The world in 2018: democracy tested by a lack of trust

It is difficult to find the right adjective to describe what 2018 will look like. The last two years have shown that the global system is undergoing a fundamental change in the way it will operate, but the dust has not quite settled. The US is taking a step back to focus on its own priorities, leaving a gap in global leadership which will be filled not by one power, but many. Oddly enough, whilst the global political picture shows a move towards a more regional, rather than global approach to problems, the global economic picture is shaping up to look better in 2018 than it has for some years. With projections of global GDP growth of some 3.7% expected, the outlook is certainly positive.

Most would be justified in wondering why there should be any concern about the global political picture if the economic projections appear to be positive. The reason is that despite the disconnect between the political and economic outlooks, the two inevitably intertwine eventually, and the more negative element drags down the other with it.

In the United States, 2018 will be an important year for President Trump, as he will want to ensure that he makes some progress on his legislative agenda, more so than he has managed in 2017, particularly with the November Senate elections coming up. The Democrats will be defending far more seats than the Republicans for the most part, but they are starting to pick themselves up after the 2016 Presidential election. If the Republicans are unable to hold both houses of Congress, Trump’s legislative and domestic agenda will be torpedoed. He may well focus more of his energy on domestic, rather than foreign policy as a result.

The EU faces its own set of challenges this year. With Germany effectively side-lined without a government until at least the early part of Q2 2018, the onus of leadership will fall on Emmanuel Macron’s shoulders on some of the more pressing issues, such as eurozone reform and the Brexit process. But one can expect Angela Merkel to return to the fold sooner rather than later, albeit weaker than she has ever been both at home and in Europe.

With the European Parliamentary elections scheduled for June 2019, Europe also has a lot of work to do to stem the tide of far-right parties, which have grown in both size and stature in the past decade.

Three giants continue to rise in Asia, being China, Japan and India, and all of whom will be engaged in rivalry of some form with one another in the years to come. China will look to take advantage of the vacuum left by the US, whilst Japan will use the chance to reassert influence in Asia and remilitarising. India still needs to conduct many domestic reforms before it can focus on projecting influence, but will slowly seek to challenge China on the continent.

Tensions between North Korea, the US and its allies will remain high, but the US may have to grudgingly accept Pyongyang as a nuclear power and adopt a policy of deterrence. Its other options, are limited.

Saudi Arabia and Iran will exert more influence in the Middle East, with support for their regional proxies in the various wars in Syria, Iraq, and Yemen looking to continue as they fight for the mantle of leadership of the Muslim world. Saudi Arabia’s new crown Prince, Muhammed bin Salman, has shown that he is far more willing to embark upon an aggressive foreign policy than Riyadh has traditionally undertaken, and this new bold streak will be matched by Iran’s desire to consolidate its influence from its borders, through Iraq, Syria and Lebanon. Direct conflict is not imminent, but increased tensions and arms proliferation are very real threats.

Where does this leave us? Whilst the Cold War was a dangerous time, with the possibility of nuclear war always just around the corner – but the rules were well-established and understood. In the aftermath of the fall of the Soviet Union, the US was the unchallenged superpower. With it no longer willing, or able to pursue its traditional global leadership role, it leaves a considerable gap. There is no direct replacement for the US to date.

China is increasingly willing, but does not yet possess the global diplomatic, political and military reach to steer the world in its favour. Depending on how favourable circumstances are, they may well be there by 2030.

Others, such as Russia, can pursue global ambitions but only in a very targeted manner, due to other limitations, and often restrict themselves to pressing issues in their immediate neighbourhood.

The EU is limited in its ability to project its voice as one on global issues, due to the varying and competing interests amongst its number. We are living in a world that has no one willing, or capable of taking the steering wheel, and the car is picking up speed as it heads downhill. The number of outcomes are not too numerous.

Not all is doom and gloom, however. ISIS poses less of a threat to Middle East stability than it has in previous years. The Brexit negotiations may finally start to pick up pace. Not to mention the European economy, both inside and outside of the euro, is doing better now than it has at any point since the 2008 recession. There are some reasons for hope.

There is a disconnect between the economic and political realities of the world we live in. structural changes in global power mean that there will more, and not less squabbling. Countries will work together on global issues, such as climate change, but global cooperation may lessen as more energy is spent on regional issues. Trade protectionism and identity politics are becoming more central to political discourse, leading to more nationalistic policies that breed suspicion. Citizens seem to trust the media, their governments and institutions less and less. Trust is central to democracies, but little of it remains. Cooperation and multilateral bargaining were central to tackling complex global issues, but the world’s guarantor of the liberal democratic order is no longer interested in running things.

It may be too early to find an adjective for 2018, but you can be certain that “boring” will not be on that list.

Bugeja Geopolitical Consulting will be looking at our world in 2018 during the Global Outlook conference which will be held on 20th January 2018 at the Hilton, Portomaso. Tickets are available from Ticketline.