I\u2019ve long been an advocate of the old school journo\u2019s aphorism: \u201cIf it bleeds, it leads.\u201d<\/p>\n
That\u2019s why I make sure to punch Reuben on the nose, every time one of his rock operas steals the Stockhead front page.<\/p>\n
But in these woke days of digital listicles and viral ejecta, I am learning to adhere to the new schools of thunk.<\/p>\n
In particular I\u2019m now liking: \u201cIf it offends or heart rends, then it trends.\u201d<\/em><\/p>\n On that sparkling note, here\u2019s something out of the Lazard Geopolitical Advisory<\/a>: Top 10 geopolitical trends in 2024.<\/p>\n \u201cThe current geopolitical landscape is fundamentally more volatile and (is) reshaping global financial markets, dramatically impacting corporate decision making,\u201d according to the head of LGA, Theodore Bunzel<\/a>.<\/p>\n Certainly 2024 looks like being another year of extraordinary geopolitical volatility.<\/p>\n We have a lot of war, (two stellar ongoing conflicts,) what appears to be the resurgence of great-power competition, and a fraught global electoral cycle all which will ensure that geopolitics remains front, centre above, below and all over what businesses need to know in the coming 12 months.<\/p>\n \u201cTwo active wars provide a backdrop to this year\u2019s geopolitical outlook. In the Middle East, 2024 will see the conflict enter its next phase,\u201d Bunzel\u2019s team notes.<\/p>\n \u201cWhile Israel\u2019s operations inside Gaza may wind down, the regional struggle pitting the US and Israel against Iran\u2019s \u2018axis of resistance\u2019 will continue, posing significant escalation risks and resurrecting the threat of global terrorism.\u201d<\/p>\n So, really, good luck \u2018fighting the Fed\u2019 this year, if you\u2019re not taking into account the shipping disruptions in the Red Sea, friction over Iran\u2019s advancing nuclear program, not to mention a spillover and escalation of the Israeli war into the West Bank or Lebanon \u2013 any of which could upend oil markets, draw in outside actors and do all sorts to commodity prices and trade.<\/p>\n \u201cAlthough the critical players \u2014 Israel, Iran, the US, Saudi Arabia et al \u2014 seek to avoid a major widening of the conflict, the situation is trending towards greater risk of escalation,\u201d according to the LGA team.<\/p>\n In Ukraine, Lazard says the \u201clines of control will likely stay stalemated throughout the year as Vladimir Putin waits out Western support (and the US election) and Ukraine rebuilds its offensive potential after a failed summer counteroffensive.\u201d<\/p>\n But, stalemate doesn\u2019t mean static.<\/p>\n \u201cRussia may launch another offensive this year, while the Ukrainian military has promised operational \u2018surprises\u2019 as it seeks to shake up the battlefield.\u201d<\/p>\n But at least on that front, LGA believes the risks of a major escalation in 2024 \u2018appear limited.\u2019<\/p>\n However, against this uncertain backdrop, over half of the world\u2019s entire population will head to the polls in 2024.<\/p>\n The US election is most consequential, but the elections in Taiwan, India, the UK, Mexico, and elsewhere will be globally and ideallogically significant.<\/p>\n At the same time, structural shifts in the global economy will accelerate in the next 12 months, Bunzel warns.<\/p>\n \u201cChina is settling into a \u2018new normal\u2019 of slower growth while continuing its strategic competition with the West.\u201d<\/p>\n This poses challenges for Australia as a major Chinese supplier and for the global economy\u2026 \u2018while creating tailwinds for new investments in places like Latin America and Southeast Asia.\u2019 Via Lazard<\/em><\/p>\n \u00a0<\/p>\n In 2024, Lazard says an unprecedented number of voters will head to the polls. <\/em><\/p>\n \u201cAn estimated 76 countries are scheduled to hold elections, including some of the world\u2019s most populous \u2014 Bangladesh, Brazil, India, Indonesia, Mexico, Pakistan, and the US \u2014 making 2024 a year of political upheaval.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n Lazuras says that most significantly, the return of Donald Trump in the US would upend US foreign policy once again. A Trump victory would portend changes on major issues, including support for NATO and Ukraine, the outlook for conflict in the Middle East, and the direction of global trade.<\/em><\/p>\n \u201cA record share of Americans hold unfavourable opinions of both major parties and their respective frontrunners. <\/em>Low voter enthusiasm and divisive partisan rhetoric will cement stalwart bases of support while further eroding the middle ground.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n The scope and scale of China\u2019s economic miracle over the past 40 years was great. Terrific even.<\/em><\/p>\n But the days of China \u2018captur(ing) the world\u2019s imagination as the engine of the global economy\u2019 won\u2019t be seen again this year.<\/em><\/p>\n Today, Lazarus reckons, China\u2019s economy is facing a gearshift \u2014 the era of rapid growth is over, and the probability of economic stagnation in the medium-to-long term is rising.<\/em><\/p>\n This secular shift in China\u2019s economy and, by extension, the global economy will be a significant factor in 2024. The \u201cnew normal\u201d will predominantly impact countries like our own whose own growth has relied on China\u2019s manufacturing role in the global economy. <\/em><\/p>\n \u201cSpecific industries, including chemicals, electronics, automation equipment and machinery, and manufacturing, will face slower demand globally.