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From Ballots and Bullets to Bytes: 7 Global Risks to Watch in 2024


Global geopolitical risks to watch in 2024
Agora Strategy Executive Briefing on 7 global risks to watch in 2024

Executive Summary


The World in 2024…

…and the key takeaways for International Businesses

 

  • Risk #1 | Elections weakening democracy: In 2024, around half the world’s population will be called to vote. However, this “super-election year” poses great threat to the democratic order and to international cooperation, as nationalist and populist movements are on the rise in many established democracies. Building on and feeding prevalent anti-globalization sentiments, they favor protectionist economic policies, curbs on immigration, and less collaboration. Firms operating globally will therefore face increased trade barriers, regulatory uncertainties, and geopolitical tensions.

  • Risk #2 | Wars waged, conflicts erupting: Russia’s war against Ukraine, with its acute threats to European security and a hardening Moscow-Beijing axis, continues to pose a great risk for companies. It has been compounded by Israel’s war against Hamas following the terrorist group’s attack in October, which risks engulfing countries like Lebanon, Sudan, Saudi Arabia, or Iran. Beyond these existing conflagrations, military conflict looms in the Indo-Pacific involving China and Taiwan or the Philippines, which would most certainly draw in the US.

  • Risk #3 | Tensions from geopolitical rivalry: The US-China rivalry will deepen, as Washington is seeking new and reassuring old allies, while China and Russia strengthen their ties. Both the de-risking of supply chains, economic diversifi­cation in Asia, and some actors’ attempts to “weaponize” their trade will continue. Countries from the Global South will maintain their balancing act between the two global rivals, though China's business appeal stemming from developing prosperity in an authoritarian system will begin to fade, as companies face specific risks from doing business there. Firms will have to adapt to a growing web of sanctions and countersanctions, especially in the tech sector.

  • Risk #4 | The disruptive energy transition: The green transition will continue to affect trade and investment flows, now that the world has officially pledged to phase out fossil fuels by 2050. This will spur massive investments in new tech­nologies and infrastructure, just as the launch of the EU’s adjustment mechanism for carbon-intensive imports will disrupt various sectors. Moreover, certain raw materials that are critical for the energy transition, like lithium, copper, cobalt, and nickel, will give producing countries new leverage. Firms will have to shock-proof their (energy) supply chains, even if oil prices are set to remain steady.

  • Risk #5 | AI is coming: The risks posed by the growing use of AI are both short- and long-term, ranging from the inconvenient and detrimental to the potentially existential. They include, with a view to the election year, highly sophisticated disinformation and election meddling. More fundamentally, AI’s military use will affect the strategic stability between nuclear weapons states, the pursuit of war with the introduction of autonomous weapon systems, and the proliferation of new types of weapons, including biological ones. In addition, tech disruptions in space, computing, and cybersecurity, including cyberattacks or ransomware, pose acute risks for companies in 2024.

  • Risk #6 | Economic uncertainty prevailing: The 2024 landscape of geoeco­nomic trends is characterized by an escalation of sanctions, trade controls, and restrictions, particularly against Russia and China. Additionally, American protectionism, China's economic slowdown, and the EU's loss of competitiveness will increase the likelihood of trade wars. However, amid these challenges, countries and companies can emerge as winners thanks to the global rivals’ increased efforts in “de-risking” and “friend- or near-shoring”.

  • Risk #7 | Climate change as a meta risk: Companies face a number of climate-related risks in 2024, from acute disasters to chronic problems and the indirect consequences of climate change. For the first half of the year, the El Nino weather system will create dangerous conditions in the Pacific rim and beyond. Crucially, local weather events – like a flood or drought – often exacerbate long-festering problems in food security or transport. These then Impact on the supply chains of international businesses and the political and economic stability of the countries in which firms operate

Download the full report:


Agora Risk Report Outlook 2024
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