10. Nigeria. The most populous country in Africa and the continent’s most important market faces its most “fiercely contested election since its transition to a democracy in 1999.” An inclusive election result could trigger a political crisis and “severe uncertainty” in a critical market.
9. Ukraine. Russian interference in presidential elections in March and parliamentary elections in the fall “is a certainty,” which will likely mean additional U.S. and EU sanctions. Neither the Ukrainian or Russian government will back down from opposing positions on access to the Sea of Azov in the Kerch Strait or contested territories, resulting in more incidents and fighting.
8. Mexico. Its new president, Andres Manuel Lopez Obrador, will focus on an ambitious social and infrastructure programs at the expense of Mexico’s fiscal position. The result: a more challenging environment for energy firms and other investors. Security is a key issue: “2018 was the most violent year on record and 2019 could easily break that standard yet again.”
7. Coalition of the Unwilling. This “motley crew” of Trump’s “fellow travelers” are nationalistic and “unwilling to uphold the global liberal order.” They are “unpredictable,” have “outsized egos” and will “speed the erosion of the international system,” increasing geopolitical and investment risks. In addition to Trump, they include Jair Bolsonaro (Brazil), Matteo Salvini (Italy), Vladimir Putin, Recep Tayyip Erdogan, Kim Jong Un, Benjamin Netanyahu and Saudi Arabia’s Mohammed bin Salman. President Donald Trump. (Photo: AP)
6. Innovation Winter. The global economy is headed for “a politically driven reduction in the financial and human capital available to drive the next generation of emerging technologies” as countries reduce exposure to foreign suppliers, more tightly regulate the use of citizens’ data and erect barriers to protect emerging tech champions. Examples include limits on U.S. visas for Chinese students and engineers, global digital regulations and taxes on Big Tech.


5. The U.S. at Home. Exceptionally high political volatility due to an growing adversarial relationship between Trump and a Democratic House of Representatives threatens markets and paves the way for a impeachment, though conviction by the Senate is unlikely, or a constitutional crisis following legal action against his business and/or members of his family. Many months of market instability could follow if either occurs during a pronounced economic slowdown.
4. European Populism. 2019 “will be the year when populists gain real power in Europe’s largest stage, eroding the EU from within.” The group expects the election of more “euroskeptics” from the right and some from the far left to the European Parliament, which will ultimately “undermine the cohesiveness of the European Commission” and the EU’s ability to rescue member nations during economic crises.
3. Cyber Gloves Off. 2019 will also be “a turning point” for cyber deterrence as the U.S. becomes more aggressive, potentially engaging in preemptive strikes via the Defense Department and letting private actors hack back in retaliation for cyberattacks. Such aggressiveness is unlikely to work because non-state actors have less to lose from moving on the offensive and other nations are likely to raise the ante in response to the U.S.’s bet.
2. U.S.-China. The Eurasia Group is “not confident” that trade and economic disagreements between the two largest economies in the world “will be resolved anytime soon.” Even if a pact is reached on tariffs, economic friction will remain between the two: The U.S. will want companies to reduce reliance on input from China and transfers in the high-tech sector and China will retaliate. Chances of an accidental military confrontation will increase. (Photo: AP)


“The geopolitical environment is the most dangerous it’s been in decades.” That’s the opening line from the Top Risks 2019 report from the Eurasia Group, a political risk analysis and consulting firm whose clients include major global financial institutions and multinational corporations.

The biggest risk, according to the Eurasia Group report, is not that 2019 will be the year the world falls apart, although that’s possible if a Russian cyberattack gets out of control or the Chinese and Americans get into a trade war that causes a deep recession. The biggest risk is that the world is setting up “for trouble down the road. Big trouble.”

Six of the top 10 global risks involve the U.S., which is mentioned more than any other country in the Eurasia Group list, although China and Europe make repeated appearances. In those mentions of the U.S., President Donald Trump features prominently as one of a growing number of leaders who espouses nationalism and has become a source of increasing political volatility that could lead to market instability.

“U.S. alliances everywhere are weakening,” according to the Eurasia Group. “The Trump administration sees alliances as corsets that restrict the U.S.’s ability to pursue its interests,” which creates opportunities for other global leaders like China’s Xi Jinping and Russia’s Vladimir Putin.

This populist/nationalistic trend that Trump and other leaders represent is “becoming more toxic” as a growing number of workers globally lose their jobs to automation and don’t have the education, training or skill set to find new employment. “These polarizing trends are being politically exploited across the advanced industrial world and in pockets of wealthier emerging markets … and along with U.S.-China conflict will intensify with the next global economic downturn,” according to the Eurasia Group.

Check out the gallery for the firm’s top global risks of 2019.

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