Eurasia Group 2024 TopRisks

Ian Bremmer
President
Cliff Kupchan
Chairman
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The United States vs. itself
Middle East on the brink
Partitioned Ukraine
Ungoverned AI
Axis of rogues
No China recovery
The fight for critical minerals
No room for error
El Nino is back
Risky business
Red Herrings
US-China crisis
Populist takeover of
European politics
BRICS vs. G7

2024. Politically it’s the Voldemort of years.
The annus horribilis. The year that must not
be named.
Three wars will dominate world affairs:
Russia vs. Ukraine, now in its third year;
Israel vs. Hamas, now in its third month; and
the United States vs. itself, ready to kick off at
any moment.
Russia-Ukraine … is getting worse. Ukraine
now stands to lose significant international
interest and support. For the United States in
particular, it’s become a distant second (and
increasingly third or lower) policy priority.
Despite hundreds of thousands of casualties,
millions of displaced people, and a murderous
hatredfortheRussianregimesharedbynearly
every Ukrainian that will define the national
identity of tens of millions for decades. Which
is leading to more desperation on the part of
the Ukrainian government, while Vladimir
Putin’s Russia remains fully isolated from the
West. The conflict is more likely to escalate,
and Ukraine is on a path to being partitioned.
Israel-Gaza … is getting worse. There’s no
obvious way to end the fighting, and whatever
the military outcome, a dramatic increase in
radicalization is guaranteed. Of Israeli Jews,
feeling themselves globally isolated and even
hated after facing the worst violence against
them since the Holocaust. Of Palestinians,
facing what they consider a genocide, with
no opportunities for peace and no prospects
of escape. Deep political divisions over the
conflict run throughout the Middle East and
across over one billion people in the broader
Muslim world, not to mention in the United
States and Europe.
And then there’s the biggest challenge in
2024 … the United States versus itself. Fully
one-third of the global population will go to
the polls this year, but an unprecedentedly
dysfunctional US election will be by far the
most consequential for the world’s security,
stability, and economic outlook. The outcome
will affect the fate of 8 billion people, and
only 160 million Americans will have a say in
it, with the winner to be decided by just tens
of thousands of voters in a handful of swing
states. The losing side—whether Democrats
or Republicans—will consider the outcome
illegitimate and be unprepared to accept it.The
world’s most powerful country faces critical
challenges to its core political institutions:
free and fair elections, the peaceful transfer of
power, and the checks and balances provided
by the separation of powers. The political state
of the union … is troubled indeed.
None of these three conflicts have adequate
guardrails preventing them from getting
worse. None have responsible leaders willing
and able to fix, or at least clean up, the mess.
Indeed, these leaders see their opponents
(andtheiropponents’supporters)asprincipal
Ian Bremmer
President
Cliff Kupchan
Chairman
eurasia group TOP RISKS 2024

adversaries—“enemies of the people”—and
are willing to use extralegal measures to
ensure victory. Most problematically, none
of the belligerents agree on what they’re
fighting over.
Climate change has long been considered
by many our greatest global challenge, but
the world is on the road to responding—
collectively, even though too slowly—because
everyone understands the nature of the
problem. There is too much carbon (and
methane) in the atmosphere, with a lot more
coming because it’s necessary for economic
growth, leading to long-term damage to
biodiversity and affecting everyone but
mostly the poorest. None of this remains
controversial: it’s just a question of who
compromises how much—and who pays what
and when. We have a pretty good sense of
where we are heading accordingly.
Not so for any of the major conflicts driving
geopolitical risk this year. The terms of
confrontation are not shared: not the
narratives, not the history, not even the basic
facts of the ongoing fighting. And in all three
cases, we are creating generations of incensed
people prepared to dig in and battle for as long
as it takes. Maybe an end to the fighting can
come when one or both sides are exhausted
… but the prospects of a sustainable peace? In
Europe, in the Middle East, and in America,
we’re not remotely close.
We call this a G-Zero world, a world without
globalleadership.WheretheUnitedStates,the
world’s sole remaining superpower, doesn’t
want to be the world’s policeman, the architect
of global trade, or the cheerleader of global
values. And no other country is prepared to
take that role for itself. We now see three
major confrontations that are the direct result
of our G-Zero world. By its nature, the G-Zero
will cause more unsolvable conflicts in the
years ahead—the only questions are where,
when, and how destabilizing. And whether
the resulting crises help fix the underlying
problem with our “geopolitical recession” or
only serve to make it worse.
*
There are plenty of bright spots. Most of the
rest of all those elections, especially the big
ones (India, the European Union, Indonesia,
Mexico), aren’t troubled at all. And then there’s
a big issue you might find surprising since it’s
less gloomy than usual: The US and China will
be the adults in the room this year. With all the
fighting going on in the world, the two biggest
economies aren’t looking for reasons to start
another conflict, despite the lack of trust and
mutually unaligned political and economic
systems. US-China tensions don’t even make
the Top Risks list, in part because the Chinese
economy and the US domestic polity are
so troubled and distracting. Geopolitically,
the world’s most strategically consequential
bilateral relationship has become a cleaner
dirty shirt.
The wild card, more than ever, is technology—
specifically, artificial intelligence.The upsides
will start materializing more dramatically as
new applications find their way into every
major corporation across every economic
sector. And as hundreds of millions of people
begin to upskill themselves in their jobs, AI
will become a copilot before it takes over your
job. But the technology is also developing
far faster than the ability to govern it, and a
technopolar world for artificial intelligence
means crisis response and reaction will come
only after things break … let’s hope in 2024
those things aren’t that big.
And now, our top risks.

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1 The United States vs. itself
While America’s military and economy remain exceptionally strong, its political system is
more dysfunctional than that of any other advanced industrial democracy … and in 2024 faces
further weakening. The US presidential election will worsen the country’s political division,
testing American democracy to a degree the nation hasn’t experienced in 150 years and
undermining US credibility on the global stage.
The US political system is remarkably divided, and its legitimacy and functionality have eroded accordingly. Public trust in
core institutions—such as Congress, the judiciary, and the media—is at historic lows; polarization and partisanship are at
historic highs. Add algorithmically amplified disinformation to the mix, and Americans no longer believe in a common set
of settled facts about the nation and the world.
The two major parties’ likely presidential candidates are uniquely unfit for office. Former President Donald Trump faces
dozens of felony criminal charges, many directly related to actions taken during his term in office, most critically including
his efforts to overturn the results of a free and fair election. In any stable, well-functioning democracy, the 2024 contest
would be principally about those. The United States is presently far from that. On the other side of the aisle, President Joe
Biden would be 86 years old at the end of his second term. The vast majority of Americans want neither to lead the nation.
This division will worsen in the run-up to the election. From the moment he secures the nomination (not guaranteed, but
overwhelmingly likely), Trump will hijack Republican and American politics, as even the most reluctant of Republicans
in Congress—and most conservative media, activist groups, and monied interests—will fall in line with him. His policy

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pronouncements—however outlandish—will shift the
national narrative and shape the policy direction on Capitol
Hill and in statehouses across the country before a vote
is cast. The result will be even more policy extremism,
division, and gridlock.
Knowing he faces prison time if he loses in November,
Trump will use his online pulpit, control of the Republican
Party, and friendly media to delegitimize both the system
that is prosecuting him and the integrity of the election.
His victim narrative and preemptive claims of fraud will
find a receptive audience of Americans who agree, putting
implicit pressure on Republican state governments and
election officials to manage the election in ways that
would benefit him (such as by purging voter rolls more
liberally or tightening voting restrictions). While these
efforts are unlikely to overturn the electoral process, they
may well disrupt it. And they are sure to persuade many
of Trump’s supporters to doubt the election outcome’s
legitimacy—a problem that will be exacerbated by AI-
fueled disinformation and social media echo chambers
(please see Top Risk #4).
In a world beset by crises, the prospect of a Trump
victory will weaken America’s position on the global
stage as Republican lawmakers take up his foreign
policy positions and US allies and adversaries hedge
against his likely policies. US support for Ukraine will
face stronger headwinds on Capitol Hill, straining the
transatlantic alliance and leaving Ukrainians and their
frontline European supporters in the lurch. Kyiv will take
increasingly reckless actions to make what gains it can
Source: Gallup
Americans’ confidence in political and social institutions continues to decline
Please tell me how much confidence you, yourself, have in each one—a great deal/quite a lot (%)
0
10
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1973 2000 2023 1973 2000 2023 1973 2000 2023 1973 2000 2023
1973 2000 2023 1973 2000 2023 1973 2000 2023
1973 2000 2023
The Supreme Court Congress
The public schools Newspapers Television news News on the internet
The presidency
The church or
organized religion
32%
27% 26%
8%
26%
18% 16%
14%
Biden and Trump are both uniquely unfit for office.
Most Americans want neither to lead the nation

