Politics

Top 11 Geopolitical Risks for 2022


Top 11 Geopolitical Risks for 2022

Top Geopolitical Risks for 2022

Below is a flurry of thoughts about the year ahead from a geopolitical risk vantage point. It’s a casual read best skimmed over the first sip or two of coffee before your brain is fully engaged. It’s not a short read at 5k words (16.7 mins for the average reader…), but hopefully has a thing or two you might not have known before. I’ve sat through the film ‘Cats’ so I know time wasted….

This analysis is more art than science, and indeed more Rothko than M.C. Esher. Much better and indeed more articulate ponderings have – and will – be written. As a formal diplomat turned crypto degen, I’m just spit-balling as a new-found spectator. Armchair general-ing is certainly less stressful – especially with a Piña Colada in hand.

So, what is geopolitical risk anyway & why should I give a monkey’s?

Geopolitical risk is about relations between nations – at the political, economic, military, and cultural/ideological level. Risk conventionally occurs when status quos are threatened. Risks are not just a big deal for states, however. They also matter for non-state actors, especially in the private sector, as developments impact corporate and investment decisions, supply chains, consumer spending, client strategies and how much a pint is on that holiday you have been saving up for.

As you’ll probably agree, 2021 was a rollercoaster…if that rollercoaster came in an IKEA box and was hastily put together by that couple who thought the third date felt like the right time to move in together… Who knows whether anyone predicted 12 months ago that I would fail to pick up a guitar for another year, or that I’d start to look at floorboarding with the same passion I once gazed upon a 2-for-1 Jägerbomb.

However, finding solace in the fact we have a new calendar year upon us may be short-lived as 2022 has the potential to make 2021 look like watching paint dry. One primary driver for this is that more than ever there is increased reputational pressure for both state and non-state actors alike to act more responsibly and ethically. Indeed, if 2021 taught us anything it was that increasingly influential generations in particular (read: Gen Z, millennial) have more and more leverage – particularly when it comes to topics like climate, ESG, transparency and data privacy.

So, without further ado, let’s take a butchers at some of the obvious risks – after which we’ll explore some of those that might not be on your risk radar. In total there are 11 – enough for a questionable football team.

1. The next X-Men protagonist – a SARS mutant

Of the potential risks in 2022, the primus inter pares is what happens next with the Coronavirus, or another virus. One of the most terrifying risks for 2022 is an exponentially more virulent and vaccine-resistant mutation of Covid-19. The biggest threat there is not that it shuts countries, companies and families down once more, but more that it goes full bubonic plague on humanity. Leaders around the world go to sleep worried about this prospect, even though it might seem unlikely. The positive news so far with the latest variant – the oft-mispronounced Omicron – is that while it has been spreading at a rapid pace, it appears relatively milder than previous variants.

An accelerator of disaster would be if a further, more virulent mutation should hit, and if that mutation was met with lack-lustre policy responses by governments, especially in light of lockdown fatigue.

Those who would be most at risk will, alike the Covid-19 situation, be developing countries, mainly in the global south, whose vaccine rollouts have been poor, in no small part due to apathetic decision-making in major economies. A further cause for concern is the natural domino effect resulting from a potential mutation hitting countries without robust medical system and health emergencies leading not only to social unrest, but towards a full-blown security crisis. Limited ability to provide reinforcements at the international level would also compound upheavals in domestic situations.

2.  Inflation + Central Bank mismanagement in a post-Covid world

Our second risk takes its inspiration from a swimming pool lilo…inflation. (Sorry). A lot of money has been pumped into the global markets – including because we have gotten ourselves to a place where quantitative easing (QE) is now an expected – and near mandatory – policy response to economic crises. Anyhow, this liquidity rush has caused further excess wealth (i.e. all the billionaires becoming whatever comes after billion), a greater ability to borrow and spend, mixed together with supply issues, and there you have it, some of the key ingredients of a tasty inflation cocktail.

