December 13, 2022
ISLAMABAD – THE world is in strategic flux and in the midst of an intensely unsettled period. Looking ahead at key geopolitical trends and challenges in 2023, their overarching aspect is uncertainty and unpredictability. This at a time of power shifts in an increasingly fragmented international system with multilateralism under growing stress. Rising geopolitical tensions and global economic volatility are keeping the world in an unstable state.
The most significant strategic dynamic in the year ahead will be the course of relations between global powers. The disruptive economic repercussions of war in Ukraine will blight prospects of global economic recovery and is already compounding a cost-of-living triggered by the coronavirus pandemic.
Most annual assessments of key global trends in the year ahead by international think tanks, investment firms and others see unpredictability as the ‘new normal’.
The Economist’s ‘The World Ahead 2023’ report succinctly describes the world today as being “much more unstable, convulsed by the vicissitudes of great-power rivalry, the aftershocks of the pandemic, economic upheaval, extreme weather, and rapid social and technological change”.
The principal geopolitical risk that will dominate the coming year is intensifying competition between the US and China and its ramifications for global geopolitics and economy. The first in-person meeting between Presidents Jo Biden and Xi Jinping in November did promise de-escalation of tensions.
Both leaders pledged to improve relations that had sunk to a historic low, raising international concerns about the advent of a new Cold War. But their meeting did not narrow differences between them on the contentious issues that divide them — Taiwan, trade disputes, technology curbs and military postures.
The outlook is uncertain, especially as Washington’s policy of containing China, reaffirmed in the Biden administration’s national security strategy, and an assertive Chinese pushback, will keep relations on a tense track. Tech de-coupling will accelerate, military competition will intensify and Taiwan will remain a dangerous flashpoint in relations.
Control Risks, a global consulting firm, sees the US-China relationship as the greatest geopolitical risk in 2023. Other assessments rule out conflict. But Southeast Asian countries worry about an accidental clash in the fraught Asia-Pacific region — the strategic theatre of the US-China stand-off.
The course of the Ukraine war is another critical area to watch in the coming year. Russia’s invasion of Ukraine marks a geopolitical fault line, which the annual Strategic Survey by the London-based International Institute of Strategic Studies says has political and economic consequences that are reshaping the global landscape.
The IISS survey argues the “war is redefining Western security, may change Russia profoundly, and is influencing perceptions and calculations globally”. Although the conflict shifted the West’s attention from its strategic priority in the Asia Pacific, it underlined that Europe’s security remained the West’s ‘core interest’.
The Survey argues the two theatres — Euro-Atlantic and Indo-Pacific — are mutually dependent as the first arena’s “fracture would make any more external security commitments unviable” while its “successful defence would lend credibility to any Indo-Pacific tilt”. Whether or not one agrees with this, there is little doubt that if a negotiated end to the war is not achieved and continues to be stalemated it will destabilise the world beyond Europe.
The year ahead will see rising geopolitical tensions and nations struggle with economic challenges.
Nothing illustrates this more starkly than the war’s economic fallout. Its disruptive impact has thrown global supply chains and commodity and energy markets into chaos, with volatility contributing to recessionary pressures in major economies and beyond.
The conflict has given rise to soaring food prices and intensified global inflation. Dealing with these challenges will consume most nations’ energies in the coming year but will hit poorer, debt-burdened economies especially hard. Food insecurity will be a key challenge in 2023, while the energy crisis will test global financial stability.
Fitch rating company describes the present economic phase as “arguably the most economically disruptive period since World War II” due to the outcome of three shocks — the global trade war, the Covid-19 pandemic, and the Ukraine conflict. In October, the IMF warned the worst is yet to come for the global economy and many countries will see a recession in 2023.
The US-China rivalry, Ukraine war and global power shifts have already led to new formal alignments and reinvigorated previous alliances. Examples include Quad and AUKUS — part of America’s Indo-Pacific strategy to counter China’s rising power.
China’s use of geo-economic strategies by its Belt and Road enterprise, that has enhanced its influence across the world, is expected to accelerate. Newer alignments are also indicated by growing China-Saudi Arabia ties.
In the prevailing geopolitical environment, nations will pursue hedging strategies to protect their interests and buffet them from the headwinds of big power rivalries. Another emerging trend also reflects how countries may respond to a more multipolar world — seeking issue-based ‘alignments’ with likeminded countries or joining ad hoc coalitions on specific issues.
What kind of world order will emerge from all this remains an unresolved question because the international system is at present so fractured. Ian Bremmer, head of the political risk firm EuroAsia Group, makes a compelling argument that “Tomorrow’s geopolitics will be based not on a single global order, but on multiple coexisting orders, with different actors providing leadership to manage different kinds of challenges”.
In a speech about where the world is headed in 2023, he said the global security order would be US-led, global economic order will depend on China’s trajectory, the global digital order would be driven by giant tech companies while the global climate order is already “multipolar and multi-stakeholder”.
2023 will see continuing challenges to democracy. This has international implications. When polarisation and searing divides make democracy dysfunctional, which is happening in many countries, domestic weakness affects their foreign policy conduct and ability to act effectively in the global arena.
Right-wing populist leaders who display intolerance and violate democratic norms at home also tend to pursue disruptive policies abroad that undermine multilateralism.
The coming year will see a world of geopolitical tensions, economic insecurity and multiple other challenges including climate change that will test the resilience of nations as well as the international community’s ability to take collective action on shared problems.