Global Risk Analysis
2024

PHP Global Risk Analysis Project
PHP Research Institute(Summary)© 2024 PHP Institute, Inc. All rights reserved.
Neither this summary nor excerpts thereof may be reprinted, copied, or retranslated
without the express permission of the PHP Institute, Inc. Citations must specify thesummary as a source.
The views expressed herein are those of the project as a group and do not necessarily
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PHP Global Risk Analysis Project, PHP Research Institute

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English Summary of the“2024 PHP Global Risk Analysis” Report

Introduction
This English-language summary presents the essence of the “2024 PHP Global Risk
Analysis” report, published at the end of 2023 in Japanese by PHP Sōken (PHP ResearchInstitute), the policy think tank of the PHP Institute, Inc.
The annual “PHP Global Risk Analysis” reports are the output of focused analyses byexperts in a broad range of fields, from geopolitics and regional studies to international
finance, global economics, energy, and cyber security issues. The 2024 edition is thethirteenth report in the series. The full report, published in Japanese, may be
downloaded from the following URL:
https://thinktank.php.co.jp/policy/8299/
The full report in Japanese features a “Global Overview” describing the worldwide
context for the various risks facing the world, along with detailed analyses of 10 global
risks that will require particular attention from Japan in 2024. It includes explorations of
the potential impacts and policy implications of each of these risks for the nation. This
English-language version presents a complete translation of the “Global Overview” andlists the key analysis points for each of the 10 risks.
The ongoing conflict in Gaza, touched off by the October 2023 Hamas attack on Israel,
has once again swung the nexus of global politics back to the Middle East. The UnitedStates has been pressed to address this burgeoning Mideast crisis, in close succession tothe ongoing war in Ukraine, making it still more difficult to dedicate resources to thestrategic rivalry with China, the most pressing issue America faces. The existing globalorder led by the United States is seeing its legitimacy shaken by the US position on theGaza conflict, even as Russia and China continue to foment a dynamic pitting the Westagainst the rest of the world. This challenge seems likely to become only more vigorousas time goes on.
All this said, American dominance remains evident in numerous realms, and the fate of
the existing global order will still be determined to a major extent by the United Statesitself. If Donald Trump makes his way back to the White House, American engagementwith the rest of the world will inevitably undergo sweeping change. The US presidential
and congressional elections in November this year will represent a severe test ofwhether the United States maintains the will to lead the international order.
National elections take place in 2024 not just in the United States, but also in Indonesia,Russia, India, and many other key nations, making this a year when more people thanever will head to the ballot box worldwide. Lai’s victory in the Taiwanese presidential
election in January will be particularly momentous in terms of its resonance with the US
election later in the year and the impact it could deliver to the delicate balance among
Washington, Beijing, and Taipei.
Humankind is also facing expanding challenges arising from its own activities on theplanet. Environmental issues including climate change and loss of biodiversity arethreatening human societies and adding complexity to energy issues and efforts toachieve a “green shift.” And as the cyber domain extends to encompass an ever greaterpart of human activities and AI and automation continue to advance, further risk factors
are coming into play.
The 10 risks in this report are not presented in order of importance or any other metric.
They have been arranged so as to highlight the connections among them and to illustrate
clearly for readers the overarching structure of global risks we face.
We hope that the thirteenth “PHP Global Risk Analysis” report will provide you withvaluable insight as you take a careful look at the reality of our world today, helping you
to squarely face the crises of our era.
January 2024
PHP Global Risk Analysis Project, PHP Research Institute2024 PHP Global Risk Analysis
Global Overview
The Pax Americana Faces Serious Challenges●●Key global regions are threatened by violent confrontations.
Ø Two wars are underway—in Europe, the ongoing Russian invasion of Ukraine,
and in the Middle East, the fighting between Israel and Hamas in Gaza. At
present, both of these remain limited, regional conflicts with no direct armed
clashes between major powers, but there is a risk of escalation, and their impact
is global in scope, reaching as far as East Asia.
Ø The United States is intervening in the European and Middle Eastern conflicts
via its supply of arms and application of sanctions, among other approaches. Its
adversaries are taking advantage of its unwillingness to use force directly,
though, while its support for Israel has exposed it to harsh criticism both
domestically and abroad. American engagement on these two fronts is also
constraining the US resources needed for a confrontation with China. The
United States, leader of the formation of order in key world regions, is seeing its
will and capabilities tested.
Ø Both the Ukraine and Gaza theaters are seeing the deployment of new weapons
and fighting methods as wartime innovation picks up speed. At the same time,countries are placing more emphasis on the importance of the nuclear weapons
option.
Ø The crafting of a new regional order in the Middle East with Israel at its axis has
ground suddenly to a halt; there is no main scenario for moving forward.
Ø The endgame for the Ukraine war remains uncertain. A Russian victory there
would establish precedent for altering the status quo through force.
Delicate dynamics are at work driving the international order.
Ø The adversarial relations between the advanced democracies on one side andRussia and China on the other are increasingly fixed in structure, andcompetition for support from the middle powers is growing more intense.
Moscow and Beijing are angling to spread a worldview pitting the advanced
democracies against all other actors. Since the start of the Gaza conflict, theUnited States has found its narratives about the international order lesspersuasive.

