palestine is shifting with the nation’s
has formed a multinational naval task force to protect demographics. A majority of Gen Zers now view the 7
shipping and deter the Houthis. But the Yemeni group October attacks—the worst violence against Jews since
The US is as isolated globally in its support for Israel as
Russia was over its invasion of Ukraine
the Holocaust—as justified. Discontent among young violence makes the prospects for an eventual two-state
Americans, minorities, and progressives with President solution increasingly dim.
Joe Biden’s steadfast backing of Israel will hurt Democrats
in the 2024 election. Finally, and perhaps most troublingly, this conflict will
stoke political and religious extremism across the Middle
The most dangerous schism, though, remains between East and elsewhere. Demonstrations could erupt in Arab
Israelis and Palestinians. Israelis across the political and Muslim countries as Israeli forces kill or displace
spectrum overwhelmingly support the complete destruction larger numbers of Palestinian civilians in Gaza, or in
of Hamas, whatever that means and however improbable it response to settler violence and repression in the West
may be. A growing majority of Palestinians in the West Bank Bank and Jerusalem. These upheavals could destabilize
and Gaza, meanwhile, support Hamas. More temporary countries with large populations of Palestinian refugees
ceasefires to the current fighting in Gaza remain possible, such as Egypt and Jordan and—in the extreme—force their
especially given the strong international pressure behind governments to cut ties with Israel. All along, Islamic
them … but they’re extremely unlikely to prove sustained. terrorist groups will use images and casualty figures from
The longer the war goes on, the more both populations will Gaza as propaganda and recruitment tools, and violence
radicalize. This will increase the risk of insurgency in Gaza, against Jews will spike in many countries. Fatal violence
deadly clashes in the West Bank and Jerusalem, and terrorist linked to the war has already hit Europe, and the United
attacks in Israel that provoke a further military response. It States is also vulnerable.
goes without saying that the expansion of Israeli-Palestinian
3 Partitioned Ukraine
Ukraine will be de facto partitioned this year, an unacceptable outcome for Ukraine and the West
that will nevertheless become reality. At a minimum, Russia will keep control of the territory it
now occupies on the Crimean peninsula and in Donetsk, Luhansk, Zaporizhzhia, and Kherson
oblasts—about 18% of Ukraine’s territory—as the war settles into a defensive struggle with a fairly
static line of control. But Russia now has the battlefield initiative and a material advantage, and it
could take more land in 2024. This year is an inflection point in the war: If Ukraine doesn’t solve
its manpower problems, increase weapons production, and set a realistic military strategy soon, it
could “lose” the war as early as next year.
Kyiv has taken a body blow from ebbing US political and material support for Ukraine. Americans are increasingly split
on the war, and many Republican lawmakers actively oppose more aid. Even if Congress approves additional military
assistance for 2024, this will probably be the last significant appropriation Kyiv will get from Washington. If Donald
Trump wins, he will drastically cut aid. If President Joe Biden wins, another large package is a long shot unless Democrats
improbably win both the House and the Senate.
The outlook for European assistance is only slightly better. German budgetary challenges on one side, growing Hungarian
opposition on the other, and a lack of leadership from most everyone else will make it hard for the Europeans to fill the
gap in military aid the Americans will leave over the medium term. While Europe is ramping up production capacity,
it doesn’t have the infrastructure to provide the high volume of ammunition (including all-important artillery shells),
heavy tanks, howitzers, and infantry fighting vehicles that Ukraine needs.
The material balance has also shifted in Russia’s favor.
On manpower, Russia is attracting significant numbers
A de facto partition of Ukraine
of men to new contracts, so a politically fraught second is inevitable
mobilization this year is unnecessary for now. President
Vladimir Putin has also successfully converted his
economy into a war operation. Roughly one-third of For their part, Ukrainians will be forced to entrench and
government spending and 6% of GDP will be devoted defend during 2024, and in a predominantly artillery-
to the war in 2024, and Russian domestic production of based war, defense is much easier than offense. This
missiles and artillery shells is now greater than before the means that Kyiv probably won’t lose much land this year.
war. North Korea is providing a large volume of additional But Ukraine will need to develop its military forces and
ammunition, and Iran continues to provide (and now come up with effective military strategies for both 2024
produce in Russia) drones (please see Top Risk #5). and 2025 by early in the year. Ukraine will also need to end
the growing domestic infighting between the presidential
Ukraine is in a more troubled position. On manpower, administration and both the military leadership—which
it must mobilize and train new recruits to improve force contributed to the failure of last year’s counteroffensive—
quality. Kyiv is considering mobilizing 500,000 additional and other political leaders like Kyiv Mayor Vitali Klitschko.
troops, which is probably impossible but shows the
quandary Ukraine is in as it confronts the army of a much The upshot is that Ukraine must make progress on
larger country. Kyiv also needs to scale up its domestic mobilization, training, defense production, strategizing,
defense production, especially of drones for the battlefield and political infighting. If it succeeds in most of these
and to hit targets inside Russia. tasks, Kyiv will be in a strong position to defend its existing
territory in coming years, with a future that could include
Russia’s material advantage will be reflected on the hard security guarantees from the West, eventual NATO
battlefield, where Moscow has seized the initiative and membership, reconstruction aid, and EU integration—a
is now attacking in Donetsk Oblast, showing limited but better geopolitical trajectory than could have plausibly been
effective offensive capability for the first time in over a expected before the Russian invasion two years ago. But if
year. Russia will form additional armies with fresh recruits it fails, Ukraine is likely to lose the war in the near future,
and continue to develop offensive capability, ratcheting where losing means giving up more territory in Donetsk
up the pressure on Ukraine. and possibly Kharkiv oblasts, and then being forced to
accept a much more unfavorable ceasefire or settlement.
Ukraine is at risk of losing, but Russia has no way to “win.”

Land war settling into defensive struggle with
Whatever longer-term gains its forces can make on the
static line of control
ground in Ukraine, NATO is now strengthened by new
B EL A R U S members Finland and (soon) Sweden. This month, the
RUS SIA
POL A N D
EU will open a membership process for Ukraine, Georgia,
and Moldova, an outcome that wasn’t on the table before
Kyiv Kharkiv Kupyansk Putin ordered his invasion. Russia has faced 11 rounds
of sanctions, with more on the way. Half of its sovereign
U K R AI N E Luhansk
Avdiivka assets have been frozen, at least some of which are likely to
Donetsk
Zaporizhzhia be seized to finance Ukrainian reconstruction. Europe will
M O L DO VA
no longer buy Russia’s commodity exports, which instead
Kherson
must be sold to China, India, and others on the cheap.
Odesa Moscow has been rendered permanently dependent on
R OM A N IA
Feodosia
Beijing. All of this, just to get pieces of eastern and southern
Reni Izmail
Sevastopol Ukraine that will take years and years to consolidate.
Still, a partitioned Ukraine will pose real risks. The first

