8 Geopolitical Trends in 2019
Forecast
- Technology & geopolitics
- Chinese digital authoritarianism;
- Why ‘America First’ makes sense;
- A new Arms Race;
- Germany: Big changes are coming;
- Italy’s banking crisis
- Brexit: What’s next?
- Russia’s Hybrid warfare in Europe;
Technology & Geopolitics
In 2019 the trend of global competition will intensify. The tensions are hinging not only on the competition between big actors but also on new technological developments, social classes frustrations, and companies.
Special artificial intelligence technology, the fifth generation of the network (5G) will play a more active role into geopolitics.
In 2019 I expect to see more debates regarding the use of technology and its impact on our lives.
Will robots replace humans?
Will artificial intelligence contribute to create a dictatorship?
There are already lots of articles about robots and how they can replace the human workforce. In 2019 I expect this to become a wider political discourse, paradoxically more widespread in states with fewer robots. The concerns are driven by a host of emerging technologies that automate physical tasks (robotics); intellectual tasks (cognitive computing); and customer service tasks (everything from self-help kiosks to grocery store scanners).
New political discourse: Say NO to Robots
The risk is polarisation. Despite the fact that the advances in technology will create brand new types of jobs as we have witnessed many times in history, this time the pace of the process will be faster than ever. In my view, the biggest issue is that debates will focus mainly on the workers who feel threatened by it and less on educational efforts to match these emerging developments, or on the economic growth potential that could compensate salaries for low skilled workers.
It is true that technology is creating new jobs but those are in software engineering, design, maintenance, support or training. People that will be affected first cannot compete in these categories. That’s why politicians will try to create a new electorate category among them.
Digital education
Maybe the most important long-term risk is the transformation of the educational system. I don’t expect to see a big transformation regarding national curriculums or approach, but I do expect education to become a hybrid between official education and digital-personal education. Currently, some of the biggest companies such as Google no longer require a degree, and I expect this trend to widen in the future.
Digital education will become more professional providing more opportunities. Also, it is highly probable to acquire new fields such as engineering or medicine. It may not guarantee degrees, but it can be good enough to help prospective students choose a career path.
Entrepreneurship
Being strongly related to education, I expect new VCs, Hedge Funds, and angel investors to look for more opportunities in less expected parts of the world. The obvious result of the democratization of education and knowledge is that of entrepreneurship. So this year, we can predict more innovation coming from other places than Silicon Valey, such as Estonia, or Israel.
It is a digital dictatorship possible?
A centralized network, artificial intelligence, and big data can practically make it easier for a government to control its people. In 2019 we will witness more and louder debates on this issue. If in 2018 we had Cambridge Analytica scandal, GDPR in Europe, in 2019, I believe these topics will be discussed more intensely, in order to create clear laws, at least in the Western world.
China is already implementing technology into their governance. The biggest risk regarding this aspect is the rising of populism to fuel autocrat leaders willing to propose this type of governance even in Europe. In the West, I expect more involvement from some of the biggest companies such as Google, Facebook, Twitter in this issue.
With a lowly educated and interconnected population, the virtual space is already the most fertile ground for populism. But let’s not blame technology because populism existed way before technology. I predict democratic parliaments will demand more social responsibility from companies such as Facebook in order to avoid fake news, manipulation and privacy security.
On the other hand, laws like those governing hate speech are very controversial due to the fact that they need arbitrage.
Who is going to decide what’s good or bad on social media?
2019 I presume to be the year when the Western world will acquire a clear perspective regarding this issue. In my view, the best remedy against fake news is an informed reader, the best solution against hate speech is a tolerant person. Education plays a major role here.
We use to say ‘Knowledge is power’. This is true, but in a world where we have free access to plenty of information, the problem is how we discern it.
We will discuss in the following chapters how practically technology is used to maintain control or impact a democratic process.
Chinese digital authoritarianism
Beijing already installed a tremendous amount of cameras in their cities with face recognition technology. This technology can be used to control masses in a way which is pretty similar to George Orwell’s 1984. This model can be exported and it is very appealing to many governments in the world, mostly to those pushing for authoritarianism.
In 2019 we will face the full integration of technology into geopolitical strategies which will dominate the paradigms of the following decades just like the early 1950s inclusion of nuclear weapons.
