“When it comes to forecasting geopolitical risk, you can’t do better than Ian Bremmer,” according to an article in Barron’s that outlines some of the Eurasia Group founder’s predictions going forward from a recent interview.
Here are some key takeaways:
- “The geopolitics of the global order are more divided than at any point since the Soviet collapse,” Bremmer said, adding that the inequality gap is widening both in developed and poor countries around the world. He adds, “That’s all on the back of coronavirus. Our global architecture and leaders are inadequate to put the world on a more sustainable path.”
- Bremmer is predicting a global depression, “more dramatic and bigger than the recession of 2008.” While not like the Great Depression (“we’re wealthier now”), Bremmer says the crisis will be “transformative, with a technological displacement that will be great and permanent for wide swaths of the population.”
- The U.S.-China tensions are “on steroids because of the pandemic” says Bremmer, who argues investors should be concerned that “we have passed the point of no return on the technology cold war. It was a top risk; it’s now a reality.” The tech space, he says, is “increasingly critical for such a large part of the economy. We’re not just taking smartphones. We’re talking anything with a chip in it.”
- In a Biden presidency, according to Bremmer, the following things would happen:
- Similar China policy, but “executed differently:” a Biden administration would be “much more proactively engaged, wanting to coordinate with allies in announcements around policies on China.”
- Unlike Trump, Biden is in favor of a strong European Union, which is “very much in America’s interests.” According to Bremmer, Biden would leave the new NAFTA in place as well as the South Korea trade deal, “alignment with Japan, normalization of relations between Israel and the Gulf, and the U.S. Embassy in Jerusalem,” and would try to reinstate the Iranian nuclear deal.
- Bremmer is slightly optimistic on the issue of climate change, saying that “we are closer to responding effectively to it,” adding that German Chancellor Angela Merkel “has completely reinvigorated her legacy through effective response to this pandemic” and is “being linked to new regulatory policy that’s very Green.” Bremmer adds that, while the health crisis is hurting the economy, it’s bolstering the digital economy, which will drive us further away from fossil fuels. “We’re not there yet,” he says, noting that the U.S., India, and China have to respond to climate change. “But, at the margins, “he says, “I am getting more optimistic that we are making progress.”