Risk Assessment 2024
The Eurasia Group is a political risk consultancy, started by Ian Bremmer in 1998. Their annual risk assessment report is widely read by movers and shakers worldwide. This year’s Top Risks, dubs 2024 “the Voldemort of years, the annus horriblis, the year that must not be named.”
They note “that three wars will dominate world affairs: Russia vs. Ukraine, now in its third year; Israel vs. Hamas, now in its third month; and the United States vs. itself, ready to kick off at any moment. Russia-Ukraine is getting worse. Israel-Hamas is getting worse… and then there’s the biggest challenge in 2024… the United States versus itself. Fully one-third of the global population will go to the polls this year, but an unprecedentedly dysfunctional U.S. election will be by far the most consequential for the world’s security, stability, and economic outlook. The outcome will affect the fate of 8 billion people, and only 160 million Americans will have a say in it, with the winner to be decided by just tens of thousands of voters in a handful of swing states. the losing side— whether Democrats or Republicans— will consider the outcome illegitimate and be unprepared to accept it. The world’s most powerful country faces critical challenges to its core political institutions: free and fair elections, the peaceful transfer of power, and the checks and balances provided by the separation of powers. the political state of the union… is troubled indeed. None of these three conflicts have adequate guardrails preventing them from getting worse. None have responsible leaders willing and able to fix, or at least clean up the mess."
In a world beset by crises, the prospect of a Trump victory will weaken America’s position on the global stage as Republican lawmakers take up his foreign policy positions and US allies and adversaries hedge against his likely policies. US support for Ukraine will face stronger headwinds on Capitol Hill, straining the transatlantic alliance and leaving Ukrainians and their frontline European supporters in the lurch. Kyiv will take increasingly reckless actions to make what gains it can before the next president takes office, while hopes for a definitive end to US aid in 2025 will stiffen Russia’s resolve to keep fighting. In the Middle East, Trump’s prominent support for Israel and willingness to bomb Iran for transgressions will embolden Israeli Prime Minister Benjamin Netanyahu and limit Biden’s political space for policy maneuver. Pressure from congressional Republicans, meanwhile, will make it politically harder— albeit not impossible— for Biden to preserve the “thaw” with china this year. the shadow of Trump will lead US allies and adversaries to brace for his return to office, with destabilizing consequences long before inauguration day.
If Trump wins the election, Biden will concede. But while Democratic leaders may be less likely to claim the election was “rigged” than the former president, they will still treat Trump as illegitimate, believing he should be in jail and is unfit for office. Some congressional Democrats will likely vote against certifying his election on the grounds that he is not qualified to serve under the 14th Amendment, undermining trust in American electoral institutions. The response inmajor cities would be a repeat of the massive street protests during the 2016 presidential transition, but in a country even more bitterly divided and with an opposition coalition more convinced that Trump 2.0 beckons the end of American democracy. Whether driven by extremist elements, clashes with counter-protesters, or opportunistic bad actors, widespread violence is a real (and indeed nearly inevitable) risk. The danger will intensify over the course of a Trump administration as he pardons those arrested for storming the Capitol on 6 January, allowing them to return to their quasi-militias and organize against what they see as elite leftist institutions.
If Trump loses, he won’t accept defeat. Instead, he will do everything in his power— legal or illegal— to contest the outcome and impugn the legitimacy of the process. He has fewer options for challenging the results than he had as president in 2020, owing to the passage of the electoral count reform act and the fact that he’s not the incumbent. But that will not stop him from trying— especially when he faces the prospect of prison time. Trump will allege mass fraud once again. He will incite widespread intimidation campaigns against election workers and secretaries of state in both red and blue states, demanding that they “find” extra votes for him. He will lean hard on Republican governors to submit slates of Republican electors in states Democrats won. and he will pressure Republican senators and representatives to object to states’ slates of electors to disqualify Democratic electoral college votes. While none of these efforts is likely to succeed, they will inflict damage on already low public confidence in the integrity of America’s democratic institutions.
Barring an unlikely Democratic landslide, Republicans are poised to see a Biden win as illegitimate, alleging either that the election was “stolen” or that politically motivated investigations made it more difficult for Trump to campaign. They will see Trump’s incarceration during the Biden administration as Democrats jailing the opposition leader for political purposes. This could create an unprecedented political crisis, destroying the remaining trust in federal
institutions Republicans still have and leading to calls for Biden to pardon Trump the same way Gerald Ford pardoned Richard Nixon to avoid national disunity. While large-scale violence is less likely in this environment, America’s political divide would deepen, and the nation’s fragmentation into red vs. blue states, cities, and towns would accelerate.