<\/em><\/p>\n \u201cChina\u2019s own reaction to its slowdown will be determinative in the long run. In the short term, Beijing is likely to lean on exports in 2024 to drive growth, driving down prices and putting pressure on producers elsewhere. Europe has indicated it will react strongly to any attempts to dump Chinese products in the EU single market, while the US will likely also respond in kind. Trade tensions could lead to an increase in protectionist policies and greater market volatility in the near term.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n US-China relations actually ended 2023 on some relatively positive notes like the face-to-face meetings between Presidents Xi and Biden, as well as other senior officials.<\/em><\/p>\n Both governments sought to improve the state of deteriorating bilateral relations, with the US <\/em>especially focused on setting a \u201cfloor\u201d for the relationship.<\/em><\/p>\n The actual strength of this \u201cfloor\u201d in the new year begins with Taiwan\u2019s presidential election this weekend.<\/em><\/p>\n On January 13, a victory for the Democratic Progressive Party (DPP) will solidify Taiwanese desire for autonomy, test Xi\u2019s image as a strongman and very likely trigger an ugly response from the direction of Beijing to be sure.<\/em><\/p>\n Other flashpoints, according to Lazarus, will include US plans to implement additional restrictions on outbound investments, exports, and trade; provocative rhetoric regarding China during the 2024 election cycle; and ongoing tensions in the South China Sea.<\/em><\/p>\n \u201cAs a result, corporations and investors will need to think strategically about how they will navigate the ups and downs of a relationship defined by strategic competition. \u2018Friendshoring\u2019 destinations, such as Southeast Asia, will also continue to benefit in the year ahead.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n As with past conflicts in the Middle East, the current fighting in Gaza is changing the nature of the global terrorism threat. <\/em><\/p>\n The highly charged conflict is creating incentives for terrorism globally, \u201cthe likes of which we haven\u2019t seen since ISIS,\u201d according to FBI director Christopher Wray.<\/em><\/p>\n \u201cHamas\u2019 political wing is also explicitly encouraging such attacks, calling for \u2018violent acts against American and British interests everywhere\u2019 and other countries supporting Israel,\u201d Lazard says.<\/em><\/p>\n \u201cRecent arrests in Denmark, Germany, and the Netherlands were based on suspected plans to carry out attacks on Jewish institutions. The Israel-Hamas conflict has also reinvigorated white supremacist groups and domestic extremist threats. Increased kidnapping by terrorist groups is another possibility.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n \u201cIsrael\u2019s operations in Gaza have emboldened Iran and its proxies, who are bringing the region closer to more direct conflict between Iran and the US & Israel.\u201d<\/em><\/p>\n The ongoing conflict in the Middle East has brought those ever-simmering-not-so-latent tensions to the fore between Iran and its proxies on one side and the US and Israel on the other, rekindling concerns about a possible regional escalation of violence.<\/em><\/p>\n Since October 7, Iranian proxies have intensified attacks across the region \u2014 and while Tehran may not be directing individual actions, it does appear to be encouraging escalation by its proxy groups.<\/em><\/p>\n Attacks by Houthi rebels in Yemen have so far had the greatest economic impact.<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n Big, comparatively brave European steps to deal with COVID, support Ukraine and try to \u2018de-risk\u2019 from China, marked the birth of what the Dutch EU Commission president, Ursula von der Leyen, coined the \u201cGeopolitical Union.\u201d <\/em><\/p>\n Since then, the EU has framed many of its flagship policies in security terms: the green transition = energy security.<\/em><\/p>\n But the key moves are closer alignment with the US against a rising China, and unflinching support for Ukraine in the face of a revanchist Russia.<\/em><\/p>\n Lazarus points out that while EU support for a more hawkish approach to China continues to grow, a challenging economic outlook and the possible return of a less transAtlantically inclined US are setting the stage for a slower rollout of<\/em> \u201cMember states are deeply concerned about Europe\u2019s economic competitiveness and the state of the single market. Recent downgrades to the EU and eurozone\u2019s growth prospects in 2024 highlight the pressures facing European governments and the EU in the year ahead. Germany, in particular, is at odds with many of the economic security goals now being pursued in Brussels.\u201d<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Lazarus says that security considerations will translate into stricter rules for investment in, and global commercialisation of, AI and biotechnology<\/em><\/p>\n Semiconductors dominated the headlines in 2023 as the industry started to manage evolving Western government concerns regarding exporting the most advanced technology to China.<\/em><\/p>\n \u201cIn 2024, governments will zero in on the risks artificial intelligence (AI) and biotechnology pose to national security and the economic resilience of their supply chains\u2026 Ongoing strategic competition between China and the US will continue to play out on the tech front as innovation and technological advancement are seen as key barometers of economic competitiveness, military capability, and global influence.