The #1 risk is The United States vs. itself: The US presidential election will worsen the country's political dysfunction, testing American democracy to a degree the nation hasn't experienced in 150 years and undermining US credibility on the global stage.
New York, 8 January 2024 – Eurasia Group, the world's leading geopolitical risk advisory firm, launched today its much anticipated
Top Risks 2024 report, offering a stark assessment of the year as a geopolitical minefield characterized by three dominant conflicts: Russia vs. Ukraine, Israel vs. Hamas, and the United States vs. itself.
The conflicts stand as stark reminders of an era devoid of effective guardrails, responsible leadership, and shared understanding—highlighting the consequences of what Eurasia Group has termed a “G-Zero world.” The question that looms large is whether these crises will serve as catalysts to address the underlying drivers of our geopolitical recession or plunge the world into further chaos.
These are some of the key takeaways from Eurasia Group's Top Risks 2024, the latest edition of the firm's flagship thought leadership report. Unveiled each January, Top Risks reviews the ten biggest threats to the trajectories of nations, industries, and institutions. It helps investors, companies, and the public prepare for and respond to opportunities and challenges wherever they invest or do business. The report is co-written by Eurasia Group president and founder Ian Bremmer and chairman Cliff Kupchan.
The #1 risk for 2024 is The United States vs. itself. Bremmer says: “The United States is already the world's most divided and dysfunctional 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, and international standing.” The report explores in detail the domestic and global consequences of a victory by Donald Trump or Joe Biden.
Other risks in the report include: Middle East on the brink (#2), Partitioned Ukraine (#3), Ungoverned AI (#4), Axis of rogues (#5), No China recovery (#6), The fight for critical minerals (#7), No room for error (#8), El Nino is back (#9), and Risky business (#10).
Top Risks 2024 also includes several “red herrings”—issues that, despite popular attention, are unlikely to pose significant threats or drive instability in the year to come. On the US-China relationship, Bremmer and Kupchan write: “The most important geopolitical relationship in the world is still fundamentally adversarial and marked by mistrust; several flashpoints will exacerbate bilateral tension throughout 2024. But preserving stability is better for both 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.” They also dispel concerns of a populist takeover in European politics, among other red herrings.
For the second consecutive year, separate standalone reports with the most important takeaways of Top Risks 2024 for
Brazil,
Canada,
Japan, and
Europe (new this year). These addendums further illustrate how global risks play out in different parts of the world, with specific implications for governments and businesses.
Press Conference: 8 January at 10:30 ET / 15:30 GMT | Register
here.
For members of the media, Bremmer and Kupchan will host an on-the-record press conference.
Livestream: 8 January at 12:00 ET / 17:00 GMT | Register
here.
GZERO Media, part of the Eurasia Group umbrella, will host a Top Risks livestream with Ian Bremmer, Cliff Kupchan and a panel of leading experts.
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Below is a summary of all ten Top Risks for 2024. View the full report
here.
1 – The United States vs itself
While America's military and economy remain exceptionally strong, the US political system is more dysfunctional than any other advanced industrial democracy. In 2024, the problem will get much worse. The presidential election will deepen the country's political division, testing American democracy to a degree the nation hasn't experienced in 150 years and undermining US credibility internationally. With the outcome of the vote close to a coin toss (at least for now), the only certainty is damage to America's social fabric, political institutions, and international standing. 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.
2 – Middle East on the brink
The fighting in Gaza will expand in 2024, with several pathways for escalation into a broader regional war. Some could draw the US and Iran more directly into the fighting. The conflict will pose risks to the global economy, widen geopolitical and political divisions, and stoke global extremism. The straightest path to escalation would be a decision by either Israel or Hezbollah to attack the other. Top Israeli leaders have pledged to “remove” the threat from Hezbollah. If Israel were to attack preemptively, the US military would provide support, and Iran would assist Hezbollah, its most important regional proxy. Houthi militants are also pursuing an escalatory path, and Shia militias operating in Iraq and Syria have increased attacks on US bases with Tehran's blessing. No country involved in the Gaza conflict wants a regional conflict to erupt. But the powder is dry, and the number of players carrying matches makes the risk of escalation high.