And then there’s the tail risk (unlikely but plausible) that you’d rather not think about: what if the world’s most powerful country is unable to hold a free and fair election on 5 November? Efforts to subvert the election could come from cyberattacks, deep fakes and disinformation, physical attacks on election process and oversight, and even terrorism to disrupt voting on the day. There’s no more geopolitically significant target than the upcoming ballot— a softer and more vulnerable target than most homeland security challenges— with plenty of foreign (and more than a few domestic) adversaries that would love nothing more than to see more chaos in America.
The United States is already the world’s most divided and dysfunctional advanced industrial democracy. The 2024 election will exacerbate this problem no matter who wins. With the outcome of the vote essentially a coin toss (at least for now), the only certainty is continued damage to America’s social fabric, political institutions, and international standing.
Trump: the final season?
What if he wins again?
Trump’s 2016 upset was met with horror from the American left and concern from allied world leaders, but generally positive reactions from American business leaders and optimism from global financial markets, which saw the lower taxes and deregulation of a Trump administration as a net positive for the US economy. The response next time around would be significantly more troubled, as a second Trump administration would have fewer guardrails than the first, reduced fiscal space, and more radical policy divisions among US states following eight additional years of polarizing politics.
A second Trump administration would take steps to consolidate executive power, weaken checks and balances, and undermine the rule of law. Trump would try to capture federal institutions by purging thousands of civil servants he sees as obstacles and replacing them with inexperienced loyalists. Much of a second Trump cabinet would be senior Republicans: former cabinet members Nikki Haley, Robert Lighthizer, and Mike Pompeo— known as capable within the broader policy community— are all likely to return. Key policy risks from the cabinet would include trade protectionism— with goals of broad-based 10% import tariffs and stripping most favored nation status from China— and unpredictability from the department of defense, where appointed leadership will be comprised of political loyalists more like Mike Flynn than Jim Mattis. At the same time, a core of Trump’s policy advisers in the White House (including the likes of Steve Bannon, Stephen Miller, and Kash Patel) would have virtually no relationships with elite business leaders or foreign dignitaries— and limited willingness to prioritize an audience with them.
Having gutted the “deep state,” Trump would be less constrained to break the rule of law. his first order of business would be to weaponize the FBI, the Justice Department, and the IRS to block proceedings against himself and his allies and persecute his political enemies. Biden and his family would be in the crosshairs, but how far this revanchist mccarthyism goes— to opposition lawmakers, media figures, donors, critics—vis a question of enormous import, especially in its signaling importance to determine behavior across the political spectrum, at best chilling political dissent and at worst squelching it nearly entirely.
There would be little remedy at the federal level to restrain a second Trump administration if it acts lawlessly. A divided or Republican-controlled Congress would be unable and unwilling to check Trump’s executive excesses, with impeachment and removal off the table even under a Democratic Congress. While a conservative supreme court, one-third of whose members were appointed by trump, would remain independent, it would have limited power to enforce its rulings against a renegade president, setting up the potential for a constitutional crisis the likes of which America hasn’t seen since the end of the Civil War.
The decentralized nature of the US system would remain a counterweight to dysfunction in Washington, as a weaker federal government would devolve power to the states and allow a free market of competing political and economic strategies to flourish. The flipside of this decentralization is that red and blue states would continue to grow polarized, not just on policy but increasingly in terms of who they attract to live, do business, and invest. This would create a fractured business and investment environment that would be difficult for companies to navigate as policies and regulations diverge from state to state and their choice of location becomes an implicit political statement.
Foreign companies would have a harder time understanding the political geography of America and spend more time trying to get on the good side of Trump’s political apparatus. Relationships across the federal government— and particularly with Republicans who have Trump’s ear— would become essential for foreign governments, even more so than they were in the first term. And investors are likely to see massive opportunities in deregulated industries but grow increasingly concerned about the US fiscal picture.
However positively markets may view its concrete policies, a second Trump presidency— with all its personalistic, authoritarian, and mercurial tendencies— would deal grievous harm to US democracy. It would also begin to raise foundational questions about the long-term stability of the US as an investment destination, the trustworthiness of its financial promises, the credibility of its commitments to foreign partners, and the durability of its role as the lynchpin of the global security order.
Had enough? And that’s without any discussion of Climate Change. Let’s skip down the list to another risk that needs a lot of assessment: Artificial Intelligence. “Gaps in AI governance,” states the report, “will become evident in 2024 as regulatory efforts falter, tech companies remain largely unconstrained, and far more powerful AI models and tools spread beyond the
control of governments.”
Last year brought a wave of ambitious ai initiatives, policy announcements, and proposed new standards, with cooperation on unusual fronts. America’s leading AI companies committed to voluntary standards at the White House. The United States, China, and most of the G20 signed up to the Bletchley Park Declaration on AI safety. The White House issued a groundbreaking AI executive order. The European Union finally agreed on its much-heralded AI Act. And the United Nations convened a high-level advisory group.
