Ian Bremmer
President

1
2
3
4
5

The United States vs. itself
Middle East on the brink
Partitioned Ukraine
Ungoverned AI
Axis of rogues

Cliff Kupchan
Chairman

6 No China recovery
7 The fight for critical minerals
8 No room for error
9 El Nino is back10 Risky business

Red Herrings
US-China crisis
Populist takeover ofEuropean politics
BRICS vs. G7

Ian Bremmer
President

2024. Politically it’s the Voldemort of years.
The annus horribilis. The year that must not
be named.
Three wars will dominate world affairs:
Russia vs. Ukraine, now in its third year;
Israel vs. Hamas, now in its third month; andthe United States vs. itself, ready to kick off at
any moment.
Russia-Ukraine … is getting worse. Ukraine
now stands to lose significant international
interest and support. For the United States inparticular, it’s become a distant second (andincreasingly third or lower) policy priority.
Despite hundreds of thousands of casualties,
millions of displaced people, and a murderous
hatred for the Russian regime shared by nearly
every Ukrainian that will define the national
identity of tens of millions for decades. Whichis leading to more desperation on the part of
the Ukrainian government, while Vladimir
Putin’s Russia remains fully isolated from theWest. The conflict is more likely to escalate,and Ukraine is on a path to being partitioned.
Israel-Gaza … is getting worse. There’s no
obvious way to end the fighting, and whatever
the military outcome, a dramatic increase inradicalization is guaranteed. Of Israeli Jews,
feeling themselves globally isolated and even
hated after facing the worst violence againstthem since the Holocaust. Of Palestinians,
facing what they consider a genocide, witheurasia group TO P R I S KS 2 0 24

Cliff Kupchan
Chairmanno opportunities for peace and no prospectsof escape. Deep political divisions over the
conflict run throughout the Middle East andacross over one billion people in the broader
Muslim world, not to mention in the UnitedStates and Europe.
And then there’s the biggest challenge in2024 … the United States versus itself. Fully
one-third of the global population will go to
the polls this year, but an unprecedentedly
dysfunctional US election will be by far themost consequential for the world’s security,
stability, and economic outlook. The outcome
will affect the fate of 8 billion people, andonly 160 million Americans will have a say init, with the winner to be decided by just tensof thousands of voters in a handful of swing
states. The losing side—whether Democrats
or Republicans—will consider the outcome
illegitimate and be unprepared to accept it. The
world’s most powerful country faces criticalchallenges to its core political institutions:
free and fair elections, the peaceful transfer of
power, and the checks and balances provided
by the separation of powers. The political stateof the union … is troubled indeed.
None of these three conflicts have adequate
guardrails preventing them from getting
worse. None have responsible leaders willing
and able to fix, or at least clean up, the mess.
Indeed, these leaders see their opponents(and their opponents’ supporters) as principal

adversaries—“enemies of the people”—andare willing to use extralegal measures toensure victory. Most problematically, noneof the belligerents agree on what they’refighting over.
Climate change has long been consideredby many our greatest global challenge, but
the world is on the road to responding—collectively, even though too slowly—because
everyone understands the nature of the
problem. There is too much carbon (andmethane) in the atmosphere, with a lot morecoming because it’s necessary for economic
growth, leading to long-term damage tobiodiversity and affecting everyone but
mostly the poorest. None of this remains
controversial: it’s just a question of whocompromises how much—and who pays what
and when. We have a pretty good sense ofwhere we are heading accordingly.
Not so for any of the major conflicts driving
geopolitical risk this year. The terms ofconfrontation are not shared: not thenarratives, not the history, not even the basic
facts of the ongoing fighting. And in all threecases, we are creating generations of incensed
people prepared to dig in and battle for as longas it takes. Maybe an end to the fighting cancome when one or both sides are exhausted… but the prospects of a sustainable peace? In
Europe, in the Middle East, and in America,
we’re not remotely close.
We call this a G-Zero world, a world without
global leadership. Where the United States, theworld’s sole remaining superpower, doesn’twant to be the world’s policeman, the architectof global trade, or the cheerleader of global
values. And no other country is prepared totake that role for itself. We now see threemajor confrontations that are the direct resultof our G-Zero world. By its nature, the G-Zeroeurasia group TO P R I S KS 2 0 24

will cause more unsolvable conflicts in theyears ahead—the only questions are where,
when, and how destabilizing. And whether
the resulting crises help fix the underlying
problem with our “geopolitical recession” oronly serve to make it worse.
*
There are plenty of bright spots. Most of therest of all those elections, especially the big
ones (India, the European Union, Indonesia,
Mexico), aren’t troubled at all. And then there’s
a big issue you might find surprising since it’sless gloomy than usual: The US and China willbe the adults in the room this year. With all thefighting going on in the world, the two biggest
economies aren’t looking for reasons to startanother conflict, despite the lack of trust andmutually unaligned political and economic
systems. US-China tensions don’t even makethe Top Risks list, in part because the Chinese
economy and the US domestic polity are
so troubled and distracting. Geopolitically,
the world’s most strategically consequential
bilateral relationship has become a cleaner
dirty shirt.
The wild card, more than ever, is technology—
specifically, artificial intelligence. The upsides
will start materializing more dramatically as
new applications find their way into every
major corporation across every economic
sector. And as hundreds of millions of people
begin to upskill themselves in their jobs, AI
will become a copilot before it takes over yourjob. But the technology is also developing
far faster than the ability to govern it, and atechnopolar world for artificial intelligencemeans crisis response and reaction will comeonly after things break … let’s hope in 2024
those things aren’t that big.
And now, our top risks.

1

The United States vs. itself

While America’s military and economy remain exceptionally strong, its political system ismore 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 andundermining US credibility on the global stage.
The US political system is remarkably divided, and its legitimacy and functionality have eroded accordingly. Public trust incore 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 setof 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

Congress

The church ororganized religion

The presidency

80
70
60
50
40
30
20

27%

32%

26%

10
0
1973

2000

2023

1973

The public schools

2000

8%
2023

1973

Newspapers

2000

2023

1973

Television news

2000

2023

News on the internet

80
70
60
50
40
30
20

26%

10

18%

0
1973

2000

2023

1973

2000

2023

16%

14%
1973

2000

2023

1973

2000

2023

Source: Gallup

pronouncements—however outlandish—will shift thenational narrative and shape the policy direction on Capitol
Hill and in statehouses across the country before a voteis cast. The result will be even more policy extremism,
division, and gridlock.
Knowing he faces prison time if he loses in November,
Trump will use his online pulpit, control of the Republican
Party, and friendly media to delegitimize both the systemthat is prosecuting him and the integrity of the election.
His victim narrative and preemptive claims of fraud willfind a receptive audience of Americans who agree, putting
implicit pressure on Republican state governments andelection officials to manage the election in ways thatwould benefit him (such as by purging voter rolls more
liberally or tightening voting restrictions). While these

efforts are unlikely to overturn the electoral process, they
may well disrupt it. And they are sure to persuade manyof Trump’s supporters to doubt the election outcome’s
legitimacy—a problem that will be exacerbated by AIfueled disinformation and social media echo chambers(please see Top Risk #4).
In a world beset by crises, the prospect of a Trump
victory will weaken America’s position on the global
stage as Republican lawmakers take up his foreign
policy positions and US allies and adversaries hedge
against his likely policies. US support for Ukraine will
face stronger headwinds on Capitol Hill, straining thetransatlantic alliance and leaving Ukrainians and theirfrontline European supporters in the lurch. Kyiv will takeincreasingly reckless actions to make what gains it can

Biden and Trump are both uniquely unfit for office.
Most Americans want neither to lead the nationeurasia group TO P R I S KS 2 0 24