Ø The administration of US President Joe Biden is pursuing a managed
competition with Beijing, maintaining open channels while it continues toconfront China by enhancing its economic and technological power, mainly via
domestic investment and export and outbound investment controls, andstrengthening its ties with allies and friendly nations.
Ø China, for its part, is taking advantage of various international crises toundermine American hegemony and advance the formation of a strategic
environment in which it is not constrained by American power. Depending on
the degree of its economic slowdown, China may take a more conciliatory stancetemporarily. Russia will grow increasingly dependent on China as its own
national power dwindles even more rapidly, and is likely to coordinate its
actions with states like Iran and North Korea as a player rejecting the global
status quo.
Ø US-led collective bodies like the G7, the Quad, the trilateral cooperative
framework with Japan and South Korea, and AUKUS are increasingly incompetition against those led by China and Russia, such as the expanded BRICS
and the Shanghai Cooperation Organization. Swing powers like India, Indonesia,Brazil, Turkey, and Saudi Arabia will engage in accordance with their own
national interests; the nations of the West will find themselves struggling withthese swing powers due to gaps between their values.
Ø Nations around the world will begin hedging their relationships with the UnitedStates due to its growing unreliability, a process that will dramaticallyaccelerate if Donald Trump takes the White House for a second term.

Global Economic Systems in an Era of Strategic Rivalry●Questions arise over whether the flourishing of state-led economies is hype orreality.
Ø Many nations adopt increasingly protectionist trade policies, prompted by thebacklash against globalization, concerns over security or competitiveness issues,
worries about severed supply chains due to pandemic or other factors, the needto address the green shift and digitalization, and rising prices. The trend grows
stronger toward what the Economist has called “homeland economics,” withgovernments interfering more frequently in markets via tools like subsidies andregulations.
Ø The US government will boost spending aimed at reshoring manufacturing
capacity and, together with its partners, seek to reconstitute supply chains thatare not dependent on China or Russia. Europe, too, will bolster its green andother industrial policies.
Ø China has seen its growth slow due to the failure of its zero-COVID policy andthe restrictions it places on free economic activities. It is nonetheless gainingsome degree of superiority by leveraging next-generation industries like electricvehicles and renewable energy. Continued arrests of foreign civilians in China
on the pretense of national security can be expected.
Ø Economic coercion and sanctions are deployed more frequently, andrestrictions are placed on trade on the basis of green or human-rights concerns.

●●

Arising as a new paradigm is “mutual dependence with strings attached,” with
an emphasis on political considerations and relationships of trust. Corporate
and investment decisions will increasingly have a high political risk premium
baked in.
Ø Base Erosion and Profit Shifting 2.0 rules will be rolled out as a newinternational tax regime. Close attention will need to be paid to corporate tax
revenue levels and the shifting global strategies of multinationals.
Ø Excessive government interference could produce inefficiencies or lead to rentseeking. Efforts will continue to explore the ideal balance of roles between themarket and government.
Mutual derisking continues apace.
Ø The economies of the West are pursuing derisking policies to reduce theirexcessive dependence on China, but removing China from the mix is proving
difficult as the country continues to enhance its economic competitiveness.
Ø Through its application of economic sanctions and unilateral monetary policy,
the United States runs the risk of triggering a shift away from the dollar as theworld’s reserve currency. The expanded BRICS framework will bring together
China, with its economic clout, and nations providing energy, food, and otherresources. Meanwhile, China is likely to recoup lost ground in its Belt and Road
Initiative with a fresh focus on quality rather than quantity in this realm.
Bifurcated societies take shape along lines between wealth and poverty.
Ø Developing nations saw their public debt balloon rapidly during the pandemic,
triggering rising poverty. They have suffered further blows from rising costs offood and energy. These weakened states are becoming fertile ground for the riseof armed groups and international crime. The nations of the West, meanwhile,
are witnessing the reemergence of immigration and refugee issues as societalproblems.
Ø In the advanced economies, the middle class is declining, leaving a two-levelstructure composed of the wealthy and the poor. Societal classes that feel

