The Top 10 Global Risks for 2021

Although the new year has begun, the COVID-19 pandemic remains, along with the global crisis it has created. And according to a report released this week by the Eurasia Group, a political risk consultancy based in New York City, the backdrop of 2021 is set with the United States being the “most powerful, politically divided, and economically unequal of the world’s industrial democracies,” while China is “America’s strongest competitor, a state capitalist, authoritarian, and techno-surveillance regime.”

While the world remains in the “worst crisis it has experienced in generations,” the report notes that nations would ordinarily look to the U.S. for leadership, but “when the most powerful country is so divided, everybody has a problem.” With the coronavirus pandemic exacerbating global issues ranging from health care to cybersecurity, the new year will witness risks felt throughout the world.

Here are the 10 greatest risks in 2021, according to the Eurasia Group:

10. Latin America, COVID-19 and Upcoming Elections

According to the report, widespread vaccinations will not be readily available until well into the second half of 2021 in many parts of Latin America, where another coronavirus wave would have lasting implications on already reeling economies. Paired with upcoming elections, countries such as Argentina, Mexico, Ecuador, Peru and Chile, which have experienced “significant fiscal deterioration,” are increasingly vulnerable, and spending on policies related to social services is likely to dwindle.

9. Europe After Merkel

After 15 years as chancellor of Germany, Angela Markel will step down in the second half of 2021. According to the report, “Merkel has been Europe’s most important leader,” and her departure poses a significant threat to the continent, already facing the fallout of intensified lockdowns in some countries, among other fiscal concerns. Merkel’s departure will leave French President Emmanuel Macron “alone at center stage of Europe,” with France‘s own presidential election not being far off. Without Merkel’s tact for negotiations, the report argues more disputes will arise throughout the bloc.

8. Low Energy Prices in the Middle East

As the COVID-19 pandemic decreased the world’s energy consumption, some countries in the region experienced the dual financial toll of the pandemic and reduced energy-related income, and will continue to reel from the two forces well into 2021. According to the report, Iraq, with oil accounting for 90% of government revenue, faces the greatest challenges, and its increasingly unstable economic conditions will likely lead to more violent protests. Unrest is also possible in Algeria, according to the report, with an upcoming election and new constitution. Low oil prices will also have implications for Saudi Arabia, the United Arab Emirates and Qatar, among others.

7. Economic Pressures in Turkey

Amid the country’s “poor COVID-19 response,” Turkey faces the backlash from the financial crisis it avoided in 2020 by initiating pro-market measures and making a move to a “more orthdox monetary policy.” The country’s central bank approving increased interest rates will affect President Recep Tayyip Erdogan’s political base most, according to the report, weakening his support, and stoking social tension. Without the support of his allies, Erdogan will be “cornered,” and likely take tougher measures, increasing tensions with the European Union. and countries in the Middle East. According to the report, in some areas, “the possibility of military confrontation is increasing” for Turkey.

6. A Tipping Point for Cybersecurity

Reliance on technology in the past year for working, shopping, and going to school from home became the reality for many and will continue to be well into 2021, placing cybersecurity at a tipping point, according to the report. Paired with plenty of new devices and a lack of industry-wide security standards, a distinct vulnerability to hackers exists. On the geopolitical front, similar trends exist, with a lack of global rules for state behavior on the subject, exemplified by recent efforts to steal vaccine research or gain access to government infrastructure data.

5. Global Reckoning Over Personal Data

Driven by competition between the United States and China, the push for border restrictions on data sharing will continue into 2021. President Donald Trump’s attempts to ban Chinese apps such as TikTok set a precedent for other countries to follow, while India moved to blacklist dozens of Chinese apps last year. Tensions between U.S. data policy and Europe’s emphasis on “sovereignty” will continue to be prevalent in 2021 as well, while a general trend of keeping personal data of citizens out of the hands of other nations persists.

4. U.S.-China Tensions Broaden

Despite the new American presidential administration, U.S.-China relations will remain tense in 2021, as the two global powers will have “a competition to heal the world, and another to green it.” President-elect Joe Biden’s administration may employ new policies in its dealing with China, enlisting allies and “seeking a multilateral front against specific Chinese economic and security policies.”

But according to the report, that will not happen easily, and creating a united front against the country will likely result in backlash for countries coordinating with the U.S. The first test will be seen in the two countries’ work to provide other nations with COVID-19 vaccines, according to the report, followed by the pursuit of clean energy and green technology. The report’s authors say both countries may seek some breathing room following the Jan. 20 U.S. presidential inauguration.

3. Competition, Not Cooperation, Over Climate Change

According to the report, “In 2021, climate will go from a playground of global cooperation to an arena of global competition.” With Japan, South Korea, the EU, the United Kingdom, China and Canada committing to carbon neutrality by the middle of the century, and President-elect Joe Biden’s commitment to rejoin the Paris Agreement on the first day of his administration, many of the world’s leaders are vying for a position at the helm of the climate conversation. According to the authors of the report, “The result will be an already fractured world drifting further apart.”

2. A Long, Unequal COVID-19 Recovery

Although a new year has begun, COVID-19 persists, and will continue to impact daily life around the world. Though various vaccines have spurred hope globally, the report suggests that the rollout of vaccinations itself will cause problems throughout 2021, along with staggering public debt and the displacement of workers. According to the report, differing rates of recovery within and between countries also has the potential to stir public anger and unrest, while a K-shaped recovery, making the rich richer and the poor poorer, will be pervasive around the world.

1. U.S. Political Polarization

In the wake of a contested U.S. presidential election season and a divided electorate, President-elect Joe Biden’s term “opens the era of the asterisk presidency, a time when the occupant of the Oval Office is seen as illegitimate by roughly half the country,” which is deemed as the top risk globally of 2021, according to the report.

Although the risk pertaining to the presidency will mostly be domestic, it will also have implications for foreign policy. Although the Biden Administration has renewed hope for a new confidence in the U.S. as a global leader, the country’s handling of the coronavirus pandemic has sparked distrust in the country’s ability to revitalize the “global order,” according to the report. Finally, Biden’s likelihood of serving only one term makes the “political effectiveness and longevity,” of his presidency a factor in determining the greater risk, according to the report.

The Top 10 Global Risks for 2021

1. U.S. Political Polarization

2. A Long, Unequal COVID-19 Recovery

3. Competition Over Climate Change

4. U.S.-China Tensions Broaden

5. Global Reckoning Over Personal Data

6. A Tipping Point for Cybersecurity

7. Economic Pressures in Turkey

8. Low Energy Prices in the Middle East

9. Europe After Merkel

10. Latin America, COVID-19 and Upcoming Elections

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