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before the next president takes office, while hopes for a
definitive end to US aid in 2025 will stiffen Russia’s resolve
tokeepfighting(pleaseseeTopRisk#3).IntheMiddleEast,
Trump’s prominent support for Israel and willingness to
bomb Iran for transgressions will embolden Israeli Prime
Minister Benjamin Netanyahu and limit Biden’s political
space for policy maneuver. Pressure from congressional
Republicans, meanwhile, will make it politically harder—
albeit not impossible (please see Red Herrings)—for Biden
to preserve the “thaw” with China this year. The shadow
of Trump will lead US allies and adversaries to brace for
his return to office, with destabilizing consequences long
before Inauguration Day.
If Trump wins the election, Biden will concede. But while
Democratic leaders may be less likely to claim the election
was “rigged” than the former president, they will still treat
Trump as illegitimate, believing he should be in jail and is
unfit for office. Some congressional Democrats will likely
vote against certifying his election on the grounds that
he is not qualified to serve under the 14th Amendment,
undermining trust in American electoral institutions. The
response in major cities would be a repeat of the massive
streetprotestsduringthe2016presidentialtransition,butin
a country even more bitterly divided and with an opposition
coalition more convinced that Trump 2.0 beckons the end
of American democracy. Whether driven by extremist
elements, clashes with counter-protesters, or opportunistic
bad actors, widespread violence is a real (and indeed nearly
inevitable) risk. The danger will intensify over the course
of a Trump administration as he pardons those arrested for
storming the Capitol on 6 January, allowing them to return
to their quasi-militias and organize against what they see as
elite leftist institutions.
If Trump loses, he won’t accept defeat. Instead, he will do
everything in his power—legal or illegal—to contest the
outcome and impugn the legitimacy of the process. He
has fewer options for challenging the results than he had
as president in 2020, owing to the passage of the Electoral
Count Reform Act and the fact that he’s not the incumbent.
But that will not stop him from trying—especially when he
faces the prospect of prison time. Trump will allege mass
fraud once again. He will incite widespread intimidation
campaigns against election workers and secretaries of
state in both red and blue states, demanding that they
“find” extra votes for him. He will lean hard on Republican
governors to submit slates of Republican electors in states
Democrats won. And he will pressure Republican senators
and representatives to object to states’ slates of electors
to disqualify Democratic electoral college votes. While
none of these efforts is likely to succeed, they will inflict
damage on already low public confidence in the integrity of
America’s democratic institutions.
Barring an unlikely Democratic landslide, Republicans
are poised to see a Biden win as illegitimate, alleging
either that the election was “stolen” or that politically
motivated investigations made it more difficult for
Trump to campaign. They will see Trump’s incarceration
during the Biden administration as Democrats jailing the
opposition leader for political purposes. This could create
an unprecedented political crisis, destroying the remaining
trust in federal institutions Republicans still have and
leading to calls for Biden to pardon Trump the same way
Gerald Ford pardoned Richard Nixon to avoid national
disunity. While large-scale violence is less likely in this
environment, America’s political divide would deepen, and
the nation’s fragmentation into red vs. blue states, cities,
and towns would accelerate.
And then there’s the tail risk (unlikely but plausible) that
you’d rather not think about: What if the world’s most
powerful country is unable to hold a free and fair election
on 5 November? Efforts to subvert the election could come
from cyberattacks, deep fakes and disinformation, physical
attacks on election process and oversight, and even
terrorism to disrupt voting on the day. There’s no more
geopolitically significant target than the upcoming ballot—a
softer and more vulnerable target than most homeland
security challenges—with plenty of foreign (and more than
a few domestic) adversaries that would love nothing more
than to see more chaos in America.
The United States is already the world’s most divided and
dysfunctional advanced industrial democracy. The 2024
election will exacerbate this problem no matter who
wins. With the outcome of the vote essentially a coin toss
(at least for now), the only certainty is continued damage
to America’s social fabric, political institutions, and
international standing.
The election will test
American democracy to a
degree the nation hasn’t
experienced in 150 years

7
Trump: The final season?
What if he wins again?
Trump’s 2016 upset was met with horror from the American
left and concern from allied world leaders, but generally
positive reactions from American business leaders and
optimism from global financial markets, which saw the
lower taxes and deregulation of a Trump administration as
a net positive for the US economy. The response next time
around would be significantly more troubled, as a second
Trump administration would have fewer guardrails than
the first, reduced fiscal space, and more radical policy
divisions among US states following eight additional years
of polarizing politics.
A second Trump administration would take steps to
consolidate executive power, weaken checks and balances,
and undermine the rule of law. Trump would try to
capture federal institutions by purging thousands of civil
servants he sees as obstacles and replacing them with
inexperienced loyalists. Much of a second Trump cabinet
would be senior Republicans: Former cabinet members
Nikki Haley, Robert Lighthizer, and Mike Pompeo—known
as capable within the broader policy community—are all
likely to return. Key policy risks from the cabinet would
include trade protectionism—with goals of broad-based
10% import tariffs and stripping most favored nation status
from China—and unpredictability from the Department of
Defense, where appointed leadership will be comprised of
political loyalists more like Mike Flynn than Jim Mattis. At
thesametime,acoreofTrump’spolicyadvisersintheWhite
House (including the likes of Steve Bannon, Stephen Miller,
and Kash Patel) would have virtually no relationships with
elite business leaders or foreign dignitaries—and limited
willingness to prioritize an audience with them.
Having gutted the “deep state,” Trump would be less
constrained to break the rule of law. His first order of
business would be to weaponize the FBI, the Justice
Department, and the IRS to block proceedings against
himself and his allies and persecute his political enemies.
Biden and his family would be in the crosshairs, but how
far this revanchist McCarthyism goes—to opposition
lawmakers, media figures, donors, critics—is a question of
enormous import, especially in its signaling importance
to determine behavior across the political spectrum, at
best chilling political dissent and at worst squelching it
nearly entirely.
There would be little remedy at the federal level to restrain
a second Trump administration if it acts lawlessly. A
divided or Republican-controlled Congress would be
unable and unwilling to check Trump’s executive excesses,
with impeachment and removal off the table even under
a Democratic Congress. While a conservative Supreme
Court, one-third of whose members were appointed by
Trump, would remain independent, it would have limited
power to enforce its rulings against a renegade president,
setting up the potential for a constitutional crisis the likes
of which America hasn’t seen since the end of the Civil War.
The decentralized nature of the US system would remain a
counterweight to dysfunction in Washington, as a weaker
federal government would devolve power to the states and
allow a free market of competing political and economic
strategiestoflourish.Theflipsideofthisdecentralizationis
that red and blue states would continue to grow polarized,
not just on policy but increasingly in terms of who they
attract to live, do business, and invest. This would create
a fractured business and investment environment that
would be difficult for companies to navigate as policies
and regulations diverge from state to state and their
choice of location becomes an implicit political statement
Foreigncompanieswouldhaveahardertimeunderstanding
the political geography of America and spend more time
trying to get on the good side of Trump’s political apparatus.
Relationships across the federal government—and
particularlywithRepublicanswhohaveTrump’sear—would
become essential for foreign governments, even more so
than they were in the first term. And investors are likely
to see massive opportunities in deregulated industries but
grow increasingly concerned about the US fiscal picture.
However positively markets may view its concrete policies,
a second Trump presidency—with all its personalistic,
authoritarian, and mercurial tendencies—would deal
grievous harm to US democracy. It would also begin to
raise foundational questions about the long-term stability
of the US as an investment destination, the trustworthiness
of its financial promises, the credibility of its commitments
to foreign partners, and the durability of its role as the
lynchpin of the global security order.
Trump would take steps to
consolidate executive power,
weaken checks and balances,
and undermine the rule of law

8
2 Middle East on the brink
On 30 September 2023, National Security Advisor Jake Sullivan said that “the Middle East is
quieter today than it has been in two decades.” He jinxed it. Just eight days later, Hamas’s
terrorist attacks shook the region to its core, jolting the world out of its complacency on the
Palestinian issue, shattering Israel’s sense of security, and turning the Middle East into a
powder keg.
To be sure, there’s still a lot of truth to Sullivan’s claim: Iran and the Gulf states are the closest they’ve been in years
thanks to the China-brokered breakthrough between Riyadh and Tehran. Qatar and the Gulf Cooperation Council fixed
their problems. The ceasefire in Yemen holds. Syria is back in the diplomatic loop. The Abraham Accords remain up and
running. And yet … everybody forgot about the Palestinians.
Now, one thing is certain: The region is no longer quiet, and it won’t be for ages. There is a network of deterrence
relationships—Israel and the US on the one hand, Iran and its proxies on the other, and the Gulf states in between—that
has so far contained the war to Gaza … just. No country wants a regional war to erupt. But the powder is dry, and the
number of players carrying matches makes the risk of escalation high. The current fighting in Gaza is accordingly likely
to be only the first phase in an expanding conflict in 2024.
One path to escalation would be a decision by Israel to strike Hezbollah. Israel’s post-7 October security posture is defined
by a commitment to restore regional deterrence and address long-standing security risks, with a bias toward preempting
threats before they materialize. Top Israeli leaders have pledged to “remove” the threat from Hezbollah on their northern
border, and the war cabinet is debating an operation to push the militant group beyond the Litani river in southern
Lebanon as called for by UN Security Council Resolution 1701. That would lead to a showdown with Hezbollah. Israeli
Prime Minister Benjamin Netanyahu has his own reasons to keep the Gaza campaign going or start another one in the