threatened by globalization, automation and digitalization, and immigration will
demand more exclusionary approaches, hindering their countries’ international
coordination efforts.

Difficult Paths Ahead for the Anthropocene●●●

The great acceleration of human activity is set to collide with planetary boundaries.
Ø Various human activities impose an inexorably increasing burden on the Earth.
Extreme weather events grow more frequent, taking a heavy toll on businessactivities and the lives of people; effects will also be seen on insurance and otherparts of the financial sector.
Ø Extreme weather will produce instability in developing nations, degrading living
conditions and triggering food and energy crises.
Poor visibility can be expected in energy markets.
Ø Geopolitical rivalries will combine with moves toward digitalization and theelectrification of vehicles to foment heightened struggles for control over notjust energy, but also key minerals, food, water, and other resources. Countries
will increasingly resort to resource nationalism and the weaponization ofstrategic commodities.
Ø Factors including the war in Ukraine, rising energy prices, and the difficulty ofenergy transitions are prompting a reconsideration of the need for rapid
decarbonization. The outcome could be widespread inaction on the global
environmental crisis.
Ø The backlash against environmental, social, and governance awareness in theUnited States places corporations in a difficult position. Actions looking beyond
the UN Sustainable Development Goals process will lack momentum.
Potential side-effects emerge from human enhancement via technology.
Ø Heightened reliance on artificial intelligence improves productivity, but jobs lostto AI also become a reality. AI-based surveillance of citizens and AI-generated
disinformation reach levels demanding attention, while the technology is alsorolled out in military applications. Controlling AI tech proves difficult, leading toincreased levels of noise about the need for stronger international regulation ofthe field.
Ø The rapid implementation of genomic techniques and automation technologies
also becomes a source of new risks to be considered.

Key Elections in a Year Representing a Historic Turning Point●The 2024 calendar is crowded with major elections worldwide.
Ø The US presidential and congressional elections in November will be the mostclosely watched. A return of Donald Trump to the White House would deliver
severe shocks to the international political scene.
Ø The January presidential and legislative contests in Taiwan, a focal point in Asia,
may producing the possibility of a “twisted” situation going forward, with eachØ

ØØØbranch of government controlled by a different party.
The Russian presidential election in March should unsurprisingly see Vladimir
Putin reelected. It remains unclear whether Ukraine will hold its presidentialcontest.
India is slated to hold a general election in the April–May period. Other South
Asian nations also go to the polls this year: Following general elections in
Bangladesh and Pakistan in January and February, respectively, Sri Lanka isscheduled to hold its presidential contest by September.
The 2024 electoral calendar also features Indonesian presidential and generalelections in February, elections for the Iranian Parliament in March and South
Korea’s National Assembly in April, general elections in South Africa aroundMay and in Mexico in June, and another June contest for the EuropeanParliament. In Singapore, Prime Minister Lee Hsien Loong plans to step down atsome point before the country’s 2025 elections. In Japan, meanwhile, Prime
Minister Kishida Fumio’s term as president of the Liberal Democratic Party ends
in September, opening the door to a possible general election here before theyear’s end.
In this busy election year, risks are on the rise of election interference anddisinformation, factors that threaten to shake electoral legitimacy as the root ofdemocratic governance.

