{"id":11419,"date":"2023-01-20T12:38:50","date_gmt":"2023-01-20T12:38:50","guid":{"rendered":"https:\/\/www.globalpanorama.org\/2023\/01\/mo\/"},"modified":"2024-11-20T21:51:13","modified_gmt":"2024-11-20T18:51:13","slug":"geopolitical-risks-awaiting-us-in-2023-how-to-navigate-mehmet-ogutcu","status":"publish","type":"post","link":"https:\/\/www.globalpanorama.org\/en\/2023\/01\/geopolitical-risks-awaiting-us-in-2023-how-to-navigate-mehmet-ogutcu\/","title":{"rendered":"Geopolitical Risks Awaiting Us In 2023: How to Navigate? – Mehmet \u00d6\u011f\u00fct\u00e7\u00fc"},"content":{"rendered":"\n
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What\u2019s in store for the global\neconomy and geopolitics this year? Well, it looks as if the year  will not be pretty. A raging war in\nEurope, <\/strong>which can further expand, sky-high inflation engulfing the\nwhole world, an energy crisis, disruption in world trade, supply chain, and\ninvestment flows, a looming worldwide recession<\/strong>, a cornered Iran,\nand an unstable China will likely create strong headwinds for government,\nbusiness, military leaders as well as individuals. <\/p>\n\n\n\n

Never in recent history have geopolitical risks<\/strong> shaped\neconomies, energy flows, the water crisis, food supply security, financial\nflows, and the position of countries in the world system more strongly than\nthey do now. That\u2019s why companies, governments, banks, insurers, and generals\nmust take these risks more seriously. It is inevitable to take them into\naccount in business decisions and government policy choices. That\u2019s why\nopportunities abound to support leaders in risk mitigation and management who\nwill closely monitor and analyze geopolitical challenges, volatility, and\nuncertainties.<\/p>\n\n\n\n

The main geopolitical and economic challenges facing us all\nin the coming year are:<\/p>\n\n\n\n

1. Authoritarian states<\/strong> trying to gain\nlegitimacy through economic nationalism, technology war, sanctions, supply\nchain relocations, fragmented geopolitics, global security issues, and the\nincreasingly politicized globalization process will accelerate. Global\ninflation shock waves started in the USA in 2021 and affected the world in\n2022. In 2023, its impact will be felt more with strong economic and political\nfluctuations. The last two generations have seen global GDP triple, almost every\ncountry get richer, and more than a billion people lifted out of extreme\npoverty. We see this progress reversed with new shocks. Billions of people will\nbecome more vulnerable due to the Covid-19 pandemic, the Russia-Ukraine war,\nrising global inflation, energy shortages, and loss of economic, security, and\npolitical gains. The global middle class will shrink, followed by more severe\npolitical instability within and between countries. Worldwide social unrest,\nthe rise of the far right, racism, immigrants, refugees, Islamic\nfundamentalism, and terrorist attacks (this time via more cyber-attacks) will\ncontinue to haunt us in 2023.<\/p>\n\n\n\n

2. The US-China rivalry<\/strong> is a strategic\nchallenge for all of us that will shape not only 2023 but the coming decades.\nAmerica is determined to do whatever it can to stop, or at least slow, the rise\nof China. Where, how, and whether the rest of the world will position itself\nalongside Beijing or Washington will become important. Countries, even\nmultinational firms, will be forced to make a fundamental choice. China\u2019s poor\neconomic performance, the health catastrophe triggered by the abrupt end of the\n\u201czero Covid\u201d strategy in the country, Xi Jinping\u2019s relationship with Putin,\nwhether the EU will lose its autonomy and come more obviously under the\nAmerican security umbrella, how China\u2019s ties with Europe will evolve, the loss\nof breath of the Belt and Road initiative, the inhibition of US-based\nmultinational companies from China\u2019s strategic industries, and whether New\nDelhi is truly ready to establish closer relations with Washington will remain\non the agenda as essential questions. We\u2019ve (mostly) survived the pandemic, but\nChina\u2019s relaxation of restrictions could pose a serious health risk to the rest\nof the world in 2023, with millions of Chinese still at risk of Covid starting\nto travel. <\/p>\n\n\n\n