5

before the next president takes office, while hopes for adefinitive end to US aid in 2025 will stiffen Russia’s resolve
to keep fighting (please see Top Risk #3). In the Middle East,
Trump’s prominent support for Israel and willingness tobomb Iran for transgressions will embolden Israeli Prime
Minister Benjamin Netanyahu and limit Biden’s politicalspace for policy maneuver. Pressure from congressional
Republicans, meanwhile, will make it politically harder—
albeit not impossible (please see Red Herrings)—for Biden
to preserve the “thaw” with China this year. The shadow
of Trump will lead US allies and adversaries to brace forhis return to office, with destabilizing consequences long
before Inauguration Day.
If Trump wins the election, Biden will concede. But while
Democratic leaders may be less likely to claim the election
was “rigged” than the former president, they will still treat
Trump as illegitimate, believing he should be in jail and isunfit for office. Some congressional Democrats will likely
vote against certifying his election on the grounds that
he is not qualified to serve under the 14th Amendment,
undermining trust in American electoral institutions. The
response in major cities would be a repeat of the massive
street protests during the 2016 presidential transition, but ina country even more bitterly divided and with an opposition
coalition more convinced that Trump 2.0 beckons the endof American democracy. Whether driven by extremist
elements, clashes with counter-protesters, or opportunistic
bad actors, widespread violence is a real (and indeed nearly
inevitable) risk. The danger will intensify over the courseof a Trump administration as he pardons those arrested forstorming the Capitol on 6 January, allowing them to returnto their quasi-militias and organize against what they see as
elite leftist institutions.
If Trump loses, he won’t accept defeat. Instead, he will doeverything in his power—legal or illegal—to contest theoutcome and impugn the legitimacy of the process. He
has fewer options for challenging the results than he had
as president in 2020, owing to the passage of the Electoral
Count Reform Act and the fact that he’s not the incumbent.
But that will not stop him from trying—especially when hefaces the prospect of prison time. Trump will allege massfraud once again. He will incite widespread intimidation
campaigns against election workers and secretaries ofstate in both red and blue states, demanding that they“find” extra votes for him. He will lean hard on Republican
governors to submit slates of Republican electors in states
Democrats won. And he will pressure Republican senatorsand representatives to object to states’ slates of electors

eurasia group TO P R I S KS 2 0 24

to disqualify Democratic electoral college votes. Whilenone of these efforts is likely to succeed, they will inflictdamage on already low public confidence in the integrity ofAmerica’s democratic institutions.
Barring an unlikely Democratic landslide, Republicans
are poised to see a Biden win as illegitimate, alleging
either that the election was “stolen” or that politicallymotivated investigations made it more difficult for
Trump to campaign. They will see Trump’s incarceration
during the Biden administration as Democrats jailing the
opposition leader for political purposes. This could create
an unprecedented political crisis, destroying the remaining
trust in federal institutions Republicans still have andleading to calls for Biden to pardon Trump the same way
Gerald Ford pardoned Richard Nixon to avoid national
disunity. While large-scale violence is less likely in thisenvironment, America’s political divide would deepen, andthe nation’s fragmentation into red vs. blue states, cities,
and towns would accelerate.
And then there’s the tail risk (unlikely but plausible) thatyou’d rather not think about: What if the world’s mostpowerful country is unable to hold a free and fair election
on 5 November? Efforts to subvert the election could comefrom cyberattacks, deep fakes and disinformation, physicalattacks on election process and oversight, and eventerrorism to disrupt voting on the day. There’s no more
geopolitically significant target than the upcoming ballot—asofter and more vulnerable target than most homeland
security challenges—with plenty of foreign (and more thana few domestic) adversaries that would love nothing morethan to see more chaos in America.
The United States is already the world’s most divided anddysfunctional advanced industrial democracy. The 2024
election will exacerbate this problem no matter who
wins. With the outcome of the vote essentially a coin toss(at least for now), the only certainty is continued damage
to America’s social fabric, political institutions, andinternational standing.

The election will test
American democracy to adegree the nation hasn’t
experienced in 150 years

6Trump: The final season?
What if he wins again?
Trump’s 2016 upset was met with horror from the Americanleft and concern from allied world leaders, but generally
positive reactions from American business leaders andoptimism from global financial markets, which saw thelower taxes and deregulation of a Trump administration as
a net positive for the US economy. The response next timearound would be significantly more troubled, as a second
Trump administration would have fewer guardrails than
the first, reduced fiscal space, and more radical policy
divisions among US states following eight additional yearsof polarizing politics.
A second Trump administration would take steps toconsolidate executive power, weaken checks and balances,and undermine the rule of law. Trump would try tocapture federal institutions by purging thousands of civil
servants he sees as obstacles and replacing them with
inexperienced loyalists. Much of a second Trump cabinet
would be senior Republicans: Former cabinet members
Nikki Haley, Robert Lighthizer, and Mike Pompeo—known
as capable within the broader policy community—are all
likely to return. Key policy risks from the cabinet would
include trade protectionism—with goals of broad-based
10% import tariffs and stripping most favored nation statusfrom China—and unpredictability from the Department of
Defense, where appointed leadership will be comprised ofpolitical loyalists more like Mike Flynn than Jim Mattis. At
the same time, a core of Trump’s policy advisers in the WhiteHouse (including the likes of Steve Bannon, Stephen Miller,
and Kash Patel) would have virtually no relationships withelite business leaders or foreign dignitaries—and limited
willingness to prioritize an audience with them.
Having gutted the “deep state,” Trump would be lessconstrained to break the rule of law. His first order ofbusiness would be to weaponize the FBI, the JusticeDepartment, and the IRS to block proceedings against
himself and his allies and persecute his political enemies.
Biden and his family would be in the crosshairs, but how
far this revanchist McCarthyism goes—to opposition
lawmakers, media figures, donors, critics—is a question ofenormous import, especially in its signaling importanceto determine behavior across the political spectrum, atbest chilling political dissent and at worst squelching it
nearly entirely.
There would be little remedy at the federal level to restrain
a second Trump administration if it acts lawlessly. A
divided or Republican-controlled Congress would beeurasia group TO P R I S KS 2 0 24

unable and unwilling to check Trump’s executive excesses,with impeachment and removal off the table even undera Democratic Congress. While a conservative Supreme
Court, one-third of whose members were appointed by
Trump, would remain independent, it would have limited
power to enforce its rulings against a renegade president,
setting up the potential for a constitutional crisis the likesof which America hasn’t seen since the end of the Civil War.
The decentralized nature of the US system would remain acounterweight to dysfunction in Washington, as a weaker
federal government would devolve power to the states andallow a free market of competing political and economic
strategies to flourish. The flipside of this decentralization isthat red and blue states would continue to grow polarized,
not just on policy but increasingly in terms of who they
attract to live, do business, and invest. This would createa fractured business and investment environment thatwould be difficult for companies to navigate as policies
and regulations diverge from state to state and theirchoice of location becomes an implicit political statement(please see Top Risk #10).
Foreign companies would have a harder time understanding
the political geography of America and spend more timetrying to get on the good side of Trump’s political apparatus.
Relationships across the federal government—andparticularly with Republicans who have Trump’s ear—would
become essential for foreign governments, even more sothan they were in the first term. And investors are likely
to see massive opportunities in deregulated industries but
grow increasingly concerned about the US fiscal picture.
However positively markets may view its concrete policies,
a second Trump presidency—with all its personalistic,
authoritarian, and mercurial tendencies—would deal
grievous harm to US democracy. It would also begin toraise foundational questions about the long-term stabilityof the US as an investment destination, the trustworthinessof its financial promises, the credibility of its commitments
to foreign partners, and the durability of its role as thelynchpin of the global security order.