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north: avoiding ouster and possible jail time (please see
box in Top Risk #5).
If Israel were to attack preemptively, it would probably
wait to do so until after the fighting ebbed in Gaza to avoid
a full-fledged, two-front war (initial withdrawals of some
Israeli troops from Gaza should be assessed accordingly).
The US military would almost certainly provide support to
the Israeli effort. Iran, in turn, would assist Hezbollah, the
most important link in Tehran’s power projection strategy
in the Levant. A spiral of escalation could turn the shadow
war between the US/Israel and Iran into a kinetic one.
A similar spiral could be initiated by Hezbollah with the
backing of Iran if its leader, Hassan Nasrallah, thought the
level of Palestinian casualties in Gaza—or the West Bank—
had become intolerably high. And if Iran believed that
Hezbollah was at risk of being existentially degraded, its
level of support for the group would increase.
Houthi militants are also pursuing escalation. The Yemen-
based former rebels have a formidable arsenal of weapons
supplied by Iran and are keen to boost their standing at
home and within the Tehran-backed “Resistance Front.”
They have a longer leash—but also less protection—from
Tehran than Iran’s other regional proxies, and they are
more risk-acceptant. The Houthis have been launching
missile and drone attacks on Israel, US warships, and
commercial shipping vessels since November, threatening
safe passage through the Strait of Bab al Mandab and the
Gulf of Aden—key transit waterways for oil and goods to
Europe, North America, and Asia. In response, the US
has formed a multinational naval task force to protect
shipping and deter the Houthis. But the Yemeni group
will remain undeterred and continue to shoot. In doing
so, it could inadvertently kill US citizens, which would
demand a stronger response from Washington. If the
Houthis stay on this path, strikes on their bases in Yemen
are increasingly likely, bringing the United States and its
allies more directly into the war.
Finally, Shia militias operating in Iraq and Syria have
systematically increased their attacks on US bases, with
Tehran’s blessing but at least partially driven by local
political dynamics. These attacks are difficult to deter,
and the possibility of unintended consequences is rising
accordingly. Risks associated with US casualties are
particularly stark. Washington has made clear that any
US deaths will lead to large-scale retaliation, and that Iran
will be held directly accountable.
All these pathways pose risks to the global economy. Most
of the world’s largest shipping companies have already
suspended transit through the Red Sea in response to
the Houthi strikes, paralyzing a critical waterway that
sees 12% of global trade pass through it. Ongoing Houthi
attacks will keep freight insurance rates elevated, disrupt
global supply chains, and create inflationary pressure. In
addition, the closer the conflict comes to Iran, the greater
the risk of disruptions to oil flows in both the Red Sea and
the Persian Gulf, pushing crude prices higher. Any moves
by Israel, the US, or others to block Iran’s 1.4 million
barrels per day of oil exports via sanctions or military
strikes would provoke retaliation by Tehran that puts
larger volumes of oil and LNG exports from the region
at risk (though the worst-case scenario, a closure of the
Strait of Hormuz, remains a very low probability).
The conflict will also widen existing global divisions and
disrupt politics. Anti-Israel sentiment is inflamed across
the Middle East, among Muslim populations around the
world, and—increasingly—within the Global South. The
United States is currently as isolated globally in its support
for Israel as Russia was over its invasion of Ukraine. As
the war in Gaza drags on, the schism between Washington
and the rest of the world will grow.
Divisions will deepen within the US as well, where public
opinion on Israel-Palestine is shifting with the nation’s
demographics. A majority of Gen Zers now view the 7
October attacks—the worst violence against Jews since
Source: IISS estimates, Financial Times, Axios Visuals
Bracing for conflict
Eastern
Mediterranean
12,500
ISRAEL
100
Red Sea
4,500
Arabian Sea
and The Gulf
1,200
SYRIA
900
IRAQ
2,000
UAE
5,000
KUWAIT
10,000
QATAR
10,000
EGYPT (MFO)
500
SAUDI
ARABIA
2,500
IRAN
YEMEN
OMAN
SUDAN
BAHRAIN
4,500
JORDAN
3,500
US personnel in the Middle East Incidents involving shipping
vessels (Nov. 19 to Dec. 18, 2023)
The Middle East is a
tinderbox, and the number
of players carrying matches
makes the risk of escalation
exceptionally high

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The US is as isolated globally in its support for Israel as
Russia was over its invasion of Ukraine
the Holocaust—as justified. Discontent among young
Americans, minorities, and progressives with President
Joe Biden’s steadfast backing of Israel will hurt Democrats
in the 2024 election.
The most dangerous schism, though, remains between
Israelis and Palestinians. Israelis across the political
spectrumoverwhelminglysupportthecompletedestruction
of Hamas, whatever that means and however improbable it
may be. A growing majority of Palestinians in theWest Bank
and Gaza, meanwhile, support Hamas. More temporary
ceasefires to the current fighting in Gaza remain possible,
especially given the strong international pressure behind
them … but they’re extremely unlikely to prove sustained.
The longer the war goes on, the more both populations will
radicalize. This will increase the risk of insurgency in Gaza,
deadly clashes in theWest Bank and Jerusalem, and terrorist
attacks in Israel that provoke a further military response. It
goes without saying that the expansion of Israeli-Palestinian
violence makes the prospects for an eventual two-state
solution increasingly dim.
Finally, and perhaps most troublingly, this conflict will
stoke political and religious extremism across the Middle
East and elsewhere. Demonstrations could erupt in Arab
and Muslim countries as Israeli forces kill or displace
larger numbers of Palestinian civilians in Gaza, or in
response to settler violence and repression in the West
Bank and Jerusalem. These upheavals could destabilize
countries with large populations of Palestinian refugees
such as Egypt and Jordan and—in the extreme—force their
governments to cut ties with Israel. All along, Islamic
terrorist groups will use images and casualty figures from
Gaza as propaganda and recruitment tools, and violence
against Jews will spike in many countries. Fatal violence
linked to the war has already hit Europe, and the United
States is also vulnerable.

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3 Partitioned Ukraine
Ukraine will be de facto partitioned this year, an unacceptable outcome for Ukraine and the West
that will nevertheless become reality. At a minimum, Russia will keep control of the territory it
now occupies on the Crimean peninsula and in Donetsk, Luhansk, Zaporizhzhia, and Kherson
oblasts—about 18% of Ukraine’s territory—as the war settles into a defensive struggle with a fairly
static line of control. But Russia now has the battlefield initiative and a material advantage, and it
could take more land in 2024. This year is an inflection point in the war: If Ukraine doesn’t solve
its manpower problems, increase weapons production, and set a realistic military strategy soon, it
could “lose” the war as early as next year.
Kyiv has taken a body blow from ebbing US political and material support for Ukraine. Americans are increasingly split
on the war, and many Republican lawmakers actively oppose more aid. Even if Congress approves additional military
assistance for 2024, this will probably be the last significant appropriation Kyiv will get from Washington. If Donald
Trump wins, he will drastically cut aid. If President Joe Biden wins, another large package is a long shot unless Democrats
improbably win both the House and the Senate.
The outlook for European assistance is only slightly better. German budgetary challenges on one side, growing Hungarian
opposition on the other, and a lack of leadership from most everyone else will make it hard for the Europeans to fill the
gap in military aid the Americans will leave over the medium term. While Europe is ramping up production capacity,
it doesn’t have the infrastructure to provide the high volume of ammunition (including all-important artillery shells),
heavy tanks, howitzers, and infantry fighting vehicles that Ukraine needs.

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The material balance has also shifted in Russia’s favor.
On manpower, Russia is attracting significant numbers
of men to new contracts, so a politically fraught second
mobilization this year is unnecessary for now. President
Vladimir Putin has also successfully converted his
economy into a war operation. Roughly one-third of
government spending and 6% of GDP will be devoted
to the war in 2024, and Russian domestic production of
missiles and artillery shells is now greater than before the
war. North Korea is providing a large volume of additional
ammunition, and Iran continues to provide (and now
produce in Russia) drones (please see Top Risk #5).
Ukraine is in a more troubled position. On manpower,
it must mobilize and train new recruits to improve force
quality. Kyiv is considering mobilizing 500,000 additional
troops, which is probably impossible but shows the
quandary Ukraine is in as it confronts the army of a much
larger country. Kyiv also needs to scale up its domestic
defense production, especially of drones for the battlefield
and to hit targets inside Russia.
Russia’s material advantage will be reflected on the
battlefield, where Moscow has seized the initiative and
is now attacking in Donetsk Oblast, showing limited but
effective offensive capability for the first time in over a
year. Russia will form additional armies with fresh recruits
and continue to develop offensive capability, ratcheting
up the pressure on Ukraine.
For their part, Ukrainians will be forced to entrench and
defend during 2024, and in a predominantly artillery-
based war, defense is much easier than offense. This
means that Kyiv probably won’t lose much land this year.
But Ukraine will need to develop its military forces and
come up with effective military strategies for both 2024
and 2025 by early in the year. Ukraine will also need to end
the growing domestic infighting between the presidential
administration and both the military leadership—which
contributed to the failure of last year’s counteroffensive—
and other political leaders like Kyiv Mayor Vitali Klitschko.
The upshot is that Ukraine must make progress on
mobilization, training, defense production, strategizing,
and political infighting. If it succeeds in most of these
tasks, Kyiv will be in a strong position to defend its existing
territory in coming years, with a future that could include
hard security guarantees from the West, eventual NATO
membership, reconstruction aid, and EU integration—a
bettergeopoliticaltrajectorythancouldhaveplausiblybeen
expected before the Russian invasion two years ago. But if
it fails, Ukraine is likely to lose the war in the near future,
where losing means giving up more territory in Donetsk
and possibly Kharkiv oblasts, and then being forced to
accept a much more unfavorable ceasefire or settlement.
Ukraine is at risk of losing, but Russia has no way to “win.”
Whatever longer-term gains its forces can make on the
ground in Ukraine, NATO is now strengthened by new
members Finland and (soon) Sweden. This month, the
EU will open a membership process for Ukraine, Georgia,
and Moldova, an outcome that wasn’t on the table before
Putin ordered his invasion. Russia has faced 11 rounds
of sanctions, with more on the way. Half of its sovereign
assets have been frozen, at least some of which are likely to
be seized to finance Ukrainian reconstruction. Europe will
no longer buy Russia’s commodity exports, which instead
must be sold to China, India, and others on the cheap.
Moscow has been rendered permanently dependent on
Beijing. All of this, just to get pieces of eastern and southern
Ukraine that will take years and years to consolidate.
Still, a partitioned Ukraine will pose real risks. The first
pertains to the Black Sea, where Ukraine has developed
a new export route through the littoral waters of NATO
members to the Bosphorus. Russia is currently deploying
mines in the area and could start to sink ships this year.
Should Moscow mistakenly strike a NATO or Western
vessel, naval warfare between the alliance and Russia
could ensue.
RUSSIA
UKRAINE
Serbia
ROMANIA
POLAND
MOLDOVA
BELARUS
Kyiv
Kherson
Odesa
Izmail
Reni
Donetsk
Zaporizhzhia
Avdiivka
Sevastopol
Luhansk
Kupyansk
Kharkiv
Feodosia
Russian frontline
Ukrainian frontline Russian occupied territory
Source: Rochan Consulting, Eurasia Group
Land war settling into defensive struggle with
static line of control
A de facto partition of Ukraine
is inevitable