Monetary policies – puppeteer-ed by Central Banks – have largely resulted in a huge amount of liquidity being pumped into the markets. At the same time fiscal policies – reigns held by governments – have also gone bananas with spending for businesses, infrastructure and social security. With both of these taps being turned on, it is back to the central bankers who will play plumber and try to turn them off when economies overheat. But the same bankers are equally terrified by the prospect of their economies stalling due to COVID, which means a fear or raising interest rates too high and thus enabling inflation to have a strong chance at continuing its rise in many places.

Inflation works like Nirmal “Nims” Purja: if it goes up, it will likely keep going up. (If you have not seen the documentary ‘14 Peaks’ yet – stop reading right now and put it on – I’ll forgive you). Today, aggressive global monetary and fiscal easing is unprecedented and is already causing inflationary pressures. The main problem – and very real risk – is that the mechanism to manage inflation is to raise interest rates, which increases the cost of debt, meaning a squeeze on budgets for government and companies creating a reduction in spend/activity.

So what you are saying is it is all a mess and I should probably just take my savings to Vegas and put them on red 32? What about all my mates on Instagram who are day trading from their high-rise apartments? Well, to those lucky devils you can say that historically high inflation usually means stock markets fall. Most bond prices also don’t usually perform particularly well. However, government bonds might be the biggest risk because yields are negative in certain developed countries, or very low with very limited return upside potential (which, granted, is generally great for debtors). History suggests gold also does fairly well during periods of higher inflation, as do currencies of commodity-exporting nations, commodity sectors and resources equities.

3.  A China unlike any other, except the China’s before it, or not?

A disclaimer with no.3 – I am an amateur Sinologist, so this section is fairly long. Don’t worry if you haven’t a clue what that means – nor did I until I was mid-way through my second degree in East Asian studies reading about Laozi, Menzi, Kongzi and Jiaozi (the last one for non-Mandarin speakers means dumpling. Take a bow). But suffice to say that final quarter of 2021 has seen quite the buzz among my fellow – and far more adept – China watchers.

In 1937 the American writer Edgar Snow wrote about a then fairly obscure guerrilla army somewhere yonder, titled his musings ‘Red Star Over China’. This account of the Chinese Communist Party (CCP) talked about dreaming of a new birth of nationalism for the middle kingdom.

70 years later, there is another red star. That star is, of course, President Xi Jinping, who has firmly declared a new era in Chinese history has begun. At China’s recent Sixth Party Plenum meeting the sexily titled “major achievements and historical experience of the CPC’s 100 years of endeavours” sought to revise historical hiccups and also made Xi Jinping Heman Master of the Universe. Basically.

This shift came on the back of Xi’s crackdown on excess wealth since 2020 – but it actually has a longer history, back to 2012 just before Xi took the reigns of the largest country in the world. Xi has long had beef with an unequal distribution of economic goods, and he has finally done something seismic enough to show he means business: he changed China’s ‘principal contradiction’.

The ‘principal contradiction’ is not well understood outside of China. It is is a Marxist dialectic term, which in the Chinese context effectively serves as a maxim to guide societal development. The principal contradiction has only been changed twice since Edgar was bouncing around with the Red Army in Bao’an – once shortly after the birth of the People’s Republic in 1949 and another in 1981. For the past four decades the ‘contradiction’ has been between “the ever-growing material and cultural needs of the people versus backward social production” – policies have therefore been aggressively focused on opening up and economic reform. The main contradiction today, according to Xi, is economic inequality – meaning that moving forward, China will be now focused more on ‘common prosperity’.

This historical revisionism, in aid of ‘common prosperity’ will shape all aspects of Chinese life and policy – foreign policy, crimes, party loyalty, karaoke songs in KTV bars etc., so investors are scratching their heads how this will develop.

In response to these developments the investors we all love to slate are about as united on what’s happening in China as the UK was on Brexit. You have Soros, Paul Marshall and SoftBank – who have defined the developments as ‘blundering’, ’inevitable’ and ‘wait & see’ respectively – sensing an imminent bear market , and Fink, Schwarzman and even Ray Dalio – the latter of whom called the moves nothing more than ‘wiggles’ – bullish. Even Cathie Wood’s ARK is stuck, first dumping shares and then accumulating tech stocks.