Trump would take steps toconsolidate executive power,
weaken checks and balances,and undermine the rule of law
7

2

Middle East on the brink

On 30 September 2023, National Security Advisor Jake Sullivan said that “the Middle East isquieter 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 thePalestinian 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 andrunning. 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 thenumber 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 definedby 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 northernborder, 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 theeurasia group TO P R I S KS 2 0 24

8

Bracing for conflict
US personnel in the Middle East
Eastern
Mediterranean

12,500Incidents involving shipping
vessels (Nov. 19 to Dec. 18, 2023)

SYRIA

900

IRAQ

2,000

KUWAIT

10,000I R ANJORDANISRAEL

3,500

100

BAHRAIN

4,500

EGYPT (MFO)

500

SAUDI
ARABIA

QATAR

10,0002,500

SU DANRed Sea

4,500

UAE
5,000
O M ANYE M E N
Arabian Sea
and The Gulf

Source: IISS estimates, Financial Times, Axios Visuals

1,200

north: avoiding ouster and possible jail time (please see
box in Top Risk #5).
If Israel were to attack preemptively, it would probably
wait to do so until after the fighting ebbed in Gaza to avoid
a full-fledged, two-front war (initial withdrawals of some
Israeli troops from Gaza should be assessed accordingly).
The US military would almost certainly provide support to
the Israeli effort. Iran, in turn, would assist Hezbollah, themost important link in Tehran’s power projection strategy
in the Levant. A spiral of escalation could turn the shadow
war between the US/Israel and Iran into a kinetic one.
A similar spiral could be initiated by Hezbollah with thebacking of Iran if its leader, Hassan Nasrallah, thought thelevel of Palestinian casualties in Gaza—or the West Bank—
had become intolerably high. And if Iran believed that
Hezbollah was at risk of being existentially degraded, its
level of support for the group would increase.
Houthi militants are also pursuing escalation. The Yemenbased former rebels have a formidable arsenal of weapons
supplied by Iran and are keen to boost their standing at
home and within the Tehran-backed “Resistance Front.”
They have a longer leash—but also less protection—from
Tehran than Iran’s other regional proxies, and they are
more risk-acceptant. The Houthis have been launching
missile and drone attacks on Israel, US warships, andcommercial shipping vessels since November, threatening
safe passage through the Strait of Bab al Mandab and the
Gulf of Aden—key transit waterways for oil and goods toEurope, North America, and Asia. In response, the US
has formed a multinational naval task force to protect
shipping and deter the Houthis. But the Yemeni groupeurasia group TO P R I S KS 2 0 24

will remain undeterred and continue to shoot. In doingso, it could inadvertently kill US citizens, which would
demand a stronger response from Washington. If the
Houthis stay on this path, strikes on their bases in Yemen
are increasingly likely, bringing the United States and its
allies more directly into the war.
Finally, Shia militias operating in Iraq and Syria havesystematically increased their attacks on US bases, with
Tehran’s blessing but at least partially driven by local
political dynamics. These attacks are difficult to deter,
and the possibility of unintended consequences is rising
accordingly. Risks associated with US casualties are
particularly stark. Washington has made clear that any
US deaths will lead to large-scale retaliation, and that Iranwill be held directly accountable.
All these pathways pose risks to the global economy. Mostof the world’s largest shipping companies have alreadysuspended transit through the Red Sea in response to
the Houthi strikes, paralyzing a critical waterway thatsees 12% of global trade pass through it. Ongoing Houthi
attacks will keep freight insurance rates elevated, disrupt
global supply chains, and create inflationary pressure. In
addition, the closer the conflict comes to Iran, the greater
the risk of disruptions to oil flows in both the Red Sea andthe Persian Gulf, pushing crude prices higher. Any moves
by Israel, the US, or others to block Iran’s 1.4 million
barrels per day of oil exports via sanctions or militarystrikes would provoke retaliation by Tehran that puts
larger volumes of oil and LNG exports from the region
at risk (though the worst-case scenario, a closure of theStrait of Hormuz, remains a very low probability).

The Middle East is atinderbox, and the numberof players carrying matches
makes the risk of escalation
exceptionally high
The conflict will also widen existing global divisions anddisrupt politics. Anti-Israel sentiment is inflamed acrossthe Middle East, among Muslim populations around theworld, and—increasingly—within the Global South. The
United States is currently as isolated globally in its support
for Israel as Russia was over its invasion of Ukraine. As
the war in Gaza drags on, the schism between Washington
and the rest of the world will grow.
Divisions will deepen within the US as well, where public
opinion on Israel-Palestine is shifting with the nation’s
demographics. A majority of Gen Zers now view the 7
October attacks—the worst violence against Jews since9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
Americans, minorities, and progressives with President
Joe Biden’s steadfast backing of Israel will hurt Democrats
in the 2024 election.
The most dangerous schism, though, remains between
Israelis and Palestinians. Israelis across the political
spectrum overwhelmingly support the complete destructionof Hamas, whatever that means and however improbable it
may be. A growing majority of Palestinians in the West Bankand Gaza, meanwhile, support Hamas. More temporary
ceasefires to the current fighting in Gaza remain possible,
especially given the strong international pressure behindthem … but they’re extremely unlikely to prove sustained.
The longer the war goes on, the more both populations willradicalize. This will increase the risk of insurgency in Gaza,
deadly clashes in the West Bank and Jerusalem, and terrorist
attacks in Israel that provoke a further military response. It
goes without saying that the expansion of Israeli-Palestinianeurasia group TO P R I S KS 2 0 24

violence makes the prospects for an eventual two-statesolution increasingly dim.
Finally, and perhaps most troublingly, this conflict will
stoke political and religious extremism across the Middle
East and elsewhere. Demonstrations could erupt in Araband Muslim countries as Israeli forces kill or displacelarger numbers of Palestinian civilians in Gaza, or in
response to settler violence and repression in the WestBank and Jerusalem. These upheavals could destabilize
countries with large populations of Palestinian refugees
such as Egypt and Jordan and—in the extreme—force theirgovernments to cut ties with Israel. All along, Islamic
terrorist groups will use images and casualty figures from
Gaza as propaganda and recruitment tools, and violenceagainst Jews will spike in many countries. Fatal violence
linked to the war has already hit Europe, and the UnitedStates is also vulnerable.

10

3Partitioned Ukraine

Ukraine will be de facto partitioned this year, an unacceptable outcome for Ukraine and the Westthat 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.

eurasia group TO P R I S KS 2 0 24

11

The material balance has also shifted in Russia’s favor.
On manpower, Russia is attracting significant numbersof men to new contracts, so a politically fraught second
mobilization this year is unnecessary for now. President
Vladimir Putin has also successfully converted his
economy into a war operation. Roughly one-third ofgovernment spending and 6% of GDP will be devoted
to the war in 2024, and Russian domestic production of
missiles and artillery shells is now greater than before thewar. North Korea is providing a large volume of additional
ammunition, and Iran continues to provide (and now
produce in Russia) drones (please see Top Risk #5).
Ukraine is in a more troubled position. On manpower,
it must mobilize and train new recruits to improve force
quality. Kyiv is considering mobilizing 500,000 additional
troops, which is probably impossible but shows thequandary Ukraine is in as it confronts the army of a muchlarger country. Kyiv also needs to scale up its domestic
defense production, especially of drones for the battlefield
and to hit targets inside Russia.
Russia’s material advantage will be reflected on thebattlefield, where Moscow has seized the initiative andis now attacking in Donetsk Oblast, showing limited but
effective offensive capability for the first time in over a
year. Russia will form additional armies with fresh recruits
and continue to develop offensive capability, ratchetingup the pressure on Ukraine.

