Summer 2024 Highlights
Brian Klein
Founder, RidgePoint | Global, an international strategic advisory firm. Advisory Board Member - Toximapp. Open source data entrepreneur. Contributing writer — geopolitics, economics, and foreign policy.
The heat and humidity is back in North America and the geopolitical temperatures are rising along with it.
If you were to focus just on the headlines, the sky is burning, Joseph Biden’s campaign is in shambles, far right parties are taking over Europe, and Beijing is the new center of power in Asia.
While there’s truth to all of the above, a deeper look shows more than the typical doom and gloom.
The next four months are certainly fraught with uncertainty, including potentially more aggressive moves by China, Iran, North Korea and others, as well as whether the US sustains its democracy. These are no longer tail risks and business planners along with investors will need to prepare for a dizzying array of possibilities that in other times would have been fanciful if not downright absurd.
Check out our sometimes contrarian views of the issues we’re watching below regarding Europe, Russia, India, greater Asia, climate change, and the U.S. presidential elections.
And in this recent NIKKEIAsia op-ed I look at the region’s security prospects with either candidate in the White House.
Thanks again for your continued support as RidgePoint | Global grows into a leader in objective, independent research and analysis. As always, I look forward to supporting your endeavors.
Sincerely,
Brian P. Klein
Founder RidgePoint | Global
Issues We’re Watching this Summer
Europe
A political lean to the right is already swinging back to the center, at least in France. The recent French presidential run-off was a major defeat for the far right. Macron, who called the snap elections, appears to be out, but whomever leads the government will be part of a left/center coalition. On the security front, NATO is growing stronger with new members Sweden and Finland. And several countries along Russia’s border now want increased defenses for what might come next as Putin’s aims to go well beyond Ukraine.
Russia
The World Bank has upgraded Russia to “high income” as its war economy continues to grow. The recent deal with North Korea to bolster a rapidly depleted weapons stockpile suggests all is not well. A newly re-armed Ukraine with advanced weapon systems (US fighter jets are on the way) point to a bloody summer and fall ahead. Still, India’s Prime Minister Narendra Modi’s recent visit suggests Russia’s oil revenue will continue to flow.
India
Prime Minister Narendra Modi’s new coalition government is unlikely to stall India’s rise. The benefits are too great to ignore by any party even with the inevitable political compromises of a coalition government. Economic growth continues apace with major foreign manufacturers relocating or expanding their operations. However, Modi’s trip to Russia and his wholehearted welcome hug with Vladimir Putin, suggest any notions that India is ready to fully embrace western priorities is misguided.
Asia/China
In a stark reversal, ASEAN is exporting more with the US than China, a shift likely to continue as China’s economic struggles persist. There has been little indication that Beijing will adopt policies favoring free market consumers to drive growth. The upcoming Communist Party Plenum may offer insights into future plans, including potential real estate sector reforms. However, major changes are unlikely, suggesting continued slower growth ahead.
The US and Europe are no longer ignoring heavily subsidized industries and the overcapacity in many of China’s key sectors. Trade protectionism will be the result no matter who is leading western economies. That puts a limit on China’s high growth of the past. Shifting to more friendly nations in Africa and the Middle East won’t be able to make up for the lost markets in major industrialized countries.
China is also acting much more aggressively towards the Philippines and Taiwan by seizing vessels to defend its territorial claims. Expect more of the same in the months ahead. For now, Manila wants to handle this on its own. Taiwan will have to defend itself for now without direct involvement of other countries short of invasion. Contrary to worries over a direct invasion of Taiwan by Chinese forces, it’s much more likely that Beijing employs an incremental approach, exerting increasing influence over outlying islands close to its shores like Kinmen that Taiwan cannot easily defend.
China’s naval assets, including swarms of fishing boats, will employ an occupy-and-deny strategy to control the seas and keep other ships from transiting this area. Time is not on Taiwan’s side, however, and China is likely to keep ratcheting up the tension before the end of the 2024.
Climate
It’s hard to find the silver lining here as record breaking heat hits the US and around the world. A Category 5 hurricane roared through the Caribbean much earlier than normal, riding a wave of warmer sea water. The 1.5C global average temperature rise looks increasingly likely to break as the heat keeps rising. Check out NASA’s animated visualization of global surface temperatures (snapshot below).
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On the brighter side, use of alternative energy, including solar, wind, and geothermal are rising and becoming price competitive with fossil fuels in many major markets. Global solar and wind energy consumption doubled in the last five years (2018 to 2023), making up roughly 6% of world energy, according to the Energy Institute’s Statistical Review of World Energy. Still, there’s a long way to go until renewables become the predominant world energy source, as the chart below shows.
Geopolitical risk affects the corporate bottom line. . . Want to build an in-house monitoring capability, or receive sharp, independent insight? Contact RidgePoint | Global to find out about our research and consulting services.
U.S. Presidential Election
Yes, Biden’s debate performance was a disaster. His public image is damaged and people are seriously wondering about his mental competency regarding another four years in office. If he starts making more public appearances, donors keep donating, and polls improve, there’s little reason to think he won’t run a strong campaign through November.
Despite what the pollsters say, no one knows what will happen on election day. Trump’s post-debate bump already appears to be waning and Biden is making a strong push to retain the party nomination, despite some pushback.
We’ll be closely watching public appearances, especially those where he doesn’t use a teleprompter like the recent ABC News interview with George Stephanopoulos, to see if he can retain the momentum or whether he decides to pull out and make way for another generation of Democratic party leadership.
Allies, however, are scrambling to figure out what happens if he or Trump is elected, and they’re right to prepare for the worst.
. . . Forewarned is forearmed. If you’re interested in more in-depth analysis or building a geopolitical risk capability for your firm, let us know at RidgePoint | Global.
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