The Establishment's Dystopian View: Is This The Year The World Falls Apart?
Eurasia says President Donald Trump should take a large share of the blame for the state the world finds itself in. CREDIT:AP
Pax Americana is unravelling. The transatlantic concord underpinning the West since the Fifties is dying. Nato, the G7, the G20, the WTO and the EU are all in varying degrees of crisis. Vladimir Putin's Russia has an open goal. "Every single one of these is trending negatively. And most in a way that hasn't been in evidence since the Second World War," it said.
Anti-liberal strongmen are tugging away at the edges in Turkey, Brazil and Hungary. Some in the twilight zones of the democratic world are drifting -towards the Putin-Xi camp.
The dystopian picture is grim enough even at this late stage of global economic expansion, which begs the question: what would happen in a deep recession with mass unemployment?
Eurasia Group warned that 2019 could "turn out to be the year the world falls apart" although it is not the central forecast. Denouement may take a little longer. There is much ruin in a great geopolitical order, to paraphrase Adam Smith.
Once a system of values and -institutions has evolved over decades, it is sticky.
It is a world in which the gloves are coming off in cyber warfare, setting off a cycle of "action and reaction" that could all too easily spin out of control.
The Pentagon's Cyber Command is preparing for "pre-emptive strikes". There are exploratory plans to give private US companies leeway to "hack back" when attacked.
In parallel, a "global tech Cold War" is closing in. States are slashing -reliance on foreign suppliers wherever national security is at stake. The West is shutting out Chinese manufacturers of 5G high-speed equipment. Digital globalism is in retreat.
Donald Trump is - in Eurasia's view - the central catalyst and accelerant for much of what is going wrong in the world. It starts at home in Washington.
Eurasia says House Democrats will probably move forward articles of impeachment for obstruction of justice. This will resolve nothing. The Republican Senate will resist. The battle will not end like Watergate with an obedient resignation in the interests of the nation. Mr Trump is no Richard Nixon. He will fight back tooth and claw, and precipitate a constitutional crisis.
Europe is in no fit state to step into the leadership vacuum as America turns its back on the liberal alliance system and nexus of shared values.
Fond hopes that Emmanuel Macron would scatter the hordes of rebel populism in Europe after his triumph in 2017 have been dashed. His approval rating has dropped to 23 per cent. He faces a national emergency from the gilets jaunes. His domestic and eurozone reforms are "a dead letter".
Eurasia estimates that eurosceptic/populist forces will win 37 per cent of the seats in the European Parliament next May, up from 28 per cent in 2014.
Eurasia says the ongoing US-China spat is the biggest risk to the global economy. CREDIT:AP
The biggest tail risk is a Sino-American showdown ending in global economic slump, bitter recrimination, and a cycle of escalation "into the kinetic space". Eurasia says relations have already deteriorated beyond the point of no return. Nor is there any workable common ground for compromise. At stake is 21st Century technology dominance, not trade.
The balance of probabilities is that the world will muddle through 2019 without any of these landmines detonating. Yet the drift of events is clear. The Western liberal order we took for granted at the end of the Cold War is under existential threat.
Ambrose Evans-Pritchard is International Business Editor of The Daily Telegraph. He has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels.
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