13
Diminishing Western support and growing political
infighting will leave Ukraine feeling increasingly desperate,
which will cause President Volodymyr Zelensky to become
more risk-acceptant (please see box in Top Risk #5). He will
turn to asymmetric warfare away from the frontlines in an
attempt to degrade the Russian military, keep Ukraine in
the headlines, and potentially bring NATO into the conflict.
More targeted killings are likely, focusing on individuals
connected to the war and occupation. The Ukrainians
will also launch deep strikes with drones and missiles
in Crimea and Russia targeting military and economic
infrastructure—possibly including Russian oil and grain
facilities on the Black Sea, which would lead to global oil
and food market disruptions. Attacks are also likely on the
Kerch Strait Bridge, Russian railroads, and Russian cities,
which would provoke stepped-up Russian attacks against
Ukrainian cities. The risk of a miscalculation or accident
that results in NATO casualties and draws the United States
more directly into the war will be heightened accordingly.
Tapering US political and material support will deepen a
rift in the transatlantic alliance, which is the cornerstone
of the international system. Europeans view current
and likely future cuts in US assistance to Ukraine as an
Afghanistan 2.0 policy lurch, but with much higher stakes
for European security. Their concern is magnified by
the risk that Trump will try to take the US out of NATO
if he wins in November. Russia’s upper hand will make
the Kremlin feel like it successfully stared down the
West on an existential issue, emboldening Putin to lean
on unsupportive countries in the EU and NATO (such as
Hungary and Slovakia) and driving further division.
A partitioned Ukraine will also undermine US credibility
on the global stage. The United States made a major
security commitment to help Ukraine protect itself and
regain its land for “as long as it takes.” Domestic politics is
leading the US to renege on this commitment, worsening
the image of the US as an unreliable partner (please see Top
Risk #1). Rogue and revisionist states will be emboldened
accordingly (please see Top Risk #5). What’s more, the war’s
trendline will make Ukraine a political loser for Biden
during an election year, giving Trump a boost. A Trump win
would accelerate this decline in US credibility.
Diminishing Western support and growing political infighting
will leave Ukraine feeling increasingly desperate

14
4 Ungoverned AI
Gaps in AI governance will become evident in 2024 as regulatory efforts falter, tech companies
remain largely unconstrained, and far more powerful AI models and tools spread beyond the
control of governments.
Last year brought a wave of ambitious AI initiatives, policy announcements, and proposed new standards, with
cooperation on unusual fronts. America’s leading AI companies committed to voluntary standards at the White House.
The United States, China, and most of the G20 signed up to the Bletchley Park Declaration on AI safety. The White House
issued a groundbreaking AI executive order. The European Union finally agreed on its much-heralded AI Act. And the
United Nations convened a high-level advisory group (of which Ian is a member).
But breakthroughs in artificial intelligence are moving much faster than governance efforts. Four factors will contribute
to this AI governance gap in 2024:
1) Politics. As governance structures are created, policy or institutional disagreements will cause them to limit their
ambitions. The lowest common denominator of what can be agreed politically by governments and what tech companies
don’t see as a constraint on their business models will fall short of what’s necessary to address AI risks. This will result
in a scattershot approach to testing foundational AI models, no agreement on how to deal with open source vs. closed
source AI, and no requirements for assessing the impact of AI tools on populations before they are rolled out. A proposed
Intergovernmental Panel on Climate Change (IPCC)-style institution for AI would be a useful first step toward a shared
global scientific understanding of the technology and its social and political implications, but it will take time … and is
not going to “fix” AI safety risks on its own any more than the IPCC has fixed climate change.

15
2) Inertia. Government attention is finite, and once AI is
no longer “the current thing,” most leaders will move on
to other, more politically salient priorities such as wars
(please see Top Risks #2 and #3) and the global economy
(please see Top Risk #8). As a result, much of the necessary
urgency and prioritization of AI governance initiatives will
fall by the wayside, particularly when implementing them
requires hard trade-offs for governments. Once attention
drifts, it will take a major crisis to force the issue to the
fore again.
3) Defection. The biggest stakeholders in AI have so
far decided to cooperate on AI governance, with tech
companies themselves committing to voluntary standards
and guardrails. But as the technology advances and its
enormous benefits become self-evident, the growing lure
of geopolitical advantage and commercial interest will
incentivize governments and companies to defect from
the non-binding agreements and regimes they’ve joined
to maximize their gains—or to not join in the first place.
4) Technological speed. AI will continue to improve
quickly, with capabilities doubling roughly every six
months—three times faster than Moore’s law. GPT-5, the
next generation of OpenAI’s large language model, is
set to come out this year—only to be rendered obsolete
by the next as-of-yet inconceivable breakthrough in a
matter of months. As AI models become exponentially
more capable, the technology itself is outpacing efforts to
contain it in real time.
Which brings us to the core challenge for AI governance:
Responding to AI is less about regulating the technology
(which is well beyond plausible containment) than
understanding the business models driving its expansion
and then constraining the incentives (capitalism,
geopolitics, human ingenuity) that propel it in potentially
dangerous directions. On this front, no near-term
governance mechanisms will come close. The result is an
AI Wild West resembling the largely ungoverned social
media landscape, but with greater potential for harm.
Two risks stand out for 2024. The first is disinformation. In
ayearwhenfourbillionpeopleheadtothepolls,generative
AI will be used by domestic and foreign actors—notably
Russia—to influence electoral campaigns, stoke division,
undermine trust in democracy, and sow political chaos
on an unprecedented scale. Sharply divided Western
societies, where voters increasingly access information
from social media echo chambers, will be particularly
vulnerable to manipulation. A crisis in global democracy
is today more likely to be precipitated by AI-created and
algorithm-driven disinformation than any other factor.
Beyond elections, AI-generated disinformation will also
be used to exacerbate ongoing geopolitical conflicts such
as the wars in the Middle East and Ukraine (please see
Top Risks #2 and #3). Kremlin propagandists recently
used generative AI to spread fake stories about Ukrainian
President Volodymyr Zelensky on TikTok, X, and
other platforms, which were then cited by Republican
lawmakers as reasons not to support further US aid to
Ukraine. Last year also saw misinformation about Hamas
and Israel spread like wildfire. While much of this has
happened without AI, the technology is about to become
a principal risk shaping snap policy decisions. Simulated
pictures, audio, and video—amplified on social media
by armies of AI-powered bots—will increasingly be used
by combatants, their backers, and chaos agents to sway
public opinion, discredit real evidence, and further
inflame geopolitical tensions around the world.
The second imminent risk is proliferation. Whereas AI
has thus far been dominated by the United States and
China, in 2024 new geopolitical actors—both countries
and companies—will be able to develop and acquire
breakthrough artificial intelligence capabilities. These
include state-backed large-language models and advanced
applications for intelligence and national security use.
Meanwhile, open-source AI will enhance the ability of
rogueactorstodevelopandusenewweaponsandheighten
the risk of accidents (even as it also enables unfathomable
economic opportunities).
AI is a “gray rhino,” and its upside is easier to predict than
its downside. It may or may not have a disruptive impact
on markets or geopolitics this year, but sooner or later it
will. The longer AI remains ungoverned, the higher the
risk of a systemic crisis—and the harder it will be for
governments to catch up.
Breakthroughs in artificial
intelligence are moving much
faster than governance efforts

16
*not yet formally signed off and will not apply in full until 2026
Source: Eurasia Group
Technological breakthroughs moving faster than governance efforts
15 August
Cyberspace Administration of China Generative AI Measures
June 2018
GPT-1
1 November
Bletchley Declaration on AI safety
30 October
US Executive Order of the Safe, Secure, and Trustworthy
Development and Use of Artificial Intelligence
8 December
EU AI Act*
21 December
UN AI Advisory Body interim report
Hiroshima Process International Guiding
Principles for Advanced AI systems
Technical
developments
Policy
developments
2021 2022 2023 2024
5 January
DALL-E
14 March
GPT-4
18 July
Llama 2
6 December
Gemini
24 February
LLaMA
30 November
ChatGPT
22 August
Stable Diffusion
12 July
Midjourney
18 July
UN Security Council special meeting on AI

17
5 Axis of rogues
Russia, North Korea, and Iran are the world’s most powerful rogue states. And they have been
working to strengthen their cooperation since Russia invaded Ukraine in February 2022,
united by the draconian sanctions levied against them, their shared hatred of the US, and
their willingness to violate international law to disrupt a global status quo they believe serves
Western interests at their expense. They are agents of chaos in today’s geopolitical order, bent
on undermining existing institutions and the governments and principles that uphold them.
Once seen by Russia as a nuisance at best and a liability at worst, North Korea has become an essential resource for
Vladimir Putin’s war effort in Ukraine thanks to its pariah status, militarized economy, and large stocks of Soviet-standard
artillery ammunition. Meeting in Russia’s Far East in September 2023, Kim Jong-un and Putin struck a deal that sends
North Korean artillery shells, rockets, and ballistic missiles to Russia in exchange for Russian food, energy, and—most
importantly—technological assistance, especially on satellite development and deployment.
Russia and Iran, longtime partners in a bid to protect Bashar Assad’s regime in Syria, have also upgraded their relationship
from a limited tactical alliance to a more comprehensive and strategic military and economic partnership. Tehran has
supplied Moscow with kamikaze drones to terrorize Ukrainian cities—now also being built in Russia—and drawn on its
decades of experience to help Moscow evade Western sanctions. For its part, Russia has become Iran’s chief external
weapons supplier, its top source of foreign investment, and a key trading partner. Moscow also provides diplomatic cover
for Tehran’s nuclear program at the UN Security Council and has developed warm relations with Iranian proxies at war
with the US and Israel in the Middle East.