Truth is, no one knows. Wiser folk than I have postulated it probably makes most sense looking at solutions to the stuff that actually really matters to the top dogs’ legitimacy in the CCP – social inequality, national security (especially anything related to data) and the twin perils of ageing population/falling birth rate.

4.   Spectacularly failing to coordinate & implement climate initiatives

Coming in hot at number 4 is that stuff that’s melting the icecaps…the changing climate.

COP26 in November 2021 was a great success as much as it was a shambles. Really depends on who you ask. In addition to governments who often face the brunt of public judgment, investors and asset managers in particular arguably need to do more walking than talking. An effective global clean energy transition will require a collective effort, with capital allocators needing to play a catalytic role.

But let’s look beyond the fancy jolly in the rainiest place in the known universe (Glasgow) and look at some of the more transformative climate measures to try to gauge potential risks a-foot. For example, the EU’s Carbon Border Adjustment Mechanism – a carbon-pricing system for imports into the EU which is aimed at preventing the risk of carbon leakage. This mechanism first and foremost risks adding to existing geopolitical friction as its basically viewed by other states as straight-up protectionism in a fake moustache and a beret. Mis-guided responses to this – and other climate initiatives- in my view, pose as much of a threat as doing nothing in the first place.

Moving East, there are very real stability risks, which could start to play more of a role given implications of net zero for oil-exporting states, not just in the Middle East, but also in Africa and Latin America. There are real political risks inherent in any attempt to diversify economic models away from fossil fuel dependency. Some countries rely heavily on oil and gas for their budgets and supporting their citizens. If they do not have the fiscal firepower or attract enough foreign investments, transitioning would seem a tall order. For example, if I am Guyana and I have found the world’s biggest offshore oil and gas discoveries in years (10 billion barrels of recoverable fossil fuels), I’m likely to ramp up production. ASAP Rocky. You can keep your solar panels and wind farms, thank you very much.

A more nuanced point here is obviously that any acceleration towards turning off old ‘unsustainable’ energies, especially if not coordinated, could also have the capacity to cause a squeeze and potentially disrupt supply chains for minerals which clean energies like electronic vehicle require.

I’d be surprised if, on top of everything else national governments and MNCs are trying to juggle, we see a faultless swan lake coordination of the implementation of promised climate initiatives. Tread wisely.

5.   NAT-OH NO – HERE COME THE RUSSIANS!

5, fittingly, rhymes with ‘staying alive’, which bring us to our next risk. But before starting this section can we please stop referring to Russia as the ‘bear’, or China as the ‘dragon’ – animal metaphors are so management consultancy circa 2014. Just stop it.

Ok so where were we. Ah yes, “What’s that on the horizon?” asked one Ukrainian farmer to another. “Looks like 100,000 Russians with guns.” Replied the other. Oh, great…

Look, Russian flexing is nothing new, but this recent mobilisation is different. The build-up has an all-new feel to it and it is scaring the bejesus outta not just Ukraine but the international community, especially NATO. Respected estimates suggest around 75% of Russian’s total battalion tactical groups have been moved, which is no joke. Beyond the movement of troops, we have also seen diplomatic ultimatums and rejection of initial mediation, worrying diplomatic rhetoric and cyber intrusion. Some estimates put an invasion as likely as early as late January 2022. As Putin made clear during his annual media pilgrimage, NATO is not welcome in what he considers Moscow’s backyard: former Soviet territory.

However, it is important to clarify that Ukraine is not part of NATO and therefore a Russian invasion of Ukraine doesn’t legally trigger any direct military response from Western powers. Russia invaded Georgia (not a NATO member) in 2008 and annexed Crimea (part of Ukraine) in 2014. UK Defence Secretary Ben Wallace has already indicated a UK military response to a Russian invasion of Ukraine is “highly unlikely” to defend Ukraine and the signals from Washington have focused on the economic over other hard power tools of retaliation. The only silver lining is the recent calls between Putin and Biden, but don’t hold your breath.

