As the world approaches the first quarter mark of the 21st century, the global landscape remains more volatile and uncertain than at any time in recent history. 2023 is expected to be one of the most challenging years in decades as market turmoil continues. Although inflation can be controlled, it will remain exceptionally high accompanied by an inevitable global recession. The main questions are how severe the recession will be. It will have different regional responses that generally revolve around the repercussions of the Covid pandemic and the Ukraine war
Arguably, the UK is already in a recession. For the United States, the recession is likely to be shorter and less severe than in Europe, whose geographic proximity and traditional energy dependence are directly affected by the conflict in Ukraine. Once China learns to live with covid in 2023, its economy will rebound. However, the question remains when and how he will deal with the virus. Moreover, the post-pandemic recovery in Chinese demand may lead to higher inflation in Western economies.
Mounting debt in emerging markets has become increasingly unsustainable. 2023 risks a series of sovereign debt defaults, particularly in Africa, unless coordinated and effective restructuring efforts are launched. Just before the end of 2022, Ghana reached a last-minute bailout deal with the International Monetary Fund. Others will likely follow suit in 2023. Moreover, investors should prepare for the possibility of a hair cut on their properties.
In the geopolitical realm, the unfortunate truth is that the worst is yet to come for Ukraine in the coming weeks and months. In particular, Russia is poised to launch a major offensive in the first half of 2023 after recruiting more than 200,000 new troops in the months leading up to the end of 2022. There is no ceasefire in sight for the foreseeable future as there is no confidence, or incentive to conduct negotiations. serious at this time.
For Russian leader Vladimir Putin, the conflict is an existential crisis and he is committed to providing his forces with everything they need to achieve victory in Ukraine. Moreover, Putin feels that time is on his side and he can prolong the war indefinitely. He seeks to exhaust Western political solidarity and public patience over time through fatigue in Ukraine. However, the morale of Russian forces and access to resources pose serious challenges to Putin in his quest for victory, which is still not clearly defined.
On his recent visit to Washington, D.C., Ukrainian President Volodymyr Zelensky got much of what he sought for 2023, including the advanced Patriot missile defense system. As Ukraine’s main military financier, the United States will have committed nearly $100 billion during the conflict’s first year. However, the leaders of the newly inaugurated Republican-controlled House of Representatives have made clear there are no “blank checks” for Ukraine. Although US funding will not stop in 2023, it is likely to slow and come under more scrutiny before disbursement.
In 2023, tensions between the United States and China will remain dangerously high on several fronts, particularly around Taiwan and the South China Sea — largely including maritime claims and territorial disputes. Although both sides would like to avoid direct confrontation, the constant game of brinksmanship can lead to a mishap with unintended consequences.
A close collision between American and Chinese aircraft — separated by just 10 feet — in the South China Sea could have sparked armed conflict and changed the course of history. This incident, and similar previous incidents, underline the indispensable need for a more effective communication hotline between the United States and China, similar to what the United States and the Soviet Union had during the Cold War.
The persistent threat of a Chinese invasion of Taiwan in 2023 is unlikely to materialize. Right now, China lacks the capacity for an effective invasion. In addition, the economic consequences for China and the world would be disastrous. Russia’s failed invasion of Ukraine offers valuable lessons. After all, the West may not be as divided or in rapid decline as Chinese leaders once thought.
Chinese leader Xi Jinping is likely to besiege, but not conquer, Taiwan if he feels a growing challenge from the United States or if the political shift toward Taiwanese independence takes an irreversible course. Additional visits to Taiwan by US political leaders, such as the August 2022 trip by former House Speaker Nancy Pelosi, could provide China with an excuse to impose a blockade and shift the lines of pressure on Taiwan in its favour.
Taiwan’s presidential election in 2024 could present a potential crisis if calls for independence escalate. Essentially, the leaders of the United States and China need to engage more regularly and manage the relationship more effectively. Failure to do so will have disastrous consequences globally.
2022 was the year that Covid was largely brought under control. In 2023, China risks stalling this progress due to a lack of transparency about the spread of the virus Covid The rapid domestic crisis resulting from the sudden termination of its disastrous policy Zero-Covid. The threat of an emerging vaccine-resistant variant remains real.
In an effort to save face and maintain power, the Communist Party leadership is displaying the same irresponsible behavior as during the initial outbreak of Covid in early 2020. It is already losing massive credibility at home with its failure to control the pandemic and the accompanying narrative
On the geopolitical front, other serious flashpoints that continue to threaten global stability in 2023 include the ongoing volatility and dangerous brinksmanship in the Gulf between Iran and Saudi Arabia and their main security guarantor, the United States. Moreover, India’s fragile borders with Pakistan and China – the three nuclear-armed nations – remain perpetual hotspots where joint skirmishes could lead to serious armed conflict at any moment.
The year 2023 will also see the growing influence of middle powers shaping geopolitics at the regional level with regular global ramifications. In particular, Saudi Arabia and its ability to set international energy prices and Turkey’s ability to influence the Ukraine war.
Marco Vicenzino – National Interest
Tags: uncertainty shape global landscape
