WEBVTT - The Biggest Global Risks in 2024 with Eurasia's Ian Bremmer 0:00:00.160 --> 0:00:01.840 Our listeners will know that there's a huge amount of 0:00:01.880 --> 0:00:06.119 political risk out there around the world. One political risk consultancy, 0:00:06.200 --> 0:00:09.480 Eurasia Group does a list every year. It's become pretty 0:00:09.520 --> 0:00:12.399 famous actually, and today we're going to talk to the 0:00:12.400 --> 0:00:15.400 co author of this list, Ian Brema. But quickly, fran 0:00:15.520 --> 0:00:17.640 you have your trustee iPad to hand give us the ten. 0:00:17.880 --> 0:00:19.960 Yeah, so I think it's really important how he ranked them. 0:00:20.440 --> 0:00:23.480 Number one he has United States versus itself, so US 0:00:23.560 --> 0:00:26.560 elections number two, Middle East on the brink. Three Ukraine 0:00:26.760 --> 0:00:30.880 for Ai, which he calls ungoverned. Five access of rogues, 0:00:30.920 --> 0:00:34.760 so this is dictators coming together. Six China recovery or 0:00:34.800 --> 0:00:39.200 no China recovery. Seven the fight for critical minerals. Eight 0:00:39.600 --> 0:00:42.800 he talks about monetary policy, no room for error. Nine 0:00:43.240 --> 0:00:46.640 actually weather patterns, Elmino's back and ten risky business. 0:00:47.360 --> 0:00:49.520 So this week, as we kick off the new year, 0:00:49.640 --> 0:00:57.840 a deep dive into those political risks. Welcome to in 0:00:57.840 --> 0:01:01.440 the City, Bloomberg's podcast, Connecting the conversations and the story 0:01:01.480 --> 0:01:04.240 is shaping the world of finance. I'm a legostraton I'm 0:01:04.240 --> 0:01:05.399 front in Lackwell, and. 0:01:05.360 --> 0:01:07.800 I'm David Merritt and joining us. This week we have 0:01:07.840 --> 0:01:12.120 Eurasia Groups president and founder in Brema, walking us through 0:01:12.560 --> 0:01:13.240 this year's list. 0:01:14.319 --> 0:01:15.720 Ian, can you just give us a bit of a 0:01:15.760 --> 0:01:18.360 history of this very famous list you now, Ron, when 0:01:18.400 --> 0:01:19.000 did you start? 0:01:20.280 --> 0:01:22.120 I started top Risks. I'm going to say it was 0:01:22.120 --> 0:01:26.560 about sixteen or seventeen years ago, and you know, it 0:01:26.640 --> 0:01:31.120 was kind of this coming back to school ready for 0:01:31.160 --> 0:01:34.520 the year, and let's do something that isn't just you know, 0:01:34.600 --> 0:01:39.880 sort of impressionistic, but rather that we can have a methodology, 0:01:40.000 --> 0:01:44.399 hold ourselves to account, and then come back at the 0:01:44.480 --> 0:01:46.560 end of the year and see how we did it. 0:01:46.560 --> 0:01:48.880 Seems like it's an obvious thing to do, and yet 0:01:48.880 --> 0:01:50.600 people don't do it. They make headlines and then they 0:01:50.640 --> 0:01:52.840 move on. And also, one of the things I like 0:01:52.880 --> 0:01:56.280 about top ris is, as opposed to responding to headlines, 0:01:56.640 --> 0:01:59.040 we get to actually set the story. We tell you 0:01:59.120 --> 0:02:01.480 here are the things we think you need to focus on. 0:02:02.120 --> 0:02:04.800 And I think that's a very valuable thing to be 0:02:04.840 --> 0:02:08.440 able to do with audiences that are getting deluged by 0:02:08.480 --> 0:02:11.120 way too much information and they don't know what matters 0:02:11.120 --> 0:02:15.040 and what doesn't. And of course the algorithms drive you 0:02:15.080 --> 0:02:19.080 towards the things that induce anger. That's not a useful service. 