Land war settling into defensive struggle withstatic line of control
B EL A R U S

RUS SIAPOL A N D

Kharkiv

Kyiv
U K R AI N E

Kupyansk

Avdiivka
Zaporizhzhia

M O L DO VA

R OM A N IA

LuhanskDonetsk

Kherson
Odesa

Reni

IzmailFeodosia

Sevastopol

SerbiaUkrainian frontline
Russian frontline
Source: Rochan Consulting, Eurasia Groupeurasia group TO P R I S KS 2 0 24

Russian occupied territory

A de facto partition of Ukraine
is inevitable
For their part, Ukrainians will be forced to entrench anddefend during 2024, and in a predominantly artillerybased war, defense is much easier than offense. Thismeans that Kyiv probably won’t lose much land this year.
But Ukraine will need to develop its military forces andcome up with effective military strategies for both 2024
and 2025 by early in the year. Ukraine will also need to end
the growing domestic infighting between the presidential
administration and both the military leadership—which
contributed to the failure of last year’s counteroffensive—and other political leaders like Kyiv Mayor Vitali Klitschko.
The upshot is that Ukraine must make progress onmobilization, training, defense production, strategizing,and political infighting. If it succeeds in most of thesetasks, Kyiv will be in a strong position to defend its existing
territory in coming years, with a future that could include
hard security guarantees from the West, eventual NATOmembership, reconstruction aid, and EU integration—abetter geopolitical trajectory than could have plausibly been
expected before the Russian invasion two years ago. But if
it fails, Ukraine is likely to lose the war in the near future,
where losing means giving up more territory in Donetsk
and possibly Kharkiv oblasts, and then being forced toaccept a much more unfavorable ceasefire or settlement.
Ukraine is at risk of losing, but Russia has no way to “win.”
Whatever longer-term gains its forces can make on the
ground in Ukraine, NATO is now strengthened by new
members Finland and (soon) Sweden. This month, theEU will open a membership process for Ukraine, Georgia,
and Moldova, an outcome that wasn’t on the table before
Putin ordered his invasion. Russia has faced 11 roundsof sanctions, with more on the way. Half of its sovereign
assets have been frozen, at least some of which are likely to
be seized to finance Ukrainian reconstruction. Europe will
no longer buy Russia’s commodity exports, which instead
must be sold to China, India, and others on the cheap.
Moscow has been rendered permanently dependent on
Beijing. All of this, just to get pieces of eastern and southern
Ukraine that will take years and years to consolidate.
Still, a partitioned Ukraine will pose real risks. The first
pertains to the Black Sea, where Ukraine has developed
a new export route through the littoral waters of NATOmembers to the Bosphorus. Russia is currently deploying
mines in the area and could start to sink ships this year.
Should Moscow mistakenly strike a NATO or Western
vessel, naval warfare between the alliance and Russia
could ensue.

12

Diminishing Western support and growing political infighting
will leave Ukraine feeling increasingly desperate
Diminishing Western support and growing political
infighting will leave Ukraine feeling increasingly desperate,
which will cause President Volodymyr Zelensky to become
more risk-acceptant (please see box in Top Risk #5). He willturn to asymmetric warfare away from the frontlines in an
attempt to degrade the Russian military, keep Ukraine in
the headlines, and potentially bring NATO into the conflict.
More targeted killings are likely, focusing on individuals
connected to the war and occupation. The Ukrainians
will also launch deep strikes with drones and missilesin Crimea and Russia targeting military and economic
infrastructure—possibly including Russian oil and grain
facilities on the Black Sea, which would lead to global oil
and food market disruptions. Attacks are also likely on the
Kerch Strait Bridge, Russian railroads, and Russian cities,
which would provoke stepped-up Russian attacks against
Ukrainian cities. The risk of a miscalculation or accident
that results in NATO casualties and draws the United States
more directly into the war will be heightened accordingly.
Tapering US political and material support will deepen arift in the transatlantic alliance, which is the cornerstoneeurasia group TO P R I S KS 2 0 24

of the international system. Europeans view current
and likely future cuts in US assistance to Ukraine as an
Afghanistan 2.0 policy lurch, but with much higher stakes
for European security. Their concern is magnified by
the risk that Trump will try to take the US out of NATOif he wins in November. Russia’s upper hand will makethe Kremlin feel like it successfully stared down theWest on an existential issue, emboldening Putin to leanon unsupportive countries in the EU and NATO (such as
Hungary and Slovakia) and driving further division.
A partitioned Ukraine will also undermine US credibilityon the global stage. The United States made a major
security commitment to help Ukraine protect itself andregain its land for “as long as it takes.” Domestic politics is
leading the US to renege on this commitment, worsening
the image of the US as an unreliable partner (please see Top
Risk #1). Rogue and revisionist states will be emboldened
accordingly (please see Top Risk #5). What’s more, the war’s
trendline will make Ukraine a political loser for Biden
during an election year, giving Trump a boost. A Trump win
would accelerate this decline in US credibility.

13

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 thecontrol of governments.
Last year brought a wave of ambitious AI initiatives, policy announcements, and proposed new standards, withcooperation 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 theUnited 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 contributeto this AI governance gap in 2024:
1) Politics. As governance structures are created, policy or institutional disagreements will cause them to limit theirambitions. 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 resultin 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 sharedglobal 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.

eurasia group TO P R I S KS 2 0 24

14

Breakthroughs in artificial
intelligence are moving much
faster than governance efforts
2) Inertia. Government attention is finite, and once AI is
no longer “the current thing,” most leaders will move on
to other, more politically salient priorities such as wars
(please see Top Risks #2 and #3) and the global economy(please see Top Risk #8). As a result, much of the necessary
urgency and prioritization of AI governance initiatives will
fall by the wayside, particularly when implementing themrequires hard trade-offs for governments. Once attention
drifts, it will take a major crisis to force the issue to thefore again.
3) Defection. The biggest stakeholders in AI have so
far decided to cooperate on AI governance, with techcompanies themselves committing to voluntary standards
and guardrails. But as the technology advances and its
enormous benefits become self-evident, the growing lureof geopolitical advantage and commercial interest will
incentivize governments and companies to defect fromthe non-binding agreements and regimes they’ve joined
to maximize their gains—or to not join in the first place.
4) Technological speed. AI will continue to improve
quickly, with capabilities doubling roughly every six
months—three times faster than Moore’s law. GPT-5, thenext generation of OpenAI’s large language model, is
set to come out this year—only to be rendered obsoleteby the next as-of-yet inconceivable breakthrough in amatter of months. As AI models become exponentiallymore capable, the technology itself is outpacing efforts tocontain it in real time.
Which brings us to the core challenge for AI governance:
Responding to AI is less about regulating the technology(which is well beyond plausible containment) thanunderstanding the business models driving its expansion
and then constraining the incentives (capitalism,
geopolitics, human ingenuity) that propel it in potentially
dangerous directions. On this front, no near-term
governance mechanisms will come close. The result is an
AI Wild West resembling the largely ungoverned social
media landscape, but with greater potential for harm.

eurasia group TO P R I S KS 2 0 24

Two risks stand out for 2024. The first is disinformation. Ina year when four billion people head to the polls, generative
AI will be used by domestic and foreign actors—notably
Russia—to influence electoral campaigns, stoke division,undermine trust in democracy, and sow political chaos
on an unprecedented scale. Sharply divided Western
societies, where voters increasingly access informationfrom social media echo chambers, will be particularly
vulnerable to manipulation. A crisis in global democracy
is today more likely to be precipitated by AI-created andalgorithm-driven disinformation than any other factor.
Beyond elections, AI-generated disinformation will also
be used to exacerbate ongoing geopolitical conflicts suchas the wars in the Middle East and Ukraine (please see
Top Risks #2 and #3). Kremlin propagandists recently
used generative AI to spread fake stories about Ukrainian
President Volodymyr Zelensky on TikTok, X, andother platforms, which were then cited by Republican
lawmakers as reasons not to support further US aid to
Ukraine. Last year also saw misinformation about Hamas
and Israel spread like wildfire. While much of this has
happened without AI, the technology is about to becomea principal risk shaping snap policy decisions. Simulated
pictures, audio, and video—amplified on social media
by armies of AI-powered bots—will increasingly be usedby combatants, their backers, and chaos agents to sway
public opinion, discredit real evidence, and further
inflame geopolitical tensions around the world.
The second imminent risk is proliferation. Whereas AI
has thus far been dominated by the United States andChina, in 2024 new geopolitical actors—both countries
and companies—will be able to develop and acquire
breakthrough artificial intelligence capabilities. These
include state-backed large-language models and advanced
applications for intelligence and national security use.
Meanwhile, open-source AI will enhance the ability ofrogue actors to develop and use new weapons and heighten
the risk of accidents (even as it also enables unfathomableeconomic opportunities).
AI is a “gray rhino,” and its upside is easier to predict thanits downside. It may or may not have a disruptive impact
on markets or geopolitics this year, but sooner or later it
will. The longer AI remains ungoverned, the higher therisk of a systemic crisis—and the harder it will be forgovernments to catch up.

