What is Forecasting?
Stratfor draws on a disciplined methodology that is based on a sober, geopolitical understanding of the world. When we combine this methodology with a deep appreciation of history, intelligence collected from around the world and a voracious analytical appetite for new and undiscovered anomalies, our team emerges with an understanding of what must happen, rather than what may. This is forecasting.
Forecasting through the internalization of constraints, rather than mere speculation about possibilities, takes both guts and discipline. What happens today is important, and we put that into context for our subscribers and clients. But the ability to predict what comes next (a month, a year, and even a decade from now) is what truly sets us apart.
Stratfor constantly monitors events against our annual and decade forecasts, and we grade ourselves – publicly – on the accuracy of our predictions each year. Read on for just a few highlights from our extensive history of accurate forecasts:
January 1995, Southeast Asia
Forecast: In our 1995-2005 Decade Forecast, Stratfor predicted the peak of the Southeast Asian “tiger” economies, stating: “The last decade’s surge in East Asian economies will be peaking early during the 1996-1997 cycle.”
Event: The 1997 Asian financial crisis triggered fears of a worldwide contagion. And in 2001, the London School of Economics wrote in a retrospective that “the timing of the Asian financial crisis and its depth took the financial and academic community by surprise, largely because this crisis did not fit traditional first- or second-generation currency crisis models, which relied on a deterioration of economic fundamentals."
November 1999, Philippines
Forecast: Stratfor predicted that Philippine President Joseph Estrada would not serve out his six-year term in office, “whether removed by force or by the broad coalition arrayed against him.”
Event: In 2001, Estrada was ousted by the People Power II movement, three years before his term was up.
January 2002, Europe
Forecast: Stratfor recognized the makings of the European financial crisis and wrote, "The euro's toughest tests will come when recession grips part or all of the eurozone. Europe lacks the economic synchronization of a single country.... What's good for Germany may not be good for Greece.”
Event: The financial crisis, which emerged first in the United States in September 2008, quickly impacted Europe, devastating the economies of several countries – including Greece.
January 2005, Security/Terrorism
Forecast: Stratfor began to identify and track the declining influence of al Qaeda as a group and noticed the beginning of a trend in which the jihadist movement’s center of gravity was shifting from the al Qaeda “core” toward regional spinoff groups and grassroots operatives in the West.
Event: This trend was borne out in several intervals and name changes, including:
- September 2006 – Algeria’s Salafist Group for Preaching and Combat became Al Qaeda in the Islamic Maghreb (AQIM).
- January 2009 – Al Qaeda in the Arabian Peninsula (AQAP) was born.
- June 2010 – Al Qaeda in the Arabian Peninsula launched “Inspire” Magazine, asking grassroots jihadists in the West to launch attacks where they lived.
- January 2014 – The Islamic State in Iraq and the Levant broke with al Qaeda, establishing a separate, more radical pole in the jihadist world.
January 2007, Former Soviet Union
Forecast: Stratfor predicted Russia's resurgence as a major geopolitical power and identified Georgia as a key battleground.
Event: In August 2008, the Russo-Georgian war broke out.
January 2008, Iran
Forecast: Stratfor wrote about divisions among conservatives in Iran’s power circles and identified the country’s presidential election, scheduled some 18 months later, as a catalyst for events.
Event: In June 2009, divisions became evident to the world during the so-called "Green Revolution" that followed President Mahmoud Ahmadinejad’s re-election. Stratfor accurately predicted the failure of the uprising.
May 2008, Afghanistan
Forecast: Stratfor investigated the possibility of NATO forces negotiating with the Afghan Taliban.
Event: This policy option, discussed only behind closed doors at NATO at the time, emerged from official sources in January 2010.
2009, Former Soviet Union
Forecast: In The Next 100 Years, Stratfor founder George Friedman wrote of a Russian resurgence, which would return Russia to its status as a major regional power and a sphere of influence encompassing much of the former Soviet territory. Friedman predicted that Russia’s rise eventually would lead to clashes with European states, including Poland and the Baltics. “The great retreat of Russian power ended in Ukraine. For the next generation, until roughly 2020, Russia’s primary concern will be reconstructing the Russian state and reasserting Russian power in the region,” he wrote.
Event: In March 2014, Russia annexed the Crimean Peninsula and contributed to violent unrest in Ukraine’s autonomy-seeking eastern regions. The annexation sent shock waves through Europe’s political and defense arenas, prompting discussions of stronger defense alliances – especially in Poland, Romania and the Baltic states.
June 2009, Europe
Forecast: Stratfor accurately predicted that Greece would become the first debt-ridden European country to melt down and seek a bailout in the wake of the financial crisis. We also predicted Ireland would be the second.
Event: In May 2010, the European Union and International Monetary Fund agreed to a three-year bailout deal for Greece. In November 2010, Ireland also requested a bailout deal.
September 2009, Saudia Arabia/Yemen
Forecast: While tactically evaluating a failed attempt on the life of a deputy justice minister in Saudi Arabia by al Qaeda in the Arabian Peninsula, we stated that the explosive device (which was smuggled in the bomber’s undergarments) could eventually be replicated and used in an attack targeting an aircraft. In a follow-on analysis, Stratfor prominently called out underwear bomb devices as a new threat to aviation.
Event: On Dec. 25, 2009, a Nigerian operative sent by al Qaeda in the Arabian Peninsula tried to use an underwear bomb to destroy Northwest Airlines Flight 253 over Detroit, Michigan.
Forecast: We made a highly controversial forecast that the United States and Iran would become strategic partners.