0:02:19.160 --> 0:02:21.320 So this is meant to be a counterweight to that. 0:02:22.240 --> 0:02:25.679 And in that sort of idea of metrics and accountability, 0:02:26.360 --> 0:02:27.480 how successful have you been? 0:02:28.440 --> 0:02:31.000 Well, First of all, it's a wonderful disciplining tool for 0:02:31.040 --> 0:02:32.919 all of the analysts. We've got about two hundred and 0:02:32.919 --> 0:02:36.040 fifty people in the firm around the world, and they 0:02:36.120 --> 0:02:38.600 need to know that this is going to be on 0:02:38.639 --> 0:02:40.600 the homepage all year, and at the end of the year, 0:02:40.639 --> 0:02:42.720 we're going to go back and see how they did. 0:02:42.800 --> 0:02:45.200 And it's fine to be wrong. You're going to be 0:02:45.200 --> 0:02:48.679 wrong about things every year, but being wrong and being 0:02:48.720 --> 0:02:51.359 wrong in an intelligent way so that you understand what 0:02:51.400 --> 0:02:55.040 it was that made you wrong and what were your 0:02:55.040 --> 0:02:58.280 thought processes that you need to rethink. And my view 0:02:58.320 --> 0:03:01.400 on top risks, and again we're looking forward at the 0:03:01.440 --> 0:03:05.200 coming year every year and we're looking at impact, likelihood 0:03:05.280 --> 0:03:09.480 and eminence together is that we don't have a crystal ball, 0:03:09.840 --> 0:03:13.760 but rather we have a really good sense of where 0:03:13.800 --> 0:03:19.000 the world is today and also what the constraints are 0:03:19.560 --> 0:03:24.480 on the political acts and actions of various leaders, whether 0:03:24.480 --> 0:03:27.480 they are business leaders or government leaders or other leaders 0:03:27.560 --> 0:03:30.839 all around the world. Which doesn't necessarily tell you what's 0:03:30.880 --> 0:03:33.760 going to happen, but it tells you a lot about 0:03:33.800 --> 0:03:36.520 what can't happen. It tells you a lot about things though. 0:03:36.520 --> 0:03:40.840 For example, I really don't want Ukraine to get partitioned. 0:03:40.920 --> 0:03:43.000 I really want them to be able to take their 0:03:43.080 --> 0:03:46.760 land back. I think it's desperately unfair that that is 0:03:46.800 --> 0:03:49.960 not going to happen. And yet I have a lot 0:03:50.000 --> 0:03:53.800 of confidence that Ukraine is essentially going to be partitioned 0:03:54.280 --> 0:03:57.760 over the course of this year. That's much less of 0:03:57.800 --> 0:04:01.280 a prediction than it is about a sense of reality 0:04:01.280 --> 0:04:03.480 of where Ukraine Russia is right now and the things 0:04:03.480 --> 0:04:05.760 that just can't happen. So I think a lot of 0:04:05.800 --> 0:04:06.920 top risks is about that. 0:04:07.600 --> 0:04:10.040 In your Top Risk twenty twenty four, the United States 0:04:10.200 --> 0:04:13.520 versus itself, will we have President Trump and what will 0:04:13.560 --> 0:04:14.080 that look like. 0:04:14.640 --> 0:04:17.400 I have very low confidence about who the next president 0:04:17.520 --> 0:04:20.680 is going to be. I would say that today, if 0:04:20.720 --> 0:04:24.760 the election war today, Trump would win, and in November 0:04:24.800 --> 0:04:28.320 I probably put it at Trump sixty forty. But there's 0:04:28.360 --> 0:04:30.560 a lot of time to play out before then. But 0:04:30.839 --> 0:04:32.760 let me tell you the things that I think I 0:04:32.800 --> 0:04:36.159 have more confidence on, and what goes into this risk. 0:04:36.279 --> 0:04:39.000 The first is that I have very high confidence Trump 0:04:39.000 --> 0:04:42.000 will get the nomination, and when he gets the nomination 0:04:42.200 --> 0:04:45.800 in the next few months, he will become much much 0:04:45.880 --> 0:04:50.479 more powerful Immediately, all of the Republican leaders will be 0:04:50.560 --> 0:04:53.120 loyal to him. He will have far more money to 0:04:53.279 --> 0:04:58.440 spend for his campaign, for his message, and he also 0:04:58.520 --> 0:05:02.040 will have the Republican leaning media all in favor of him, 0:05:02.080 --> 0:05:03.600 covering him all the time in a way that they 0:05:03.600 --> 0:05:06.080 are not. Right now, there's a lot more hedging, and 0:05:06.120 --> 0:05:11.000 that means that Trump's policies, both domestic and international, will 0:05:11.080 --> 0:05:16.040 become the policies of half of the American policy space. 0:05:16.240 --> 0:05:19.960 So that by itself is a very big issue. Secondly, 0:05:20.560 --> 0:05:23.120 and this is of course the big monster that's looming, 0:05:23.680 --> 0:05:25.960 is the fact that the United States today is the 0:05:26.000 --> 0:05:30.040 only advanced democracy that cannot count on a free and 0:05:30.160 --> 0:05:34.520 fair transition that is seen as legitimate by its population. 