These tensions have a knock-on effect with Russia’s already thorny relationship with the EU. The Russians have huge leverage over the EU – supplying approximately 50% of Europe`s natural gas imports, therein giving Moscow significant power to deprive European populations of energy and much needed heat during the winter months. This does not mean that Russia will push this button, but undeniably weakens Brussels’ hand, and also increases their willingness to resolve the Ukraine crisis diplomatically.

The EU is also somewhat distracted with its own internal problems – particularly with some of these former Soviet territories. Flare ups and populism re-ignition in Poland and Hungary is also resulting from tapping into dissatisfaction through economic nationalism which in turn supports protectionism policies and immigration restrictions. This is in addition to the more talked-of risks: EU-UK fighting, the departure of Auntie Angela (cue violin – or accordion, more Germanic) and pressure mounting for Uncle Emmanuel at the Élysée Palace.

So, the risk of miscalculation leading to a Russian invasion of Ukraine and further messiness in European markets may well be a-foot for the new year, potentially just as we have just about sobered up from New Year’s Eve. However, expect to see diplomatic channels working over-time in parallel to try to avoid military actions. 

6.   BAN THEM ALL! THOSE DANGEROUS, DASTERDLY DIGITALLY CRYPTO CURRENCIES, OR ARE THEY COINS?

Gm. WAGMI. Probably Nothing. If you know what I’m talking about, you’re early. If you don’t, you’ll still be early. But don’t worry, by next December you’ll be hodling and complaining about the fudsters – even when you get rekt.

While the financial ‘INDUSTRY’ has hastily reversed their formerly gilded mantras of “buy the dip, short the VIX, f*** bitcoin”, politicians and policy makers are less convinced. Central Bankers are somewhere in the middle on crypto and digital assets/currencies, depending on where you are, of course.

You know, spooky, voodoo stuff which has made 38-year-old white men from the US tweet aggressive memes, often multiple times a minute. More specifically the risk is the panic by those who haven’t yet boarded the train and want to protect the centralised, exploitative world we all currently inhabit.

At even a whisper of ‘digital’ or ‘crypto’ currencies, many geopolitical ‘experts’ and economists (sic) go all “well if financial innovation isn’t carefully managed it’ll be at the root of the mother of all economic crises…global financial stability and the control of information will collapse, and it will be the arrival of the apocalypse.”

But geopolitical sages are not alone. Politicians, legislation, policy makers and regulators alike also all seem to be generally sceptical – which means we continued confrontation on our hands. Elizabeth Warren in particular seems to be terrified by decentralised finance vs the scenes caused by, you know, that thing which caused the global recession just over a decade ago – centralised finance.

So, why is this a geopolitical risk? Well there is a question of global dollar dominance being challenge (/replaced). More acutely we’ve seen a ‘if you can’t beat them, join them’ approach from central banks who’ve been exploring digital currencies – as a half-way house to crypto adoption as, of course, it would still enable some sort of control without going fully bankless. Indeed, 81 countries representing 90% of global GDP are exploring CBDCs. Not since 1694 since the Bank of England began regularly issuing bank notes has such a transformative opportunity been presented. And with opportunity comes the risk of crisis – as powers old and new come up against one another. 

7.   Look, you’ve got to mention cyber!

For number 7, we’re going to be talking about cyber risks. Cyber. Cy-ber. Shivers. Buzzword bingo complete! But actually, we’re not. Well, sort of. Hear me out.

Yes, yes cyber is important, and an undoubted geopolitical risk. Many states’ security apparatuses will continue to go after adversaries’ critical national infrastructure (meaning assets essential for socio-economic functioning, e.g. communications, defence, energy etc), as well as dominant industrial players for trade and IP secrets. This will at least ensure those of us smart enough to study computer science at school will stay on course to get their Caribbean beach house and retire by 40. But what will be more interesting in 2022 is the impending regulation around the industry which is closing in.

