Chatham House: 2018 Risks And Opportunities In International Affairs

There is a sense that the established order in global affairs is shifting. The rules, norms and institutions that have governed state-to-state relations and international policymaking for decades are being challenged by phenomena that include diminished US leadership, a more assertive China, political populism and technological change. The ‘destination’ remains opaque, as emerging contests for geopolitical advantage – and to shape the future global order – are still being played out. The articles commissioned for this volume, the first of a new annual series, have been written by Chatham House experts and reflect their perspectives on selected aspects of this transition. Covering geopolitics and security, politics and society, governance, the global economy, and issues around resources and the environment, the articles highlight developments and trends that are coalescing into definable shape as risks or opportunities. The inaugural 2018 edition identifies 17 risks and 14 opportunities:

RISKS

Geopolitics and security

  • America: The Trump presidency is having a multitude of negative effects on domestic politics and US foreign relations. If sustained, these problems could weaken American democracy while rendering the country’s international leadership less effective.
  • Nuclear weapons: The Non-Proliferation Treaty is in trouble again. A lack of progress on arms control and disarmament – as well as a volatile international scene – has renewed fears of nuclear weapons use. The risks are significant and should be taken seriously.
  • North Korea: The 12 June summit between Donald Trump and Kim Jong-un offered no substantive pathway to denuclearisation. Indeed, US concessions to North Korea could risk regional destabilisation by undermining the security agendas of Japan and South Korea.
  • Iran: US withdrawal from the JCPOA may prompt Iran to restart its nuclear programme. By reducing US influence in the Middle East, the decision enfeebles EU foreign policy and risks making space for extra-regional actors such as China and Russia to pursue their agendas.
  • Transatlantic relations: Proposed EU retaliation against US policies on Iran and trade looks ill-advised. Europe has more to lose from a trade war and, more importantly, has no serious alternative to the US security guarantee – already weakened under Donald Trump.
  • China: Centralization of power under Xi Jinping could imperil decision-making and policy responsiveness at a crucial time for China, with the country facing significant domestic economic challenges and a more complicated foreign policy environment.
  • Russia: Economic stagnation in Russia is contributing to geopolitical risk by encouraging – and, to an extent, dictating – the Kremlin’s pursuit of belligerent foreign policy. A lack of reform is impairing growth prospects and makes further external entanglements more likely.
  • Russia–NATO relations: The risk of military or political miscalculation leading to conflict is rising. Russia’s increasing use of non-military destabilisation methods, in combination with conventional threats, dangerously blurs the line between peacetime and wartime activities.
  • Britain: In the UK, some Brexit supporters hope leaving the EU will facilitate a sort of swashbuckling globalism. But aspirations for unfettered free trade seem misplaced – Brexit risks leaving the UK isolated and less influential.
  • The Middle East and North Africa: The rise of hybrid armed groups in Libya, Syria and Iraq threatens state-building and stabilisation. Such groups are accumulating political and economic interests, profiteering and perpetuating conflict.

Politics and society

  • America: Political fractures in the US present risks of strategic incoherence and miscalculation in the short term; domestic institutional degradation in the medium term; and foreign policy overcorrections towards adversaries in the long term.

Governance

  • International law: Countries that have traditionally led the way in shaping international law are ceding space to emerging voices. Areas of the law perceived by some as too liberal will be vulnerable, and states will disagree on the development of the law in emerging areas.
  • Refugee protection: Despite signs of a more concerted international response, obstacles to protection for exiled populations loom large. Some states may simply ignore principles in new initiatives, or use foreign policy instruments to prevent refugee mobility.

Global economy

  • Financial regulation: The strengthening of financial regulation, post-2008, to prevent global contagion is being imperilled by the reversal of some protections and lack of coordination among others. This ‘divergence’ in rules will make a new crisis more likely, and harder to address.