Serbia
pertains to the Black Sea, where Ukraine has developed
Ukrainian frontline Russian occupied territory a new export route through the littoral waters of NATO
Russian frontline members to the Bosphorus. Russia is currently deploying
mines in the area and could start to sink ships this year.
Source: Rochan Consulting, Eurasia Group Should Moscow mistakenly strike a NATO or Western
vessel, naval warfare between the alliance and Russia
could ensue.
Diminishing Western support and growing political infighting
will leave Ukraine feeling increasingly desperate
Diminishing Western support and growing political of the international system. Europeans view current
infighting will leave Ukraine feeling increasingly desperate, and likely future cuts in US assistance to Ukraine as an
which will cause President Volodymyr Zelensky to become Afghanistan 2.0 policy lurch, but with much higher stakes
more risk-acceptant (please see box in Top Risk #5). He will for European security. Their concern is magnified by
turn to asymmetric warfare away from the frontlines in an the risk that Trump will try to take the US out of NATO
attempt to degrade the Russian military, keep Ukraine in if he wins in November. Russia’s upper hand will make
the headlines, and potentially bring NATO into the conflict. the Kremlin feel like it successfully stared down the
More targeted killings are likely, focusing on individuals West on an existential issue, emboldening Putin to lean
connected to the war and occupation. The Ukrainians on unsupportive countries in the EU and NATO (such as
will also launch deep strikes with drones and missiles Hungary and Slovakia) and driving further division.
in Crimea and Russia targeting military and economic
infrastructure—possibly including Russian oil and grain A partitioned Ukraine will also undermine US credibility
facilities on the Black Sea, which would lead to global oil on the global stage. The United States made a major
and food market disruptions. Attacks are also likely on the security commitment to help Ukraine protect itself and
Kerch Strait Bridge, Russian railroads, and Russian cities, regain its land for “as long as it takes.” Domestic politics is
which would provoke stepped-up Russian attacks against leading the US to renege on this commitment, worsening
Ukrainian cities. The risk of a miscalculation or accident the image of the US as an unreliable partner (please see Top
that results in NATO casualties and draws the United States Risk #1). Rogue and revisionist states will be emboldened
more directly into the war will be heightened accordingly. accordingly (please see Top Risk #5). What’s more, the war’s
trendline will make Ukraine a political loser for Biden
Tapering US political and material support will deepen a during an election year, giving Trump a boost. A Trump win
rift in the transatlantic alliance, which is the cornerstone would accelerate this decline in US credibility.
4 Ungoverned AI
Gaps in AI governance will become evident in 2024 as regulatory efforts falter, tech companies
remain largely unconstrained, and far more powerful AI models and tools spread beyond the
control of governments.
Last year brought a wave of ambitious AI initiatives, policy announcements, and proposed new standards, with
cooperation on unusual fronts. America’s leading AI companies committed to voluntary standards at the White House.
The United States, China, and most of the G20 signed up to the Bletchley Park Declaration on AI safety. The White House
issued a groundbreaking AI executive order. The European Union finally agreed on its much-heralded AI Act. And the
United Nations convened a high-level advisory group (of which Ian is a member).
But breakthroughs in artificial intelligence are moving much faster than governance efforts. Four factors will contribute
to this AI governance gap in 2024:
1) Politics. As governance structures are created, policy or institutional disagreements will cause them to limit their
ambitions. The lowest common denominator of what can be agreed politically by governments and what tech companies
don’t see as a constraint on their business models will fall short of what’s necessary to address AI risks. This will result
in a scattershot approach to testing foundational AI models, no agreement on how to deal with open source vs. closed
source AI, and no requirements for assessing the impact of AI tools on populations before they are rolled out. A proposed
Intergovernmental Panel on Climate Change (IPCC)-style institution for AI would be a useful first step toward a shared
global scientific understanding of the technology and its social and political implications, but it will take time … and is
not going to “fix” AI safety risks on its own any more than the IPCC has fixed climate change.
Two risks stand out for 2024. The first is disinformation. In
a year when four billion people head to the polls, generative
Breakthroughs in artificial AI will be used by domestic and foreign actors—notably
Russia—to influence electoral campaigns, stoke division,
intelligence are moving much undermine trust in democracy, and sow political chaos
faster than governance efforts on an unprecedented scale. Sharply divided Western
societies, where voters increasingly access information
from social media echo chambers, will be particularly
vulnerable to manipulation. A crisis in global democracy
2) Inertia. Government attention is finite, and once AI is is today more likely to be precipitated by AI-created and
no longer “the current thing,” most leaders will move on algorithm-driven disinformation than any other factor.
to other, more politically salient priorities such as wars
(please see Top Risks #2 and #3) and the global economy Beyond elections, AI-generated disinformation will also
(please see Top Risk #8). As a result, much of the necessary be used to exacerbate ongoing geopolitical conflicts such
urgency and prioritization of AI governance initiatives will as the wars in the Middle East and Ukraine (please see
fall by the wayside, particularly when implementing them Top Risks #2 and #3). Kremlin propagandists recently
requires hard trade-offs for governments. Once attention used generative AI to spread fake stories about Ukrainian
drifts, it will take a major crisis to force the issue to the President Volodymyr Zelensky on TikTok, X, and
fore again. other platforms, which were then cited by Republican
lawmakers as reasons not to support further US aid to
3) Defection. The biggest stakeholders in AI have so Ukraine. Last year also saw misinformation about Hamas
far decided to cooperate on AI governance, with tech and Israel spread like wildfire. While much of this has
companies themselves committing to voluntary standards happened without AI, the technology is about to become
and guardrails. But as the technology advances and its a principal risk shaping snap policy decisions. Simulated
enormous benefits become self-evident, the growing lure pictures, audio, and video—amplified on social media
of geopolitical advantage and commercial interest will by armies of AI-powered bots—will increasingly be used
incentivize governments and companies to defect from by combatants, their backers, and chaos agents to sway
the non-binding agreements and regimes they’ve joined public opinion, discredit real evidence, and further
to maximize their gains—or to not join in the first place. inflame geopolitical tensions around the world.
4) Technological speed. AI will continue to improve The second imminent risk is proliferation. Whereas AI
quickly, with capabilities doubling roughly every six has thus far been dominated by the United States and
months—three times faster than Moore’s law. GPT-5, the China, in 2024 new geopolitical actors—both countries
next generation of OpenAI’s large language model, is and companies—will be able to develop and acquire
set to come out this year—only to be rendered obsolete breakthrough artificial intelligence capabilities. These
by the next as-of-yet inconceivable breakthrough in a include state-backed large-language models and advanced
matter of months. As AI models become exponentially applications for intelligence and national security use.
more capable, the technology itself is outpacing efforts to Meanwhile, open-source AI will enhance the ability of
contain it in real time. rogue actors to develop and use new weapons and heighten
the risk of accidents (even as it also enables unfathomable
Which brings us to the core challenge for AI governance: economic opportunities).
Responding to AI is less about regulating the technology
(which is well beyond plausible containment) than AI is a “gray rhino,” and its upside is easier to predict than
understanding the business models driving its expansion its downside. It may or may not have a disruptive impact
and then constraining the incentives (capitalism, on markets or geopolitics this year, but sooner or later it
geopolitics, human ingenuity) that propel it in potentially will. The longer AI remains ungoverned, the higher the
dangerous directions. On this front, no near-term risk of a systemic crisis—and the harder it will be for
governance mechanisms will come close. The result is an governments to catch up.
AI Wild West resembling the largely ungoverned social
media landscape, but with greater potential for harm.
Technological breakthroughs moving faster than governance efforts
Technical
developments
30 November 6 December
June 2018 ChatGPT Gemini
GPT-1
22 August 24 February
Stable Diffusion LLaMA
12 July 14 March 18 July
5 January Midjourney GPT-4 Llama 2
2021 DALL-E 2022 2023 2024
15 August
Cyberspace Administration of China Generative AI Measures
30 October 18 July
US Executive Order of the Safe, Secure, and Trustworthy UN Security Council special meeting on AI
Development and Use of Artificial Intelligence
1 November
Hiroshima Process International Guiding Bletchley Declaration on AI safety
Principles for Advanced AI systems
8 December
EU AI Act*
Policy 21 December
developments UN AI Advisory Body interim report
*not yet formally signed off and will not apply in full until 2026
Source: Eurasia Group
5 Axis of rogues
Russia, North Korea, and Iran are the world’s most powerful rogue states. And they have been
working to strengthen their cooperation since Russia invaded Ukraine in February 2022,
united by the draconian sanctions levied against them, their shared hatred of the US, and
their willingness to violate international law to disrupt a global status quo they believe serves
Western interests at their expense. They are agents of chaos in today’s geopolitical order, bent
on undermining existing institutions and the governments and principles that uphold them.
Once seen by Russia as a nuisance at best and a liability at worst, North Korea has become an essential resource for
Vladimir Putin’s war effort in Ukraine thanks to its pariah status, militarized economy, and large stocks of Soviet-standard
artillery ammunition. Meeting in Russia’s Far East in September 2023, Kim Jong-un and Putin struck a deal that sends
North Korean artillery shells, rockets, and ballistic missiles to Russia in exchange for Russian food, energy, and—most
importantly—technological assistance, especially on satellite development and deployment.
Russia and Iran, longtime partners in a bid to protect Bashar Assad’s regime in Syria, have also upgraded their relationship
from a limited tactical alliance to a more comprehensive and strategic military and economic partnership. Tehran has
supplied Moscow with kamikaze drones to terrorize Ukrainian cities—now also being built in Russia—and drawn on its
decades of experience to help Moscow evade Western sanctions. For its part, Russia has become Iran’s chief external
weapons supplier, its top source of foreign investment, and a key trading partner. Moscow also provides diplomatic cover
for Tehran’s nuclear program at the UN Security Council and has developed warm relations with Iranian proxies at war
with the US and Israel in the Middle East.
While less prominent than Russia’s bilateral ties within the
axis, North Korea and Iran have a decades-long history of
cooperation on nuclear and ballistic missile development. The world’s most powerful rogue
This cooperation has reportedly extended to North Korea
supplying weapons and missile designs to Hamas, the states have been working to
Houthis, and other Iranian-backed militant groups. strengthen their cooperation since
In 2024, deeper alignment and mutual support among Russia invaded Ukraine
these rogue states will pose a growing threat to global
stability as they boost one another’s capabilities and act
in increasingly coordinated and disruptive ways on the supply Tehran with fighter jets and advanced weapons
global stage. technology. Along with growing Russian support for Iran’s
proxies, this will alter the regional balance of power in
Russia will be the primary driver of risk as it seeks to Iran’s favor at a time when Tehran and its proxies represent
bolster its warfighting capabilities in Ukraine while a much more direct security challenge to the West (please
working to deflect Western attention elsewhere. In see Top Risk #2). Both bilateral deals would strengthen
exchange for North Korean artillery shells and rockets Russia’s hand in Ukraine and increase the war’s damage
to sustain its war of attrition, Moscow will provide and costs (please see Top Risk #3).
Pyongyang with technologies and know-how to advance
its missile, submarine, and satellite programs, with The severity of existing Western sanctions against all
major repercussions for Northeast Asian security. And three rogue states and the close cooperation among
in exchange for stepped-up provision of Iranian drones, them means they will not be deterred by fear of further
munitions, sanctions relief, and ballistic missiles with sanctions and isolation. This will unleash them to wage
which to strike Ukrainian cities, Moscow is poised to asymmetric warfare short of direct military attacks on
the US and Europe, including via cyberattacks, support
Aiding and abetting for terrorism, and disinformation campaigns designed
to disrupt elections and sow chaos. More generally, the
axis’s coordinated sanctions-busting and rule-breaking
will undermine the compellent and deterrent power of
Western sanctions, emboldening other would-be rogues.
R US SI A
It bears noting that China is not a member of the axis

