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Global geopolitical risk predictions for 2016

Maria Korolov | Jan. 6, 2016
The recent multi-decade trend towards globalisation is hitting up against a new trend towards localisation and fragmentation this coming year, and that, combined with political and military hotspots around the globe, experts say, is likely to make international companies pay more attention to geopolitical risks in 2016

The previous 25 years have been marked by globalization. A number of forces acted together to bring our planet closer together. Trade pacts, peacekeeping alliances, the Internet.

But now, according to Christopher Swift, a professor of national security studies at Georgetown, we're in a new era of localization and fragmentation.

"The global economic system is reorganizing into regional blocks, and those blocks are putting more barriers around themselves," he said.

Russia, China, and the NAFTA region are starting to focus internally. The European Union struggles to keep its coalitions together, the U.S. is facing a dramatic political divide, and the Middle East is suffering from its own divides. And the fragmentation is expanding to the rule of law as well.

"We're seeing countries like Russia and China find ways to break those rules to further their own subjective interests," Swift said.

The effect on business is that boards and directors are going to be less likely to take on big international challenges, will be more careful, more timid.

"The environment is just not as flexible as it used to be," he said.

ISIS

ISIS dominated the international news in 2016, and is likely to be a continued source of conflict next year, according to experts.

"The issue on everybody's mind is ISIS and the effect it's having on the broader world," said Kevin Frank, head of intelligence at security firm Nuix. Frank was previously an intelligence officer for the Defense Intelligence Agency and for the U.S. Navy.

More than just a local conflict in the Middle East, the violence has spilled over into Europe, and a flood of refugees from Syria and Iraq is putting pressure on local governments in Europe and elsewhere, he said.

According to the global intelligence company Strategic Forecasting, ISIS and its affiliates will continue to try to conduct terrorist attacks outside the Middle East in order to stay relevant.

On a positive note, Stratfor also predicts that ISIS will suffer notable losses in its core areas in Syria and Iraq -- but that this will just encourage its leadership to call for more operations in the West.

RUSSIA

Russia is facing problems on several fronts, according to Nuix' Frank. "Russia is involved in a festering sore in the Ukraine that is not going to come to a conclusion in 2016. Russia will continue to support the separatists... There will be no closure in the Ukraine for quite some time."

Russia is also taking a hit to its economy as a result of the loss of half of its income from oil, he added.

"Add on to that that the Russians are getting involved in Syria," he said.

 

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