0:05:34.680 --> 0:05:38.280 It's the only country that is experiencing a crisis of democracy. 0:05:38.520 --> 0:05:41.320 Among the wealthy democracies in the world today, it's also 0:05:41.440 --> 0:05:44.000 the most powerful. That's a very serious problem. That's why 0:05:44.000 --> 0:05:47.560 it's called the United States versus itself. Democrats and Republicans 0:05:47.920 --> 0:05:52.480 exist in different fact spaces, different information spaces, and there's 0:05:52.480 --> 0:05:55.160 no effort to there's no effort to fix that. There's 0:05:55.160 --> 0:05:56.440 no diplomacy going on. 0:05:56.640 --> 0:05:59.520 Yeah, and I know you basically say that he would, 0:05:59.680 --> 0:06:03.760 you know, Trump president would take steps to consolidate executive power, 0:06:03.839 --> 0:06:07.880 undermine the rule of law. Then you many questions about 0:06:07.960 --> 0:06:11.440 checks and balances. Would you worry more about domestically what 0:06:11.480 --> 0:06:13.600 it does to the US or foreign policy? So what 0:06:13.640 --> 0:06:17.080 that means for Ukraine, what means for israeland likes. 0:06:17.480 --> 0:06:21.520 I worry more about the domestic side and the implications 0:06:21.560 --> 0:06:23.640 the domestic side have for the rest of the world. 0:06:23.760 --> 0:06:27.160 So that's the causal process, that's the driver. But for example, 0:06:27.240 --> 0:06:28.880 I don't think if Trump would have win, I don't 0:06:28.880 --> 0:06:31.560 think the United States will withdraw from NATO. But I 0:06:31.600 --> 0:06:34.240 think NATO will start to fall apart. It'll fragment. Let 0:06:34.240 --> 0:06:39.720 me so to explain how Trump is a political adversary 0:06:39.960 --> 0:06:44.559 of President Zelenski in Ukraine, he demanded that Ukraine open 0:06:44.600 --> 0:06:49.480 an investigation under Biden and Hunter, it was enormously important, 0:06:49.760 --> 0:06:54.360 Zelenski refused. Trump absolutely will do everything in his power 0:06:54.680 --> 0:06:57.440 to respond to that if he becomes president. That means 0:06:57.800 --> 0:07:02.080 demanding that Zelenski accepts unacceptable terms to the end of 0:07:02.080 --> 0:07:05.600 the war. It means ending military support for Ukraine that 0:07:05.640 --> 0:07:08.760 allows Putin to get on the offensive, to take more land, 0:07:08.880 --> 0:07:12.400 to threaten Kiev. The response of the polls of the 0:07:12.400 --> 0:07:17.720 Baltic states of the Nordics will be incredibly alarmed and urgent. 0:07:18.120 --> 0:07:20.920 But there are other countries in Europe with leaders that 0:07:20.960 --> 0:07:24.520 support Trump, like Orbon in Hungary, as well as let's 0:07:24.520 --> 0:07:27.680 say the Italians and Maloney, that will say, well, yeah, 0:07:27.760 --> 0:07:29.400 I mean, why are we paying for this, why are 0:07:29.440 --> 0:07:31.560 taxpayers on it? Let's just find a way to normalize 0:07:31.560 --> 0:07:37.200 relations with Russia. That is an unprecedented existential challenge for NATO. 0:07:37.560 --> 0:07:39.160 That's the way that's likely to play out. And I 0:07:39.200 --> 0:07:41.400 can give you other examples for how that might play 0:07:41.440 --> 0:07:43.440 out in the Middle East, how it might play out 0:07:43.440 --> 0:07:46.080 on the border, how may play out with tariffs and 0:07:46.120 --> 0:07:50.160 decoupling with China, all of those things that are starting 0:07:50.800 --> 0:07:54.600 with the dysfunction domestically in the United States, but are 0:07:54.800 --> 0:07:58.000 having massive implications well beyond American shores. 0:07:58.160 --> 0:08:01.680 What about domestically within the United States, the impact of 0:08:02.440 --> 0:08:07.280 possibly another fractious handover of power. Would we see worse 0:08:07.320 --> 0:08:10.480 scenes than we saw at the January sixth riots at 0:08:10.520 --> 0:08:13.240 the Capitol. Are there more attacks on American institutions? And 0:08:13.240 --> 0:08:16.360 what does that mean for the American economy and business 0:08:16.400 --> 0:08:16.840 as a whole. 