The biggest goal of China is to compete with the US in exporting a political and economic model around the globe. For the first time since 1991, a form of authoritarianism is challenging a liberal free market system. I am of the opinion that 2019 will remain in history as the year when this competition started.
Similarly to the Cold War period when the US endeavoured to thwart the spread of socialism domestically and internationally, this year will bring about a more aggressive campaign to suppress Chinese tech companies that are able to provide the necessary means to build a digital authoritarian political system.
Digital authoritarianism: an alternative to liberal democracy
In 2019, the United States will strengthen its containment policy towards Beijing in 3 main areas:
- Tariffs against Chinese products, what we call trade war;
- Policies against Chinese tech companies;
- Containment against Chinese expansion in the South-China Sea and Asia.
By building it at home and exporting it to South East Asia, Central Asia, Middle East, Africa, South America, and perhaps even Europe, China is building a chain of potential allies dependent on Chinese economic and political support.
The American Cold War strategy of containment will come back in 2019, this time directed at China; it will be especially visible in the South China Sea, Belt, and Road initiatives and the tech sector.
If in the South China sea we will witness direct military support for Taiwan, Vietnam, Japan, and most likely more military standoffs in the region, regarding the Belt and Road Initiative (BRI) we can foresee a lower chance of success for containment due to a greater Chinese economic and political access among BRI receivers. In other words, China is buying partners and it is hard for the US to compete.
Regarding the tech sector, I expect a more aggressive approach against Chinese tech companies. The US and Australia already expressed concerns about some of the biggest Chinese telecommunications companies such as Huawei and ZTE being involved in espionage. Australia started to ban Chinese 5G technology companies, and the same measure is being debated in the US Congress and receiving bipartisan support. It is likely for the US to follow Australia in banning Chinese 5G related companies from its territory.
Tariffs
In 2019 we will see an increase in tariffs and sanctions imposed by the United States against China. The target sectors are emerging technologies such as artificial intelligence, cybersecurity, and 5G network. The main concerns of the US are intellectual theft practiced by China against US companies.
We will assist to a more aggressive investment containment against China in order to impact their development in critical areas: aerospace, high-end semiconductors, internet of things. The cyberspace is becoming a battlefield.
In investment, we expect the US to promote Europe, Israel, Japan, Australia, New Zealand, Canada, South Korea, and Taiwan as an alternative to China for giant companies.
Why ‘America First’ makes sense
The United States foreign policy is striving after 19 years of continuous wars to be able to act through allies or partners. Trump’s controversial approach towards NATO, Europe, Japan, and South Korea may seem counter-intuitive, but in reality, his policy is abiding by US constraints: reduce the costs of maintaining global stability.
Geopolitically speaking, those actions are not a form of so-called Trumpism but in fact, they address new realities:
- With a comparable financial power, Europe defense expenses are far less than the US despite the fact Europeans fave more security concerns compared to the US.
- The US main geopolitical foe is in Pacific not in Atlantic.
- washington realized that maintaining global stability is cheaper and more efficient with more active allies.
Why NATO is obsolete
NATO original purpose was to defend the West against the Soviet Union. After 1991, NATO constantly expanded towards the East becoming more powerful but also less relevant. At the same time Western states such as Germany, France, Italy, Spain, the Netherlands felt less inclined to invest in NATO.
EU GDP is similar to the US. Practically there is no reason for Europeans do not have a comparable military power to that of the US, except the fact Europeans are looking to reduce costs by being under the protective wing of Washington. Whether we like it or not, this is how the White House understand the situation.
The Macron’s speech of a European Army was designed to insult the US’ current administration. In fact, Washington would be the biggest supporter of this idea. It would solve the main problem of the US: having to cover for 70% of NATO’s spendings.
A more active role for Poland and Romania
For the US’ geopolitical interests, Poland and Romania are the most important NATO members right now because not only are they near Russia but they are the most enthusiastic supporters of NATO.
In 2019 we will notice that both will require a more NATO presence in the region related to Russia’s aggressive policy in Ukraine. Washington is looking to shift its military presence from mid-Europe (Germany, Italy) to Poland, Romania, and the Baltics.