18
While less prominent than Russia’s bilateral ties within the
axis, North Korea and Iran have a decades-long history of
cooperation on nuclear and ballistic missile development.
This cooperation has reportedly extended to North Korea
supplying weapons and missile designs to Hamas, the
Houthis, and other Iranian-backed militant groups.
In 2024, deeper alignment and mutual support among
these rogue states will pose a growing threat to global
stability as they boost one another’s capabilities and act
in increasingly coordinated and disruptive ways on the
global stage.
Russia will be the primary driver of risk as it seeks to
bolster its warfighting capabilities in Ukraine while
working to deflect Western attention elsewhere. In
exchange for North Korean artillery shells and rockets
to sustain its war of attrition, Moscow will provide
Pyongyang with technologies and know-how to advance
its missile, submarine, and satellite programs, with
major repercussions for Northeast Asian security. And
in exchange for stepped-up provision of Iranian drones,
munitions, sanctions relief, and ballistic missiles with
which to strike Ukrainian cities, Moscow is poised to
supply Tehran with fighter jets and advanced weapons
technology. Along with growing Russian support for Iran’s
proxies, this will alter the regional balance of power in
Iran’s favor at a time whenTehran and its proxies represent
a much more direct security challenge to the West (please
see Top Risk #2). Both bilateral deals would strengthen
Russia’s hand in Ukraine and increase the war’s damage
and costs (please see Top Risk #3).
The severity of existing Western sanctions against all
three rogue states and the close cooperation among
them means they will not be deterred by fear of further
sanctions and isolation. This will unleash them to wage
asymmetric warfare short of direct military attacks on
the US and Europe, including via cyberattacks, support
for terrorism, and disinformation campaigns designed
to disrupt elections and sow chaos. More generally, the
axis’s coordinated sanctions-busting and rule-breaking
will undermine the compellent and deterrent power of
Western sanctions, emboldening other would-be rogues.
It bears noting that China is not a member of the axis
of rogues. Beijing did not openly condemn Russian
aggression in Ukraine, but neither did it endorse the
invasion or do much to help Putin’s war effort beyond
purchasing discounted oil and allowing flows of dual-use
goods to continue. (If India and the UAE were less friendly
to the United States, analysts would be likening their
Russia policies to China’s.) Beijing has looked on warily at
the deepening security cooperation between Moscow and
Pyongyang—indeed, Chinese officials didn’t know Kim was
going to Russia until after it was publicly announced …
and they were piqued by it. And while it has ramped up oil
imports from and diplomatic support for Tehran, Beijing
has no desire to jeopardize its more strategically important
interests in the Gulf (particularly its ties with Saudi Arabia
and the United Arab Emirates) by helping Iran make
regional trouble.
That said, China is often well-served by the three rogues’
anti-Western operations and maintains a de facto policy of
pro-axis neutrality. Indeed, without active acquiescence
from China, the axis’s rogue activities would be less
impactful. Short of violating international sanctions or
jeopardizing its own interests, expect Beijing to continue
todobusinesswithandlegitimizetheaxisasitundermines
the US and its allies this year.
The world’s most powerful rogue
states have been working to
strengthen their cooperation since
Russia invaded Ukraine
6,000
Iranian drones constructed
at a facility in Russia
by mid-2025
3,700
Shahed drones used
so far in the war
(Ukrainian military estimate)
2 million
rounds of
North Korean
artillery
(ROK estimate)
400,000
rounds of
North Korean
rockets
(ROK estimate)
5,000
containers of military equipment
have traveled from North Korea
to Russia since August
RUSSIA
IRAN
NORTH
KOREA
Source: YonhapNews, CNBC, Washington Post, Reuters
Aiding and abetting

19
Three caveats are in order. First, Russia, Iran, and North
Korea leaning on each other is a sign of their desperation
and weakness on the global stage. When your best (and
near only) friends are two rogue states, you’re in trouble.
Second, all of them seek to avoid an active shooting war
with the West, which means continued caution when
escalating direct attacks on the United States or its core
allies. And third, despite their common interest in
sowing chaos, dictators have trouble trusting each other,
making the entente a fragile one. This axis is a marriage
of convenience and opportunity; its members are neither
strategic nor ideological bedfellows—they are focused
primarily on regime survival and geopolitical gain. As
such, their relationships will remain largely transactional.
Still,thedisruptivepotentialoftheirgrowingcooperation—
especially with a boost or at the very least a blind eye from
Beijing—should not be underestimated.
Deeper alignment and mutual support among these rogue
states will pose a growing threat to global stability

20
America’s dangerous friends
America’s enemies are becoming more dangerous, but
even its friends could drag it into expanded conflicts
this year.
Volodymyr Zelensky. President Joe Biden has been
Ukraine’s staunchest supporter since Russia’s invasion
in February 2022. Having pledged to stay by Kyiv’s side
“as long as it takes,” he has shepherded $113 billion in
militaryandotheraidthathasprovenvitaltoUkrainians’
ability to defend themselves. Biden has done this even
though he neither likes nor trusts President Zelensky.
However, political support for Ukraine within the
US has wavered as the war has dragged on, seriously
undermining Biden’s ability to keep the aid coming past
thisyear.AndifDonaldTrump—whoconsidersZelensky
a personal adversary—wins in November, Ukrainians
can wave goodbye to their biggest backer (please see
Top Risk #1). Cracks have also emerged within Ukraine,
where infighting between Zelensky and Chief of the
Armed Forces Valery Zaluzhny (over military strategy)
as well as Kyiv Mayor Vitali Klitschko (over Zelensky’s
allegedly authoritarian leadership) has spilled into the
open, threatening Ukrainian political unity and fueling
more skepticism among Kyiv’s friends.
Under pressure domestically and frustrated with both
diminishing US support and increasing difficulties on
the battlefield, a desperate Zelensky will be willing to
take bigger risks to turn the war around and maintain
his political standing before Trump potentially takes
office (please see Top Risk #3). This includes more
aggressive attacks against targets in Russia, Crimea,
and the Black Sea, threatening a response from Russia
and potentially forcing the United States to become
more directly involved in the war.
Benjamin Netanyahu. Israel is America’s closest ally in
the Middle East, the only democracy in the region, and
the largest cumulative recipient of US foreign aid. It is no
surprise that Biden—a self-described Zionist and longtime
Israel supporter—strongly backed Israel’s initial response
to Hamas’s 7 October attacks, despite his complicated
relationship with Prime Minister Benjamin Netanyahu.
Since then, however, a public rift has opened between the
twoovertheconductandendgameofthewarinGaza.They
are also at odds about the role the Palestinian Authority
should play in Gaza’s postwar governance as well as the
viability of a two-state solution. Fundamentally, Biden
wants to see the war end, while Netanyahu has political
and personal reasons to keep it going or even escalate it.
Determined to stay in power and out of jail and
emboldened by the possibility that his friend Trump
returns to power in January 2025, Netanyahu will push
back against pressure from Biden to end the war. He
will ignore calls for restraint in Gaza while eyeing more
conflict with Hezbollah in the north (please see Top
Risk #2). He will also continue to inflame tensions in the
West Bank and thwart any efforts to create a Palestinian
state in the future. As a result, the United States will be
inextricably tied to an intensifying conflict over which
it has limited influence—one that will further strain US
relations with the Arab world, the Global South, and
even some allies, as well as create political challenges for
Bidenathome.ShouldNetanyahudecidetopreemptively
strike Hezbollah or even Iran itself, the US would find
itself drawn into a much broader Middle East war.
William Lai. Washington’s long-standing “one China”
policy and its security cooperation with Taiwan have
been critical to deterring both a Chinese invasion and
a declaration of independence from Taipei. Although
Biden has repeatedly said the US would defend Taiwan
against a Chinese attack, “strategic ambiguity” remains
the official stance, and the president has no desire to
risk a crisis with Beijing over the island. But the uneasy
status quo in the Taiwan Strait will soon be tested if
Taiwan elects Vice President William Lai, the ruling
party candidate whom China views as the most pro-
independence Taiwanese leader in a generation, as
president (and his running mate Hsiao Bi-khim, Taiwan’s
former representative to the US, as vice president).
While Biden will oppose any de jure independence
moves from Lai, the domestic politics of the Taiwan
issue will prevent the US president from objecting to the
smaller, symbolic steps toward de facto autonomy Lai is
likely to take. Yet even these will be enough to provoke a
beyond-precedent military response from Beijing, such
as violating Taiwan’s airspace or waters or conducting
ship inspections. Biden will be forced to respond to
Chinese aggression with a show of resolve in support for
Taipei that could jeopardize the US-China thaw and risk
a dangerous cycle of escalation.
Ukraine, Israel, and Taiwan will all continue to be major
US allies. But their leaders’ pursuit of their national—and,
occasionally, personal—interests will further entangle
Washington in growing conflicts.

21
6 No China recovery
Any green shoots in the Chinese economy will only raise false hopes of a recovery as economic
constraints and political dynamics prevent a durable growth rebound. Consolidation of power
at the top (Eurasia Group’s Top Risk #2 for 2023) has snuffed out policy debate and animal spirits
just as China’s past growth engines have been exhausted, and there is little the government will
do to reverse either trend. Beijing’s failure to address the country’s sputtering growth model,
financial fragilities, insufficient demand, and crisis of confidence will expose gaps in the
legitimacy of the Chinese Communist Party (CPP) and increase the risk of social instability.
We’ve already seen warning signs of deepening malaise emerge in 2023, from the exit of foreign investors and Moody’s
outlook downgrades to stalled property purchases and a stock market slump. This year, appetite to re-invest in the
country will continue to be dampened by vague and conflicting policy signals, growing concerns about geopolitical
risk, and the CCP’s ongoing regulatory crackdowns.
The persistence of constraints such as unfavorable demographics, eroding labor cost advantages, high indebtedness
(particularly at the local level), Western “de-risking” efforts, and continued reliance on state investment for growth
will further diminish hopes of a resurgent Chinese economy. While Beijing will try to restore confidence and prop up
demand by throwing more money at the problem—building yet more infrastructure to meet its likely 5% growth target
(again) for 2024—its efforts will have limited impact in the absence of a true shift toward bold reform.