0:08:17.400 --> 0:08:20.320 So I don't believe we'd have a January sixth reprize 0:08:20.440 --> 0:08:23.400 in Washington because it would be expected and planned for 0:08:23.440 --> 0:08:27.960 in the city will be locked down. But the stakes 0:08:27.960 --> 0:08:31.240 here are very high. If Trump loses, He's probably going 0:08:31.280 --> 0:08:34.160 to jail. He knows that. And therefore, if it looks 0:08:34.200 --> 0:08:35.839 like he's going to lose, or if it looks really close, 0:08:35.920 --> 0:08:39.960 he is highly incentive to do everything possible to prevent 0:08:40.040 --> 0:08:43.440 that outcome, and that includes actively sending his supporters to 0:08:43.520 --> 0:08:46.800 try to disrupt this election. There are also actors that 0:08:46.840 --> 0:08:49.960 would outside the US that benefit from chaos in the 0:08:50.040 --> 0:08:53.400 US that are much more incentive to engage and intervene 0:08:53.520 --> 0:08:56.720 against a soft and complex homeland security target that is 0:08:56.760 --> 0:08:59.839 the US electoral process. So there's that on top of that. 0:09:00.360 --> 0:09:06.080 If Biden loses, then certainly Biden's many of his advisors, 0:09:06.120 --> 0:09:09.120 many Democratic senators have spoken to them about this. They 0:09:09.160 --> 0:09:12.720 really believe that they will face legal jeopardy in a 0:09:12.840 --> 0:09:16.600 Trump administration. That Trump would focus on of course, ending 0:09:17.160 --> 0:09:20.680 the investigations and the judicial cases against him, but also 0:09:21.480 --> 0:09:25.360 would focus on politicizing the IRS, the FBI, the Department 0:09:25.400 --> 0:09:29.360 of Justice, and would use those institutions to go after 0:09:29.480 --> 0:09:33.120 his enemies, some of whom would be arrested, some of 0:09:33.160 --> 0:09:37.320 whom would face investigations, but many more of whom would 0:09:37.400 --> 0:09:41.040 have a chilling impact of this new McCarthyism that would 0:09:41.080 --> 0:09:44.400 stop them from saying what they would otherwise want to say, 0:09:44.440 --> 0:09:46.680 acting in ways they would otherwise want to act. And 0:09:46.679 --> 0:09:49.720 of course the implications of that of red versus Blue 0:09:49.720 --> 0:09:53.160 state are significant. Now does that affect credit worthiness of 0:09:53.200 --> 0:09:57.120 the United States over time? I think it does. I 0:09:57.120 --> 0:09:59.560 think if you are a foreign investor looking at the 0:09:59.679 --> 0:10:02.680 US and you have exposure in red states exposure blue states, 0:10:02.720 --> 0:10:06.560 and they are both creating environments that are mutually exclusive 0:10:06.640 --> 0:10:08.160 in terms of the cost you'll have to pay in 0:10:08.200 --> 0:10:11.040 the policy alignments you have, that'll change the way you 0:10:11.080 --> 0:10:14.000 think about investing in the United States. Absolutely. So, there 0:10:14.040 --> 0:10:16.960 will be a market positive response to Trump if he wins, 0:10:17.400 --> 0:10:20.920 because he will still focus on lower taxes and regulatory 0:10:21.000 --> 0:10:24.680 rollback and large amounts of deficit spending, all of which 0:10:24.679 --> 0:10:27.320 near term is market positive, but then you will have 0:10:27.400 --> 0:10:32.240 this inner circle of large number of Trump advisors whose 0:10:32.360 --> 0:10:38.320 top priorities are vindication and retribution, and that will be 0:10:38.360 --> 0:10:38.920 a negative. 0:10:39.080 --> 0:10:40.920 So it sounds like sort of lose lose, right, like 0:10:41.040 --> 0:10:44.880 either outcome. You're saying the American democracy suffers in the 0:10:44.880 --> 0:10:47.720 long run regardless of who wins, because of the reaction 0:10:47.800 --> 0:10:48.719 of the other side. 0:10:48.920 --> 0:10:52.400 We've had President Biden now for almost four years, and 0:10:52.559 --> 0:10:56.240 if you look in our report at the level of 0:10:56.400 --> 0:10:59.600 trust in the United States for all of the critical 0:10:59.600 --> 0:11:05.160 political institutions, the executive and the judiciary, and Congress, and 