What do experts see as the greatest risk to the world in 2020? American politics


This is the opinion of experts from the consulting companies Eurasia Group and Control Risks. The World Economic Forum, which will prepare its annual meeting of political leaders and CEOs in Davos next week, also warns this year of increasing turmoil due to trade conflicts and political polarization that make global challenges more difficult.

"The campaign will focus foreign policy on crisis management and divert US attention from non-pressing issues and regions. Trump's drive for pre-election" victories "will increase foreign policy leverage in trade and security relations," wrote Control Risks a recent report.

The Eurasia Group, which for the first time rated US politics as the main risk in its annual assessment of the state of the world, warns that the elections will be split in more than a century and the outcome is likely to be unlawful by about half of the population. The analysts expect the result to be challenged no matter which candidate triumphs.

"The 2020 election is an American Brexit – a highly polarized vote where the risk is less than the political uncertainty about what people voted for," the Eurasia Group report said. "It is new political territory, this time in a country where insecurity abroad triggers shock waves."

Voters fill out their ballot papers in a polling station in Virginia in 2018.

In preparation for its report prior to the Davos meeting, the World Economic Forum interviewed 750 global experts and decision-makers who identified economic confrontation and national political polarization as the main risks in 2020.

Taken together, the reports show a world with delicate problems and few obvious solutions. The increasing explosiveness of politics in the industrialized countries is undermining the rules on which trade and globalization have been based for decades, and giving elected leaders permission to act unilaterally and to fuel conflicts such as the US-China trade war.

Treasury Secretary Steven Mnuchin, who will attend the Davos meeting, rejected the idea that the upheaval in American politics posed a threat.

"I don't think this will affect the global economy," Mnuchin told reporters on Wednesday, adding that other political issues, such as Britain's exit from the European Union and the elections in Israel that got bogged down last year, were equally irrelevant.

    According to a White House representative, Trump is expected to travel to Davos after skipping during the 2019 decommissioning
Other major headaches have not gone away. People paid to identify threats to global peace and prosperity are also concerned about the climate crisis, the struggle between Washington and Beijing for the future of technology, Russia's geopolitical aggressions, and ongoing armed conflict in the Middle East.

A decade ago, most risk analysts were concerned about financial problems such as asset bubbles, said John Drzik, author of the World Economic Forum report and chairman of research firm Marsh & McLennan Insights. These concerns have been replaced by new, more complex challenges that are often connected.

"In 2020 we have a combination of negative trend lines that we haven't seen in generations. This deteriorating environment is more likely to lead to a global crisis," warned analysts from the Eurasia Group.

The world has already faced two major hot spots this year. The murder of top Iranian general Qasem Soleimani on Trump's orders brought the two countries to the brink of war, jeopardized oil supplies from the Middle East, and prompted Tehran to accelerate uranium enrichment, a move that set Iran on the path to building a nuclear power plant could bring gun.

Tensions cooled after US forces avoided losses in an Iranian repression attack on bases in Iraq and Trump reduced his rhetoric. Analysts believe that Iran, which has serious economic problems and a troubled population at home, will now try to avoid an open conflict with the United States while being opportunistic against American interests.

"Iran will continue to disrupt Gulf tanker traffic. Tehran also has a penchant for hitting opponents in an unpredictable, asymmetrical manner, including through its robust offensive cyber capabilities and proxy network across the region with the ability to engage citizens and assets of the Gulf to attack the United States and its allies, "said the Eurasia Group.

Climate in crisis

And the devastating bushfires in Australia have shown why long-term concern about climate dominates. According to the World Economic Forum poll, the five biggest risks of the next decade will be environmental, including increasing extreme weather events and the breakdown of ecosystems.
Fires, storms, and floods cost $ 150 billion in 2019. More disasters are on the way

"The short-term effects of climate change add up to a planetary emergency that will result in death, social and geopolitical tensions, and negative economic impacts," the group warned in a report that discussed their survey.

According to Drzik, climate change dominates the ranking of longer-term companies because experts and investors can better understand and measure the associated risks. And they also recognize that climate change may bring some companies out of business, but it also opens up new opportunities.

An example: BlackRock (BLK) CEO Larry Fink, who controls $ 7 trillion in investments, said Tuesday that the asset manager would drop investments that he saw as a sustainability risk.

– Joe Johns contributed to the Washington coverage.