I don’t want to go all Game of Thrones here, but REGULATION IS COMING! It’s a case of when not if. Regulation won’t just hit cyber but will encompass data and privacy as well – all of the deadly sins caused by the moloch of technology.

So, let’s break down why it will likely be the year for private regulations. First, on the back of GDPR in the EU, the US is getting more serious. Businesses and government will fight about how best to do it, but there’s an inevitability that the next year will shape the bulk of it.

Second, data. We are already seeing new data protection laws in countries like China and Saudi Arabia, and it’s likely many more will follow. Japan, Australia, Vietnam, Canada and a host of others are all taking a long hard look at existing legislation – and largely coming to the same conclusion: we should probably update that thing that applied before the invention of the internet…

Third, regulation – and laws – will also likely come in around ransomware, potentially even incorporating attacks as threats against critical national infrastructure which means perpetrators could be hunted down by cyberpunk versions of Dog the Bounty Hunter.

Moreover, it is not inconceivable we will also see new requirements around insurance, especially with regards to cyber risk and covering losses from any breaches.

Whatever happens, the needle is likely to move and not everyone is going to agree so we’ll have to keep a watchful eye on who wins the argument.

Overlooked risks

So that’s the more obvious stuff out of the way, but I’m a contrarian – and not just because its way more fun, but out of necessity. So, let’s get under the hood of the chevvy (which I assume is how folk from the mid-west of the US refer to lesser spotted risks) and unpack a few potential surprise jack-in-the-boxes.

8.  Elections galore in emerging markets

So, there are a few important elections coming up in 2022, which likely won’t grab headlines in the way they should. (For any journos reading, this is now your Everest.) France will dominant, because it’s France and maybe the fate of the EU rests in the balance (…), as will maybe Australia’s federal elections. Not to mention the mid term elections in the US and whether the Democrats can hold onto their (slim) majority in Congress. And some outfits will focus on India’s state assembly votes as an indication of how the general election of 2024 might play out for Prime Minister Modi.

However, there will also be particularly important elections in a host of other countries including Kenya, Philippines, South Korea, Brazil and Colombia. And all of these are important economies in their respective regions, and the outcome of their politics will have an impact on the geopolitical landscape far beyond their borders.

First, term limitations mean Kenya and The Philippines are required appoint new leaders.

In Kenya, it’s a run-off between current Deputy President – and reimagined figurehead of democratic legitimacy – William Ruto and former Prime Minister – and opposition candidate to incumbent President Kenyatta – Raila Odinga – the latter of whom Kenyatta has put his weight behind after some flip-flopping. Kenya election periods are arguably the most violent in its post-Independence history, with ethnicity and tribalism at the heart of what drives the violence. This year could bring more violence, especially with socioeconomic tensions and ‘hustle vs dynasty’ narratives, both of which have been exacerbated by Covid-19. A lack of electoral system reform, corruption and interference in judicial independence hasn’t helped, either. 2021 wasn’t exactly democracies’ year in sub-Saharan Africa with military coups in Sudan, Guinea, Chad and Mali, and with the Horn facing less-than-smooth political situations in Ethiopia and Somalia – eyes across the continent and beyond will be watching Kenya with bated breath.

In the Philippines the post-Duterte era is likely to feature another Duterte-esque character – albeit in the form of the son of the country’s former kleptocratic leader, Ferdinand Marcos. Macro Jr – known as ‘Bongbong’ – is looking to take the Presidency with Duterte’s daughter as his running mate, therein aggregating dynastic power. Some of the challengers are also known figures, including boxer-turned-senator Manny Pacquiao, although Marcos is comfortably ahead – signalling a continuation of autocracy. If Marcos and Duterte Juniors get in, it’s safe to assume there will be continued concerns for human rights abuses, press freedoms, and shifts further away from the US, towards China’s embrace.