0:11:05.240 --> 0:11:09.640 the church and public schools and the newspapers and television news, 0:11:10.840 --> 0:11:13.800 they've all gone down. And they've gone down not just 0:11:13.920 --> 0:11:17.200 over the past couple decades, but also under Biden. So 0:11:17.400 --> 0:11:20.760 I mean, if you're telling me that somehow a second 0:11:20.800 --> 0:11:23.840 Biden term, when he's eighty two to eighty six, he's 0:11:23.840 --> 0:11:27.440 going to manage to somehow turn that around. With Trump 0:11:27.480 --> 0:11:31.959 facing far more legal jeopardy, and with Trump's supporters believing 0:11:32.480 --> 0:11:36.360 that there are a series of politicized judicial cases against 0:11:36.440 --> 0:11:38.200 him to take him out. And by the way, I 0:11:38.240 --> 0:11:41.880 don't believe that, but I do think that some of 0:11:41.920 --> 0:11:47.040 the cases against Trump are politicized. I think that raising 0:11:48.080 --> 0:11:52.720 the financial charges to felony charges in the state of 0:11:52.760 --> 0:11:54.959 New York that would not happen against someone else. That's 0:11:54.960 --> 0:11:57.520 a politicized case. And if you're a Trump supporter and 0:11:57.559 --> 0:11:59.520 you see that in one of the cases, well your 0:11:59.559 --> 0:12:02.000 presumption is that must be what they're doing everywhere. So 0:12:02.600 --> 0:12:07.880 it's the fact that Americans do not remotely agree on 0:12:08.080 --> 0:12:12.400 shared facts or narrative, which is very similar to Israel 0:12:12.520 --> 0:12:15.319 and Hamas, and it's very similar to Russia and Ukraine. 0:12:15.320 --> 0:12:18.200 And it's very dangerous in this environment. 0:12:18.520 --> 0:12:22.360 And do you see anybody anything coming forward to try 0:12:22.400 --> 0:12:25.640 and address that kind of parallel universes that the two 0:12:25.640 --> 0:12:26.680 different Americas live in. 0:12:27.240 --> 0:12:32.920 Oh, Elon Musk absolutely is trying to address it with success, 0:12:34.400 --> 0:12:37.080 with success for one side. No, I mean, I know 0:12:37.120 --> 0:12:39.000 that that wasn't the question you were asking on being 0:12:39.040 --> 0:12:40.960 cute about it, because of course, No. What I see 0:12:41.000 --> 0:12:44.280 is exactly the opposite. What I see is that we 0:12:44.360 --> 0:12:49.040 are increasingly driving people algorithmically. But this is the big 0:12:49.160 --> 0:12:51.480 We can talk about the inequality in the US, and 0:12:51.520 --> 0:12:54.600 we can talk about the identity politics and the race politics, 0:12:54.840 --> 0:12:57.600 but the big thing that has happened in the last 0:12:57.679 --> 0:13:01.800 thirty years is that the institutions that Americans have been 0:13:01.840 --> 0:13:05.880 a part of raising them into becoming civic minded creatures. 0:13:05.960 --> 0:13:10.400 Civic minded citizens have eroded. Church membership is way down, 0:13:11.440 --> 0:13:17.520 public schools are eroding, the family is atomizing, and you know, 0:13:17.600 --> 0:13:20.120 even Little League attendants and all the rest. And what 0:13:20.240 --> 0:13:25.240 has replaced that has been algorithmic learning. What has replaced 0:13:25.280 --> 0:13:31.680 that has been people being intermediated in their personal connections 0:13:32.280 --> 0:13:36.560 and in their information sources through their smartphone devices by 0:13:36.640 --> 0:13:40.400 business models that have no interest in creating citizenship or 0:13:40.440 --> 0:13:42.240 promoting democracy. 0:13:41.720 --> 0:13:44.000 But just confirming what they think already. 0:13:43.880 --> 0:13:46.360 Well and creating you know, I'm not even sure that 0:13:46.360 --> 0:13:48.120 that's what the models are trying to do. I think 0:13:48.120 --> 0:13:51.120 they're trying to addict people that are on them to 0:13:51.200 --> 0:13:53.440 gather their data and to make more money out of them. 0:13:53.480 --> 0:13:55.439 But it so happens that the best way to do 0:13:55.520 --> 0:14:00.760 that is through confirming what they already believe, even driving 0:14:00.920 --> 0:14:06.040 very strong emotional reactions. And so yes, that is exactly 0:14:06.080 --> 0:14:09.240 what's happening right now in the United States, much more 0:14:09.240 --> 0:14:11.640 than in Japan or South Korea, or Canada or Europe. 