AAFTER TWO In the years that the pandemic has defined the immediate future, now the main driver is the war in Ukraine. In the coming months, the world will have to grapple with the unpredictability of the conflict’s geopolitical and security implications; the struggle to control inflation; chaos in energy markets; and China’s uncertain post-pandemic path. To complicate matters further, all of these things are closely related, like an interlocking set of gears. Here are ten themes and trends to keep an eye on in the coming year.
1. All eyes on Ukraine. Energy prices, inflation, interest rates, economic growth, food shortages all depend on how the conflict unfolds in the coming months. Rapid advances by Ukraine could threaten Vladimir Putin, but a stalemate seems the most likely outcome. Russia will try to settle the conflict, hoping that energy shortages and political changes in America will erode Western support for Ukraine.
2. Recessions loom. Major economies will slide into recession as central banks hike interest rates to curb inflation in the aftermath of the pandemic fueled by high energy prices. America’s recession should be relatively mild; Europe will be more brutal. The pain will be global as the strong dollar hurts poor countries already impacted by soaring food prices.
3. Climate silver linings on the horizon. As countries rush to secure their energy supplies, they are turning back to dirty fossil fuels. But in the medium term, war will accelerate the shift to renewable energy as a safer alternative to hydrocarbons supplied by autocrats. In addition to wind and sun, nuclear energy and hydrogen will also benefit.
4. China peak? Sometime in April, China’s population of around 1.43 billion will be overtaken by India. As China’s population shrinks and its economy faces headwinds, expect much debate as to whether China has peaked. Slower growth means its economy may never overtake America’s size.
5. Divided America. Though Republicans fared worse than expected in the midterm elections, social and cultural divides over abortion, guns and other hot-button issues are widening after a series of controversial Supreme Court rulings. Donald Trump’s formal entry into the 2024 presidential race will add fuel to the fire.
6. Hot spots to watch. The intense focus on the war in Ukraine increases the risk of conflict elsewhere. With Russia distracted, conflicts erupt in its backyard. China may decide there has never been a better time to act in Taiwan. Tensions between India and China could flare up in the Himalayas. And could Turkey try to conquer a Greek island in the Aegean?
7. Changing Alliances. Amid geopolitical shifts, alliances are responding. Nato, revived by the war in Ukraine, will welcome two new members. Will Saudi Arabia join the Abraham Accords, a rising bloc? Other groupings of growing importance are the Quad and VICTIM (two American-run clubs designed to deal with China’s rise) and I2U2– not a rock band, but a sustainability forum between India, Israel, the United Arab Emirates and the United States.
8. Revenge tourism. Take that, Covid! As travelers engage in “revenge” tourism post-lockdown, traveler spending will almost return to 2019 levels of $1.4 trillion, but only because inflation has pushed prices up. The actual number of international tourist trips will be 1.6 billion in 2019, still below the pre-pandemic level of 1.8 billion. Business travel will remain weak as companies cut costs.
9. Metaverse Reality Check. Will the idea of working and playing in virtual worlds catch on beyond video games? 2023 will provide some answers as Apple launches its first headset and Meta decides whether to change strategy if the stock price falls. Meanwhile, a less complicated and more immediately useful shift could be the rise of “passkeys” to replace passwords.
10. New year, new jargon. Never heard of a master key? No fear! Turn to our dedicated Understanding this section, which summarizes the important vocabulary that will come in handy in 2023. NIMBYs are off and YIMBYs are in; Cryptocurrencies are uncool and post-quantum cryptography is hot; but can you define a frozen conflict or synfuel? We’ll cover you.
In retrospect, the pandemic marked the end of a period of relative stability and predictability in geopolitics and the economy. Today’s world is far more unstable, shaken by the vicissitudes of great power rivalry, the aftershocks of the pandemic, economic upheaval, extreme weather conditions, and rapid social and technological change. Unpredictability is the new normal. There is no escape. But we hope reading The world ahead 2023 will help you face this new reality with confidence.■
This article appeared in the Editor’s Notes section of The World Ahead 2023 print edition under the heading “Editor’s Notes.”