3 – Partitioned Ukraine
Russia's invasion of Ukraine remains an historic failure. NATO is strengthened by new members Finland and Sweden. The EU has opened a membership process for Ukraine, Russia has faced 11 rounds of sanctions, with more on the way, and half of its sovereign assets have been frozen—money increasingly likely to be used for Ukrainian reconstruction. Europe no longer buys Russian energy. But Ukraine will be de facto partitioned this year, and Russia now has the battlefield initiative and a material advantage. 2024 is an inflection point in the war: and if Ukraine doesn't solve its manpower problems, increase weapons production, and set a realistic military strategy soon, its territorial losses could prove permanent and may well expand. Kyiv has taken a body blow from ebbing political and material support from the United States, and the outlook for European assistance is only slightly better. Ukraine is desperate for more troops. For all these reasons, Kyiv will take bigger military risks this year, including strikes on more targets inside Russia that provoke unprecedented Russian responses and could pull NATO into the conflict.
4 – Ungoverned AI
Technology will outstrip AI governance in 2024 as regulatory efforts falter, tech companies remain largely unconstrained, and far more powerful AI models and tools spread beyond the control of governments.
5 – Axis of rogues
In 2024, Russia, North Korea, and Iran will boost one another's capabilities and act in increasingly coordinated and disruptive ways on the global stage. Meanwhile, even Washington's friends—the leaders of Ukraine, Israel and (potentially) Taiwan—will pull the US into confrontations it wants to avoid.
6 – No China recovery
Absent an unlikely loosening of President Xi Jinping's grip on power or a radical pivot toward large-scale consumer stimulus and structural reform, China's economy will underperform throughout 2024. Beijing's failure to reform the country's sputtering economic growth model, the country's financial fragilities, and a crisis of public confidence will expose gaps in the Chinese Communist Party's leadership capabilities and increase the risk of social instability.
7 – The fight for critical minerals
Critical minerals will be a crucial component in 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. In 2024, governments around the world will intensify their use of industrial policies and trade restrictions that disrupt the flow of the critical minerals.
8 – No room for error
The global inflation shock that began in 2021 will continue to exert an economic and political drag in 2024. High interest rates caused by stubborn inflation will slow growth around the world, and governments will have little scope to stimulate growth or respond to shocks, heightening risk of financial stress, social unrest, and political instability.
9 – El Nino is back
After a four-year absence, a powerful El Nino climate pattern will peak in the first half of this year, bringing extreme weather events that trigger food insecurity, increase water stress, disrupt logistics, spread disease, and foment migration and political instability, particularly in countries already weakened by the pandemic and the energy and food prices shocks created by the Ukraine war.
10 – Risky business
Customers, employees, and investors—mostly on the progressive side—have brought the US culture wars to corporate offices, and now courts, state legislatures, governors, and activist groups—mostly conservative ones—will hit back. Companies caught in the political and legal crossfire will face higher uncertainty and costs.
Red herrings
US-China crisis
This will be another turbulent year for US-China relations, particularly over Taiwan and tech competition, but domestic preoccupations have persuaded Presidents JoeBiden and Xi Jinping that better-managed relations serve both sides.
Populist takeover of European politics
Europe's populists will continue to strike fear in the European political establishment, but limited setbacks for mainstream parties at European Parliament, national, and local elections will neither upend the European political order nor derail EU ambitions rejuvenated by the Covid-19 pandemic and Ukraine war.
BRICS vs. G7
Even after this year's expansion, the BRICS will not emerge as a China-led rival to the G7.
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About Eurasia Group and GZERO Media
Eurasia Group is the world's leading geopolitical risk advisory firm. We help clients understand, anticipate, and respond to instability and opportunities everywhere they do business.
Together with GZERO Media, the go-to source of first insight into geopolitics, and our full-fledged events team, the Eurasia Group umbrella provides a complete political risk solution.
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