0:14:11.840 --> 0:14:14.400 And we are reaping the consequences of the United States. 0:14:14.760 --> 0:14:17.880 In nineteen eighty nine, when I wrote my dissertation the 0:14:17.920 --> 0:14:21.080 Wall came down, the US was the principal exporter of 0:14:21.200 --> 0:14:25.560 democracy in the world. The United States today is the 0:14:25.600 --> 0:14:29.800 principal exporter of tools that destroy democracy in the world. 0:14:29.920 --> 0:14:33.440 And that is a radical transformation over the course of 0:14:33.480 --> 0:14:34.600 thirty years. 0:14:34.440 --> 0:14:39.080 And extending that thought, we've written this over seventeen years. 0:14:39.320 --> 0:14:42.040 You just talked about nineteen eighty nine when you write 0:14:42.080 --> 0:14:45.040 these lists, to what extent is this year's list your 0:14:45.120 --> 0:14:47.000 most gloomy yet? 0:14:48.440 --> 0:14:51.920 I think that maybe the one that was the most 0:14:52.000 --> 0:14:55.960 gloomy was about twelve years ago when I wrote about 0:14:55.960 --> 0:14:59.640 the G zero world for the first time, and the 0:14:59.680 --> 0:15:03.200 star of that was, Look, we've had all of these 0:15:03.240 --> 0:15:07.880 political institutions globally, and they reflected an old balance of power. 0:15:08.320 --> 0:15:11.360 The balance of power has shifted dramatically. It's not coming back. 0:15:11.400 --> 0:15:14.840 The institutions no longer reflect that new balance of power, 0:15:15.600 --> 0:15:17.720 and therefore they're starting to fall apart, and we're going 0:15:17.800 --> 0:15:21.040 to enter into an age of geopolitical recession that will 0:15:21.080 --> 0:15:22.840 get you more conflict, which means. 0:15:22.800 --> 0:15:25.360 This is what twenty twelve, twenty twelve. 0:15:25.200 --> 0:15:26.760 I think it was twenty twelve and I said, what 0:15:26.760 --> 0:15:29.720 that means is that the United States, which historically has 0:15:29.800 --> 0:15:32.640 been the global policeman, the architect of global tay trade, 0:15:32.680 --> 0:15:36.000 and the promoter of global values, will no longer do so, 0:15:36.480 --> 0:15:38.240 will no longer act in that way, and that no 0:15:38.320 --> 0:15:40.840 other country or group of countries will replace it now 0:15:41.120 --> 0:15:46.200 at time, the people said, well that that feels very gloomy, 0:15:46.280 --> 0:15:51.200 and I said, well, not yet, but structurally will over time. 0:15:51.320 --> 0:15:53.600 And I think that if you take that as the 0:15:53.720 --> 0:15:58.240 backdrop as a long cycle, what we see in twenty 0:15:58.280 --> 0:16:03.320 twenty four is the result of the g zero playing 0:16:03.360 --> 0:16:05.600 out for over a decade of Now we're in the 0:16:05.680 --> 0:16:08.200 teeth of it. So in that regard, it might not 0:16:08.280 --> 0:16:10.520 be the most gloomy, but it probably feels like the 0:16:10.520 --> 0:16:13.680 most gloomy because people now accept what we're saying in 0:16:13.720 --> 0:16:15.720 a way that they weren't prepared to in twenty twelve. 0:16:16.400 --> 0:16:17.960 In what will happen in the Middle East. 0:16:18.920 --> 0:16:21.800 I think the war will expand I think that it's 0:16:22.040 --> 0:16:24.560 very hard to imagine that you can keep the war 0:16:24.720 --> 0:16:28.640 contained to the territory of Gaza. There are too many 0:16:28.760 --> 0:16:33.520 ways for it to metastasize. There is the Northern Front 0:16:33.560 --> 0:16:37.280 with Hezbollah, where the skirmishes are growing, and where the 0:16:37.320 --> 0:16:41.880 Israeli war cabinet sees an opportunity to degrade Hesbelah's military 0:16:41.880 --> 0:16:44.760 capacity and also push them back from the border in 0:16:44.800 --> 0:16:47.760 accordance with you and Security Council resolutions that have never 0:16:47.840 --> 0:16:51.320 actually been implemented. Then you've got the Huthies that the 0:16:51.360 --> 0:16:55.400 Americans