15

Technological breakthroughs moving faster than governance efforts
Technical
developments

2021

5 January
DALL-E

6 December
Gemini30 November
ChatGPT

June 2018
GPT-1

22 AugustStable Diffusion

2022

12 July
Midjourney

24 February
LLaMA

2023

14 March
GPT-4

18 July
Llama 22024

15 August
Cyberspace Administration of China Generative AI Measures
30 October
US Executive Order of the Safe, Secure, and Trustworthy
Development and Use of Artificial Intelligence
Hiroshima Process International Guiding
Principles for Advanced AI systems

Policydevelopments

18 July
UN Security Council special meeting on AI
1 November
Bletchley Declaration on AI safety
8 December
EU AI Act*
21 December
UN AI Advisory Body interim report*not yet formally signed off and will not apply in full until 2026
Source: Eurasia Groupeurasia group TO P R I S KS 2 0 24

16

5

Axis of rogues

Russia, North Korea, and Iran are the world’s most powerful rogue states. And they have beenworking 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, andtheir 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—mostimportantly—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 relationshipfrom 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 coverfor 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.

eurasia group TO P R I S KS 2 0 24

17

While less prominent than Russia’s bilateral ties within theaxis, North Korea and Iran have a decades-long history ofcooperation on nuclear and ballistic missile development.
This cooperation has reportedly extended to North Korea
supplying weapons and missile designs to Hamas, theHouthis, and other Iranian-backed militant groups.
In 2024, deeper alignment and mutual support among
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
global stage.
Russia will be the primary driver of risk as it seeks tobolster its warfighting capabilities in Ukraine whileworking to deflect Western attention elsewhere. In
exchange for North Korean artillery shells and rockets
to sustain its war of attrition, Moscow will provide
Pyongyang with technologies and know-how to advanceits missile, submarine, and satellite programs, withmajor repercussions for Northeast Asian security. And
in exchange for stepped-up provision of Iranian drones,
munitions, sanctions relief, and ballistic missiles withwhich to strike Ukrainian cities, Moscow is poised to

Aiding and abetting

R US SI A

I R AN

3,700

Shahed drones used
so far in the war(Ukrainian military estimate)

6,000

Iranian drones constructed
at a facility in Russia
by mid-2025

N OR T H
KOR E A

5,000

containers of military equipment
have traveled from North Korea
to Russia since August

2 million

rounds ofNorth Korean
rockets(ROK estimate)(ROK estimate)

Source: YonhapNews, CNBC, Washington Post, Reuters

eurasia group TO P R I S KS 2 0 24

400,000

rounds ofNorth Korean
artillery

The world’s most powerful rogue
states have been working tostrengthen their cooperation since
Russia invaded Ukraine
supply Tehran with fighter jets and advanced weapons
technology. Along with growing Russian support for Iran’s
proxies, this will alter the regional balance of power in
Iran’s favor at a time when Tehran and its proxies represent
a much more direct security challenge to the West (please
see Top Risk #2). Both bilateral deals would strengthen
Russia’s hand in Ukraine and increase the war’s damage
and costs (please see Top Risk #3).
The severity of existing Western sanctions against all
three rogue states and the close cooperation among
them means they will not be deterred by fear of further
sanctions and isolation. This will unleash them to wage
asymmetric warfare short of direct military attacks on
the US and Europe, including via cyberattacks, support
for terrorism, and disinformation campaigns designed
to disrupt elections and sow chaos. More generally, theaxis’s coordinated sanctions-busting and rule-breaking
will undermine the compellent and deterrent power ofWestern sanctions, emboldening other would-be rogues.
It bears noting that China is not a member of the axisof rogues. Beijing did not openly condemn Russian
aggression in Ukraine, but neither did it endorse theinvasion or do much to help Putin’s war effort beyondpurchasing 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 andPyongyang—indeed, Chinese officials didn’t know Kim wasgoing to Russia until after it was publicly announced …
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 importantinterests in the Gulf (particularly its ties with Saudi Arabia
and the United Arab Emirates) by helping Iran makeregional trouble.
That said, China is often well-served by the three rogues’
anti-Western operations and maintains a de facto policy of
pro-axis neutrality. Indeed, without active acquiescencefrom China, the axis’s rogue activities would be less
impactful. Short of violating international sanctions or
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.
18

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
Korea leaning on each other is a sign of their desperation
and weakness on the global stage. When your best (andnear only) friends are two rogue states, you’re in trouble.
Second, all of them seek to avoid an active shooting war
with the West, which means continued caution whenescalating direct attacks on the United States or its coreallies. And third, despite their common interest in
sowing chaos, dictators have trouble trusting each other,eurasia group TO P R I S KS 2 0 24

making the entente a fragile one. This axis is a marriageof convenience and opportunity; its members are neither
strategic nor ideological bedfellows—they are focused
primarily on regime survival and geopolitical gain. As
such, their relationships will remain largely transactional.
Still, the disruptive potential of their growing cooperation—
especially with a boost or at the very least a blind eye from
Beijing—should not be underestimated.

19

America’s dangerous friends
America’s enemies are becoming more dangerous, buteven its friends could drag it into expanded conflicts
this year.
Volodymyr Zelensky. President Joe Biden has been
Ukraine’s staunchest supporter since Russia’s invasion
in February 2022. Having pledged to stay by Kyiv’s side
“as long as it takes,” he has shepherded $113 billion in
military and other aid that has proven vital to Ukrainians’
ability to defend themselves. Biden has done this eventhough he neither likes nor trusts President Zelensky.
However, political support for Ukraine within the
US has wavered as the war has dragged on, seriously
undermining Biden’s ability to keep the aid coming pastthis year. And if Donald Trump—who considers Zelensky
a personal adversary—wins in November, Ukrainians
can wave goodbye to their biggest backer (please see
Top Risk #1). Cracks have also emerged within Ukraine,where infighting between Zelensky and Chief of theArmed Forces Valery Zaluzhny (over military strategy)
as well as Kyiv Mayor Vitali Klitschko (over Zelensky’s
allegedly authoritarian leadership) has spilled into theopen, threatening Ukrainian political unity and fuelingmore skepticism among Kyiv’s friends.
Under pressure domestically and frustrated with bothdiminishing US support and increasing difficulties on
the battlefield, a desperate Zelensky will be willing totake bigger risks to turn the war around and maintainhis political standing before Trump potentially takes
office (please see Top Risk #3). This includes moreaggressive attacks against targets in Russia, Crimea,
and the Black Sea, threatening a response from Russia
and potentially forcing the United States to become
more directly involved in the war.
Benjamin Netanyahu. Israel is America’s closest ally in
the Middle East, the only democracy in the region, andthe largest cumulative recipient of US foreign aid. It is no
surprise that Biden—a self-described Zionist and longtime
Israel supporter—strongly backed Israel’s initial response
to Hamas’s 7 October attacks, despite his complicatedrelationship with Prime Minister Benjamin Netanyahu.
Since then, however, a public rift has opened between thetwo over the conduct and endgame of the war in Gaza. They
are also at odds about the role the Palestinian Authority
should play in Gaza’s postwar governance as well as theviability of a two-state solution. Fundamentally, Biden
wants to see the war end, while Netanyahu has politicaland personal reasons to keep it going or even escalate it.