of rogues. Beijing did not openly condemn Russian
N OR T H aggression in Ukraine, but neither did it endorse the
I R AN KOR E A invasion or do much to help Putin’s war effort beyond
purchasing discounted oil and allowing flows of dual-use
goods to continue. (If India and the UAE were less friendly
to the United States, analysts would be likening their
Russia policies to China’s.) Beijing has looked on warily at
the deepening security cooperation between Moscow and
3,700 5,000 Pyongyang—indeed, Chinese officials didn’t know Kim was
Shahed drones used containers of military equipment
going to Russia until after it was publicly announced …
so far in the war have traveled from North Korea
(Ukrainian military estimate) to Russia since August and they were piqued by it. And while it has ramped up oil
imports from and diplomatic support for Tehran, Beijing
has no desire to jeopardize its more strategically important
interests in the Gulf (particularly its ties with Saudi Arabia
and the United Arab Emirates) by helping Iran make
regional trouble.
6,000 2 million 400,000
Iranian drones constructed rounds of rounds of That said, China is often well-served by the three rogues’
at a facility in Russia North Korean North Korean anti-Western operations and maintains a de facto policy of
by mid-2025 artillery rockets pro-axis neutrality. Indeed, without active acquiescence
(ROK estimate) (ROK estimate) from China, the axis’s rogue activities would be less
impactful. Short of violating international sanctions or
Source: YonhapNews, CNBC, Washington Post, Reuters jeopardizing its own interests, expect Beijing to continue
to do business with and legitimize the axis as it undermines
the US and its allies this year.
Deeper alignment and mutual support among these rogue
states will pose a growing threat to global stability
Three caveats are in order. First, Russia, Iran, and North making the entente a fragile one. This axis is a marriage
Korea leaning on each other is a sign of their desperation of convenience and opportunity; its members are neither
and weakness on the global stage. When your best (and strategic nor ideological bedfellows—they are focused
near only) friends are two rogue states, you’re in trouble. primarily on regime survival and geopolitical gain. As
Second, all of them seek to avoid an active shooting war such, their relationships will remain largely transactional.
with the West, which means continued caution when
escalating direct attacks on the United States or its core Still, the disruptive potential of their growing cooperation—
allies. And third, despite their common interest in especially with a boost or at the very least a blind eye from
sowing chaos, dictators have trouble trusting each other, Beijing—should not be underestimated.
America’s dangerous friends
America’s enemies are becoming more dangerous, but Determined to stay in power and out of jail and
even its friends could drag it into expanded conflicts emboldened by the possibility that his friend Trump
this year. returns to power in January 2025, Netanyahu will push
back against pressure from Biden to end the war. He
Volodymyr Zelensky. President Joe Biden has been will ignore calls for restraint in Gaza while eyeing more
Ukraine’s staunchest supporter since Russia’s invasion conflict with Hezbollah in the north (please see Top
in February 2022. Having pledged to stay by Kyiv’s side Risk #2). He will also continue to inflame tensions in the
“as long as it takes,” he has shepherded $113 billion in West Bank and thwart any efforts to create a Palestinian
military and other aid that has proven vital to Ukrainians’ state in the future. As a result, the United States will be
ability to defend themselves. Biden has done this even inextricably tied to an intensifying conflict over which
though he neither likes nor trusts President Zelensky. it has limited influence—one that will further strain US
However, political support for Ukraine within the relations with the Arab world, the Global South, and
US has wavered as the war has dragged on, seriously even some allies, as well as create political challenges for
undermining Biden’s ability to keep the aid coming past Biden at home. Should Netanyahu decide to preemptively
this year. And if Donald Trump—who considers Zelensky strike Hezbollah or even Iran itself, the US would find
a personal adversary—wins in November, Ukrainians itself drawn into a much broader Middle East war.
can wave goodbye to their biggest backer (please see
Top Risk #1). Cracks have also emerged within Ukraine, William Lai. Washington’s long-standing “one China”
where infighting between Zelensky and Chief of the policy and its security cooperation with Taiwan have
Armed Forces Valery Zaluzhny (over military strategy) been critical to deterring both a Chinese invasion and
as well as Kyiv Mayor Vitali Klitschko (over Zelensky’s a declaration of independence from Taipei. Although
allegedly authoritarian leadership) has spilled into the Biden has repeatedly said the US would defend Taiwan
open, threatening Ukrainian political unity and fueling against a Chinese attack, “strategic ambiguity” remains
more skepticism among Kyiv’s friends. the official stance, and the president has no desire to
risk a crisis with Beijing over the island. But the uneasy
Under pressure domestically and frustrated with both status quo in the Taiwan Strait will soon be tested if
diminishing US support and increasing difficulties on Taiwan elects Vice President William Lai, the ruling
the battlefield, a desperate Zelensky will be willing to party candidate whom China views as the most pro-
take bigger risks to turn the war around and maintain independence Taiwanese leader in a generation, as
his political standing before Trump potentially takes president (and his running mate Hsiao Bi-khim, Taiwan’s
office (please see Top Risk #3). This includes more former representative to the US, as vice president).
aggressive attacks against targets in Russia, Crimea,
and the Black Sea, threatening a response from Russia While Biden will oppose any de jure independence
and potentially forcing the United States to become moves from Lai, the domestic politics of the Taiwan
more directly involved in the war. issue will prevent the US president from objecting to the
smaller, symbolic steps toward de facto autonomy Lai is
Benjamin Netanyahu. Israel is America’s closest ally in likely to take. Yet even these will be enough to provoke a
the Middle East, the only democracy in the region, and beyond-precedent military response from Beijing, such
the largest cumulative recipient of US foreign aid. It is no as violating Taiwan’s airspace or waters or conducting
surprise that Biden—a self-described Zionist and longtime ship inspections. Biden will be forced to respond to
Israel supporter—strongly backed Israel’s initial response Chinese aggression with a show of resolve in support for
to Hamas’s 7 October attacks, despite his complicated Taipei that could jeopardize the US-China thaw and risk
relationship with Prime Minister Benjamin Netanyahu. a dangerous cycle of escalation.
Since then, however, a public rift has opened between the
two over the conduct and endgame of the war in Gaza. They Ukraine, Israel, and Taiwan will all continue to be major
are also at odds about the role the Palestinian Authority US allies. But their leaders’ pursuit of their national—and,
should play in Gaza’s postwar governance as well as the occasionally, personal—interests will further entangle
viability of a two-state solution. Fundamentally, Biden Washington in growing conflicts.
wants to see the war end, while Netanyahu has political
and personal reasons to keep it going or even escalate it.
6 No China recovery
Any green shoots in the Chinese economy will only raise false hopes of a recovery as economic
constraints and political dynamics prevent a durable growth rebound. Consolidation of power
at the top (Eurasia Group’s Top Risk #2 for 2023) has snuffed out policy debate and animal spirits
just as China’s past growth engines have been exhausted, and there is little the government will
do to reverse either trend. Beijing’s failure to address the country’s sputtering growth model,
financial fragilities, insufficient demand, and crisis of confidence will expose gaps in the
legitimacy of the Chinese Communist Party (CPP) and increase the risk of social instability.
We’ve already seen warning signs of deepening malaise emerge in 2023, from the exit of foreign investors and Moody’s
outlook downgrades to stalled property purchases and a stock market slump. This year, appetite to re-invest in the
country will continue to be dampened by vague and conflicting policy signals, growing concerns about geopolitical
risk, and the CCP’s ongoing regulatory crackdowns.
The persistence of constraints such as unfavorable demographics, eroding labor cost advantages, high indebtedness
(particularly at the local level), Western “de-risking” efforts, and continued reliance on state investment for growth
will further diminish hopes of a resurgent Chinese economy. While Beijing will try to restore confidence and prop up
demand by throwing more money at the problem—building yet more infrastructure to meet its likely 5% growth target
(again) for 2024—its efforts will have limited impact in the absence of a true shift toward bold reform.
Key economic indicators on downward trajectory
Consumer confidence index Foreign direct investment (USD billion)