22
Four additional economic factors will impede a recovery
in 2024:
1) Fading zero-Covid rebound. The tailwind from
last year’s reopening will disappear as slowing income
growth, higher unemployment, local government fiscal
consolidation, falling property prices, and cascading
defaults weigh on confidence and consumption.
2) Real estate weakness. Previously a pillar of China’s
economy,therealestatesectorwon’tprovideamuchhoped-
for boost despite recent stabilization efforts, with new
construction remaining anemic owing to weak homebuyer
demand and slumping land purchases by cash-strapped
property developers over the past two years.
3)Lowexternaldemand.InternationaldemandforChinese
exports, especially from the US and Europe, will prove less
resilient than in 2023, constrained by high interest rates
and slow global growth (please see Top Risk #8).
4) Government economic response. Beijing’s whack-
a-mole approach to emerging episodes of financial
stress such as developer defaults and bank collapses (as
opposed to larger-scale, more preemptive reform) will sap
confidence and test the government’s already-stretched
administrative capacity.
Then there’s politics. President Xi Jinping’s concentration
of power and prioritization of security over growth will
not only weigh on consumer, business, and investor
confidence, but it will also make the regime slower to
respond to rising economic and financial vulnerabilities.
This doesn’t mean that China faces an imminent crisis.
Rather, these conditions will entrench the country’s
economic malaise and expose cracks in the CCP’s veneer
of competence and legitimacy.
Absent an unlikely loosening of Xi’s grip or a radical pivot
toward large-scale consumer stimulus and structural
reform that restore confidence and reignite growth, China’s
economy will underperform throughout 2024. While the
CCP’s rule is stable, there remains a longer-term risk that
Beijing will react too slowly to warning signs of financial
contagion and social unrest, increasing the chances that
the government could one day lose control of both.
Absent an unlikely loosening of Xi’s grip or a radical pivot
toward bold reform, China’s economy will underperform
Source: Eurasia Group, Macrobond. NBS
Key economic indicators on downward trajectory
Consumer confidence index Foreign direct investment (USD billion)
Stock market Housing starts
(billion, residential housing measured in floor space area)
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
122.3
87.0
51.67
1.411
0.759
56.0
100.6
2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023
-65.09

23
7 The fight for critical minerals
In 2024, governments around the world will take protectionist measures that disrupt the flow
of critical minerals, increasing price volatility and reshaping downstream supply chains.
Critical minerals sit upstream of virtually every sector that will drive growth, innovation, and national security in the
21st century, from clean energy to advanced computing, biotechnology, transportation, and defense. Extraction of these
essential raw materials is asymmetrically distributed across geographies, with single countries mining at least half of the
world’s lithium (Australia), cobalt (the Democratic Republic of Congo), nickel (Indonesia), and rare earth elements (China).
Meanwhile, around 60% to 90% of most critical minerals are processed and refined in China.
Thehighlyconcentratednatureofcriticalmineralmining,processing,andrefiningmakesmineralsupplychainsvulnerable
to bottlenecks and chokepoints. But not all critical minerals are created equal. Some like gallium and germanium—used
in semiconductors and solar panels—can be partly swapped for other elements in the event of a supply crunch. Yet others
like lithium and graphite—“battery metals” essential to the production of electric vehicles—are less substitutable. The most
vulnerable supply chains are for the niche, illiquid, and Chinese-dominated rare earth metals such as neodymium and
dysprosium, required in everything from consumer electronics to high-tech defense applications.
Demand for critical minerals has surged in recent years as advanced economies such as the United States and the European
Union have begun subsidizing domestic manufacturing to boost their advanced computing and clean energy sectors amid
their growing tech competition with China. Yet these countries’ ability to meet the surging demand for minerals created
by these industrial policies is being complicated by their dependence on Chinese-controlled minerals. That is a strategic
vulnerability so deep that the Pentagon has taken the unprecedented step of directly financing mining and refining
operations. US-aligned nations have also entered into multilateral deals such as the Minerals Security Partnership intended
to scale up supplies domestically and from friendly trade partners. In both cases, however, long lead times for new mining

24
and refining projects ensure these efforts won’t fix their
supply vulnerabilities soon.
Makingmattersworseforthemselves,theUSandtheEUhave
also enacted import restrictions in an attempt to reduce their
dependence on China and promote cleaner supply chains.
The problem with this strategy is that stringent mineral
origin mandates in the US and clean supply chain laws in
Europe—the former focused on national security and the
latter on human rights, environmental, and sustainability
standards—limit their procurement of critical minerals
to geopolitically acceptable sources, exacerbating supply
challenges and increasing price volatility.
As the US and Europe scramble to secure minerals, the
governments of many producer nations are imposing a
growing number of export restrictions on these minerals.
Nations sitting atop raw material deposits—largely but
not exclusively developing countries—see a once-in-a-
generation opportunity to leverage their position in the
world’s most important supply chains to attract investment,
create jobs, retain profits, move up the value chain, and
gain foreign policy leverage. These include established
critical minerals players such as Australia, Canada, Chile,
the Democratic Republic of Congo, Indonesia, and Zambia,
as well as countries with underdeveloped mineral deposits
in sub-Saharan Africa, South Asia, and the Middle East.
Many of them have begun and will continue to impose
export measures on raw mineral ores that create market
inefficiencies,increasepricevolatility,andriskundermining
private investment and production. Most consequentially,
China is fine-tuning an export control regime to weaponize
its mineral dominance in the hopes of gaining leverage in
its expanding tech competition with the United States and
its allies. Last year, Beijing imposed export restrictions on
gallium, germanium, and graphite, and in late December
the government enacted export bans on machinery used to
refine and separate rare earth elements.
This year, competing pressures from critical minerals
importers and exporters will become acute as governments
intensifytheiruseofindustrialpoliciesandtraderestrictions.
On the importer side, a wave of new EV gigafactories will
come online across North America and Europe in 2024 with
operations that are subject to strict sourcing requirements.
The new US Treasury rules that took effect on 1 January
enforcing restrictions on subsidy eligibility for EV supply
chains, aimed squarely at countering Beijing’s dominance
of battery metal supply chains, will test America’s ability to
procure non-Chinese minerals and related products.
On the exporter side, China will begin enforcing the export
licensing requirements for graphite it set up last year
in response to US export controls on its semiconductor
industry. Rare earth elements could be next. President Joko
Widodo (Jokowi) could extend Indonesia’s banner export
restrictions on nickel to other metals such as copper in the
run-up to this year’s presidential election; while Jokowi is
not running again, the frontrunner in the race to succeed
him, Prabowo Subianto, would further Jakarta’s resource
nationalism if elected. And in sub-Saharan Africa, Tanzania
will enact a ban on raw lithium exports, Nigeria will enforce
the export ban on mineral ores it passed last year, and Ghana
will consider similar policies. These moves will restrict the
flow of critical minerals and could disrupt important supply
chains, such as those of Western EV battery manufacturers
in the event of a Chinese graphite export ban.
Critical minerals importers and
exporters will intensify their use
of industrial policies and trade
restrictions
Note: Export measures include bans, quotas, licensing, and subsidies. Critical minerals refer to 51 commodities defined as such by IRENA's compilation of 35 national critical minerals lists.
Analysis may include mineral by-products like oxides.
Source: Eurasia Group, Global Trade Alert, International Renewable Energy Agency (IRENA)
Export interventions are surging for critical minerals
Total export-related measures on critical minerals
0
20
40
60
80
100
120
140
160
180
200
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

25
8 No room for error
The global inflation shock that began in 2021 will continue to exert a powerful economic
and political drag in 2024. High interest rates caused by stubborn inflation will slow growth
around the world. With macroeconomic policy buffers largely exhausted, governments will
have limited scope to stimulate growth or respond to shocks, heightening the risk of financial
stress, social unrest, and political instability.
While 2023 saw a significant deceleration in inflation and the end of the monetary tightening cycle, global interest rates
remain highly restrictive. Despite expectations of a substantial easing in monetary policy, persistently above-target
inflation will lead central banks to keep interest rates high in 2024. Their efforts to cool inflation without sparking a
recession will be hindered by inflationary pressures over which they will have no control: The ongoing war in Ukraine
will keep commodity prices high and volatile (please see Top Risk #3), the ongoing war in the Middle East will raise
freight costs and disrupt global supply chains (please see Top Risk #2), and El Nino will threaten food prices (please see
Top Risk #9). Moreover, political and geopolitical calculations by major oil producers will keep oil prices—which usually
act as a countercyclical stabilizer in times of low growth—relatively elevated, while industrial policies aimed at boosting
national security and supply chain resilience will lead to growing geoeconomic fragmentation and higher prices.
Sticky inflation and tight financial conditions will weaken global demand and exacerbate economic insecurity. Faced
with persistent inflationary pressures and rising debt-servicing costs, households and firms will retrench. Fiscal
policymakers—especially those under pressure from market stress—will be reluctant to step in, instead focusing on
reducing public spending after several years of pandemic-related deficits. Chinese growth, once a safety net during
global downturns, will remain too weak to fill the gap (please see Top Risk #6). As a result, much of the world will
experience subdued growth, and many countries will dip into recession.

26
With policy space already diminished by the pandemic
response, “de-risking” efforts, the energy transition,
the Russia-Ukraine war, and soaring interest costs, any
additional negative supply shocks would prompt central
banks to tighten rather than ease monetary policy to rein
in inflation expectations, depressing growth further. At
the same time, widening political divisions within many
countries and geopolitical tensions among them will
reduce the scope for domestic crisis response and global
policy coordination.
These economic headwinds will deepen voter discontent
in a year when two-thirds of adults in the democratic
world will go to the polls, hurting weak incumbents
and boosting populist challengers. In the United States,
despite improving economic fundamentals, negative
perceptions of the economy will be a drag on President
Joe Biden’s reelection bid, while in the United Kingdom,
the Conservative Party is set to be voted out on the back
of weak growth. In South Africa, meanwhile, the ruling
African National Congress faces the prospect of losing its
parliamentary majority for the first time since the end of
apartheid thanks to a chronically weak economy.
In countries without scheduled elections in 2024, a
shrinking economic pie will cause fiercer fights over the
distribution of scarce resources, leading to social unrest
and political instability. Those with the lowest growth
rates, highest debt levels, and most divisive politics will
be most vulnerable. Some governments will be under
intense pressure to enact fiscally unsustainable populist
or heterodox policies, in turn exacerbating their inflation
and debt problems. In Nigeria, popular discontent will
undermine the government’s ability to advance reform
priorities such as removing fuel subsidies and introducing
more flexibility in the foreign exchange market. In Brazil,
a slowing economy and faltering government approval
ratings will prompt President Luiz Inacio Lula da Silva to
weaken the country’s fiscal framework. And having just
been elected to implement radical changes, Argentina’s
President Javier Milei will struggle to address deep
economic imbalances amid mounting social backlash.
Heightened economic, financial, and political strain will
provoke debt distress in emerging and frontier economies
with the least capacity to respond. In addition to those
already undergoing debt restructurings—Zambia, Ghana,
Sri Lanka—borrowers such as Pakistan and Egypt could
be forced to default on their debts. The largest creditor
nations, most notably China, will be reluctant to provide
meaningful multilateral debt relief. Developed markets
with high debt levels such as Italy and Canada, meanwhile,
will also face fiscal and financial strain in this environment.
Although they will have enough economic and political
capacity to address these challenges, rising debt service
costs will crowd out spending on public goods.
While financial markets proved resilient in 2023,
persistently high interest rates, tepid growth, and
exhausted buffers will heighten the risk that something
breaks. Last year’s bond market volatility and the banking
crisis triggered by the collapse of Silicon Valley Bank
could return, or other interest rate-sensitive markets such
as real estate, corporate debt, and insurance could face
real stress. With growth subdued and policy set to remain
tight, further accidents are bound to happen.
Persistently above-target inflation will lead
central banks to keep interest rates high in 2024
end-2021 to end-2023 (lhs)
Source: Eurasia Group, Macrobond, BIS
High post-Covid debt levels set to collide with much higher interest rates
Non-financial sectors debt (% GDP) and policy rates
Corporate debt (rhs)
Household debt (rhs) Government debt (rhs)
Policy rate range:
0
50
100
150
200
250
300
350
400
450
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
Japan
France
Canada
China
Greece
US
Italy
Euro
Area
UK
Germany
India
Brazil
South
Africa
Mexico
Percent Percent

