annual forecasts

2018 Annual Forecast

3 MINS READDec 26, 2017 | 11:57 GMT
Though the threat of war on the Korean Peninsula can't be ruled out, the United States will probably try to avoid a costly preventive strike against the North's nuclear weapons program that would plunge the global economy back into recession.

As the specter of war looms in the Asia-Pacific, global alliances will form and transform, and the United States will crack down even harder on Iran -- as well as its own trade partners.

(FAYEZ NURELDINE/LINTAO ZHANG/SEAN GALLUP/ALEXEY NIKOLSKY/SERTS/PINGEBAT/MHNEWMEDIA/IIAP/AFP/iStock/Getty Images)

Overview

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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Global Trends

In today's world, nations are becoming increasingly interconnected by air, land, sea and cyberspace. As globalization has knitted countries and continents closer together, the borders of the map and the barriers of geography have been rendered, in some ways, obsolete. Now events in one region can more easily have consequences in another, at times even rippling across the globe. We explore those with the greatest impact on international decision-making during the forecast period below.
Dec 21, 2017 | 18:22 GMT
Because the United States is the only actor with the ability to tip the scales of several geopolitical scenarios in either direction, any forecast of the year ahead must start with Washington.
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  • The United States will reluctantly adopt a policy of containment toward North Korea when Pyongyang achieves a viable nuclear deterrent, likely in 2018.
  • An emerging coalition between China and Russia will increasingly challenge U.S. hegemony, although alliances will remain fluid worldwide.
  • Working within and beyond the bounds of the World Trade Organization, the United States will pursue an aggressive trade agenda against China, Mexico, South Korea and Japan.
  • As the global oil market recovers, Saudi Arabia will bear the burden of keeping production cuts in place as other oil producers renege on their agreed-upon quotas. The Saudis will look to Russia to help forestall an uptick in U.S. shale output.

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.

Dec 21, 2017 | 21:09 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.

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  • As North Korea races to achieve a viable nuclear deterrent, the United States could choose to launch a military strike against it. But because of the steep costs that such action would carry, Washington is more likely to shift toward a policy of containment.
  • China will take advantage of the United States' distraction in North Korea to deepen its conciliatory outreach to its Southeast Asian neighbors.
  • Though the United States will intensify its economic offensive against China, the limits of those measures and Beijing's appeals within the World Trade Organization will prevent the outbreak of a trade war.
  • At home, President Xi Jinping's steady consolidation of power will give him freer rein to enact critical reforms. However, he will have to reconcile measures to improve financial stability and pollution control with the need to maintain stable growth.
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North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.
Dec 22, 2017 | 15:11 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

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  • In 2018, U.S. President Donald Trump's administration will try to implement more of the protectionist trade agenda it unveiled in 2017. Though the possibility remains that the United States could unilaterally withdraw from the North American Free Trade Agreement, the deal's supporters would turn to Congress and the federal courts in that event to prevent NAFTA's demise.
  • Dissatisfaction with the political status quo will influence presidential races in Mexico, Brazil and Colombia.
  • Brazil and Argentina, South America's two biggest economies, will take advantage of their pro-trade governments' remaining time in office to forge deeper trade ties with other economic blocs and countries.
  • As the United States and its Latin American allies press for free elections in Venezuela under the threat of further sanctions, Venezuelan President Nicolas Maduro's administration will resist any efforts to erode its authority while trying to mitigate the fallout from the country's rapid economic decline.
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North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.

Dec 22, 2017 | 15:22 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.

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  • Iran will lean heavily on Russia and Europe for support as the United States, Saudi Arabia and Israel team up to undercut it.
  • Determined to prevent Iran from following in North Korea's nuclear footsteps, the United States will redouble its efforts to counter Iranian influence across the Middle East. Though Washington's actions will jeopardize the Iranian nuclear deal, Tehran won't abandon the accord.
  • To the west, the diverging interests of Iran, Turkey, Russia and Syria will impede any meaningful progress in settling the Syrian civil war.
  • Saudi Arabia will make notable strides in reforming its economy, but it will struggle to achieve the same success in altering social behavior and expectations within the kingdom. 
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North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.

Dec 22, 2017 | 19:27 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.

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  • As its standoff with the West intensifies in 2018, Russia will look to expand its influence in the Asia-Pacific region and in the Middle East.
  • The United States and Russia will spar over sanctions and arms control agreements as Moscow strives to undermine the unity of NATO and the European Union through hybrid warfare.
  • Presidential and regional elections in Russia will serve as a crucial test for the Kremlin, which will have to deal with converging crises at home.
  • Though negotiations over the Ukrainian conflict will pick up over the next year, they will fail to produce a resolution to the war in Donbas.
  • Economic and security challenges will test governments across Central Asia and encourage Russia and China to collaborate more closely in the region to stave off instability.
See more on this Region

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.

Dec 22, 2017 | 20:17 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.

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  • The debate over how best to reform the European Union will take the spotlight in 2018, laying bare the regional rifts that divide the Continent.
  • Though France and Germany will be at the heart of this debate, they will prove more willing to cooperate than to confront each other. To that end, Paris will agree to water down or postpone many of its proposals for the bloc.
  • General elections in Italy will generate uncertainty about the eurozone's future. Though the country won't leave the currency area in the coming year, its next government will lobby for the authorization to boost public spending.
  • The United Kingdom will spend 2018 negotiating the terms of a trade agreement with the European Union. Though leaders probably will reach an arrangement for the transition period following the Brexit, a trade deal will be tougher to obtain.
  • The Continental bloc also will seek out free trade agreements with other countries, a strategy that will become a cornerstone of the bloc's foreign policy.
See more on this Region

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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.

Dec 22, 2017 | 20:31 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.

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  • The slow deterioration of the U.S.-Pakistani relationship over their differences in Afghanistan in 2018 will push Islamabad to develop stronger relationships with Iran and Russia, while Washington solidifies its partnership with New Delhi.
  • Negotiations to resolve the war in Afghanistan probably won't materialize next year as Pakistan continues its support for the Taliban -- and as the United States sends 6,000 more troops to the conflict.
  • Former Pakistani Prime Minister Nawaz Sharif's corruption trial will weaken the country's ruling Pakistan Muslim League-Nawaz party and reinforce the military's political power.
  • Focusing on his bid for re-election in 2019, Indian Prime Minister Narendra Modi is likely to refrain from introducing politically sensitive land and labor reforms next year.
See more on this Region

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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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 22, 2017 | 21:01 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.

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  • Southern Africa will undergo a sweeping political transformation next year as South Africa, Zimbabwe, the Democratic Republic of the Congo and Angola try to move away from their long-entrenched leadership.
  • Despite his health issues, Nigerian President Muhammadu Buhari could seek a second term in 2019, though he may have trouble holding his party together in an increasingly competitive political environment.
  • Stubbornly low energy prices will continue to constrain Nigeria's finances, but as other sources of economic pressure ease, the government may have the means to offer some concessions to militants in the oil-producing Niger Delta region.
  • As the incipient Group of Five (G5) Sahel Force struggles to address persistent terrorist threats, the U.S. military will deploy armed drones over Niger as a new way to combat militancy in the vast, ungoverned lands of southern Libya and the Sahel.
See more on this Region

North Korea's likely achievement of a viable nuclear deterrent next year will give rise to a new and more unstable era of containment. As the specter of war looms in the Asia-Pacific, China and Russia will band together while the United States cracks down even harder on Iran -- as well as its own trade partners....

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