122.3
51.67
87.0
-65.09
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Stock market Housing starts

(billion, residential housing measured in floor space area)
1.411
100.6
56.0
0.759
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
Source: Eurasia Group, Macrobond. NBS
Four additional economic factors will impede a recovery stress such as developer defaults and bank collapses (as
in 2024: opposed to larger-scale, more preemptive reform) will sap
confidence and test the government’s already-stretched
1) Fading zero-Covid rebound. The tailwind from administrative capacity.
last year’s reopening will disappear as slowing income
growth, higher unemployment, local government fiscal Then there’s politics. President Xi Jinping’s concentration
consolidation, falling property prices, and cascading of power and prioritization of security over growth will
defaults weigh on confidence and consumption. not only weigh on consumer, business, and investor
confidence, but it will also make the regime slower to
2) Real estate weakness. Previously a pillar of China’s respond to rising economic and financial vulnerabilities.
economy, the real estate sector won’t provide a much hoped- This doesn’t mean that China faces an imminent crisis.
for boost despite recent stabilization efforts, with new Rather, these conditions will entrench the country’s
construction remaining anemic owing to weak homebuyer economic malaise and expose cracks in the CCP’s veneer
demand and slumping land purchases by cash-strapped of competence and legitimacy.
property developers over the past two years.
Absent an unlikely loosening of Xi’s grip or a radical pivot
3) Low external demand. International demand for Chinese toward large-scale consumer stimulus and structural
exports, especially from the US and Europe, will prove less reform that restore confidence and reignite growth, China’s
resilient than in 2023, constrained by high interest rates economy will underperform throughout 2024. While the
and slow global growth (please see Top Risk #8). CCP’s rule is stable, there remains a longer-term risk that
Beijing will react too slowly to warning signs of financial
4) Government economic response. Beijing’s whack- contagion and social unrest, increasing the chances that
a-mole approach to emerging episodes of financial the government could one day lose control of both.
Absent an unlikely loosening of Xi’s grip or a radical pivot