and allies are trying to deter unsuccessfully, more likely 0:16:55.440 --> 0:16:57.800 to lead to the US to attack those bases inside 0:16:57.880 --> 0:17:01.359 Yemen that'll escalate the war. You've got the Iranian proxies 0:17:02.000 --> 0:17:05.320 in Syria in Iraq that are more likely to have 0:17:05.359 --> 0:17:09.399 success in causing casualties among American servicemen and women, and 0:17:09.440 --> 0:17:11.440 that the Americans will respond to. And then of course, 0:17:11.760 --> 0:17:15.480 you have the radicalization of millions upon millions of Muslims 0:17:15.560 --> 0:17:17.840 all over the world, some of whom will turn to violence, 0:17:17.840 --> 0:17:19.800 some of whom will turn to terrorism, lone will for 0:17:19.920 --> 0:17:23.040 organized activities. So I put all this together, it's very 0:17:23.080 --> 0:17:25.119 hard to imagine that we will be smart enough and 0:17:25.200 --> 0:17:28.679 lucky enough to avoid all of that escalation over the 0:17:28.720 --> 0:17:31.239 coming months. I'm not talking about the US is at 0:17:31.240 --> 0:17:33.840 war with Iran two hundred dollar oil in a global recession. 0:17:33.840 --> 0:17:37.359 And then Trump wins that is possible. Maybe it's ten percent, 0:17:37.440 --> 0:17:40.800 twenty percent. It is not the baseline, but the baseline 0:17:40.840 --> 0:17:43.000 is that this war will escalate over the coming months. 0:17:43.000 --> 0:17:47.560 Absolutely, there's so many fundamentals that are so worrying about 0:17:47.600 --> 0:17:50.240 the world right now. What's the rays of sunshine? And 0:17:50.280 --> 0:17:52.440 it might sound panglossian, and if the rays of sunshine 0:17:52.480 --> 0:17:54.680 don't exist, it's not particularly helpful to try and find them, 0:17:54.680 --> 0:17:57.320 But what are the things that could surprise on the upside? 0:17:57.520 --> 0:17:59.200 If you want to look at some of the things 0:17:59.200 --> 0:18:01.480 that I'm much more positive and we do at the 0:18:01.560 --> 0:18:03.760 end of this report. We have red herrings every year, 0:18:04.560 --> 0:18:05.840 and so I'll give you a couple of those, and 0:18:05.880 --> 0:18:09.080 I'll talk about some others that aren't here. One, this 0:18:09.119 --> 0:18:10.919 is a year where billions of people are going to 0:18:10.960 --> 0:18:14.600 the polls deeply concerned about the United States and it's 0:18:14.720 --> 0:18:17.679 crisis of democracy. But for the rest of the world, 0:18:17.880 --> 0:18:22.200 you're not seeing that. In India, the world's most populous democracy, 0:18:22.560 --> 0:18:25.800 Modi's at seventy five percent. He's going to win easily 0:18:25.920 --> 0:18:29.240 have another five years. Not only will he have strong 0:18:29.320 --> 0:18:32.880 growth and will he be able to conclude legacy economic 0:18:32.920 --> 0:18:37.000 reform packages, but he also acts as a bridge between 0:18:37.080 --> 0:18:39.920 the West and the global South. Imagine if a country 0:18:39.960 --> 0:18:43.639 as powerful as India instead had the politics of the 0:18:43.680 --> 0:18:48.280 ANC in South Africa and was much more aligned towards China, 0:18:48.359 --> 0:18:51.639 you'd have a geopolitical environment that feels much more like 0:18:51.720 --> 0:18:55.840 blocks pro West and pro China. That's not happening at all. 0:18:56.080 --> 0:18:58.639 And India is a big piece of this. Mexico going 0:18:58.680 --> 0:19:01.520 to have a very strong trans towards a new leader 0:19:01.880 --> 0:19:05.520 supported by AMLO, but who is more technocratic, who has 0:19:05.560 --> 0:19:08.560 a climate science background, who's more pro business, who understands 0:19:08.600 --> 0:19:12.160 the economy. That's a really big win. Indonesia post Djoco 0:19:12.760 --> 0:19:14.679 likely to be pro Boa, who he wants also one 0:19:14.680 --> 0:19:16.560 of the most populous democracies in the world. The EU 0:19:17.280 --> 0:19:20.639 likely to have likely to return the same constellation of 0:19:20.720 --> 0:19:27.280 parties to create a vonderline or related led largest common 0:19:27.320 --> 0:19:31.080 market in