2013 Annual Forecast Preview
Video Transcript:
Video Transcript:
Stratfor will release on Jan. 7 its forecast for the year 2013. Here is a preview of the key geopolitical developments we expect to play out this year.
The fate of Europe will become more visible in 2013. The European Stability Mechanism and the European Central Bank’s ability to intervene in bond markets will continue to play an important role in holding European institutions together this year. And while the survival of the eurozone is no small achievement, these short-term remedies are piling over the deep structural aspects of the crisis that will only intensify this year. These include rising unemployment, rising social discontent, declining competiveness and the fundamental tension between integration and sovereignty in times of austerity.
While social unrest in the periphery will be severe, the economic crisis will also penetrate the core, with both Germany and France facing economic stagnation. France will see a lot more union-led protests this year, which will add to the political tension between Paris and Berlin. Political fragmentation will also spread beyond the eurozone as the United Kingdom, Central and Eastern European countries become more alienated from the decision-making of the core. Political resistance in northern Europe to bailouts will build, but in the end the European Union will provide financial assistance where needed for the sake of maintaining the integrity of the European Union.
The Middle East will remain in flux, with Syria in the spotlight. Militia and clan interests will dominate the northern Levant as Alawite forces struggle to maintain their hold on Damascus against Sunni rebel forces. The remaining minorities will prepare for what will end up being a very long and bloody sectarian fight in Syria and Lebanon.
This puts Iran in a major dilemma. With Syria and Lebanon unraveling, Iran will be largely relegated to the role of regional spoiler. It can sow instability in the Levant and the Palestinian Territories, but it no longer poses a strategic threat to the balance of power of the region. The United States will therefore be unlikely to engage Iran in a serious negotiation, preferring instead to see Iran weaken under the weight of sanctions. Iran will struggle economically this year, but the regime will hold together as it turns its attention to preserving Iranian influence in Iraq, the next key battleground after Syria.
Russia will be more flexible in natural gas negotiations in Europe in order to maintain its market share and strategic relationships with the European core. Russia will also face uneven success in trying to consolidate influence in its periphery -- Moscow will continue to face resistance in the Baltic states, but is likely to make some headway in its energy integration efforts with Ukraine this year. In the Caucasus, Russia’s fortified position in Georgia will cause a lot of unease in Azerbaijan.
China will continue its slow and painful process of rebalancing away from a model of high export-driven growth on the coast to a more sustainable system of developing the interior. China’s economic decline will be gradual and will manifest itself politically as the increasingly insecure Communist Party of China exhibits growing assertiveness over China's interests in the South and East China Seas.
The decline of low-end coastal manufacturing in China will open up opportunities for Southeast Asian countries like Indonesia, Vietnam, the Philippines and potentially Myanmar to attract new foreign investment. East African and Latin American states will also be looking to take advantage of diffusion of foreign investment away from coastal China.
In Latin America, a newly elected government in Mexico will make headway in energy reform, attracting attention away from ongoing cartel violence to significant economic development taking place in the interior. And in Venezuela, the likely incapacitation of President Hugo Chavez will create a power struggle among a triumvirate of chavistas as Vice President Nicolas Maduro is likely to struggle in trying to hold onto power against powerful oil and military interests amid decaying economic conditions.
These were just a few highlights but you can read the full forecast as well as detailed analysis on these trends on our website.