toward bold reform, China’s economy will underperform
7 The fight for critical minerals
In 2024, governments around the world will take protectionist measures that disrupt the flow
of critical minerals, increasing price volatility and reshaping downstream supply chains.
Critical minerals sit upstream of virtually every sector that will drive growth, innovation, and national security in the
21st century, from clean energy to advanced computing, biotechnology, transportation, and defense. Extraction of these
essential raw materials is asymmetrically distributed across geographies, with single countries mining at least half of the
world’s lithium (Australia), cobalt (the Democratic Republic of Congo), nickel (Indonesia), and rare earth elements (China).
Meanwhile, around 60% to 90% of most critical minerals are processed and refined in China.
The highly concentrated nature of critical mineral mining, processing, and refining makes mineral supply chains vulnerable
to bottlenecks and chokepoints. But not all critical minerals are created equal. Some like gallium and germanium—used
in semiconductors and solar panels—can be partly swapped for other elements in the event of a supply crunch. Yet others
like lithium and graphite—“battery metals” essential to the production of electric vehicles—are less substitutable. The most
vulnerable supply chains are for the niche, illiquid, and Chinese-dominated rare earth metals such as neodymium and
dysprosium, required in everything from consumer electronics to high-tech defense applications.
Demand for critical minerals has surged in recent years as advanced economies such as the United States and the European
Union have begun subsidizing domestic manufacturing to boost their advanced computing and clean energy sectors amid
their growing tech competition with China. Yet these countries’ ability to meet the surging demand for minerals created
by these industrial policies is being complicated by their dependence on Chinese-controlled minerals. That is a strategic
vulnerability so deep that the Pentagon has taken the unprecedented step of directly financing mining and refining
operations. US-aligned nations have also entered into multilateral deals such as the Minerals Security Partnership intended
to scale up supplies domestically and from friendly trade partners. In both cases, however, long lead times for new mining
Export interventions are surging for critical minerals
Total export-related measures on critical minerals
200
180
160
140
120
100
80
60
40
20
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Note: Export measures include bans, quotas, licensing, and subsidies. Critical minerals refer to 51 commodities defined as such by IRENA's compilation of 35 national critical minerals lists.
Analysis may include mineral by-products like oxides.
Source: Eurasia Group, Global Trade Alert, International Renewable Energy Agency (IRENA)
and refining projects ensure these efforts won’t fix their inefficiencies, increase price volatility, and risk undermining
supply vulnerabilities soon. private investment and production. Most consequentially,
China is fine-tuning an export control regime to weaponize
Making matters worse for themselves, the US and the EU have its mineral dominance in the hopes of gaining leverage in
also enacted import restrictions in an attempt to reduce their its expanding tech competition with the United States and
dependence on China and promote cleaner supply chains. its allies. Last year, Beijing imposed export restrictions on
The problem with this strategy is that stringent mineral gallium, germanium, and graphite, and in late December
origin mandates in the US and clean supply chain laws in the government enacted export bans on machinery used to
Europe—the former focused on national security and the refine and separate rare earth elements.
latter on human rights, environmental, and sustainability
standards—limit their procurement of critical minerals This year, competing pressures from critical minerals
to geopolitically acceptable sources, exacerbating supply importers and exporters will become acute as governments
challenges and increasing price volatility. intensify their use of industrial policies and trade restrictions.
As the US and Europe scramble to secure minerals, the On the importer side, a wave of new EV gigafactories will
governments of many producer nations are imposing a come online across North America and Europe in 2024 with
growing number of export restrictions on these minerals. operations that are subject to strict sourcing requirements.
Nations sitting atop raw material deposits—largely but The new US Treasury rules that took effect on 1 January
not exclusively developing countries—see a once-in-a- enforcing restrictions on subsidy eligibility for EV supply
generation opportunity to leverage their position in the chains, aimed squarely at countering Beijing’s dominance
world’s most important supply chains to attract investment, of battery metal supply chains, will test America’s ability to
create jobs, retain profits, move up the value chain, and procure non-Chinese minerals and related products.
gain foreign policy leverage. These include established
critical minerals players such as Australia, Canada, Chile, On the exporter side, China will begin enforcing the export
the Democratic Republic of Congo, Indonesia, and Zambia, licensing requirements for graphite it set up last year
as well as countries with underdeveloped mineral deposits in response to US export controls on its semiconductor
in sub-Saharan Africa, South Asia, and the Middle East. industry. Rare earth elements could be next. President Joko
Many of them have begun and will continue to impose Widodo (Jokowi) could extend Indonesia’s banner export
export measures on raw mineral ores that create market restrictions on nickel to other metals such as copper in the
run-up to this year’s presidential election; while Jokowi is
not running again, the frontrunner in the race to succeed
him, Prabowo Subianto, would further Jakarta’s resource
Critical minerals importers and nationalism if elected. And in sub-Saharan Africa, Tanzania
will enact a ban on raw lithium exports, Nigeria will enforce
exporters will intensify their use the export ban on mineral ores it passed last year, and Ghana
of industrial policies and trade will consider similar policies. These moves will restrict the
flow of critical minerals and could disrupt important supply
restrictions chains, such as those of Western EV battery manufacturers
in the event of a Chinese graphite export ban.
8 No room for error
The global inflation shock that began in 2021 will continue to exert a powerful economic
and political drag in 2024. High interest rates caused by stubborn inflation will slow growth
around the world. With macroeconomic policy buffers largely exhausted, governments will
have limited scope to stimulate growth or respond to shocks, heightening the risk of financial
stress, social unrest, and political instability.
While 2023 saw a significant deceleration in inflation and the end of the monetary tightening cycle, global interest rates
remain highly restrictive. Despite expectations of a substantial easing in monetary policy, persistently above-target
inflation will lead central banks to keep interest rates high in 2024. Their efforts to cool inflation without sparking a
recession will be hindered by inflationary pressures over which they will have no control: The ongoing war in Ukraine
will keep commodity prices high and volatile (please see Top Risk #3), the ongoing war in the Middle East will raise
freight costs and disrupt global supply chains (please see Top Risk #2), and El Nino will threaten food prices (please see
Top Risk #9). Moreover, political and geopolitical calculations by major oil producers will keep oil prices—which usually
act as a countercyclical stabilizer in times of low growth—relatively elevated, while industrial policies aimed at boosting
national security and supply chain resilience will lead to growing geoeconomic fragmentation and higher prices.
Sticky inflation and tight financial conditions will weaken global demand and exacerbate economic insecurity. Faced
with persistent inflationary pressures and rising debt-servicing costs, households and firms will retrench. Fiscal
policymakers—especially those under pressure from market stress—will be reluctant to step in, instead focusing on
reducing public spending after several years of pandemic-related deficits. Chinese growth, once a safety net during
global downturns, will remain too weak to fill the gap (please see Top Risk #6). As a result, much of the world will
experience subdued growth, and many countries will dip into recession.
Persistently above-target inflation will lead
central banks to keep interest rates high in 2024
With policy space already diminished by the pandemic undermine the government’s ability to advance reform
response, “de-risking” efforts, the energy transition, priorities such as removing fuel subsidies and introducing
the Russia-Ukraine war, and soaring interest costs, any more flexibility in the foreign exchange market. In Brazil,
additional negative supply shocks would prompt central a slowing economy and faltering government approval
banks to tighten rather than ease monetary policy to rein ratings will prompt President Luiz Inacio Lula da Silva to
in inflation expectations, depressing growth further. At weaken the country’s fiscal framework. And having just
the same time, widening political divisions within many been elected to implement radical changes, Argentina’s
countries and geopolitical tensions among them will President Javier Milei will struggle to address deep
reduce the scope for domestic crisis response and global economic imbalances amid mounting social backlash.
policy coordination.
Heightened economic, financial, and political strain will
These economic headwinds will deepen voter discontent provoke debt distress in emerging and frontier economies
in a year when two-thirds of adults in the democratic with the least capacity to respond. In addition to those
world will go to the polls, hurting weak incumbents already undergoing debt restructurings—Zambia, Ghana,
and boosting populist challengers. In the United States, Sri Lanka—borrowers such as Pakistan and Egypt could
despite improving economic fundamentals, negative be forced to default on their debts. The largest creditor
perceptions of the economy will be a drag on President nations, most notably China, will be reluctant to provide
Joe Biden’s reelection bid, while in the United Kingdom, meaningful multilateral debt relief. Developed markets
the Conservative Party is set to be voted out on the back with high debt levels such as Italy and Canada, meanwhile,
of weak growth. In South Africa, meanwhile, the ruling will also face fiscal and financial strain in this environment.
African National Congress faces the prospect of losing its Although they will have enough economic and political
parliamentary majority for the first time since the end of capacity to address these challenges, rising debt service
apartheid thanks to a chronically weak economy. costs will crowd out spending on public goods.
In countries without scheduled elections in 2024, a While financial markets proved resilient in 2023,
shrinking economic pie will cause fiercer fights over the persistently high interest rates, tepid growth, and
distribution of scarce resources, leading to social unrest exhausted buffers will heighten the risk that something
and political instability. Those with the lowest growth breaks. Last year’s bond market volatility and the banking
rates, highest debt levels, and most divisive politics will crisis triggered by the collapse of Silicon Valley Bank
be most vulnerable. Some governments will be under could return, or other interest rate-sensitive markets such
intense pressure to enact fiscally unsustainable populist as real estate, corporate debt, and insurance could face
or heterodox policies, in turn exacerbating their inflation real stress. With growth subdued and policy set to remain
and debt problems. In Nigeria, popular discontent will tight, further accidents are bound to happen.
High post-Covid debt levels set to collide with much higher interest rates
Non-financial sectors debt (% GDP) and policy rates
Policy rate range: end-2021 to end-2023 (lhs) Household debt (rhs) Corporate debt (rhs) Government debt (rhs)
Percent Percent
13 450
12
11 400
10 350
9
8 300
7 250
6
5 200
4 150
3
2 100
1
0 50
-1 0
Japan
France
Canada
China
Greece
US
Italy
Euro Area
UK
Germany
India
Brazil
South Africa
Mexico
Source: Eurasia Group, Macrobond, BIS
9 El Nino is back
After a four-year absence, a powerful El Nino climate pattern will peak in the first half of this
year, bringing extreme weather events that will cause food insecurity, increase water stress,
disrupt logistics, spread disease, and fuel migration and political instability.
El Nino is a predictable pattern that increases the frequency and magnitude of extreme weather events such as heat
waves, droughts, storms, and floods due to higher global temperatures stemming from warmer currents and winds in the
Pacific Ocean. The last time a strong El Nino occurred (in 2016), it contributed to making that year the hottest on record.
Since then, however, baseline temperatures have increased further owing to climate change. With El Nino peaking in
the first half of the year and its effect on global temperatures lagging by a few months, 2024 will likely set a new record.
El Nino will affect much of the world, but countries in the Indo-Pacific, Latin America, and Southern Africa will be
hit hardest. South and Southeast Asia, Central America, northern South America, and Australia all risk prolonged dry
periods and record high temperatures, increasing the likelihood of unusually severe and widespread drought. In Brazil,
dry conditions in parts of the country will exacerbate the risk of fires, accelerating deforestation and threatening sources
of fresh water and hydroelectric power generation. The northern US and Canada are also likely to experience warm, dry
weather, leading to elevated forest fire risk after an unprecedented 2023 season that saw fires rip through Canadian forests
and blanketed New York under a thick cloud of smoke. Further south, increased rainfall could cause flash flooding in
California after years of drought, while the Southeastern US is also expected to see higher than normal rainfall. Eastern
Africa will face a higher risk of flooding in the eastern Horn and of drought further inland, while Southern Africa could
experience elevated temperatures and increased drought.
2023 was the hottest year on record entering a strong El Nino
Difference from 1901-2000 average global temperature (oC)
1.5
2023
1.2
2015
0.9
2009
0.6 1997
1987
1982
0.3 1991
1957
0.0 1972
1965
-0.3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: NOAA NCEI
In some regions, extreme weather caused by El Nino will transport more challenging. Even lower water levels in
threaten agricultural production, leading to potentially the Panama Canal will more dramatically disrupt one of
severe disruptions in food supplies. In South and the world’s busiest shipping hubs. Reduced hydroelectric
Southeast Asia, poor harvests of rice, wheat, corn, palm and nuclear power generation are a related concern,
oil, sugar, and coffee would be especially disruptive, given especially in parts of South America, South and Southeast
already high food prices. Drought in Southern Africa Asia, Europe, and East Africa. Lastly, competition over
would particularly affect South Africa, Zimbabwe, and shared water resources will intensify between neighboring
Mozambique, the region’s largest agricultural producers countries such as Ethiopia and Sudan, India and China,
of wheat and corn, while droughts in Brazil and Australia and India and Pakistan.
could further constrain supplies of wheat, corn, and rice.
Livestock and fisheries will be exposed to an increased El Nino will also increase the chance of natural disasters
risk of serious losses owing to severe weather. caused by extreme weather events such as fires, cyclones,
landslides, and floods. These occurrences will bring
Localized disruptions to food supplies in some regions downside risk for homes, businesses, and infrastructure,
will increase food prices, heighten food insecurity, and with important implications for a global insurance
provoke unrest. Though some global staple prices have industry already reeling from the consequences of climate
retreated from recent highs, renewed price pressures will change. In some inundated areas, tropical diseases will
drive social and political instability in countries where become more frequent, with a heightened risk of spikes
food prices remain elevated, such as Pakistan, Sri Lanka, of cholera in East Africa and dengue fever in South and
the Philippines, Indonesia, and Malaysia. High food prices Southeast Asia and Central and South America.
will also increase instability in regions such as North
Africa and the Middle East that are heavily dependent on The combination of food insecurity, water stress, and
food imports, with Egypt, Tunisia, and Lebanon among natural disasters will put the most pressure on countries
the most vulnerable countries. with limited adaptation capabilities—many of them already
suffering from elevated political and economic fragility.
El Nino will increase water stress in regions with a high This will threaten lives and livelihoods among the most
concentration of water-intensive industries—a global risk vulnerable populations in the most vulnerable countries,
we highlighted last year that El Nino is set to exacerbate. driving internal migration (in Africa, Asia, and the Middle
Droughts will make the logistics of river and canal East) and cross-border refugee flows (in the Americas).
Extreme weather caused by El Nino will threaten