President Moon Jae-in must also step down, but only after a single term in office, in Seoul, and South Korea faces a particularly polarised choice in their candidates. March’s election will be a test of whether voters have any faith left in the ruling Democratic Party considering corruption allegations and tense relations with Pyongyang. The People Power Party opposition are polling higher than the likely Democratic nominee but there’s still very much all to play for. The winner will hold important reigns, dictating how the country engages not just with North Korea, but how it situates itself in the wider US-China tensions.

And extremely low ratings of leaders in both Brazil and Colombia could see swings to the left, or at least the centre, away from far-right incumbents.

In Colombia, the second election since the historic 2016 peace deal ending the civil war will see incumbent President Ivan Duque – who has the least popular polling of any Colombian President on record – attempt to fend off over 60 candidates (though with only a handful actually polling with any meaningful numbers). Gustavo Petro, a leftist former guerrilla-turned-Senator, is ahead but given coalitions are likely to be formed in the coming weeks, current polling figures are as useful as a lamppost to a drunkard – more for support than illumination. The election will likely be fought on the age-old topics for emerging market economies: corruption, taxes and healthcare.

In Brazil, President Bolsonaro does, granted, grab headlines – but often for his more questionable positions on political issues such as denying climate change, and dismissing Covid-19, than anything else. Former leftist leader, Luiz Inacio Lula da Silva, is looking to make a comeback to the political sphere which could make for a particularly interesting showdown in Brasilia – although at the time of writing, Bolsonaro is currently in hospital awaiting potential surgery. Polls show Lula leading, but given his previous conviction of corruption (now overturned), and a recent Bolsonaro move to increase cash assistance to those in need, could even the playing field.

Political risk is afoot with all – from extreme candidates getting into power and adopting less growth-conducive policies to election violence to increased domestic and international tensions.

Undoubtedly the financial markets will also react – trade, bonds, sectors all to watch, as will equity risk premiums.

9.  The capital often overlooked…human

What do a famous Japanese painting, Nazaré, Mexican football matches and Her Majesty Queen Elizabeth II all have in common? That’s right…waves.

And talking of waves in a seemingly transition – 2022 is set to continue a 2021 trend: one of resignations. Turns out people don’t love their jobs. Covid anxieties, skills shortages, need for more labour in different parts of economies due to Covid all continue to shape labour, globally.

A massive, often overlooked, risk is talent, and businesses just failing to hire and retain good people – including those with important institutional knowledge. HR strategies are still being made up but people who don’t have a scooby, when what 2021 – and 2022 – demand is a drastic re-thinking of the corporate strategy.

Covid-induced disruptions, hiring and the fact no one wants to be miserable working for John anymore (sorry, John, but you are as useful as a chocolate teapot), means that succession challenges are a major risk. The ability to attract and retain top talent will be enormous. This is changing talent pools and professional nous.

The continuation of this trend becomes a political risk to things like productivity – which are at risk of decreasing, potentially significantly. Couple this with the acceleration and adoption of digital technologies that require new skills, and we are also likely to see the digital divide globally increasing. Sigh.

10.  Is that debt? Shh, who’s making that noise…

Our penultimate risk brings us to a bloke called Dick who, sadly, doesn’t possess the same dulcet tones as Judi Dench, but who spoke for the first time publicly towards the end of 2021 about Moore problems to do with geopolitical influence. For those who are there already with that clever wordplay (I thank you), I’m of course talking about the new head of MI6 (Richard Moore) who warned of something I’ve also banged on about a fair bit in my time…hidden debt. And I think 2022 could be a turning point where people actually start caring because it will cause things to happen. Mysterious.

A basically buried multi-year study recently concluded that different countries owe China nearly $400bn – the equivalent to a steak at Salt Bae’s new steak restaurant in London. And the best part about it – they were ‘hidden’!

By hidden I mean having debt exposure to China from special purpose and semi-private loans (that are “kept off the public balance sheet“) in excess of 10% of their GDPs. Countries include 42 lower-middle income countries (LMICs) such as Laos, Papua New Guinea, the Maldives, Brunei, Cambodia, Myanmar, Zambia, Ethiopia, Chad.