eurasia group TO P R I S KS 2 0 24

Determined to stay in power and out of jail andemboldened by the possibility that his friend Trump
returns to power in January 2025, Netanyahu will pushback against pressure from Biden to end the war. He
will ignore calls for restraint in Gaza while eyeing more
conflict with Hezbollah in the north (please see Top
Risk #2). He will also continue to inflame tensions in theWest Bank and thwart any efforts to create a Palestinianstate in the future. As a result, the United States will be
inextricably tied to an intensifying conflict over which
it has limited influence—one that will further strain US
relations with the Arab world, the Global South, andeven some allies, as well as create political challenges for
Biden at home. Should Netanyahu decide to preemptively
strike Hezbollah or even Iran itself, the US would finditself drawn into a much broader Middle East war.
William Lai. Washington’s long-standing “one China”
policy and its security cooperation with Taiwan havebeen critical to deterring both a Chinese invasion anda declaration of independence from Taipei. Although
Biden has repeatedly said the US would defend Taiwan
against a Chinese attack, “strategic ambiguity” remains
the official stance, and the president has no desire torisk a crisis with Beijing over the island. But the uneasy
status quo in the Taiwan Strait will soon be tested if
Taiwan elects Vice President William Lai, the rulingparty candidate whom China views as the most proindependence Taiwanese leader in a generation, as
president (and his running mate Hsiao Bi-khim, Taiwan’s
former representative to the US, as vice president).
While Biden will oppose any de jure independence
moves from Lai, the domestic politics of the Taiwan
issue will prevent the US president from objecting to thesmaller, symbolic steps toward de facto autonomy Lai islikely to take. Yet even these will be enough to provoke abeyond-precedent military response from Beijing, suchas violating Taiwan’s airspace or waters or conducting
ship inspections. Biden will be forced to respond to
Chinese aggression with a show of resolve in support for
Taipei that could jeopardize the US-China thaw and riska dangerous cycle of escalation.
Ukraine, Israel, and Taiwan will all continue to be major
US allies. But their leaders’ pursuit of their national—and,occasionally, personal—interests will further entangle
Washington in growing conflicts.

20

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 powerat 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 thelegitimacy 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 geopoliticalrisk, 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.

eurasia group TO P R I S KS 2 0 24

21

Key economic indicators on downward trajectory
Consumer confidence index

Foreign direct investment (USD billion)

122.3
51.67

87.0
2018

2019

2020

2021

2022

2023

2018

Stock market

2019

2020

2021

2022

-65.092023

Housing starts(billion, residential housing measured in floor space area)

1.411
100.6
56.0
2018

2019

2020

2021

2022

2023

0.759
2018

2019

2020

2021

2022

2023

Source: Eurasia Group, Macrobond. NBS

Four additional economic factors will impede a recovery
in 2024:
1) Fading zero-Covid rebound. The tailwind fromlast year’s reopening will disappear as slowing income
growth, higher unemployment, local government fiscal
consolidation, falling property prices, and cascading
defaults weigh on confidence and consumption.
2) Real estate weakness. Previously a pillar of China’s
economy, the real estate sector won’t provide a much hopedfor boost despite recent stabilization efforts, with new
construction remaining anemic owing to weak homebuyer
demand and slumping land purchases by cash-strapped
property developers over the past two years.
3) Low external demand. International demand for Chinese
exports, especially from the US and Europe, will prove lessresilient than in 2023, constrained by high interest rates
and slow global growth (please see Top Risk #8).
4) Government economic response. Beijing’s whacka-mole approach to emerging episodes of financial

stress such as developer defaults and bank collapses (asopposed to larger-scale, more preemptive reform) will sap
confidence and test the government’s already-stretchedadministrative capacity.
Then there’s politics. President Xi Jinping’s concentrationof power and prioritization of security over growth will
not only weigh on consumer, business, and investor
confidence, but it will also make the regime slower to
respond to rising economic and financial vulnerabilities.
This doesn’t mean that China faces an imminent crisis.
Rather, these conditions will entrench the country’s
economic malaise and expose cracks in the CCP’s veneerof competence and legitimacy.
Absent an unlikely loosening of Xi’s grip or a radical pivot
toward large-scale consumer stimulus and structuralreform that restore confidence and reignite growth, China’s
economy will underperform throughout 2024. While the
CCP’s rule is stable, there remains a longer-term risk that
Beijing will react too slowly to warning signs of financial
contagion and social unrest, increasing the chances thatthe 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
eurasia group TO P R I S KS 2 0 24

22

7

The fight for critical minerals

In 2024, governments around the world will take protectionist measures that disrupt the flowof 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 theseessential raw materials is asymmetrically distributed across geographies, with single countries mining at least half of theworld’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 mostvulnerable supply chains are for the niche, illiquid, and Chinese-dominated rare earth metals such as neodymium anddysprosium, 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 createdby 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
eurasia group TO P R I S KS 2 0 24

23

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
supply vulnerabilities soon.
Making matters worse for themselves, the US and the EU havealso enacted import restrictions in an attempt to reduce theirdependence on China and promote cleaner supply chains.
The problem with this strategy is that stringent mineralorigin mandates in the US and clean supply chain laws in
Europe—the former focused on national security and thelatter on human rights, environmental, and sustainability
standards—limit their procurement of critical minerals
to geopolitically acceptable sources, exacerbating supply
challenges and increasing price volatility.
As the US and Europe scramble to secure minerals, thegovernments of many producer nations are imposing a
growing number of export restrictions on these minerals.
Nations sitting atop raw material deposits—largely but
not exclusively developing countries—see a once-in-ageneration opportunity to leverage their position in theworld’s most important supply chains to attract investment,
create jobs, retain profits, move up the value chain, andgain foreign policy leverage. These include establishedcritical minerals players such as Australia, Canada, Chile,the Democratic Republic of Congo, Indonesia, and Zambia,
as well as countries with underdeveloped mineral deposits
in sub-Saharan Africa, South Asia, and the Middle East.
Many of them have begun and will continue to impose
export measures on raw mineral ores that create market

Critical minerals importers andexporters will intensify their useof industrial policies and trade
restrictions
eurasia group TO P R I S KS 2 0 24

inefficiencies, increase price volatility, and risk undermining
private investment and production. Most consequentially,
China is fine-tuning an export control regime to weaponize
its mineral dominance in the hopes of gaining leverage in
its expanding tech competition with the United States andits allies. Last year, Beijing imposed export restrictions on
gallium, germanium, and graphite, and in late December
the government enacted export bans on machinery used torefine and separate rare earth elements.
This year, competing pressures from critical minerals
importers and exporters will become acute as governments
intensify their use of industrial policies and trade restrictions.
On the importer side, a wave of new EV gigafactories will
come online across North America and Europe in 2024 with
operations that are subject to strict sourcing requirements.
The new US Treasury rules that took effect on 1 January
enforcing restrictions on subsidy eligibility for EV supply
chains, aimed squarely at countering Beijing’s dominanceof battery metal supply chains, will test America’s ability to
procure non-Chinese minerals and related products.
On the exporter side, China will begin enforcing the export
licensing requirements for graphite it set up last year
in response to US export controls on its semiconductor
industry. Rare earth elements could be next. President Joko
Widodo (Jokowi) could extend Indonesia’s banner export
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
nationalism if elected. And in sub-Saharan Africa, Tanzania
will enact a ban on raw lithium exports, Nigeria will enforce
the export ban on mineral ores it passed last year, and Ghana
will consider similar policies. These moves will restrict theflow of critical minerals and could disrupt important supply
chains, such as those of Western EV battery manufacturers
in the event of a Chinese graphite export ban.
24

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 growtharound 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 arecession 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. Facedwith 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.
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25

Persistently above-target inflation will lead
central banks to keep interest rates high in 2024

With policy space already diminished by the pandemic
response, “de-risking” efforts, the energy transition,
the Russia-Ukraine war, and soaring interest costs, any
additional negative supply shocks would prompt central
banks to tighten rather than ease monetary policy to rein
in inflation expectations, depressing growth further. At
the same time, widening political divisions within many
countries and geopolitical tensions among them will
reduce the scope for domestic crisis response and global
policy coordination.

undermine the government’s ability to advance reform
priorities such as removing fuel subsidies and introducing
more flexibility in the foreign exchange market. In Brazil,
a slowing economy and faltering government approval
ratings will prompt President Luiz Inacio Lula da Silva to
weaken the country’s fiscal framework. And having justbeen elected to implement radical changes, Argentina’s
President Javier Milei will struggle to address deep
economic imbalances amid mounting social backlash.