agricultural production and food prices
10 Risky business
Two years ago, we warned that customers, employees, and investors—mostly on the left—were
bringing the US culture wars to corporate boardrooms (please see Eurasia Group’s 2022 Top
Risk #9). That’s still happening.
Since then, courts, governors, state legislatures, and activist groups—mostly on the right—have started to punch back. In
2021, Texas banned state investment funds from working with financial firms that boycott fossil fuel companies to comply
with ESG standards. In 2022, Florida revoked Disney’s long-standing special tax status in retribution for the company’s
criticism of the “Don’t Say Gay” law signed by the state’s Republican governor. In 2023, conservatives nationwide launched
a boycott of Bud Light after transgender influencer Dylan Mulvaney promoted the beer on Instagram, causing sales to
plummet and forcing out two senior executives. The year closed with a knock-down fight against elite university presidents
over their response to campus activism, antisemitism, and the Israel-Hamas war.
America’s growing political polarization is fragmenting the internal market along party lines. Red and blue states
increasingly diverge on issues as varied as LGBTQ rights, education policy, and even whether companies can require on-
site employees to be vaccinated, making it costlier for companies to operate in all states. Last March, for example, after
Walgreens decided it would not distribute the abortion pill mifepristone, California Governor Gavin Newsom announced
his state would no longer do business with the pharmacy chain (though he could not ultimately follow through on the
threat). A couple of months later, seven Republican state attorneys-general sent a letter to Target warning that the retailer’s
Pride Month merchandise could violate their states’ child protection laws. Since 2021, 18 states have passed laws or issued
orders to ban or limit the teaching of race, gender, and sexuality issues in schools.
This year, as the November elections approach, Donald Trump’s megaphone grows louder, and new fronts open in
America’s culture wars, conservatives will continue to jettison their free-market instincts in favor of retaliatory, “anti-
Business leaders will find themselves in a lose-lose environment
of higher policy uncertainty and regulatory risk
woke” political activism, doubling down on their use of of one-party rule will play out in the policy space as
state legislatures and the courts to assert states’ rights state lawmakers press the advantage conferred by their
over federal regulatory authority. dominance to impose maximally conservative or liberal
policies on the nation’s thorniest issues, leaving little
For instance, last year’s ruling by the US Supreme Court room for bipartisan compromise and deepening policy
banning affirmative action in university admissions opened polarization even further.
the door for conservative politicians, activists, and attorneys-
general to ramp up legal challenges against corporate Firms operating in both blue and red states (read: most of
diversity, equity, and inclusion programs. Groups such as the Fortune 500) will struggle to adopt cohesive nationwide
the National Center for Public Policy Research and America strategies that satisfy Democrats and Republicans alike.
First Legal are already filing shareholder complaints and Increasingly, these companies will face a tough choice:
bringing lawsuits against major corporations such as comply with laws and regulations that offend their
Starbucks and McDonald’s. Legal battles will also play out corporate and customer values and risk getting “canceled,”
across states over transgender protections, environmental or exit certain state markets. And with the GDP of some
regulations, abortion restrictions, gun control, and other US states rivaling that of sovereign countries—California’s
hot-button issues. As the Supreme Court continues to rule economy is larger than the UK’s, Texas’s GDP tops Italy’s,
in ways that shift decision-making authority toward states and New York’s economy is bigger than Russia’s—these are
(such as in the Dobbs v. Jackson Women’s Health decision expensive decisions.
on abortion rights) in these and other divisive policy areas,
more legal and regulatory fragmentation will ensue. While the decentralization of US politics—and the resulting
free market of political and economic strategies—may
Companies will also face growing risks from a widening be both a growth driver and a stabilizing feature during
red vs. blue divide among America’s state capitals this year a contentious election year that will result in significant
as the shades of each color darken within states and the dysfunction at the federal level (please see Top Risk #1),
number of state government trifectas reaches its highest companies caught between conservatives and progressives
level in decades. In 2024, one party or the other will control will nonetheless see their decision-making autonomy
the governor’s mansion and both legislative chambers in 40 limited and their cost of doing business rise. Forced to
of the 50 US states, home to about four in five Americans. navigate conflicting laws, regulations, and court rulings
In all these states, the same party that holds the trifecta across red and blue states, business leaders will find
will also hold the top three executive positions: governor, themselves in a lose-lose environment of higher policy
attorney general, and secretary of state. This consolidation uncertainty and regulatory risk.
Corporate America grappling with competing pressures