That’s one problem. Another is that hidden debt doesn’t just cause issues for countries who now owe resources to China, but it also complicates debt relief talks with Western international financial institutions.

Another indicator there might be an issue is bonds – which have been trading at depressed prices. And couple this with the fact that Chinese companies have built nearly 200 sensitive African government buildings and over 14 intra-governmental ‘secure’ telecoms networks, and these countries and potentially their sovereignty is looking capable of being compromised. While the relationships between Chinese companies and the Chinese Government are murky at best, in many of these deals there is direct bankrolling or backing from Beijing, which means there will likely be state-to-state level implications down the line on these debts.

While the International Financial Institutions (read: IMF) probably think (unofficially) that any ‘hidden’ creditors should be in the back of the queue in case of a restructuring, if they did it would result in countries suffering even bigger losses. And that could lead to more economic decline and political instability – best case scenario. And leaves more of a gap for Chinese policy banks or other potentially less scrutinised creditors to come back in.

Western nations and institutions are scratching their heads about what to do but the risk is if they overextend too quickly, it could also bring about another now host of risks, but more on that next year…

11.   Emboldened Extremism

And finally, you will be aware of the Taliban putting Western – and non-Western but mainly Western – intelligence agency assessments to shame.

While there is continued risk in Afghanistan, one of the more macro geopolitical risks is overspill beyond its borders. More specifically, emboldened Jihadism globally, which has the potential to lead to more radicalisation and potential terrorism.

Take Africa for example, one of – if not the – biggest security threat on the African continent at the moment is the Sahel. There’s particular cause of concern among Western, especially EU, policy makers that it will become safe haven for terrorists linked to Al Qaeda & Islamic State, who are already emboldened by what seen as jihadist victory in Afghan.

We’ve already seen some of this risk manifesting in the latter half of 2021 – with increased piracy the Gulf of Guinea, continued terrorist attacks in Somalia and jihadist clashing in Mozambican Cabo Delgado where over 800,000 people have been displaced.

Displacement is important here as when coupled with disillusionment in particular, it results in a higher likelihood of radicalisation. As above, this flywheel continues to rotate towards more terrorism.

Other extremist and violent groups are also growing in number and diversity daily. Technophobia extremists, violent anarchists, or right-wing terrorisms/white supremacist groups – the latter of which rose over 300% globally from the five years in the run-up to Covid-19 according to the Global Terrorism Index – may, in response to increased extremism and momentum by Jihadists for example, also become more extreme. Violent extremists from all stripes are in one way or another, inspiring each other. As US, UK and other troops withdrew over the summer from Afghanistan, white nationalists have been praising the Taliban recently, with one for example calling the Taliban “epic” on Telegram. This is not a one-off. The extent of right wing praise of Jihadism “drew the attention of John Cohen”, head of the US Department of Homeland Security’s Office of Intelligence and Analysis.

Furthermore if you add together some of the other risks for 2022 above, such as hidden debt problems or inflationary missteps, into some of the markets where terrorism risks are particularly high, things have the potential to get even messier.

Ok I’m bored now – can you wrap up so I can make another cafetière?

I hear you.

Competition for global influence and the geopolitical impact that will have on us all is set to reach its highest level since the Cold War according to some folk that sit in a basement somewhere in an undisclosed location in the US. While no single locale will dominate risk in 2022, I’m sure strapping in for a bumpy ride in that seat. Taking a spare spanner with me, too.

If you’ve made it all the way here, congratulations! And thank you. Hopefully you’ve learnt something – even if its ‘don’t click on that link from James’s mother again’.

As I’ve now finished my last Piña Colada, I’ll spare you any more blabbering and simply say ‘buckle up kids’…2022 could make 2021 look like a blissful jog through fields of wheat.

– James Tunningley

James is tired, slightly intoxicated, and the Founder of Frontier Horizons. He is a long-standing writer for GRI.

The article was edited by GRI’ers Basim Al-Ahmadi, Ryan Chan & Eden Fall-Bailey. Graphic by Jasmin Martin-Lof.



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