annual forecasts

2012 Annual Forecast

2 MINS READJan 20, 2012 | 14:14 GMT
A statue of the euro symbol by German artist Ottman Hoerl stands in front of European Central Bank headquarters in Berlin.
(DANIEL ROLAND/AFP/Getty Images)

Overview

Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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Europe

To the west of Eurasia lays Europe, a region predisposed to division. It is surrounded on nearly all sides by islands and peninsulas that make it difficult for Europe to cohere. The northern half of the continent, moreover, sits on a plain whose short, meandering rivers tend to empower countries without forcing them to work with others. The southern half is situated on more mountainous terrain that has historically impeded the creation of strong, unified economies. As a result, Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Jan 20, 2012 | 16:39 GMT
Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

section Highlights
  • The European Union and eurozone will survive 2012, and Europe's financial crisis will stabilize, at least temporarily. 
  • The driving force behind developments in Europe in 2012 will be political, not economic.
  • Political and financial turbulence will persist as Germany negotiates a new intergovernmental treaty with other eurozone countries.
  • Though we would predict failure for such an effort, the Germans will have six key advantages in 2012.
  • The countries most likely to clash with Germany are Ireland, Finland, the Netherlands and Spain.
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Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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Eurasia

Eurasia is the world’s most expansive region. It connects the East to the West, forming a land bridge that borders Europe, the Asia-Pacific, the Middle East and South Asia. Forming the borders of this massive tract of land are the Northern European Plain, the Carpathian Mountains, the Southern Caucasus Mountains, the Tien Shan Mountains and Siberia. At the heart of Eurasia is Russia, a country that throughout history has tried, to varying degrees of success, to extend its influence to Eurasia’s farthest reaches — a strategy meant to insulate it from outside powers. But this strategy necessarily creates conflict throughout Russia’s borderlands, putting Eurasia a near constant state of instability.

Jan 20, 2012 | 16:39 GMT
Eurasia connects the East to the West, forming a land bridge that borders Europe, the Asia-Pacific, the Middle East and South Asia.

Eurasia connects the East to the West, forming a land bridge that borders Europe, the Asia-Pacific, the Middle East and South Asia.

section Highlights
  • In Russia, the social unrest seen at the end of 2011 will continue festering throughout the presidential elections in 2012.
  • Russia will continue building its influence in its former Soviet periphery in 2012, particularly by institutionalizing its relationships with many former Soviet states. 
  • As Ukraine's chances to grow closer to the European Union decrease, Kiev will realize that Moscow is the only outside power it can turn to.
  • Moscow and Washington will continue their standoff over ballistic missile defense and U.S. support for Central Europe, and Moscow will react to the row by increasing security pressure on Central Europe and bolstering its economic presence in the region.
  • Numerous factors will undermine Central Asia's stability in 2012, but they will not lead to a major breaking point in the region this year.
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Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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Middle East and North Africa

The Middle East and North Africa is the world's crossroads. It encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between. The story of the region, as is so often the case of places stuck between foreign players, is the story of trade, exchange and conflict. The traditional powers of the region are Turkey and Iran — Saudi Arabia and Egypt are the current Arab powers — and their competition for influence over the region's weaker states makes the Middle East and North Africa an arena of violence and instability.

Jan 20, 2012 | 16:41 GMT
The Middle East and North Africa encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between.

The Middle East and North Africa encompasses the Arabian Peninsula, the mountains of Iran, the plains of Turkey, the deserts of the Levant, the lands north of the Sahara and all coasts in between.

section Highlights
  • Iran will continue to expand its influence, but operating under heavy constraints, it will be unable to fundamentally alter the politics of the region in its favor.
  • Saudi Arabia will lead efforts to shore up and consolidate the defenses of Gulf Cooperation Council members to try to ward off the threat posed by Iran, but such efforts will not be a sufficient replacement for the United States and the role it plays as a security guarantor.
  • Turkey will attempt to contain the spread of Iranian influence in northern Iraq by building up political, economic, military and intelligence assets.
  • Syrian President Bashar al Assad will continue to struggle in trying to stamp out domestic unrest. 
  • Concerns over the Egypt's struggling economy will outweigh the military's concerns over its political opposition. 
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Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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Asia-Pacific

The Asia-Pacific is home to more people than any other region. Centered on the western rim of the Pacific Ocean, this region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast. Several of these countries, most notably China, experienced rapid economic growth in the second half of the 20th century, giving the region a new sense of global economic relevance that continues today. That relevance, however, depends largely on China, a power in transition whose rise is testing the network of U.S. alliances that have long dominated the region. How effectively Beijing manages its transition will shape the regional balance of power in the decades to come.

Jan 20, 2012 | 16:42 GMT
Centered on the western rim of the Pacific Ocean, the Asia-Pacific region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast.