These economic headwinds will deepen voter discontent
in a year when two-thirds of adults in the democratic
world will go to the polls, hurting weak incumbents
and boosting populist challengers. In the United States,
despite improving economic fundamentals, negative
perceptions of the economy will be a drag on President
Joe Biden’s reelection bid, while in the United Kingdom,
the Conservative Party is set to be voted out on the backof weak growth. In South Africa, meanwhile, the ruling
African National Congress faces the prospect of losing its
parliamentary majority for the first time since the end ofapartheid thanks to a chronically weak economy.

Heightened economic, financial, and political strain will
provoke debt distress in emerging and frontier economies
with the least capacity to respond. In addition to thosealready undergoing debt restructurings—Zambia, Ghana,
Sri Lanka—borrowers such as Pakistan and Egypt could
be forced to default on their debts. The largest creditor
nations, most notably China, will be reluctant to provide
meaningful multilateral debt relief. Developed markets
with high debt levels such as Italy and Canada, meanwhile,
will also face fiscal and financial strain in this environment.
Although they will have enough economic and political
capacity to address these challenges, rising debt service
costs will crowd out spending on public goods.

In countries without scheduled elections in 2024, ashrinking economic pie will cause fiercer fights over the
distribution of scarce resources, leading to social unrestand political instability. Those with the lowest growth
rates, highest debt levels, and most divisive politics will
be most vulnerable. Some governments will be underintense pressure to enact fiscally unsustainable populist
or heterodox policies, in turn exacerbating their inflationand debt problems. In Nigeria, popular discontent will

While financial markets proved resilient in 2023,
persistently high interest rates, tepid growth, andexhausted buffers will heighten the risk that something
breaks. Last year’s bond market volatility and the banking
crisis triggered by the collapse of Silicon Valley Bank
could return, or other interest rate-sensitive markets suchas real estate, corporate debt, and insurance could facereal stress. With growth subdued and policy set to remaintight, 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 toend-2023 (lhs)Household debt (rhs)Corporate debt (rhs)

Government debt (rhs)

Percent

Percent

13
12
11
10
9
8
7
6
5
4
3
2
1
0
-1

MexicoSouth Africa

BrazilIndia

Germany

UK

Euro Area

Italy

US

GreeceChina

CanadaFrance

Japan

450
400
350
300
250
200
150
100
50
0

Source: Eurasia Group, Macrobond, BIS

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9

El Nino is backAfter a four-year absence, a powerful El Nino climate pattern will peak in the first half of thisyear, 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 heatwaves, 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 sourcesof 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 forestsand 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.

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27

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
1997
1987
1982
1991
1957
1972
1965

0.6
0.3
0.0
-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
threaten agricultural production, leading to potentiallysevere disruptions in food supplies. In South andSoutheast Asia, poor harvests of rice, wheat, corn, palmoil, sugar, and coffee would be especially disruptive, given
already high food prices. Drought in Southern Africa
would particularly affect South Africa, Zimbabwe, andMozambique, the region’s largest agricultural producersof wheat and corn, while droughts in Brazil and Australia
could further constrain supplies of wheat, corn, and rice.
Livestock and fisheries will be exposed to an increased
risk of serious losses owing to severe weather.
Localized disruptions to food supplies in some regions
will increase food prices, heighten food insecurity, andprovoke unrest. Though some global staple prices haveretreated from recent highs, renewed price pressures will
drive social and political instability in countries where
food prices remain elevated, such as Pakistan, Sri Lanka,
the Philippines, Indonesia, and Malaysia. High food prices
will also increase instability in regions such as North
Africa and the Middle East that are heavily dependent onfood imports, with Egypt, Tunisia, and Lebanon among
the most vulnerable countries.
El Nino will increase water stress in regions with a highconcentration of water-intensive industries—a global risk
we highlighted last year that El Nino is set to exacerbate.
Droughts will make the logistics of river and canaltransport more challenging. Even lower water levels in
the Panama Canal will more dramatically disrupt one of
the world’s busiest shipping hubs. Reduced hydroelectricand nuclear power generation are a related concern,
especially in parts of South America, South and Southeast
Asia, Europe, and East Africa. Lastly, competition overshared water resources will intensify between neighboring
countries such as Ethiopia and Sudan, India and China,
and India and Pakistan.
El Nino will also increase the chance of natural disasters
caused by extreme weather events such as fires, cyclones,
landslides, and floods. These occurrences will bringdownside risk for homes, businesses, and infrastructure,with important implications for a global insurance
industry already reeling from the consequences of climatechange. In some inundated areas, tropical diseases will
become more frequent, with a heightened risk of spikesof cholera in East Africa and dengue fever in South andSoutheast Asia and Central and South America.
The combination of food insecurity, water stress, andnatural disasters will put the most pressure on countries
with limited adaptation capabilities—many of them alreadysuffering from elevated political and economic fragility.
This will threaten lives and livelihoods among the mostvulnerable populations in the most vulnerable countries,
driving internal migration (in Africa, Asia, and the Middle
East) and cross-border refugee flows (in the Americas).

Extreme weather caused by El Nino will threaten
agricultural production and food prices

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28

10

Risky businessTwo years ago, we warned that customers, employees, and investors—mostly on the left—werebringing 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 launcheda boycott of Bud Light after transgender influencer Dylan Mulvaney promoted the beer on Instagram, causing sales toplummet 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 onsite 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 thethreat). 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 issuedorders 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, “antieurasia group TO P R I S KS 2 0 24

29

Business leaders will find themselves in a lose-lose environmentof higher policy uncertainty and regulatory riskwoke” political activism, doubling down on their use ofstate legislatures and the courts to assert states’ rights
over federal regulatory authority.
For instance, last year’s ruling by the US Supreme Courtbanning affirmative action in university admissions opened
the door for conservative politicians, activists, and attorneysgeneral to ramp up legal challenges against corporate
diversity, equity, and inclusion programs. Groups such as
the National Center for Public Policy Research and America
First Legal are already filing shareholder complaints andbringing lawsuits against major corporations such as
Starbucks and McDonald’s. Legal battles will also play out
across states over transgender protections, environmental
regulations, abortion restrictions, gun control, and otherhot-button issues. As the Supreme Court continues to rulein ways that shift decision-making authority toward states(such as in the Dobbs v. Jackson Women’s Health decision
on abortion rights) in these and other divisive policy areas,
more legal and regulatory fragmentation will ensue.
Companies will also face growing risks from a widening
red vs. blue divide among America’s state capitals this year
as the shades of each color darken within states and thenumber of state government trifectas reaches its highest
level in decades. In 2024, one party or the other will control
the governor’s mansion and both legislative chambers in 40of the 50 US states, home to about four in five Americans.
In all these states, the same party that holds the trifecta
will also hold the top three executive positions: governor,
attorney general, and secretary of state. This consolidationof one-party rule will play out in the policy space asstate lawmakers press the advantage conferred by their
dominance to impose maximally conservative or liberalpolicies on the nation’s thorniest issues, leaving little
room for bipartisan compromise and deepening policy
polarization even further.
Firms operating in both blue and red states (read: most of
the Fortune 500) will struggle to adopt cohesive nationwide
strategies that satisfy Democrats and Republicans alike.
Increasingly, these companies will face a tough choice:comply with laws and regulations that offend theircorporate and customer values and risk getting “canceled,”
or exit certain state markets. And with the GDP of some
US states rivaling that of sovereign countries—California’s
economy is larger than the UK’s, Texas’s GDP tops Italy’s,and New York’s economy is bigger than Russia’s—these are
expensive decisions.
While the decentralization of US politics—and the resulting
free market of political and economic strategies—may
be both a growth driver and a stabilizing feature during
a contentious election year that will result in significant
dysfunction at the federal level (please see Top Risk #1),
companies caught between conservatives and progressives
will nonetheless see their decision-making autonomy
limited and their cost of doing business rise. Forced tonavigate conflicting laws, regulations, and court rulings
across red and blue states, business leaders will findthemselves in a lose-lose environment of higher policy
uncertainty and regulatory risk.