\u201d<\/em><\/p>\n The EU is similarly animated by its emerging economic security agenda and the importance of \u201cderisking\u201d from China.<\/em><\/p>\n Meanwhile the firms says that the explosive emergence of generative AI and the rise of synthetic biology have cemented AI and biotechnologies as the next frontiers of innovation.<\/em><\/p>\n A recognition of the vast possible gains and possible catastrophic risks made possible by AI and biotechnology is motivating regulators\u2019 interest. Where biotechnology can vastly improve lives and cure problems, for instance, it can also be leveraged for biowarfare applications or genetically modified diseases targeting specific populations, which has serious national security implications.<\/em><\/p>\n As a result, states are increasingly classifying biotech and AI as \u201cstrategic sectors.\u201d<\/em><\/p>\n In 2024, the AI agenda will move from policy formulation to implementation as the now-finalised EU AI Act moves forward and US agencies begin executing President Biden\u2019s AI executive order. Other countries will also be rushing to put forward their own AI policy frameworks with likely be more prescriptive rules by governments around the world.<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n In 2024, India is expected to maintain its position as a top-performing emerging market, benefiting from the shifting geopolitical environment and its role as a counterweight to China in the Indo-Pacific region.<\/em><\/p>\n Record stock-market valuations and surging foreign inflows in 2023 have set the stage for continued growth in 2024, with the World Bank recognising India as one of the few bright spots in an otherwise challenging global landscape.<\/em><\/p>\n The 2024 elections will be a crucial test for Prime Minister Narendra Modi, his nationalism and his economic policies. With projected 6% GDP growth and recent Bharatiya Janata Party (BJP) successes in state elections, Modi\u2019s position appears<\/em> Under Modi, India has made significant progress in streamlining the economy and promoting national integration. But, the BJP risks undermining recent tailwinds with inflammatory Hindu-nationalist rhetoric which could easily lead to sectarian violence as it has in the past and stimie India\u2019s best-on-field investor confidence.<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \u00a0<\/p>\n \u00a0<\/p>\n Brazil and Mexico have benefited \u2014 and continue to benefit \u2014 from the geopolitical \u201cnew normal\u201d defined by US-China strategic competition and global economic fragmentation. Both countries are winners in a challenging geopolitical landscape, capitalising on reconfigurations in global supply chains and commodity markets.<\/em><\/p>\n Challenges in 2024, however, will test this momentum, according to Lazarus.<\/em><\/p>\n Toppy commodity prices, bolstered by wars in Ukraine and the Middle East, will likely continue to represent a major economic win for Brazil and Mexico has similarly benefited.<\/em><\/p>\n Mexico surpassed China as the US\u2019s top trading partner as the promise of nearshoring has started to materialise, though the US remains sensitive to ensuring that China does not access US technology via Mexico.<\/em><\/p>\n Brazil\u2019s lefty President Luiz In\u00e1cio Lula da Silva is expected to take on a more controversial, international profile in 2024. With Brazil assuming the G20 Presidency in 2024 and hosting COP30 in 2025, President Lula will benefit from the spotlight of various international platforms to espouse his proto-Marxist views challenging the Western-dominated world order.<\/em><\/p>\n \u201cHe may choose to push for policies such as an end to US-dollar dominance or support for some Russian claims in Ukraine, generating political headwinds as investors evaluate Brazil\u2019s economic attractiveness,\u201d Lazarus notes.<\/em><\/p>\n But then elections in June may revive some uncertainty.<\/em><\/p>\n However, Lazarus reckons the ruling party candidate Claudia Sheinbaum is expected to win and will represent policy continuity, along with some potentially new favorable policies in sectors such as energy.<\/em><\/p>\n \u201cInflammatory rhetoric regarding Mexico in the US election, especially on immigration and border security, may cause distractions, but ultimately Mexico\u2019s attractiveness for near shoring will continue to draw investment.\u201d<\/em><\/p>\n \u00a0<\/p>\n This will pose challenges for the global economy while creating tailwinds for new investments in places like Latin America and Southeast Asia.<\/p>\n In short, this year is likely to be a bumpy ride.<\/p>\n <\/span><\/p>\n The post And now for the Top 10 Geopolitical Nightmares 2024 may never wake up from<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n\u00a0<\/p>\n\u200b
\nLazard Geopolitical Advisory: Top 10 geopolitical trends in 2024<\/em><\/h2>\n<\/h2>\n
The world chooses (electoral cycle)<\/h2>\n
America\u2019s reluctant rematch: The 2024 Presidential Election<\/h2>\n
<\/h2>\n
China\u2019s miracle fades: A secular slowdown<\/h2>\n
Fragile US-China d\u00e9tente put to the test<\/h2>\n\n
Resurgence of global terrorism threat<\/h2>\n\n
Edging towards escalation in the Middle East<\/h2>\n
Europe\u2019s conundrum: Is unity a bridge too far?<\/h2>\n
\nthe EU\u2019s economic security package.<\/em><\/p>\nTech war\u2019s next front: AI and biotechnology in the crosshairs<\/h2>\n\n
Modi\u2019s India at a crossroads<\/h2>\n
\nstrong heading into the 2024 elections.\u00a0<\/em><\/p>\nLatin America\u2019s giants: Brazil and Mexico in the spotlight<\/h2>\n