27
9 El Nino is back
After a four-year absence, a powerful El Nino climate pattern will peak in the first half of this
year, bringing extreme weather events that will cause food insecurity, increase water stress,
disrupt logistics, spread disease, and fuel migration and political instability.
El Nino is a predictable pattern that increases the frequency and magnitude of extreme weather events such as heat
waves, droughts, storms, and floods due to higher global temperatures stemming from warmer currents and winds in the
Pacific Ocean. The last time a strong El Nino occurred (in 2016), it contributed to making that year the hottest on record.
Since then, however, baseline temperatures have increased further owing to climate change. With El Nino peaking in
the first half of the year and its effect on global temperatures lagging by a few months, 2024 will likely set a new record.
El Nino will affect much of the world, but countries in the Indo-Pacific, Latin America, and Southern Africa will be
hit hardest. South and Southeast Asia, Central America, northern South America, and Australia all risk prolonged dry
periods and record high temperatures, increasing the likelihood of unusually severe and widespread drought. In Brazil,
dry conditions in parts of the country will exacerbate the risk of fires, accelerating deforestation and threatening sources
of fresh water and hydroelectric power generation. The northern US and Canada are also likely to experience warm, dry
weather, leading to elevated forest fire risk after an unprecedented 2023 season that saw fires rip through Canadian forests
and blanketed New York under a thick cloud of smoke. Further south, increased rainfall could cause flash flooding in
California after years of drought, while the Southeastern US is also expected to see higher than normal rainfall. Eastern
Africa will face a higher risk of flooding in the eastern Horn and of drought further inland, while Southern Africa could
experience elevated temperatures and increased drought.

28
In some regions, extreme weather caused by El Nino will
threaten agricultural production, leading to potentially
severe disruptions in food supplies. In South and
Southeast Asia, poor harvests of rice, wheat, corn, palm
oil, sugar, and coffee would be especially disruptive, given
already high food prices. Drought in Southern Africa
would particularly affect South Africa, Zimbabwe, and
Mozambique, the region’s largest agricultural producers
of wheat and corn, while droughts in Brazil and Australia
could further constrain supplies of wheat, corn, and rice.
Livestock and fisheries will be exposed to an increased
risk of serious losses owing to severe weather.
Localized disruptions to food supplies in some regions
will increase food prices, heighten food insecurity, and
provoke unrest. Though some global staple prices have
retreated from recent highs, renewed price pressures will
drive social and political instability in countries where
food prices remain elevated, such as Pakistan, Sri Lanka,
the Philippines, Indonesia, and Malaysia. High food prices
will also increase instability in regions such as North
Africa and the Middle East that are heavily dependent on
food imports, with Egypt, Tunisia, and Lebanon among
the most vulnerable countries.
El Nino will increase water stress in regions with a high
concentration of water-intensive industries—a global risk
we highlighted last year that El Nino is set to exacerbate.
Droughts will make the logistics of river and canal
transport more challenging. Even lower water levels in
the Panama Canal will more dramatically disrupt one of
the world’s busiest shipping hubs. Reduced hydroelectric
and nuclear power generation are a related concern,
especially in parts of South America, South and Southeast
Asia, Europe, and East Africa. Lastly, competition over
sharedwaterresourceswillintensifybetweenneighboring
countries such as Ethiopia and Sudan, India and China,
and India and Pakistan.
El Nino will also increase the chance of natural disasters
caused by extreme weather events such as fires, cyclones,
landslides, and floods. These occurrences will bring
downside risk for homes, businesses, and infrastructure,
with important implications for a global insurance
industry already reeling from the consequences of climate
change. In some inundated areas, tropical diseases will
become more frequent, with a heightened risk of spikes
of cholera in East Africa and dengue fever in South and
Southeast Asia and Central and South America.
The combination of food insecurity, water stress, and
natural disasters will put the most pressure on countries
with limited adaptation capabilities—many of them already
suffering from elevated political and economic fragility.
This will threaten lives and livelihoods among the most
vulnerable populations in the most vulnerable countries,
driving internal migration (in Africa, Asia, and the Middle
East) and cross-border refugee flows (in the Americas).
Extreme weather caused by El Nino will threaten
agricultural production and food prices
Source: NOAA NCEI
2023 was the hottest year on record entering a strong El Nino
Difference from 1901-2000 average global temperature (o
C)
-0.3
0.0
0.3
0.6
0.9
1.2
1.5
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
2023
2015
2009
1997
1991
1987
1982
1957
1972
1965

29
10 Risky business
Two years ago, we warned that customers, employees, and investors—mostly on the left—were
bringing the US culture wars to corporate boardrooms (please see Eurasia Group’s 2022 Top
Risk #9). That’s still happening.
Since then, courts, governors, state legislatures, and activist groups—mostly on the right—have started to punch back. In
2021, Texas banned state investment funds from working with financial firms that boycott fossil fuel companies to comply
with ESG standards. In 2022, Florida revoked Disney’s long-standing special tax status in retribution for the company’s
criticism of the “Don’t Say Gay” law signed by the state’s Republican governor. In 2023, conservatives nationwide launched
a boycott of Bud Light after transgender influencer Dylan Mulvaney promoted the beer on Instagram, causing sales to
plummet and forcing out two senior executives. The year closed with a knock-down fight against elite university presidents
over their response to campus activism, antisemitism, and the Israel-Hamas war.
America’s growing political polarization is fragmenting the internal market along party lines. Red and blue states
increasingly diverge on issues as varied as LGBTQ rights, education policy, and even whether companies can require on-
site employees to be vaccinated, making it costlier for companies to operate in all states. Last March, for example, after
Walgreens decided it would not distribute the abortion pill mifepristone, California Governor Gavin Newsom announced
his state would no longer do business with the pharmacy chain (though he could not ultimately follow through on the
threat). A couple of months later, seven Republican state attorneys-general sent a letter to Target warning that the retailer’s
Pride Month merchandise could violate their states’ child protection laws. Since 2021, 18 states have passed laws or issued
orders to ban or limit the teaching of race, gender, and sexuality issues in schools.
This year, as the November elections approach, Donald Trump’s megaphone grows louder, and new fronts open in
America’s culture wars, conservatives will continue to jettison their free-market instincts in favor of retaliatory, “anti-

30
woke” political activism, doubling down on their use of
state legislatures and the courts to assert states’ rights
over federal regulatory authority.
For instance, last year’s ruling by the US Supreme Court
banning affirmative action in university admissions opened
thedoorforconservativepoliticians,activists,andattorneys-
general to ramp up legal challenges against corporate
diversity, equity, and inclusion programs. Groups such as
the National Center for Public Policy Research and America
First Legal are already filing shareholder complaints and
bringing lawsuits against major corporations such as
Starbucks and McDonald’s. Legal battles will also play out
across states over transgender protections, environmental
regulations, abortion restrictions, gun control, and other
hot-button issues. As the Supreme Court continues to rule
in ways that shift decision-making authority toward states
(such as in the Dobbs v. Jackson Women’s Health decision
on abortion rights) in these and other divisive policy areas,
more legal and regulatory fragmentation will ensue.
Companies will also face growing risks from a widening
red vs. blue divide among America’s state capitals this year
as the shades of each color darken within states and the
number of state government trifectas reaches its highest
level in decades. In 2024, one party or the other will control
the governor’s mansion and both legislative chambers in 40
of the 50 US states, home to about four in five Americans.
In all these states, the same party that holds the trifecta
will also hold the top three executive positions: governor,
attorney general, and secretary of state. This consolidation
of one-party rule will play out in the policy space as
state lawmakers press the advantage conferred by their
dominance to impose maximally conservative or liberal
policies on the nation’s thorniest issues, leaving little
room for bipartisan compromise and deepening policy
polarization even further.
Firms operating in both blue and red states (read: most of
the Fortune 500) will struggle to adopt cohesive nationwide
strategies that satisfy Democrats and Republicans alike.
Increasingly, these companies will face a tough choice:
comply with laws and regulations that offend their
corporate and customer values and risk getting “canceled,”
or exit certain state markets. And with the GDP of some
US states rivaling that of sovereign countries—California’s
economy is larger than the UK’s, Texas’s GDP tops Italy’s,
and New York’s economy is bigger than Russia’s—these are
expensive decisions.
While the decentralization of US politics—and the resulting
free market of political and economic strategies—may
be both a growth driver and a stabilizing feature during
a contentious election year that will result in significant
dysfunction at the federal level (please see Top Risk #1),
companies caught between conservatives and progressives
will nonetheless see their decision-making autonomy
limited and their cost of doing business rise. Forced to
navigate conflicting laws, regulations, and court rulings
across red and blue states, business leaders will find
themselves in a lose-lose environment of higher policy
uncertainty and regulatory risk.
Business leaders will find themselves in a lose-lose environment
of higher policy uncertainty and regulatory risk
Corporate America grappling with competing pressures
Race
Oil
Courts
Environment
Legislation
Texas
Women’s
rights
Florida
New York
DEI
LGBTQ+
California
Gun control