Corporate America grappling with competing pressures
Texas

New York

California

Oil

FloridaRace

CourtsGun control

LGBTQ+

DEI
Source: Eurasia Groupeurasia group TO P R I S KS 2 0 24

Environment

Women’srightsLegislation

30

RED
HERRINGS
US-China crisis
This year will prove another turbulent one for US-China relations, with several irritants that will threaten to derail thethaw 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

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31

Diplomatic rapprochement has buttressed stability, will likely remain a bilateral priority in 2024
2023

US

China

Virtual
Nov

Jun
18-19

Jul
6-9

16-19

US Secretary of State Antony Blinken kicks off seriesof visits, meets with Xi and Foreign Minister Wang Yi

4-7

Kerry meets with Chinese counterpart Xie Zhenhua

6

US and China hold first nuclear arms control talks
in five years

Treasury Secretary Janet Yellen meets Premier
Li Qiang, urges “mutually beneficial" economic
relationship

8-10

Yellen meets with Chinese Vice Premier He Lifeng

16

US climate envoy John Kerry visits China for talks
on environmental cooperation

Raimondo and Chinese Commerce Minister Wang
Wentao commit to improving technical discussions

16

At APEC summit, Biden and Xi pledge increased
cooperation on fentanyl and AI and restoration ofhigh-level military dialogue

Secretary of Commerce Gina Raimondo meets with
Chinese counterparts

14

Aug
27-30

Oct
9-11

2024

21

Yellen gives speech on US-China strategy
highlighting importance of maintaining stability
and avoiding crises
US and China restart high-level military dialogue

California Governor Gavin Newsom travels to
China for a series of meetings

22-29

1

Senate Majority Leader Chuck Schumer leads first
congressional delegation to China in several years

Dec

Jan
Biden and Xi exchange letters on the 45th
anniversary of establishing diplomatic relations

Source: Eurasia Groupthe Woodside Summit. Election-year politics in the US will
limit cooperation and occasionally dial up hostile rhetoricand actions (please see Top Risk #1). But new diplomaticand military-to-military channels will help manage
tensions with Beijing.

pugnacious foreign-policy approach. Moreover, given thesignificant uncertainty—and growing concern—about
how Donald Trump might approach US-China relations
in a second term, China’s leadership has incentives toreinforce engagement while the option is still on the table.

Beijing’s recent charm offensive—a far cry from the “wolfwarrior” diplomacy of Xi’s first two terms—will continue,as China’s domestic economic challenges and thestructural issues underpinning them (please see Top Risk#6) remain defining priorities in 2024 and beyond. The
importance of social and economic stability at home andthe need to ease the fears of foreign investors and trading
partners will continue to override inclinations for a more

The most important geopolitical relationship in the worldis still fundamentally adversarial and marked by mistrust;several flashpoints will exacerbate bilateral tension
throughout 2024. But preserving stability is better forboth sides this year, neither of which wants to risk major
decoupling or conflict. The two countries will carefully
manage the relationship’s decline as they weather any
expected turbulence.

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32

Populist takeover of European politics
A surge in support for far-right and populist parties
within many European countries is fueling concern thatthe centrist consensus that has defined Europe’s postwar
order could break down in 2024.
In 2023, Geert Wilders and his Freedom Party secured
mainstream support for the first time to win the Dutchelections. Robert Fico’s left-wing nationalist Smer cameback to power in Slovakia. Support for the far-right
Alternative for Germany (AfD) surged to record highs.
Far-right and far-left parties in France currently have over
50% support combined. Economic headwinds, migratory
pressures, some Ukraine war fatigue, and intra-EU discord
are kindling fears of a populist sweep at the European
Parliament elections in June.
But Europe’s center will hold in 2024.
Euroskeptic and populist parties should capture arounda quarter of European Parliament seats. An alliance ofEurope’s center-right parties with far-right and populist
parties is politically unlikely. Even if their politics align,
they will not account for a sizable majority in the European
Parliament. Therefore, the traditional European coalition—
comprising the center-right, social democrats, liberals, andGreens—will maintain power in the EU’s legislature, andthe European Commission (the bloc’s executive) will bechosen by consensus among centrist candidates.
Hungarian Prime Minister Viktor Orban will continue
obstructing EU decision-making, but centrist governmentsin the majority of member states will manage to findworkarounds. Moreover, Orban will no longer have thesupport of his crucial former allies in Warsaw after Polishvoters replaced a xenophobic right-wing government with
an EU-friendly centrist one in 2023. Despite pushbackfrom Hungary and other headwinds, financial support for
Ukraine is likely to be maintained near current levels thisyear. Even in countries led by antiestablishment parties,
such as Italian Prime Minister Giorgia Meloni’s Brothersof Italy, decision-making will remain overwhelmingly
pragmatic—even centrist.
Populists and right-wingers will continue to make gains
and strike fear into the European political establishment.

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Centrist pro-EU parties will retain a majority

Projected seat distribution following June’s elections for
European Parliament compared to current distribution(% of seats)
Euroskeptic

right-wing groups

OthersCurrent
distribution
Projected
distribution(Nov 2023)

80.4%

19.6%

-5.6%

+5.6%

74.9%

25.1%

Current distribution (%)
Renew (Center) 13.8
Greens/EFA (Green) 9.6

EPP (Center-right) 26.5
ECR (Right) 8.8

S&D (Left) 21.0

ID (Right) 10.8

GUE/NGL(Left) 5.7

Centrist pro-EU
coalition

Non-inscrits 3.8

Right-wing
euroskeptic

Projected distribution (Nov 2023) (%)
Renew (Center) 13.3

EPP (Center-right) 24.7

Greens/EFA (Green) 6.5

ECR (Right) 12.4

S&D (Left) 19.2
ID (Right) 12.8
GUE/NGL(Left) 6.4

Non-inscrits 4.7

Source: Der Föderalist (dynamic scenario) 6 November.
European Parliament and Eurasia Group

But limited setbacks for mainstream parties in European
Parliament, national, and local elections will neither
upend the European political order nor fundamentally
derail revamped EU ambitions following the twin crises of
the Covid-19 pandemic and the Ukraine war.

33

BRICS vs. G7
On 1 January, the BRICS welcomed new members Saudi
Arabia, Iran, Egypt, the United Arab Emirates, andEthiopia. Some have argued that this expanded BRICS
will become an anti-US counterweight to the G7 and theWest. This view also holds that China will co-opt theorganization, and through it, expand its influence over the
Global South.
We disagree.
The expanded BRICS, like the original organization, will
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
beyond a shared desire to boost their status on the global
stage. They also have dramatically different political andeconomic systems. The addition of new members will makeconsensus—a requirement for the group to take any action—even harder to reach than it already is. The expanded BRICS
now includes two pairs of countries that are longtime rivals:
China and India plus Saudi Arabia and Iran.
China will have important influence in the BRICS, to be
sure, but its attempt to co-opt the group won’t work. India
is a critical member—especially and increasingly as a leaderof the Global South—and will oppose most initiatives thatstrengthen Chinese clout. Also, most BRICS countries seek
good relations with both the US and China and don’t wantto jeopardize their existing (and in some cases growing)
diplomatic and commercial ties with the G7. Therefore, they
will place limits on Chinese sway.

China unlikely to lead BRICS
China favorability vs US favorability

Pro-China sentiment
80%
70

South
Africa60

Brazil

50
40

India

30
2005

2010

2015

2020

2023

Pro-US sentiment
80%
70

India

60

Brazil50

South
Africa

40

2005

2010

2015

2020

2023

Source: Pew Research Center

The BRICS will not emerge as a China-led rival to the G7 thisyear—or anytime soon.

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We hope you’ll take all this in the spirit it’s intended: We’ve entered ayear of grave concern, but supported by the hope that tough times bringout the best of us. This isn’t going to be particularly enjoyable, especiallyfor our fellow citizens here in the United States. It’s personally painful towatch 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 makebusiness 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 capableglobal 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
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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