The Vulnerability of Elites: Geopolitical Risk in 2013 Categorizing the major themes, risks, opportunities, and wild cards—based on discussions of the Global Agenda Council on Geopolitical Risk in Dubai, November 2012.
Introduction In a post-financial crisis world, the lack of viable international leadership is in stark relief. As the Global Agenda Council on Geopolitical Risk’s 2012 report highlighted, the effectiveness of global institutions and the rise of regionalism are overarching themes defining world events. In 2013, this breakdown of international coordination will go increasingly local: in such a world, governments will focus more on their domestic agendas, which will create new risks in and of itself. Most importantly, the growing vulnerability of elites makes effective public and private leadership that much more difficult to sustain. Leaders of all kinds are becoming more vulnerable to their constituents, generating more reactive and short-term governance. Whether one looks at the dismal approval ratings of the U.S. Congress or the impact that more open flows of information is having on the Chinese ruling elite, it is clear that people are becoming more and more uninspired by their governments. When it comes to unemployment, the widening disparity of wealth, or environmental degradation, highly complex or even intractable issues set politicians up for failure in the eyes of their constituents. Underperformance erodes elites’ legitimacy, making it that much harder for them to lead effectively. States captured by corruption or special interests, or that exhibit a lack of transparency, growing disparity of wealth, or a perceived indifference to the lives of the citizenry, will increasingly fall victim to this ‘legitimacy deficit.’ Corporate and NGO leaders who act with impropriety can also find the ground shifting beneath their feet, sometimes overnight. Rapid news cycles and social media can allow dissident movements to arise without warning, creating new challenges for those in charge.
Against this backdrop, a host of key 2013 risks and opportunities takes shape. Tensions between China and Japan are likely to worsen. The spill over from the Syrian civil war will have severe knock-on effects throughout the region. The Iranian nuclear threat, Afghanistan-Pakistan conflict in the wake of US 2014 withdrawal, and eurozone crisis response are other key risks. Opportunities could arise from a brighter US outlook and continuity in its government. A growing awareness of the lack of international leadership may impel political leaders to deal with issues locally, and could result in better crisis response. In addition, there are a host of wildcards—on the downside and upside—that could prove game-changers over the coming year. Discussion will break down into categories as follows: A. Overview: The Vulnerability of Elites B. Key Risks C. Wildcards D. Opportunities
A. Overview: The Vulnerability of Elites The challenge The vulnerability of elites cuts across emerging markets and advanced economies, democracies and authoritarian states, public and private institutions, and a wide array of issues. This is the challenge: as their legitimacy gets called into question, political actors struggle to react to instability, crises and opportunities in the most effective manner. Whether it is the growing disparity of wealth, or the evolving Page 1