31
RED
HERRINGS
US-China crisis
This year will prove another turbulent one for US-China relations, with several irritants that will threaten to derail the
thaw the two sides established over the course of 2023.
First, if Vice President William Lai wins Taiwan’s presidential election, Beijing will take aggressive military and economic
steps to discourage his pro-independence ambitions. Policymakers in Washington will respond with a show of support
for Taiwan (please see box in Top Risk #5). Second, China’s drive to assert its regional interests will continue to produce
close encounters with US military assets in or above the Taiwan Strait and the South China Sea. Third, tech competition
between the US and China will continue apace asWashington expands restrictions on China’s semiconductor and artificial
intelligence industries while Beijing retaliates with further export controls on critical minerals and green technologies
Yet we expect the US and China to maintain comparatively stable ties in 2024. There are several reasons why.
While committed to “systemic competition,” President Joe Biden’s administration is more immediately determined to
put a floor beneath the relationship and preserve the guardrails established by Biden and Chinese President Xi Jinping at

32
the Woodside Summit. Election-year politics in the US will
limit cooperation and occasionally dial up hostile rhetoric
and actions (please see Top Risk #1). But new diplomatic
and military-to-military channels will help manage
tensions with Beijing.
Beijing’s recent charm offensive—a far cry from the “wolf
warrior” diplomacy of Xi’s first two terms—will continue,
as China’s domestic economic challenges and the
structural issues underpinning them (please see Top Risk
#6) remain defining priorities in 2024 and beyond. The
importance of social and economic stability at home and
the need to ease the fears of foreign investors and trading
partners will continue to override inclinations for a more
pugnacious foreign-policy approach. Moreover, given the
significant uncertainty—and growing concern—about
how Donald Trump might approach US-China relations
in a second term, China’s leadership has incentives to
reinforce engagement while the option is still on the table.
The most important geopolitical relationship in the world
is still fundamentally adversarial and marked by mistrust;
several flashpoints will exacerbate bilateral tension
throughout 2024. But preserving stability is better for
both sides this year, neither of which wants to risk major
decoupling or conflict. The two countries will carefully
manage the relationship’s decline as they weather any
expected turbulence.
Diplomatic rapprochement has buttressed stability, will likely remain a bilateral priority in 2024
US and China restart high-level military dialogue
Yellen gives speech on US-China strategy
highlighting importance of maintaining stability
and avoiding crises
At APEC summit, Biden and Xi pledge increased
cooperation on fentanyl and AI and restoration of
high-level military dialogue
Raimondo and Chinese Commerce Minister Wang
Wentao commit to improving technical discussions
Yellen meets with Chinese Vice Premier He Lifeng
Kerry meets with Chinese counterpart Xie Zhenhua
California Governor Gavin Newsom travels to
China for a series of meetings
Senate Majority Leader Chuck Schumer leads first
congressional delegation to China in several years
Secretary of Commerce Gina Raimondo meets with
Chinese counterparts
US climate envoy John Kerry visits China for talks
on environmental cooperation
Treasury Secretary Janet Yellen meets Premier
Li Qiang, urges “mutually beneficial" economic
relationship
US Secretary of State Antony Blinken kicks off series
of visits, meets with Xi and Foreign Minister Wang Yi
Biden and Xi exchange letters on the 45th
anniversary of establishing diplomatic relations
US and China hold first nuclear arms control talks
in five years
Jun
2023
18-19
2024
Jul
Aug
Oct
Nov
Dec
Jan
27-30
6-9
16-19
9-11
22-29
4-7
6
8-10
16
16
14
21
1
US China Virtual

33
Populist takeover of European politics
A surge in support for far-right and populist parties
within many European countries is fueling concern that
the centrist consensus that has defined Europe’s postwar
order could break down in 2024.
In 2023, Geert Wilders and his Freedom Party secured
mainstream support for the first time to win the Dutch
elections. Robert Fico’s left-wing nationalist Smer came
back to power in Slovakia. Support for the far-right
Alternative for Germany (AfD) surged to record highs.
Far-right and far-left parties in France currently have over
50% support combined. Economic headwinds, migratory
pressures, some Ukraine war fatigue, and intra-EU discord
are kindling fears of a populist sweep at the European
Parliament elections in June.
But Europe’s center will hold in 2024.
Euroskeptic and populist parties should capture around
a quarter of European Parliament seats. An alliance of
Europe’s center-right parties with far-right and populist
parties is politically unlikely. Even if their politics align,
they will not account for a sizable majority in the European
Parliament. Therefore, the traditional European coalition—
comprising the center-right, social democrats, liberals, and
Greens—will maintain power in the EU’s legislature, and
the European Commission (the bloc’s executive) will be
chosen by consensus among centrist candidates.
Hungarian Prime Minister Viktor Orban will continue
obstructingEUdecision-making,butcentristgovernments
in the majority of member states will manage to find
workarounds. Moreover, Orban will no longer have the
support of his crucial former allies in Warsaw after Polish
voters replaced a xenophobic right-wing government with
an EU-friendly centrist one in 2023. Despite pushback
from Hungary and other headwinds, financial support for
Ukraine is likely to be maintained near current levels this
year. Even in countries led by antiestablishment parties,
such as Italian Prime Minister Giorgia Meloni’s Brothers
of Italy, decision-making will remain overwhelmingly
pragmatic—even centrist.
Populists and right-wingers will continue to make gains
and strike fear into the European political establishment.
But limited setbacks for mainstream parties in European
Parliament, national, and local elections will neither
upend the European political order nor fundamentally
derail revamped EU ambitions following the twin crises of
the Covid-19 pandemic and the Ukraine war.
Centrist pro-EU parties will retain a majority
Projected seat distribution following June’s elections for
European Parliament compared to current distribution
(% of seats)
S&D (Left) 21.0
Greens/EFA (Green) 9.6
Renew (Center) 13.8
EPP (Center-right) 26.5
ID (Right) 10.8
Non-inscrits 3.8
GUE/NGL
(Left) 5.7
ECR (Right) 8.8
Current distribution (%)
Current
distribution
Projected
distribution
(Nov 2023)
80.4% 19.6%
74.9% 25.1%
Others
Euroskeptic
right-wing groups
-5.6% +5.6%
S&D (Left) 19.2
Greens/EFA (Green) 6.5
Renew (Center) 13.3 EPP (Center-right) 24.7
ID (Right) 12.8
Non-inscrits 4.7
GUE/NGL
(Left) 6.4
ECR (Right) 12.4
Projected distribution (Nov 2023) (%)
Source: Der Föderalist (dynamic scenario) 6 November.
European Parliament and Eurasia Group
Centrist pro-EU
coalition
Right-wing
euroskeptic

34
BRICS vs. G7
On 1 January, the BRICS welcomed new members Saudi
Arabia, Iran, Egypt, the United Arab Emirates, and
Ethiopia. Some have argued that this expanded BRICS
will become an anti-US counterweight to the G7 and the
West. This view also holds that China will co-opt the
organization, and through it, expand its influence over the
Global South.
We disagree.
The expanded BRICS, like the original organization, will
be a weak group, with much less institutional coherence
than the G7. The group’s original members—China, India,
Russia, South Africa, and Brazil—have little in common
beyond a shared desire to boost their status on the global
stage. They also have dramatically different political and
economic systems. The addition of new members will make
consensus—a requirement for the group to take any action—
even harder to reach than it already is. The expanded BRICS
now includes two pairs of countries that are longtime rivals:
China and India plus Saudi Arabia and Iran.
China will have important influence in the BRICS, to be
sure, but its attempt to co-opt the group won’t work. India
is a critical member—especially and increasingly as a leader
of the Global South—and will oppose most initiatives that
strengthen Chinese clout. Also, most BRICS countries seek
good relations with both the US and China and don’t want
to jeopardize their existing (and in some cases growing)
diplomatic and commercial ties with the G7.Therefore, they
will place limits on Chinese sway.
The BRICS will not emerge as a China-led rival to the G7 this
year—or anytime soon.
China unlikely to lead BRICS
China favorability vs US favorability
Pro-China sentiment
Pro-US sentiment
Source: Pew Research Center
40
50
60
70
80%
2023
2020
2015
2010
2005
30
40
50
60
70
80%
2023
2020
2015
2010
2005
India
Brazil
South
Africa
India
Brazil
South
Africa

We hope you’ll take all this in the spirit it’s intended: We’ve entered a
year of grave concern, but supported by the hope that tough times bring
out the best of us. This isn’t going to be particularly enjoyable, especially
for our fellow citizens here in the United States. It’s personally painful to
watch our country go through a tumultuous time, with those we care about
affected by it. It’s nothing compared to what we’ve been seeing in Ukraine,
Gaza, or South Sudan … and yet for a nation that has spent too much time
presuming “it can’t happen here,” 2024 is a necessary wake-up call.
It’s critical we don’t just talk about these global issues to help make
business and policy decisions, but also to connect with those closest to us.
If we can’t make a difference with those we know and love, we’re lost.
One of us (Ian) just returned from the South Pole. Having the entire world
on my shoulders—even if for just a moment—felt like the right thing to do
to prepare for the year. Antarctica is an entire continent that’s been kept
peaceful and pristine, for humanity and our animal friends, for generations
now. Yeah, we’re melting it. But otherwise, it turns out we can be capable
global custodians when we set our minds to it.
Let’s remember that. Thinking about the year ahead of us, we’re not that
into Mars. We’re focused on doing a better job with the planet we’re on first.
With our best wishes to you for our year ahead,
Ian and Cliff
This material was produced by Eurasia Group for use by the recipient. This is intended as general background
research and is not intended to constitute advice on any particular commercial investment, trade matter, or issue and
should not be relied upon for such purposes. It is not to be made available to any person other than the recipient. No
part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,
electronic or otherwise, without the prior consent of Eurasia Group. Photo credit: Reuters, Getty
© 2024 Eurasia Group, 149 Fifth Avenue, 15th Floor, New York, NY 10010
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Eurasia Group 2024 TopRisks