Texas
New York
Oil
California
Florida
Race
Courts
Gun control
LGBTQ+
Environment
Women’s
DEI rights
Legislation
RED
HERRINGS
US-China crisis
This year will prove another turbulent one for US-China relations, with several irritants that will threaten to derail the
thaw the two sides established over the course of 2023.
First, if Vice President William Lai wins Taiwan’s presidential election, Beijing will take aggressive military and economic
steps to discourage his pro-independence ambitions. Policymakers in Washington will respond with a show of support
for Taiwan (please see box in Top Risk #5). Second, China’s drive to assert its regional interests will continue to produce
close encounters with US military assets in or above the Taiwan Strait and the South China Sea. Third, tech competition
between the US and China will continue apace as Washington expands restrictions on China’s semiconductor and artificial
intelligence industries while Beijing retaliates with further export controls on critical minerals and green technologies
(please see Top Risk #7).
Yet we expect the US and China to maintain comparatively stable ties in 2024. There are several reasons why.
While committed to “systemic competition,” President Joe Biden’s administration is more immediately determined to
put a floor beneath the relationship and preserve the guardrails established by Biden and Chinese President Xi Jinping at
Diplomatic rapprochement has buttressed stability, will likely remain a bilateral priority in 2024
US China Virtual
Jun Nov
2023
18-19 US Secretary of State Antony Blinken kicks off series 4-7 Kerry meets with Chinese counterpart Xie Zhenhua
of visits, meets with Xi and Foreign Minister Wang Yi
6 US and China hold first nuclear arms control talks
in five years
Jul
6-9 Treasury Secretary Janet Yellen meets Premier 8-10 Yellen meets with Chinese Vice Premier He Lifeng
Li Qiang, urges “mutually beneficial" economic
relationship 16 Raimondo and Chinese Commerce Minister Wang
Wentao commit to improving technical discussions
16-19 US climate envoy John Kerry visits China for talks
on environmental cooperation 16 At APEC summit, Biden and Xi pledge increased
cooperation on fentanyl and AI and restoration of
high-level military dialogue
Aug
27-30 Secretary of Commerce Gina Raimondo meets with Dec
Chinese counterparts 14 Yellen gives speech on US-China strategy
highlighting importance of maintaining stability
Oct and avoiding crises
9-11 Senate Majority Leader Chuck Schumer leads first
21 US and China restart high-level military dialogue
congressional delegation to China in several years
22-29 California Governor Gavin Newsom travels to

China for a series of meetings
Jan
2024
1 Biden and Xi exchange letters on the 45th

