With 2009 and its year-end Top 10 lists comfortably packed away, the Carnegie Council held an event last week to usher in the New Year with a list of what to worry about in 2010. Panelists included Eurasia Group president — and WPR contributor — Ian Bremmer; the executive director of the U.N. Global Compact, Georg Kell; the editor in chief of strategy+business, Art Kleiner; and the executive director of the World Policy Institute, Michele Wucker.
Bremmer kicked things off with highlights from his recently published Eurasia Group report. Here’s a sample from his overall list, with each risk weighted by its probable impact, its likelihood of coming to fruition in the next 12 months, and its proximity in time:
–U.S.-China. Bremmer said that fundamental differences between the two powers will cause a deterioration in relations over the next 12 months, with the U.S. wanting China to take a larger role in international issues, such as climate change and human rights, and China not seeing any national interest in doing so. Bremmer predicted this trend would continue in the coming year on hot-button issues such as nuclear proliferation, cyber-security and Afghanistan. Bremmer said the economic relationship will see strains as China’s export protections on goods such as tires and steel draw wealth away from the U.S. and lead to American tariff retaliation.”By way of protectionist policies and slower consumer spending, the United States is rejecting China’s development model,” Bremmer said in his report.
–Iran. The internal fractures within Iran’s leadership amount to a “purely geopolitical risk,” Bremmer said in his report. “Making Iran feel like a cornered animal . . . [amounts to] a very serious risk,” he told the audience at the Carnegie event, adding, “The last six months have changed their position in the region an awful lot.” Bremmer believes that 2010 will be the year that the West’s tough talk on Tehran turns into to sanctions, with the international community losing patience with Iran’s antics to stall nuclear talks. Due to an increasingly fragmented government, Bremmer says Iran couldn’t reach a definitive stance on nuclear proliferation even if it wanted to. On a positive note, sanctions will most likely prevent any military action by Israel, at least for the first six months of the year.
–Japan. Japan may seem out of place on a list of the Top 10 risks for 2010, but Bremmer said Tokyo’s newly reshuffled government has earned it a spot at the top. “Japan has just gone through a revolution,” he said. Its seemingly “zero-party” state will result in schizophrenic policy, causing problems for the world’s second-largest economy. Bremmer said that fears over the United States replaying Japan’s “lost decade” are misplaced, with the real concern being that Japan repeats its own history.
Bremmer also pointed to what he believes are some “red herrings,” such as Yemen and Afghanistan. He said that the actual risks they pose for 2010 have been exaggerated by the smoke and mirrors of heavy media coverage. Until Yemen actually fails as a state — which Bremmer doesn’t predict happening in the next 12 months — it poses little risk to the global or even regional community. As for Afghanistan, Bremmer simply said, “If the U.S. has to lose a war, that would be the one to lose, but it won’t be in 2010.”
Adding to Bremmer’s risk assessment, the other panelists mentioned subjects ranging from global migration to inefficient risk-management approaches to fears of deglobalization. Attention then turned to the burgeoning liquefied natural gas (LNG) industry and how the largely unregulated market may affect geopolitical relationships. Bremmer predicted that competition will cause Russia and Middle East gas suppliers to butt heads, specifically escalating tension between Qatar and Russia as they compete for the same markets.