Since the Ukrainian crisis in 2014, the US deployed troops in Romania, Poland, and the Baltics and it continues to increase its military presence. Not only that but the US is now committed to helping those countries in their fight against corruption, especially Romania. A stable and less corrupt political system is a security guarantee against Russian subversive movements as the Ukrainian situation taught us.
Corruption is a security risk. Bribery and blackmail are the most common sources of shady contracts in infrastructure or IT that reduce the efficiency of the state in various areas. Populism is another corruption-related topic because it is widely known that politicians are looking to manipulate the less educated people the same part of the society that seems to care less about corruption scandals. Intelligence services of an adversary can use corruption to project their interest in that country such as create divisions among society, build political polarization, impact infrastructure development or even impact crucial decisions as we witnessed in Ukraine.
Despite the fact, the military deployments in those countries are made under the NATO flagship, in reality, we’re talking about bilateral relationships with each individual state. I expect in 2019 Eastern European states such as Poland, Romania, Lithuania, Estonia, Latvia perhaps Bulgaria, Czech Republic, and Slovakia to start talks on a new form of common security commitment.
A new Arms Race
Russia is a declining power, despite the Russian rhetoric, they will remain a regional power with influence over the former Soviet space.
In 2019 we can expect a more volatile relationship between Russia and the US with an impact on Eastern Europe.
There are two major treaties disputed in terms of arms control:
The Intermediate-range Nuclear Forces Treaty (INF) (signed in 1987) and New START Agreement (signed in 2010).
The INF treaty bans ground-launch missiles with a range in between 500 km and 5,500 km. The New Start agreement limits each country’s nuclear capabilities to 1,500 warheads.
The US withdrawal from the Intermediate-range Nuclear Forces Treaty (INF) and the expiration of the New START in February 2021, is creating a more volatile environment in Europe.
The US objective is to maintain its military presence in Eastern Europe meanwhile Russia is concerned that launchers at the U.S. Aegis Ashore missile defense sites in Romania (and the planned site in Poland) are capable of firing offensive missiles. For Moscow, this is a national priority and implicit a matter of political legitimacy for Putin. From Moscow perspective, NATO military build-up in Romania, Poland, and the Baltics has an offensive purpose.
Russia will increase its military presence in the former Soviet periphery through 2019
We can expect a Russian military buildup in Belarus and Sea of Azov. As a response, the US will increase their military presence in the Baltic States, Poland, Romania and it will support Ukraine in their building naval assets.
The US is already negotiating with Poland the establishment of a permanent American military base in the country.
Ukraine is trying to gain support from the West. Due to the controversies of the Poroshenko regime, I expect negotiations with the EU to be more difficult, though NATO will surely provide military assistance to any pro-West administration.
This configuration creates new opportunities for Poland, Romania and the Baltic States. All of them are engaged in a long-term campaign of lobbying the US for more engagement in their national security. In 2019 we may expect a shift from a purely defensive doctrine to a more offensive one. Warsaw and Bucharest are both seeking security guarantees.
I expect Poland to have a more active role in NATO in its region. Being the most powerful US ally in the region, I expect policymakers from Warsaw to create a cohesive strategy regarding Ukraine, the Baltic region and even Balkans. We must understand one thing about Polish mindset: being located between Germany and Russia, they are looking to gain security guarantees from outside. In 1930, Poland gained guarantees from London and Paris. The problem was those guarantees didn’t come with practical deployments and mutual interest. Currently, the security guarantor is the US, Poland has now a practical guarantee from the US and geopolitical mutual interest. The current goal of Warsaw policy makes is to make Poland an active player.
Romania has a direct national interest in influencing Moldova. Being a popular political idea in Romania, we will see a more nationalistic approach in Romanian political debates towards Moldova and the prospect of unification. I don’t expect a realistic strategy towards unification due to economic and social factors, but a more nationalistic discourse in Romania is highly expected in the near future.
Regarding the Baltic States, they will continue to remain preoccupied with preserving their security.
Germany: big changes are coming
Chancellor Merkel has said her current term will be her last, and the ruling Christian Democratic Union party has already elected a new leader. However, the party is split over its future political orientation; its partner in the governing coalition is experiencing an identity crisis, which could result in early elections.