3. The Russia-Ukraine war<\/strong>, sanctions on oil and\ngas, disruption of traditional energy and investment flows that benefit China\nand India, and the shift of Middle East oil and North African gas to Europe\nwill continue to be hot topics. Russia has no chance of winning the war in\nUkraine despite causing so much humanitarian and infrastructure damage. The\nEuropean Union is stronger than ever. NATO has rediscovered its raison d’etre.\nThe G7 is getting stronger. American hard power remains unrivaled globally \u2013 at\nleast for now. But a cornered Russia can transform from a global player to the\nworld\u2019s most dangerous state. It could pose a serious and widespread danger not\nonly to the EU and the US but also to its surrounding neighbours. Stuck in\nUkraine, with little to lose from further isolation and Western retaliation,\nand faced with intense domestic pressure to show power, Russia may turn to an\nasymmetrical war against the West. Besides the nuclear threat,\nKremlin-affiliated hackers can accelerate increasingly sophisticated\ncyberattacks against Western firms, governments, and infrastructure.<\/p>\n\n\n\n

4. Iran<\/strong>, one of Russia\u2019s most important military\nallies, is experiencing the most tremendousinternal unrest since the 1979\nrevolution that brought the Islamic Republic to power. Tehran is also faced\nwith an extremely hostile geopolitical environment. Since the death of\n22-year-old Mahsa Amini, who died after being arrested by the Iranian \u2018morality\npolice\u2019, Iran has faced a great deal of internal turmoil and protests. At the\nsame time, Tehran dramatically escalated its nuclear program and almost\ncompletely ended its chances of reviving the nuclear deal. And now it supplies\ndeadly weapons to Putin\u2019s army. New conflicts and further Western sanctions can\nbe expected in 2023. As a result, Tehran may advance its \u201cregionalism\u201d\nstrategy, seeking wider cooperation with Asian countries, particularly Russia\nand China. The activities of Kurdish and Azeri separatist movements against the\ncentral government may increase. Iran has become a permanent member of the\nShanghai Co-operation Organization, which strengthens its role on the Eurasian\nchessboard and the Moscow-Beijing-Tehran axis. It will cooperate with Moscow in\nthe Caspian Sea, the epicenter of various energy pipelines and projects connecting\nthe Central Asian and Caucasian oil and gas fields to Europe. The far-right and\nreligious government in Israel may attempt unexpected moves against Iran.<\/p>\n\n\n\n

5. The energy crisis<\/strong>, which marked the last year,\nwill, unfortunately, create much more difficult market conditions and increase\ncosts for households and businesses, especially in the second half of 2023,\nwith the combination of geopolitics, economy, and production factors. The\nfinancial burden on energy-importing countries will increase and further widen\nthe gap between OPEC+ and mainstream consumers. Of course, investments in\nrenewable resources, which are getting cheaper, will step up, and efforts\nagainst climate change<\/strong> will intensify. Water\nshortages will become a global and systemic problem this year, and efforts\nto transition from water crisis to water risk management will accelerate. Food\nsupply security will be more of a concern. Governments, international\norganizations, investors, insurers<\/strong>, and private companies will work\nhard to strike the food-water-energy equation and how to deal with these\nchallenges on their own. <\/p>\n\n\n\n

6. Asian risks.<\/strong> Higher interest rates will\nensure a challenging economic environment in Asia. Growth in economies with\nhigh levels of household debt, such as Australia and South Korea, is set to\nslow sharply, even as a systemic crisis is avoided.  Political\nuncertainty in Southeast Asia, as elections take place in Thailand and loom in\nIndonesia, will encourage manufacturers to look to India as they seek to reduce\nreliance on China. Improvements in India\u2019s business environment and progress in\nbilateral trade deals make it an increasingly viable investment\ndestination. China\u2019s domestic challenges, as it seeks an exit from\nzero-covid policies, will probably lead it to adopt a less confrontational\napproach in international affairs. North Korea remains a risk. Japan to\ncontinue building stronger military capabilities. The Taiwan-China-US standoff\nto continue. A reduction in geopolitical risk would be welcomed by markets\nafter the turbulence of 2020-22. <\/p>\n\n\n\n