But breakthroughs in Artificial Intelligence are moving much faster than governance efforts. Four factors will contribute to this AI governance gap in 2024:
1) Politics. As governance structures are created, policy or institutional disagreements will cause them to limit their ambitions. The lowest common denominator of what can be agreed politically by governments and what tech companies don’t see as a constraint on their business models will fall short of what’s necessary to address AI risks. This will result in a scattershot approach to testing foundational AI models, no agreement on how to deal with open source vs. closed source AI, and no requirements for assessing the impact of AI tools on populations before they are rolled out. a proposed intergovernmental panel on climate change (IPCC)-style institution for AI would be a useful first step toward a shared global scientific understanding of the technology and its social and political implications, but it will take time… and is not going to “fix” AI safety risks on its own any more than the IPCC has fixed climate change.
2) Inertia. Government attention is finite, and once AI is no longer "the current thing," most leaders will move on to other, more politically salient priorities such as wars and the global economy. As a result, much of the necessary urgency and prioritization of AI governance initiatives will fall by the wayside, particularly when implementing them requires hard trade-offs for governments. Once attention drifts, it will take a major crisis to force the issue to the fore again.
3) Defection. The biggest stakeholders in AI have so far decided to cooperate on AI governance, with tech companies themselves committing to voluntary standards and guardrails. But as the technology advances and its enormous benefits become self-evident, the growing lure of geopolitical advantage and commercial interest will incentivize governments and companies to defect from the non-binding agreements and regimes they’ve joined to maximize their gains— or to not join in the first place.
4) Technological speed. AI will continue to improve quickly, with capabilities doubling roughly every six months— three times faster than Moore’s Law. GPT-5, the next generation of open AI’s large language model, is set to come out this year— only to be rendered obsolete by the next as-of-yet inconceivable breakthrough in a matter of months. As AI models become exponentially more capable, the technology itself is outpacing efforts to contain it in real time.
Which brings us to the core challenge for ai governance: responding to AI is less about regulating the technology (which is well beyond plausible containment) than understanding the business models driving its expansion and then constraining the incentives (capitalism, geopolitics, human ingenuity) that propel it in potentially dangerous directions. On this front, no near-term governance mechanisms will come close. The result is an AI wild west resembling the largely ungoverned social media landscape, but with greater potential for harm.
Two risks stand out for 2024. The first is disinformation. In a year when four billion people head to the polls, generative AI will be used by domestic and foreign actors— notably Russia— to influence electoral campaigns, stoke division, undermine trust in democracy, and sow political chaos on an unprecedented scale. Sharply divided western societies, where voters increasingly access information from social media echo chambers, will be particularly vulnerable to manipulation. A crisis in global democracy is today more likely to be precipitated by AI-created and algorithm-driven disinformation than any other factor.
Beyond elections, AI-generated disinformation will also be used to exacerbate ongoing geopolitical conflicts such as the wars in the Middle East and Ukraine. Kremlin propagandists recently used generative AI to spread fake stories about Ukrainian president Volodymyr Zelensky on TikTok, Twitter and other platforms, which were then cited by [Russo-] Republican lawmakers as reasons not to support further US aid to Ukraine. Last year also saw misinformation about Hamas and Israel spread like wildfire. while much of this has happened without AI, the technology is about to become a principal risk shaping snap policy decisions. Simulated pictures, audio, and video— amplified on social media by armies of AI-powered bots— will increasingly be used by combatants, their backers, and chaos agents to sway public opinion, discredit real evidence, and further inflame geopolitical tensions around the world.
The second imminent risk is proliferation. Whereas AI has thus far been dominated by the United States and China, in 2024 new geopolitical actors— both countries and companies— will be able to develop and acquire breakthrough artificial intelligence capabilities. These include state backed large-language models and advanced applications for intelligence and national security use. Meanwhile, open-source AI will enhance the ability of rogue actors to develop and use new weapons and heighten the risk of accidents (even as it also enables unfathomable economic opportunities).
AI is a “gray rhino,” and its upside is easier to predict than its downside. it may or may not have a disruptive impact on markets or geopolitics this year, but sooner or later it will. The longer AI remains ungoverned, the higher the risk of a systemic crisis— and the harder it will be for governments to catch up.
Let’s face it, American political discord is a major obstacle to effective AI governance. That's a problem for many reasons, one of which is that AI is rotten and mostly full of shit. With divided power structures, opposing priorities and bad actors from Trump to Marjorie Traitor Greene, Matt Gaetz and Lauren Boebert (not to mention lobbyists) involved at a decision-making nexus, crafting and implementing comprehensive regulations may be beyond just challenging, leading to fragmented and inadequate measures, leaving gaps in security and exacerbating existing risks. The lure of geopolitical advantage or commercial profit will inevitably incentivize defection from collective efforts and the common good. Is there any political— let alone corporate— leadership on the horizon that anyone can identify as trustworthy?