2024 PHP Global Risk Analysis
Global Risks 2024
1. Global Leadership Falters in a “Postprimacy America” Buffeted by Electoral
Upheaval and War● The outlook remains murky for the 2024 US presidential election● Conflicts in Ukraine and Gaza continue to test American will and abilities
Go-it-alone economic policy prompts counterparts to pursue derisking vis-à -vis USeconomy
2. Heightened Power Struggles in China Undermine Xi Jinping Administration,
Push Beijing Toward Harder Line Internationally● High-ranking officials’ power struggles and promotion-seeking degrade Beijing’s
administrative capabilities as a whole● Military tensions ramp up between China and the United States following theTaiwanese presidential election
3. Global Economies Fragment, Turn Inward, Boosting Costs and Dragging GrowthLower● The “weaponization of economic dependencies” hampers efficiency and reverses thetrend toward globalization● Production capacity reshoring and other “homeland economics” policies dragnational economies into mudslinging matches● The existing economic order, built around the US dollar as the core currency, faces
increasing challenges
4. Worldwide Impact of Middle Eastern Volatility Sparked by the Gaza Conflict● China, Russia, and Iran seek to craft a new order as Israel and the United States are
mired in an increasingly harsh Gaza situation● Tensions emerge in the US-Israel relationship; Israel seeks to maintain tight ties withWashington via a fresh Iran-centered crisis
5. Russia’s War on Ukraine Continues Under Russian Narrative Spinning It as
Facet of a Shifting Global Order● The Ukraine conflict, entering its third year, trends in Russia’s favor● Russia spreads a narrative painting its acts as a new anticolonialist push
6. North Korean Nuclear Tests Tip the Dominos Toward a New Nuclear Crisis● Potential for new North Korean nuclear testing rises amid warming MoscowPyongyang ties
● North Korea angles for new peace-treaty talks with one eye on US presidential●election● A potential nuclear crisis chain emerges via arms networks including Russia, North
Korea, Iran, Hamas, and other actors
7. Rapidly Rising Immigrant Flows Bring Right-Wing Resurgence, Instability toEuropean Politics● Societies struggle to cope with illegal inflows of immigrants from the Middle Eastand Africa● Far-right parties make advances and Eastern European states gain stronger voices,casting dark clouds over a Ukraine in need of further aid
The European Union finds consensus harder to reach amid chilling France-Germany
relations, impacting its diplomatic capabilities
8. Uncertainties Rise as the Gulf Widens Between Ideals and the New Reality inthe Energy Field● Oil-producing nations and major energy firms see fiercer standoffs between forces
pushing for greener energy and those seeking to roll it back● Green industrial policy leads increasingly to protectionism, while signs appear ofcourse corrections toward more feasible policies● Heightened risks appear of energy shortages as demand skyrockets for AI and datacenter operation
9. Cyber Threats Reach New Heights, Seriously Impacting Foreign Policy andMilitary Affairs● Geopolitical factors lead to sustained increases in cyber espionage and cyberdisruption as foreign policy tools● Russia and North Korea enhance cybercrime collaboration, primarily in hacking thattargets crypto assets● Rampant increase in cybercrime enabled by AI
10. Emergence of Autonomous Android Soldiers in Conflict Arenas● Rapid advances in AI and brain-machine interface technology enables production ofautonomous android soldiers● Potential scenarios could arise for Israeli deployment of such fighters as part ofoperation to cleanse Hamas tunnel network● Concerns heighten regarding unchecked proliferation of lethal autonomous weaponsystems (LAWS)●

Project Members
Taisuke Abiru
Senior Research Fellow
The Sasakawa Peace Foundation

Seiya Nakajima
Visiting Professor
Fukui Prefectural University

Masafumi Iida
HeadToshio Nawa
Executive Director/Senior Security

China Division, National Institute for
Defense Studies

AnalystCyber Defense Institute, Inc.

Satoshi Ikeuchi
Professor
Research Center for Advanced Scienceand Technology, The University of Tokyo

Noriaki Oba
President/Energy Analyst
G.K. Post-Oil Strategy InstituteKuniharu Kakihara
Lieutenant General
Commander
Air Development and Test Command
Masafumi Kaneko
Director, Member of the Board/Chief
Research Officer
PHP Institute, Inc.
Haruyoshi Mabuchi, CFA
President
Bouquet de Fleurettes

Izuru Sugawara
Project Fellow
PHP Institute, Inc.
Koichi Tajima
Division Manager
Research Division, Japan Credit Rating
Agency Ltd.
Toshiyuki Yasui, PhD, PMP
Dean of the Department of Social System
Design and Professor
Eikei University of Hiroshima