The Economist Intelligence Unit (EIU) has compiled a list of what it regards as the top 10 global risks of 2019. It makes for sobering reading, with a number of active threats to stability and security only likely to get worse before they get any better.“Geopolitical uncertainty is on the rise and will remain a source of significant risk,” the EIU says in its 2019 global risks report. It cautions that the rise of so-called populist leaders is far from over. This rise includes figures such as US President Trump, Brazil’s President Bolsonaro, along with India’s Prime Minister Narendra Modi and the Indonesian President Joko Widodo, who between them hold power in the four most populous democracies in the world today. There are many more who could be added to the roll call: Turkey‘s Recep Tayyip Erdoğan, Russia’s Vladimir Putin and Hungary’s Viktor Orbán to name but three.
With nationalist policies and protectionist outlooks, populist leaders excel at the kind of rhetoric that plays well to supporters on their home turf while ratcheting up international tensions. But it can have a substantial impact on trade, destabilize financial markets and the oil sector, and provoke trade wars of the kind witnessed between China and the US.
If the trend towards populism continues to gain ground globally, such tensions are only likely to increase.
There are also some very specific points of contention on the world map, the EIU says. One is the slowing down of the Chinese economy, another is an oil price rise caused by supply shortages of supply. The EIU rates both of these scenarios as low risk, but identifies their impact as high (very high in the China example) should they occur, highlighting the importance of global collaboration and connectedness.
The threat of armed conflict between nation states is also not to be discounted. While the likelihood of war on the Korean peninsula is not high, such a conflagration could have catastrophic consequences for the region, and beyond. Recent events in Kashmir, which have seen India and Pakistan firing upon one another demonstrate the potential for situations like simmering territorial disputes to become inflamed.
The EIU Top 10 Global Risks
- A US-China trade conflict morphs into a full-blown global trade war
- US corporate debt burden turns downturn into a recession
- Contagion spreads to create a broad-based emerging-markets crisis
- China suffers a disorderly and prolonged economic downturn
- Supply shortages lead to a globally damaging oil-price spike
- Territorial disputes in the South or East China Sea lead to an outbreak of hostilities
- Cyber-attacks and data integrity concerns cripple large parts of the internet
- There is a major military confrontation on the Korean peninsula
- Political gridlock leads to a disorderly no-deal Brexit
- Political and financial instability lead to an Italian banking crisis