By Graham Vanbergen: The Cold War peace dividend is disintegrating, geopolitical alliances are shifting, democracy is to be challenged, AI is exponentially accelerating, and legacy business models are crashing. In the context of a world becoming rapidly more unstable, what are the prospects in 2024 for the new world disorder?

 

One year ago, at dawn on February 24, the world changed. Russian President Vladimir Putin ordered the invasion of Ukraine. The Cold War peace dividend instantly disintegrated with a subsequent geopolitical reshuffle of allegiances and alliances. But more has happened in a year of dramatic change to the accepted world order.

According to the UN refugee agency UNHCR, nearly 115 million people worldwide have been forced to flee their homes by the end of September 2023, due to conflict, persecution and human rights violations. That is double the figure for the entirety of WW2. Global temperature records are shattered yet again, and AI suddenly appears to offer the greatest hope for humanity and a renewed fear of its demise in equal measure.

India overtook China as the most populous country in the world. Where relations between the two Asian giants soured over the last decade, particularly following a border brawl between Indian and Chinese troops in the Galwan Valley.

And whilst there were many other geopolitical events, such as the civil war in Sudan, and Azerbaijan seizing Nagorno-Karabakh – there was, of course, the attack of Israel that has seen thousands of women and children slaughtered in the retaliatory aftermath as the hunt for Hamas fighters continues.

In the context of a world becoming rapidly more unstable, what are the prospects for 2024?

Leaving aside the aforementioned, the global democratic recession continues unabated. Far-right parties have fared well across Europe during the last few years, resuscitating memories of how European democracies collapsed a century ago. politico.eu reports that – “Germany is currently confronting one of the gravest challenges to its democracy since the Nazi regime and its political establishment thinks the solution might be to ban the country’s second most popular political party, the AfD.”

Indeed, part of the problem here is political opportunism. In 2024, as widely reported, more than 70 elections will take place where over half of the world’s population, who are eligible voters, will choose the future of their leaders and the fate of democracy itself. Populists will make promises they can’t keep and do what they can to weaponise social media, policy levers, and exploit the continued global problem of immigration to win at all costs. And they have been making considerable gains over the last decade.

In ten EU countries, more than 10 per cent share of the seats held are by far-right political parties. The Netherlands, once a country of political moderation, has just elected a far-right Prime Minister. According to observers, Italy’s new PM, Georgia Meloni is the “most right-wing” republican government since World War II.

Switzerland, Hungary, Poland, Sweden, Austria, and Finland have significant far-right representation. France also looks like it is heading in the same direction. Much of this is about immigration – and with tens of millions on the move – it is not hard to see why there is a political shift underway – and away from democracy.

It should be noted, however, that 2024 will also be a year defined by the outcome of elections and wars. The ongoing conflicts in Ukraine and Gaza, along with the fear of a US-China clash over Taiwan, will affect the outcomes of the elections in Europe and the West, and those same election results will affect the outcomes of those same ongoing conflicts. The chessboard of power and geopolitics will change as each country decides.

AI will continue to cause sensational headlines. This is hardly surprising as the global AI market was valued at about $500 billion last year and is expected to grow to $2.5 trillion by 2032. All over the world, policymakers are attempting to catch up, especially the security services – with global recognition for its regulation. However, in this more divided world, 2024 will not usher in some sort of real agreement for a global governance framework to help monitor a regulatory set of agreed processes around AI. One example to take is just how long it took for world leaders to get around a table and agree on a strategy to save mankind from the climate crisis.

To make that point, world oil demand will rise faster than expected in 2024, and reach new record highs, which the International Energy Agency (IEA) confirms, a sign that the outlook for near-term oil use remains quite robust despite the COP28 agreement to transition away from fossil fuels.

As for other predicted events in 2024, the Financial Times editors have polished their crystal ball and collectively agreed that Donald Trump will not be America’s president-elect, that Keir Starmer will be the UK’s next Prime Minister, that there will be no wider regional war in the Middle-East, that China will not attack Taiwan, that Elon Musk’s X (formerly Twitter) will file for bankruptcy, that renewable energy will not outstrip coal-powered energy supply (in 2024) and that 2024 will break all global temperature records.

Foreign Policy predicts that a stalemate in Ukraine “will look a lot like the bloody but static World War I battles of 1915 and 1916”, with “more deadly battles that yield little territorial gains, and little to show for Russian President Vladimir Putin’s ill-fated war besides a higher death toll on both sides.”

This sounds like an escalation in global tensions is unlikely, but the reality is that it is now impossible to make predictions about war and peace today. 

Economically, the world has become just as unstable. Bankruptcies all over the world will soon be soaring, especially in the USA and Europe. The IMF reports that massive government support schemes for companies and households amounted to more than $10tn for 2020 and the first half of 2021. But since then, these packages have been largely withdrawn, and subsequently, interest rates have increased. And whilst interest rates will fall in 2024 – so will many companies.

And yet, as Isabella Weber, Assistant Professor of Economics at the University of Massachusetts, recently stated after writing about the effects of global instability: “Meanwhile, the world’s richest family dynasties increased their wealth by more than 40% in 2023, and S&P 500 companies reaped profits that would have broken records before the recent pandemic-era profit explosions and inflationary pressures. In these turbulent times, it is an enormous challenge to make reliable projections. But one thing is clear: The Great Moderation is history.”

If the Great Moderation is over, then political instability follows. It always has. Inequality has always driven big change. 

One thing is for sure, 2024 will compound the new world disorder. It will be characterised by yet more insecurity and danger. The shifting sands of new alliances and the instability in international relations and markets will make the post-war peace dividend a rather foreign concept of what becomes a bygone age. It was an era that we probably did not fully appreciate and fight harder to maintain until it started vapourising before our very eyes, unravelling in real-time.