Centered on the western rim of the Pacific Ocean, the Asia-Pacific region includes the easternmost countries of continental Asia as well as the archipelagos that punctuate the coast.

section Highlights
  • With the politburo lineup changing in October and the new state leaders taking office in early 2013, the Communist Party of China will focus on maintaining social stability to preserve the legacy of the outgoing leadership and solidify the legitimacy of the incoming leadership.
  • Declining external demand will threaten China's already weakened export-oriented manufacturing industry, which has experienced rising costs as well as appreciating currency on top of its already slim profit margins. 
  • Beijing will resume and launch a number of large infrastructure projects even at the expense of overcapacity and lack of productivity. 
  • Given the economic uncertainty and political sensitivity surrounding the leadership transition, political elites in Beijing will attempt consensus at the highest levels. 
  • The first six months of the year will be critical for North Korea as the unity of the government is tested amid the leadership transfer.
See more on this Region

Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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Americas

The Americas stretch from the Arctic Circle in Canada to the southern tip of Chile. This geographically, culturally and politically diverse region is home to the United States, a nation whose geography helped it become the foremost economic and military power in the world — an ascendance aided in part by bringing Mexico and Canada into its sphere of influence. Farther south, the nations of South America are like islands, separated by vast spaces of impenetrable mountains, rivers and jungles. Try though these countries may to integrate more closely, deeper ties such as those that characterize North America will prove elusive.
Jan 20, 2012 | 16:43 GMT
This geographically, culturally and politically diverse region is home to the United States, a nation whose geography helped it become the foremost economic and military power in the world

This geographically, culturally and politically diverse region is home to the United States, a nation whose geography helped it become the foremost economic and military power in the world

section Highlights
  • Regardless of any change in party after Mexico's presidential election, the country's underlying challenges will remain.
  • Los Zetas and the Sinaloa cartel will probably intensify their efforts to extend control over regional supply chains in 2012, although the Mexican cartels will remain dependent on relationships with local organized crime in other transit and producing countries.
  • Brazil will spend 2012 focused on mitigating shocks to trade and capital flows from the crisis in Europe, though it will be less vulnerable than many other developing countries since it derives only about 10 percent of gross domestic product from exports. 
  • In Venezuela, dissatisfaction with socio-economic issues will drive further protests, but the majority of political action will be centered on the upcoming election.
  • A political shift in Venezuela could force Cuba to reach out to the United States as a much more powerful -- but also more politically invasive -- economic partner.
See more on this Region

Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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South Asia

Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders. The Himalayan Mountains form the northern border of South Asia, whose two main rivers, the Indus and the Ganges, support the region’s great population centers. India is the region’s dominant country, home to the world’s fastest growing economy. But its rivalry with neighboring Pakistan, a fellow nuclear power and growing consumer market, has made South Asia one of the world’s most dangerous nuclear flashpoints. The region is also a testament to how militancy and militarism can undermine the regional integration needed to unleash higher economic growth.

Jan 20, 2012 | 16:43 GMT
Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders.

Everything that informs geopolitics can be found in South Asia: challenging demographics, geographic diversity, and contentious, ill-defined borders.

section Highlights
  • The U.S.-led campaign in Afghanistan will not maintain sufficient force levels long enough to militarily defeat the Taliban.
  • But the Taliban will not be in a position to drive the United States and its allies from the country by force.
  • U.S.-Pakistani tensions will intensify in 2012 as the United States reaches an understanding with Pakistan, which will have to deal with the situation in the region after the United States leaves.
  • Political, religious, ethnic and ideological tensions will intensify in Pakistan.
See more on this Region

Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

section

Sub-Saharan Africa

Sub-Saharan Africa is a study in diversity. Covering an area that spans the entire width of the continent beginning at the Sahara Desert and ending at the southernmost tip of South Africa, the region is home to countless cultures, languages, religions, plants, animals and natural resources. It’s no surprise that it captured the imagination of Europe’s earliest explorers — and that it continues to capture the imagination of current world powers eager to exploit it. And yet despite the region’s diversity, Sub-Saharan African countries have common challenges — transnational terrorism, rapid population growth, endemic poverty and corruption — that prevent them from capitalizing on their economic potential. The coming years will be critical for the region, especially as its political institutions mature in a rapidly globalizing world.

Jan 20, 2012 | 16:44 GMT
Covering an area that spans the entire width of the continent beginning at the Sahara Desert and ending at the southernmost tip of South Africa, Sub-Saharan Africa is home to countless cultures, languages, religions, plants, animals and natural resources.

Covering an area that spans the entire width of the continent beginning at the Sahara Desert and ending at the southernmost tip of South Africa, Sub-Saharan Africa is home to countless cultures, languages, religions, plants, animals and natural resources.

section Highlights
  • A containment strategy will solidify against Somali jihadists -- both the transnationalist group al Shabaab and its nationalist rival, the Somali Islamic Emirate.
  • Aggrieved political elites in northern Nigeria, believing the government of President Goodluck Jonathan stole political power from them, will seek to use the Boko Haram militant group to their advantage.
  • The Niger Delta in southern Nigeria will also see a slow but steady return to militant violence. 
  • U.N. peacekeepers will maintain their deployments in South Sudan and Darfur to respond to border clashes between militias on both sides of the Sudan-South Sudan border.
  • South Africa will remain focused on internal rivalries that will inhibit its ability to consolidate its influence in the southern African region. 
See more on this Region

Our forecast for 2012 is framed by the idea that we are in the midst of what we might call a generational shift in the way the world works. The processes are still under way, and we will therefore have to consider the future of Europe, China and the Middle East in some detail before drawing a conclusion. ...

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