Resources and climate

  • Protectionism and sustainability: Rising international trade frictions could have negative implications for food security, low-carbon innovation and climate policy. For instance, trade disputes risk dampening competition essential to the development of new technologies.
  • Electricity: The transition from fossil fuels to low-carbon alternatives presents new challenges for international energy relations. Concerns about cross-border electricity interconnection and cybersecurity could eclipse traditional preoccupations with oil markets.
  • Oil and gas: Emerging and early-stage oil and gas producers that follow old models of development will lock in carbon risks and squander green growth opportunities. Instead, economic planning needs to anticipate the constraints of decarbonization.

OPPORTUNITIES

Geopolitics and security

  • Cybersecurity: Artificial intelligence promises better software tools for combating cyber threats, with approaches that incorporate human feedback into adaptive systems showing particular promise.
  • Resilience to biological threats: As cities become more vulnerable to biological threats, the need for robust emergency planning is increasing. Recent field experience offers useful indications of how cities could improve preparedness and emergency planning frameworks.

Politics and society

  • Civil society innovation: Some recent trends – such as the use of technology to facilitate public engagement and the innovative use of partnerships across sectors – provide an opportunity for civil society organisations to engage strategically on human rights issues.
  • Activism in the US: Deficiencies in political leadership in Washington are motivating groups across civil society, local government and the corporate sector to mobilise in ever more creative ways. These groups have a real chance to shape policy and governance.
  • Uzbekistan: Among an uninspiring cast of authoritarian Central Asian states, Uzbekistan is showing unexpected early signs of economic and policy reform. Under a new president, the country has seen more change in the past 18 months than in decades of the previous misrule.

Governance

  • China and human rights: The ‘Belt and Road Initiative’ provides a new entry point for engaging China constructively on human rights issues, particularly economic and social rights – for instance, by writing certain protections into investment and free-trade contracts.
  • Disaster warning in South Asia: Shared natural disaster warning systems offer a politically uncontentious means of cross-border cooperation, and even conceivably a future route to improved India–Pakistan relations.
  • Health emergencies: A new approach to assessing country capacities for control of outbreaks and other public health emergencies provides a clearer picture of vulnerabilities, and costed roadmaps to better health security.

Global economy

  • Tax policy harmonisation: The G20’s efforts, long stalled, to tackle tax avoidance by ensuring that multinationals are subject to similar tax rules worldwide have been boosted by a potentially game-changing reform in the US.
  • Latin America: The region’s economic outlook has been improving, aided by more established consumer markets and Chinese commodity demand. However, political and growth risks still loom large.
  • Infrastructure: For all the concerns about China’s geopolitical agenda, the ‘Belt and Road Initiative’ can bring a significant economic boost to developing countries in Asia – provided that the investment model evolves to offer clear benefits to all.
  • Africa: Trade between African countries is fragmented, making economies of scale hard to achieve. A planned 55-country free-trade area – the world’s largest by country coverage – offers opportunities for much-needed integration.

Resources and climate

  • Food security: Pressures on vulnerable food trade ‘chokepoints’ – strategically vital transit locations – will likely continue to rise. However, an initiative to improve monitoring of the global food supply chain may help governments and traders to anticipate blockages.
  • Land use and climate change: Scaling up carbon sequestration technologies to reduce emissions will increase competition for land. However, developments in multilateral policymaking in 2018–20 offer a window of opportunity in which to shape the debate.

Contributing writers: Leslie Vinjamuri, Patricia Lewis, John Nilsson-Wright, Neil Quilliam, Sanam Vakil, Hans Kundnani, Champa Patel, Kerry Brown, Philip Hanson, Mathieu Boulègue, Thomas Raines, Lina Khatib, Tim Eaton, Renad Mansour, Joyce Hakmeh, Beyza Unal, Jacob Parakilas, Chanu Peiris, Courtney Rice, James Nixey, Ruma Mandal, Jeff Crisp, Harriet Moynihan, Gareth Price, David L. Heymann, Emma Ross, Osman Dar, Matthew Oxenford, Stephen Pickford, Richard Lapper, Andrew Cainey, Carlos Lopes, Felix Preston, Daniel Quiggin, Siân Bradley, Glada Lahn, Laura Wellesley, Johanna Lehne, Richard King. 19 June 2018.

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