“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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