anniversary of establishing diplomatic relations
the Woodside Summit. Election-year politics in the US will pugnacious foreign-policy approach. Moreover, given the
limit cooperation and occasionally dial up hostile rhetoric significant uncertainty—and growing concern—about
and actions (please see Top Risk #1). But new diplomatic how Donald Trump might approach US-China relations
and military-to-military channels will help manage in a second term, China’s leadership has incentives to
tensions with Beijing. reinforce engagement while the option is still on the table.
Beijing’s recent charm offensive—a far cry from the “wolf The most important geopolitical relationship in the world
warrior” diplomacy of Xi’s first two terms—will continue, is still fundamentally adversarial and marked by mistrust;
as China’s domestic economic challenges and the several flashpoints will exacerbate bilateral tension
structural issues underpinning them (please see Top Risk throughout 2024. But preserving stability is better for
#6) remain defining priorities in 2024 and beyond. The both sides this year, neither of which wants to risk major
importance of social and economic stability at home and decoupling or conflict. The two countries will carefully
the need to ease the fears of foreign investors and trading manage the relationship’s decline as they weather any
partners will continue to override inclinations for a more expected turbulence.
Populist takeover of European politics
A surge in support for far-right and populist parties
Centrist pro-EU parties will retain a majority
within many European countries is fueling concern that
Projected seat distribution following June’s elections for
the centrist consensus that has defined Europe’s postwar
European Parliament compared to current distribution
order could break down in 2024.
(% of seats) Euroskeptic
right-wing groups
In 2023, Geert Wilders and his Freedom Party secured
Others
mainstream support for the first time to win the Dutch
elections. Robert Fico’s left-wing nationalist Smer came Current
back to power in Slovakia. Support for the far-right 80.4% 19.6%
distribution
Alternative for Germany (AfD) surged to record highs.
-5.6% +5.6%
Far-right and far-left parties in France currently have over Projected
50% support combined. Economic headwinds, migratory distribution 74.9% 25.1%
pressures, some Ukraine war fatigue, and intra-EU discord (Nov 2023)
are kindling fears of a populist sweep at the European
Parliament elections in June.
Current distribution (%)
But Europe’s center will hold in 2024. Renew (Center) 13.8
EPP (Center-right) 26.5
Greens/EFA (Green) 9.6
Euroskeptic and populist parties should capture around
a quarter of European Parliament seats. An alliance of ECR (Right) 8.8
S&D (Left) 21.0
Europe’s center-right parties with far-right and populist
ID (Right) 10.8
parties is politically unlikely. Even if their politics align, GUE/NGL
they will not account for a sizable majority in the European (Left) 5.7 Non-inscrits 3.8
Parliament. Therefore, the traditional European coalition— Centrist pro-EU Right-wing
comprising the center-right, social democrats, liberals, and coalition euroskeptic
Greens—will maintain power in the EU’s legislature, and
the European Commission (the bloc’s executive) will be Projected distribution (Nov 2023) (%)
chosen by consensus among centrist candidates. Renew (Center) 13.3 EPP (Center-right) 24.7
Greens/EFA (Green) 6.5
Hungarian Prime Minister Viktor Orban will continue ECR (Right) 12.4
obstructing EU decision-making, but centrist governments S&D (Left) 19.2
ID (Right) 12.8
in the majority of member states will manage to find
workarounds. Moreover, Orban will no longer have the GUE/NGL
(Left) 6.4 Non-inscrits 4.7
support of his crucial former allies in Warsaw after Polish
Source: Der Föderalist (dynamic scenario) 6 November.
voters replaced a xenophobic right-wing government with European Parliament and Eurasia Group
an EU-friendly centrist one in 2023. Despite pushback
from Hungary and other headwinds, financial support for
Ukraine is likely to be maintained near current levels this
year. Even in countries led by antiestablishment parties, But limited setbacks for mainstream parties in European
such as Italian Prime Minister Giorgia Meloni’s Brothers Parliament, national, and local elections will neither
of Italy, decision-making will remain overwhelmingly upend the European political order nor fundamentally
pragmatic—even centrist. derail revamped EU ambitions following the twin crises of
the Covid-19 pandemic and the Ukraine war.
Populists and right-wingers will continue to make gains
and strike fear into the European political establishment.
BRICS vs. G7
On 1 January, the BRICS welcomed new members Saudi China unlikely to lead BRICS
Arabia, Iran, Egypt, the United Arab Emirates, and China favorability vs US favorability
Ethiopia. Some have argued that this expanded BRICS
Pro-China sentiment
will become an anti-US counterweight to the G7 and the
80%
West. This view also holds that China will co-opt the
organization, and through it, expand its influence over the 70 South
Africa
Global South. 60
50 Brazil
We disagree. 40
India
30
The expanded BRICS, like the original organization, will 2005 2010 2015 2020 2023
be a weak group, with much less institutional coherence
than the G7. The group’s original members—China, India,
Russia, South Africa, and Brazil—have little in common Pro-US sentiment
beyond a shared desire to boost their status on the global
80%
stage. They also have dramatically different political and
70 India
economic systems. The addition of new members will make
consensus—a requirement for the group to take any action— 60 Brazil
even harder to reach than it already is. The expanded BRICS 50 South
now includes two pairs of countries that are longtime rivals: Africa
40
China and India plus Saudi Arabia and Iran. 2005 2010 2015 2020 2023
China will have important influence in the BRICS, to be Source: Pew Research Center
sure, but its attempt to co-opt the group won’t work. India
is a critical member—especially and increasingly as a leader
of the Global South—and will oppose most initiatives that
strengthen Chinese clout. Also, most BRICS countries seek
good relations with both the US and China and don’t want
to jeopardize their existing (and in some cases growing)
diplomatic and commercial ties with the G7. Therefore, they
will place limits on Chinese sway.
The BRICS will not emerge as a China-led rival to the G7 this

year—or anytime soon.
We hope you’ll take all this in the spirit it’s intended: We’ve entered a
year of grave concern, but supported by the hope that tough times bring
out the best of us. This isn’t going to be particularly enjoyable, especially
for our fellow citizens here in the United States. It’s personally painful to
watch our country go through a tumultuous time, with those we care about
affected by it. It’s nothing compared to what we’ve been seeing in Ukraine,
Gaza, or South Sudan … and yet for a nation that has spent too much time
presuming “it can’t happen here,” 2024 is a necessary wake-up call.
It’s critical we don’t just talk about these global issues to help make
business and policy decisions, but also to connect with those closest to us.
If we can’t make a difference with those we know and love, we’re lost.
One of us (Ian) just returned from the South Pole. Having the entire world
on my shoulders—even if for just a moment—felt like the right thing to do
to prepare for the year. Antarctica is an entire continent that’s been kept
peaceful and pristine, for humanity and our animal friends, for generations
now. Yeah, we’re melting it. But otherwise, it turns out we can be capable
global custodians when we set our minds to it.
Let’s remember that. Thinking about the year ahead of us, we’re not that
into Mars. We’re focused on doing a better job with the planet we’re on first.
With our best wishes to you for our year ahead,
Ian and Cliff
New York | London | Washington DC | São Paulo | Tokyo | Singapore | San Francisco | Brasília
This material was produced by Eurasia Group for use by the recipient. This is intended as general background
research and is not intended to constitute advice on any particular commercial investment, trade matter, or issue and
should not be relied upon for such purposes. It is not to be made available to any person other than the recipient. No
part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic or otherwise, without the prior consent of Eurasia Group. Photo credit: Reuters, Getty
© 2024 Eurasia Group, 149 Fifth Avenue, 15th Floor, New York, NY 10010

Eurasia Group Top Risks 2024

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Ian Bremmer Cliff Kupchan

1 The United States vs. itself 6 No China recovery Red Herrings

The Supreme Court The church or

The public schools Newspapers Television news News on the internet

Biden and Trump are both uniquely unfit for office.

Ukraine is at risk of losing, but Russia has no way to “win.”

Still, a partitioned Ukraine will pose real risks. The first

It bears noting that China is not a member of the axis

Consumer confidence index Foreign direct investment (USD billion)

Stock market Housing starts

Absent an unlikely loosening of Xi’s grip or a radical pivot

Source: Eurasia Group, Macrobond, BIS

Extreme weather caused by El Nino will threaten

Corporate America grappling with competing pressures

22-29 California Governor Gavin Newsom travels to

1 Biden and Xi exchange letters on the 45th

Source: Eurasia Group

The BRICS will not emerge as a China-led rival to the G7 this

With our best wishes to you for our year ahead,

Ian and Cliff

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