Isolated and humiliated, “rogue” Russia tops list of geopolitical risks in 2023 (Eurasia Group)

An isolated and humiliated Russia is the biggest threat in 2023, political risk consultancy Eurasia Group released its annual list of key geopolitical risks on Tuesday.

Eurasia Group Chairman and Founder Jan Bremmer writes: “A humiliated Russia will transform from a global player into the world’s most dangerous rogue state, posing a serious threat to the security of Europe, the United States and beyond.” Cliff Kupchan, the company’s president. , in the report.

All kidding aside, the Kremlin has been careful to keep the war against Ukraine domestic last year, avoiding direct confrontation with NATO. In 2023, Russian President Vladimir Putin “can’t afford to be so cautious,” they wrote.

The Eurasian Group noted that Russia, which promised a quick victory after the February invasion, does not have good military options to win the war. Russia has little influence over the US or Europe. While this would cut off much of the remaining gas flow to Europe and increase European public support for the talks, it would not lead to the lifting of sanctions or weaken military support for Ukraine.

“Defeated on the battlefield in Ukraine, increasingly shaken by sanctions, unaffected by the EU or the US, with little to lose from further isolation and Western retaliation, and facing intense domestic pressure to show force, Russia will turn to asymmetric warfare. Rather than open aggression, which depends on military and/or economic power that Russia no longer possesses, it aims to harm the West and weaken the NATO alliance,” Bremmer and Kupchan write.

They predicted that Moscow’s nuclear strikes would intensify and Putin’s threats would become more overt.

While Putin is “anti-Armageddon,” nuclear alarm is “easier said than done, and the potential for mutually assured destruction through accidents and miscalculations will be greater in 2023 than at any time since the 1962 Cuban Missile Crisis,” they wrote. . “And unlike at the height of the Cold War, Putin has no way to go back or return to the pre-war status quo.”

Kremlin-linked hackers will increase cyberattacks against Western businesses, governments and infrastructure, they say. Russia will also step up its attack on Western elections by supporting and funding disinformation and extremism.

energy crisis

Bremmer and Kupchan also warned that the respite from rising energy prices in the second half of 2022 could be temporary.

CL.1 oil,

and other energy prices rose after Russia’s aggression in Ukraine, but then retreated. Crude oil prices rose in 2022, but ended the year below levels seen just before the invasion. Rising natural gas prices in Europe have also fallen significantly.

“Regarding oil, a faster-than-expected economic recovery in China with the country’s sudden departure from a zero-Covid policy and only a shallow recession in the US that will not destroy demand will boost oil demand growth. exposes a critical shortage of crude oil and new supplies,” they wrote.

“On gas, the need for the European Union to rebuild gas storage in the absence of cheap Russian supplies from the second quarter of 2023 will create new competition for LNG and demand for more gas pipelines from Norway and North Africa.”

Rising oil prices “will also increase friction between OPEC+, led by Saudi Arabia, and global consumers, led by the US, as the two sides pursue conflicting fiscal goals.”

Other threats highlighted in the report include:

  • “Maximum Xi”: Chinese President Xi Jinping has the most powerful power since Mao Zedong.
  • Mass disorder: Artificial intelligence and other technologies will be a “gift” to autocrats who want to intervene abroad and suppress dissent at home.
  • Inflation: Rising interest rates and the threat of a global recession could trigger a crisis in emerging markets.
  • Iran: The threat of regime collapse is low but remains the highest in four decades.

U.S. stocks fell on Tuesday as investors returned from a three-day weekend to start the new year. S&P 500 SPX,
Down more than 19% in 2022, the worst annual performance since 2008, the Dow Jones Industrial Average DJIA,
It loses 8.8%.

To see: Interest rate shock destroys stocks in 2022. Experts say that the market will move in 2023.

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