the planet for another five years. Then you 0:19:31.119 --> 0:19:34.440 have the US and China, which are the most powerful 0:19:34.960 --> 0:19:38.400 countries in the world and the most important geopolitical relationship 0:19:38.440 --> 0:19:41.120 in the world, and it's likely to be better managed 0:19:41.119 --> 0:19:43.719 this year than it was in twenty twenty three, and 0:19:43.920 --> 0:19:46.439 two reasons for that. One is because the Americans have 0:19:46.560 --> 0:19:50.240 this very challenging domestic year with the elections, and Biden 0:19:50.320 --> 0:19:53.640 does not want yet another crisis to have to respond 0:19:53.680 --> 0:19:56.280 to like he has in the Middle East and Russia. 0:19:56.359 --> 0:20:00.919 Ukraine and China is facing significant economic under performance and 0:20:00.960 --> 0:20:02.679 this is not the time for them to have a 0:20:02.680 --> 0:20:05.080 fight with the US and or its allies. So yeah, 0:20:05.119 --> 0:20:08.200 there'll be problems over Taiwan, problems over the South China Sea, 0:20:08.240 --> 0:20:11.200 but they will be better managed and responded to than 0:20:11.240 --> 0:20:13.160 we would have had over the past Year's next final 0:20:13.200 --> 0:20:19.000 point artificial intelligence, which is a risk, but also does 0:20:19.160 --> 0:20:25.480 represent transformative economic opportunity, productivity and unlocked human capital much 0:20:25.520 --> 0:20:28.479 faster than people think. And I'm very excited. I'm an 0:20:28.600 --> 0:20:31.720 enthusiast for that. That could be a second wave of globalization, 0:20:32.080 --> 0:20:33.520 So that's pretty exciting too. 0:20:33.920 --> 0:20:37.080 But Ian we're facing two wars. So there's war in Ukraine, 0:20:37.119 --> 0:20:40.600 there's a Middle East, and frankly, it's you know, the 0:20:40.640 --> 0:20:44.159 possibility of escalation in the Middle East is huge, So 0:20:44.240 --> 0:20:46.320 what do you expect in the Middle East? And it 0:20:46.359 --> 0:20:49.200 seems that when there's a power vacuum or when the 0:20:49.600 --> 0:20:54.320 US is divided, that's when foreign policy or foreign leaders 0:20:54.359 --> 0:20:57.120 trying to take advantage and frankly do what they want 0:20:57.119 --> 0:20:57.800 across the world. 0:20:58.280 --> 0:21:00.400 So I was too positive for you in the last Okay, 0:21:00.440 --> 0:21:06.000 we made it go back to horrible things. So yeah, 0:21:06.040 --> 0:21:08.480 the United States, of course, has not been divided for 0:21:08.520 --> 0:21:11.359 the last year and a half. On Ukraine, it's mostly 0:21:11.400 --> 0:21:15.760 been united. And that's also true with NATO, and it's 0:21:15.760 --> 0:21:18.879 also true with American allies in Asia. Eleven rounds of 0:21:18.880 --> 0:21:23.440 sanctions against the Russians and a half of Russia's reserves 0:21:23.520 --> 0:21:27.280 being frozen by the US and Europe and Japan. That's 0:21:27.359 --> 0:21:30.000 all to the good, but that is now becoming much 0:21:30.000 --> 0:21:32.280 more divided. In twenty twenty four. I think we've already 0:21:32.320 --> 0:21:36.199 seen peak NATO, We've seen peak Atlanticism. It's going to 0:21:36.200 --> 0:21:39.600 get a lot harder, and the Ukrainians are not going 0:21:39.640 --> 0:21:43.240 to get enough money to take more territory back. So 0:21:43.480 --> 0:21:46.760 Ukraine is going to be divided. Ukraine is going to 0:21:46.800 --> 0:21:49.960 be partitioned. And I say that as someone who desperately 0:21:49.960 --> 0:21:52.520 does not want that to happen, but I think it will. 0:21:52.640 --> 0:21:54.560 It's kind of like North Korea has nuclear weapons. I 0:21:54.560 --> 0:21:56.720 don't want it to happen when we try to ignore it, 0:21:56.720 --> 0:21:57.360 but they have it. 0:21:57.400 --> 0:21:59.720 But resolves the conflict that end. 0:22:00.119 --> 0:22:02.920 It resolves the conflict at all. No, No, because first 0:22:02.920 --> 0:22:05.000 of all, it's not clear that the Ukrainians can even 0:22:05.080 --> 0:22:07.920 hold on to the territory. They still have. The average 0:22:08.000 --> 0:22:10.520