7. Generation Z<\/strong>, born between the mid-1990s and\nthe early 2010s, is the first generation who cannot do without the internet.\nDigital devices and social media have managed to connect them across borders to\ncreate the first truly global generation. This makes them a new political and\ngeopolitical actor, especially in the US and Europe. Generation Z, with the\nability and motivation to organize online to reshape corporate and public\npolicy, can turn politics upside down at the click of a button, complicating\ncompanies\u2019 business. That\u2019s why we all must understand the expectations,\npriorities, and concerns of this generation.<\/p>\n\n\n\n

8. We may not be fully aware of it, but who will emerge from\nthe presidential and parliamentary ballot boxes in Turkey<\/strong> next\nsummer is eagerly awaited by the international community as much as many Turks\nare. The election results are seen as an important geopolitical risk or\nopportunity. The debates on whether Russian geopolitical revisionism will bring\nTurkey closer to the West or shift it to the Beijing-Moscow-Tehran axis will\nnot be concluded in 2023 either. Efforts such as reconciliation with Gulf\ncountries, Egypt and Israel, normalization of relations with Syria, and easing\nthe tension in Libya are expected to continue.<\/p>\n\n\n\n

In a nutshell<\/strong>, 2023 will be fraught with so many\ngeopolitical risks that will intensely engage the insurance industry and with\nless good news. Let\u2019s prepare well in advance to manage them effectively if we\ndo not want to fall victim to, and pay dearly for, these risks.<\/p>\n\n\n\n

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Mehmet \u00d6\u011f\u00fct\u00e7\u00fc<\/h5>\n\n\n\n

Chairman,\u00a0Global Resources Partners, UK, and The London Energy Club. Former diplomat, prime minister adviser, IEA and OECD senior executive, director and independent board member at British Gas, Genel Energy, Invensys, \u015ei\u015fecam, Ya\u015far Holding companies. Chairman of the Middle East Institute, Washington DC, Advisory Board. He can be contacted at\u00a0mehmetogutcu@me.com<\/a><\/p>\n<\/div><\/div>\n\n\n\n

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To cite this work:<\/strong>\u00a0Mehmet \u00d6\u011f\u00fct\u00e7\u00fc, “Geopolitical risks awaiting us in 2023: How to navigate?”,\u00a0Panorama<\/em>, Online, 20 January 2023, https:\/\/www.globalpanorama.org\/blog\/2023\/01\/20\/mo <\/a><\/p>\n\n\n\n

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Copyright@UIKPanorama All on-line and print rights reserved. Opinions expressed in works published by the Panorama<\/em> belongs to the authors alone unless otherwise stated, and do not imply endorsement by the IRCT, Global Academy, or the Editors\/Editorial Board of Panorama. <\/p>\n","protected":false},"excerpt":{"rendered":"

What\u2019s in store for the global economy and geopolitics this year? Well, it looks as if the year  will not be pretty. A raging war in Europe, which can further expand, sky-high inflation engulfing the whole world, an energy crisis, disruption in world trade, supply chain, and investment flows, a looming worldwide recession, a cornered Iran, and an […]<\/p>\n","protected":false},"author":10,"featured_media":9878,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[512,486,507],"tags":[656,653,621,612,644],"class_list":["post-11419","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crisis-in-ukraine","category-opinion","category-russia","tag-english","tag-international-politics","tag-russia","tag-security-strategy-geopolitics","tag-ukraine"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/posts\/11419","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/comments?post=11419"}],"version-history":[{"count":0,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/posts\/11419\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/media\/9878"}],"wp:attachment":[{"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/media?parent=11419"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/categories?post=11419"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.globalpanorama.org\/en\/wp-json\/wp\/v2\/tags?post=11419"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}