Annual Forecasts

2017 Annual Forecast

9 MINS READDec 27, 2016 | 13:44 GMT
The main theme of U.S. President-elect Donald Trump's campaign was retrenchment, the idea that the United States will pull back from overseas obligations, get others to carry more of the weight of their own defense, and let the United States focus on boosting economic competitiveness.

The convulsions to come in 2017, including those in the United States, are the political manifestations of much deeper forces in play. In much of the developed world, such Japan, Russia and Germany, the trend of aging demographics and declining productivity is layered with technological innovation and the labor displacement that comes with it.

(Stratfor)

Overview

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 23:21 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 eurozone crisis could enter a new, more dangerous stage.
  • The debate in the United Kingdom will not be whether the Brexit should happen but how it should happen.
  • Russia will exploit Europe's divisions to its advantage.
  • EU members, weary of the rise of nationalist parties, will try to stem the flow of migrants.
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Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 00:32 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
  • With Europe so divided, partial sanctions relief is within Russia's grasp.
  • With the prospect of things quieting on Russia's western front, Moscow will try to improve its strategic position on its eastern front.
  • Even if Russia pulls itself out of recession, it still faces a prolonged period of stagnation, and the government will have to adhere to a conservative budget until oil prices rise meaningfully again.
  • Instability, as is so often the case, will plague Central Asia in 2017.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 01:20 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
  • The United States will be no less engaged with the Middle East in 2017 than it was in 2016.
  • Developments in the fights inside Syria and Iraq will aggravate sectarian tensions and intensify the ongoing rivalry between Turkey and Iran.
  • Turkey's ruling party will try to strengthen the presidency under Recep Tayyip Erdogan.
  • 2017 will test the durability of U.S.-Iranian relations.
  • Saudi Arabia will struggle to enact its ambitious reform plans.
  • Egypt will be economically stable enough in 2017 to formulate a foreign policy independent of Saudi interests.
  • The Islamic State will lose power as a conventional military force.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 20:34 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
  • Chinese policy in 2017 will be defined by President Xi Jinping's efforts to consolidate power.
  • China will brace and prepare for potentially new trade policies under the Trump administration.
  • Beijing will continue to employ a carrot-and-stick strategy in the South China Sea.
  • Japan will make progress in its efforts to revive its economy and its military.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.
Dec 27, 2016 | 23:49 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
  • NAFTA will remain largely intact despite U.S. campaign promises made to the contrary.
  • The Trump administration will loosen regulations on domestic energy, enabling North America to more easily integrate as an energy bloc.
  • Latin American commodities exporters will continue to feel the pinch of low commodities prices in 2017.
  • The price of oil will make or break Venezuela in 2017.
  • The Colombian government's main priority in 2017 will be to implement the revised peace deal it struck with the Revolutionary Armed Forces of Colombia in late 2016.
  • Brazil will begin its climb out of economic recession.
  • In Argentina, economic growth will pick up again in 2017.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 00:05 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
  • 2017 will be a crucible for Prime Minister Narendra Modi's Bharatiya Janata Party.
  • An uptick in nationalism, not to mention the perennial cross-border militant attacks into Kashmir, will have both India and Pakistan on high alert.
  • South Asian militancy will be used as a means to political ends.
  • The threat from India -- real or perceived -- will push the Pakistani army to maintain the status quo.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

Forecasts

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.

Dec 27, 2016 | 00:18 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
  • For South Africa, difficulties such as slow economic recovery will inform the decisions of 2017.
  • African rulers will cling to power in a variety of inventive ways.
  • Nigerian President Muhammadu Buhari has another tough year ahead of him. 
  • 2017 will be a trying year for Somali security forces.
  • Ethiopia will de-prioritize its commitment to the African Union Mission in Somalia.
  • East Africa will make more progress in the energy field.
See more on this Region

Long-arching trends tend to quietly build over decades and then noisily surface as the politics catch up. The longer economic pain persists, the stronger the political response. That loud banging at the door is the force of nationalism greeting the world's powers, particularly Europe and the United States, still the only superpower....

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