In 2019 we will probably assist to a major change of the German political landscape. Extremist formations have become more popular securing seats in the Bundestag. Merkel’s popularity suffered because of her immigration policies generated by the Arab Spring. Migration became a hot topic all over the Western world. In Germany I expect the new candidate to be more conservative towards migration and accepting refugees. Additionally, many populist factions will use this topic to gain votes.
The political system in Germany is a proportional one, which means an opinion can find its way into the Parliament impacting Germany and Europe.
Italy’s banking crisis
Looking ahead at 2019, Italy sits at the heart of the Eurozone’s stability. Its budget proposal for 2019 was met with sharp criticism by the European Commission because the Italians sought to spend far beyond their means, especially since Italy has more than 2,6 trillion USD in debt. Normally, this would be a domestic issue. However, since Italian banks hold about 375 billion EUR in sovereign debt, of which a third is held by forces outside the country, Brussels is worried that a banking crisis in Italy could spread to other member states of the bloc. As a result, the leadership of the EU feels the need to step in. There is no telling how this will play out, the risk of a new financial crash is real, and what makes the ordeal even more troublesome is that the coalition government in Rome is split on the matter, which could result in early elections. At the very least, in 2019, the contest between Brussels and Rome will reach new heights.
Brexit
More political uncertainty can be found in the talks concerning Brexit. The United Kingdom is scheduled to leave the European Union in March, and London is trying to soften its exit from the bloc by ratifying a comprehensive exit agreement.
Brexit is very complex issue due to its ramification within the UK. The Irish border seems to be the most sensible social topic. Due to the ‘Good Friday’ agreement with the Republic of Ireland, the UK guarantees an open border between the two countries. A no-deal Brexit would close the border. In order to maintain an open border, the UK should stay in the Customs Union which is against what brexitiers voted for.
Economically, British companies require clarity from London. A no-deal Brexit would have disastrous consequences for British companies with a European market.
Prime Minister Theresa May has come under fire over the deal her administration reached with Brussels in November 2018. However, critics have presented no alternative plans. British lawmakers will vote on this matter in the coming year, which will set the terms of Brexit once and for all.
Whatever is decided, at the end of the day, the UK maintains close relations with several EU members such as France, Germany, Poland, and the Netherlands. There are mechanisms in place to ensure that those ties endure regardless of whether a deal is reached or not.
Russia and hybrid warfare
The cyberspace is a tremendous opportunity for Russia (and China) to compensate for their disadvantages. Moscow will increase his cyber campaign against West and Western-leaning countries by interfering in national politics, spreading propaganda on social media, launching cyber attacks and special operations in order to undermine EU’ and NATO’ cohesion.
We can expect a Russian interference in Italy, France, and Hungary with the objective to promote anti-establishment parties in the next EU parliamentary elections in May.
Those states are targeted because of their internal polarization and high economic risk, especially in Italy. From the 2017 presidential elections to the 2018 Yellow Vest protests in Paris we observe a French society divided on different matters. The anti-establishment discourse is popular in rural areas, among white French citizens with low and medium education and income. Trump’s definition of ‘forgotten men and women’ is applicable not only in the US but also in Europe too, mainly in multicultural societies such as France.
Hungary is a proper target because they have an anti-establishment leader, Viktor Orban. His legitimacy is based on a nationalistic view, anti-migration, and therefore anti-EU.
Regarding Italy, their banking sector will remain the main source of financial risk within Eurozone. I think Italy will be the most important target of Russian trolls in the following months. With approximately 25% of their GDP in debt held by its banks, the entire Italian economy remains vulnerable. Politically, the tensions between Rome and Brussels will remain. The political and financial turbulence in Rome is the most dangerous prospect against EU stability.
Final thoughts
2019 will be a year with similar geopolitical issues as 2018 but with more serious debates, at least in Europe and the United States. Technology such as 5G network, artificial intelligence and cybersecurity will become an integrated part on geopolitics in the same way nuclear weapons became a part of global affairs in the early 1950s. This means academic and non-academic debated and views about the role played by technology in our world. If I’d have to choose, I’d say this is the most important aspect we should spend time this year. The vision we create now will affect us in the next decade.
In 2019 we will witness more riots in Europe, the US and perhaps other parts of the world such as Russia and South America. However, riots will impact the discourse and they have the potential to show to the elites (progressists) to try a more appealing political discourse for the traditionalist people in order to counter charismatic right-wing leaders.