Event: In 2014, Washington announced a policy of rapprochement with Iran over its nuclear program. The two were pushed closer into partnership by a jihadist surge in neighboring states. Negotiations between Iran and the six world powers culminated in a nuclear agreement in July 2015.
January 2011, Egypt
Forecast: Stratfor maintained that the military was the force to watch in Egypt. During the “Arab Spring,” a time when many believed a true revolution was under way, we stated: “The important thing to remember is that the Egyptian military, since the founding of the modern republic in 1952, has been the guarantor of regime stability. Over the past several decades, the military has allowed former military commanders to form civilian institutions to take the lead in matters of political governance but never has relinquished its rights to the state.”
Event: In the spring of 2014, Egypt’s armed forces chief, Gen. Abdel Fattah al-Sisi, resigned his military post and announced his presidential candidacy. He easily won election in May 2014.
November 2011, Europe
Forecast: Stratfor warned that Europe’s ongoing economic crisis would create fertile ground for nationalist and far-right political movements. In later months and years, these groups gained traction in various EU countries at different times.
Event: A watershed moment occurred with European Parliament elections in May 2014, when anti-establishment and euroskeptic parties more than doubled their presence in the parliament, creating stronger challenges for mainstream groups.
February 2012, Middle East
Forecast: As the Syrian crisis evolved from a rebel insurgency to a civil war, Stratfor predicted the rise of jihadism amid the Syrian rebellion, and a gradual spillover in Iraq that would deepen regional sectarianism and put Iran on the defensive.
Event: In June 2014, militants from the Islamic State of Iraq and the Levant overran Mosul and swept through large swathes of northern and western Iraq.
April 2012, Europe
Forecast: Stratfor stated that rising levels of emigration from Central and Eastern European countries would eventually become a serious issue for the largest economies in Europe.
Event: In January 2014, the British government announced policies designed to make it harder for immigrants to obtain welfare benefits. Also that month, the German government established a special committee to investigate the effects of immigration from Eastern Europe, amid complaints from German cities.
May 2012, Spain
Forecast: We predicted a banking bailout for Spain.
Event: A banking bailout for Spain was announced in November 2012.
July 2012, Europe
Forecast: While the financial markets were in a frenzy over the Greek bailout, Stratfor stressed that the financial crisis was a political crisis at its core that would test the Franco-German relationship.
Event: For much of 2014, the French and German governments expressed contradictory views about the future of the European Union, with France demanding a weakening of the euro and softer deficit targets for eurozone countries. Germany repeatedly rejected both ideas.
August 2012, Iran
Forecast: Stratfor maintained its standing assessment that Israel would not launch a unilateral strike on Iranian nuclear facilities, giving a low probability to an attack in August 2012.
Event: Despite heightened rhetoric and warnings of an imminent attack in the run-up to the U.S. presidential election and Iranian naval exercises in the Strait of Hormuz, the threat and subsequent market volatility proved unfounded.
January 2013, Europe
Forecast: Stratfor warned that Europe’s financial crisis would extend from the periphery to the core of the eurozone, with a particular focus on France.
Event: In June 2014, France announced that unemployment had reached a new record high of nearly 3.4 million. Additionally, the country’s national statistics bureau predicted the economy would grow by only 0.7 percent in 2014, significantly below the 1 percent forecast on which the government based its economic plans.
May 2013, Iraq
Forecast: We wrote: “Al Qaeda in Iraq is trying to use the Syrian conflict to reignite sectarian warfare in Iraq and thereby create an uninterrupted operating space stretching from Iraq to Lebanon.”
Event: In June 2014, the Islamic State in Iraq and the Levant (ISIL) – a radical offshoot of Al Qaeda in Iraq – overran Mosul and created a porous battle space in the Middle East, essentially eradicating the dividing line between Syria and Iraq.
January 2014, Mexico
Forecast: Stratfor’s security analysts correctly predicted substantial shifts among organized crime groups in northeastern Mexico, given the weakened state of the Gulf Cartel factions in Tamaulipas state. Among these shifts, we predicted in March that the Tampico faction would collapse, bringing new violence as external groups became involved in cartel turf battles.
Event: In April 2014, violence associated with outside groups surged and spread in Reynosa and territory controlled by Los Zetas.
January 2014, Argentina
Forecast: We wrote: "The government will try to normalize its external position — softening up trade restrictions and/or reaching deals with lenders such as the Paris Club and multilaterals such as the International Monetary Fund and World Bank — in order to gain access to international capital markets."
Event: In late May 2014, Argentina announced a deal to settle outstanding debt with the Paris Club, 13 years after default, for $9.7 billion.
January 2014, East Africa
Forecast: We stated that economic and transportation supply chain infrastructure would become more deeply integrated in southern and eastern Africa during the year.
Event: This forecast took shape in a series of announcements between June and December 2014, including ratification of a monetary protocol by Tanzania (in June) and Uganda (in December); the implementation of a single customs territory for central trade corridor between Kenya, Uganda and Rwanda in July; the launch of construction on a Uganda-Kenya railroad in November; and Tanzania's joining a one-tourist visa system for East Africa, also in November.
Forecast: In June, we predicted that the threat of a Grexit would be temporarily averted when Greece and its creditors reached an agreement on debt payments, with the European Central Bank using Emergency Liquidity Assistance measures as its primary bargaining chip in negotiations. We also stated that the ruling Syriza party would be divided over the deal and break up into smaller factions – leading to a new, more moderate government in Athens.
Event: The European Central Bank withdrew Emergency Liquidity Assistance to Greece on June 27, leading to capital controls and weakening Prime Minister Alexis Tsipras' standing in Syriza. Greece and its creditors reached an agreement July 12, preceding a split of Syriza into smaller factions.