GRI’s 2015 year in risk review

The year 2015 very much seemed to be a year of transition (and not generally for the better), filled with many surprises.

The staying power of the Islamic State

Perhaps even more shocking that the initial rise and onslaught of the group now known as ISIS is their staying power: under not insignificant military pressure from the U.S., Iraq, Syria, several European/NATO states, various rebels groups and nominally Russia (which is targeting mainly non-ISIS groups) and some (minor) action from Arab nations, ISIS has not only survived but thrived.

This is the case even as ISIS has lost some of its gains from its peak territorial power (Iraq only just recently—apparently—managed to retake the city of Ramadi from ISIS, which has held it for most of the year, and is not even close to regaining sovereignty in much of Western Iraq, let alone the situation in Syria), so even as ISIS has suffered some setbacks in Iraq and Syria, it has seen its power increase in Libya, Egypt’s Sinai, and elsewhere, and has also demonstrated its global reach as far away as Paris, France, and San Bernardino, California, in the United States.

Though the favored political rhetoric involves talk of “eradicating” and “destroying” ISIS, such talk is not only wildly premature, it borders on farce.  The unfortunate truth is that ISIS is here to stay for the foreseeable future, in one form or another.

With the death of Osama bin Laden and his al-Qaeda receding somewhat into the background, the West might have thought that terrorism was not much of a global problem, but a regional one successfully contained in places far away. Instead, ISIS has made clear that terrorism is not fading away, and perhaps its greatest success is to direct the attention of large portions of the populations France and the United States to consider ISIS/terrorism a—or the—major issue they face, whereas before few French or Americans would have prioritized it so highly.

China’s economy comes back down to earth in 2015

After decades of remarkably consistent and robust economic growth, the Chinese economic juggernaut has plummeted and has taken on a far more vulnerable quality.  Hitting the lowest officially announced growth levels since the world economic/financial crisis was in full gear early in 2009, China said its GDP growth rate slowed to 6.9% in 2015’s third quarter, but there is plenty of suspicion surrounding that figure, as some experts and indicators point towards what could actually be a significantly lower number.

Furthermore, the overall trend this year thus far has been a significantly downward one compared to 2014 and earlier years.  This affects all manner of global economic indicators, as China’s massive economic engine consumes and outputs many things; global oil prices are but one of the casualties of China’s slowing economy.

The Chinese Communist Party (CCP) has been able to fairly easily deal with both labor and political unrestwhile its economy was doing better, but one thing to watch in 2016 will be how the CCP handles what will surely be growing unrest as the economy in China is expected to continue to slow down.

Another thing to watch will be how China’s crisis will further affect the global economy.  Finally, how this crisis affects China’s effort to shift from an economy driven on manufacturing exports to a domestic consumer-based economy will also be telling.  All-in-all, China and its leadership is looking at a challenging 2016.

The refugee crisis

There is something deeply disturbing about the fact that seventy years after the end of WWII, the world is seeing the largest global displacement of human beings from their homes since the end of that conflict.  At the end of 2014, the number of refugees and internally displaced persons  was nearly sixty million, and that number has only increased this year, so that roughly one out of every 122 people in the world has been forced to flee home.

That the international community has been unable and, to be honest, unwilling to 1.) stem the tide of increasing refugees and/or 2.) settle existing refugees with any zeal or energy proportionate to the crisis is a testament to the failure of said community to live up to the hopes and dreams that characterized the founding of the United Nations just a few months after the end of WWII.  This failure has producedpathetically tragic results.  From Jordan to Italy, waves of displaced bring considerable risk and possibility of destabilization.  Specifically, the wave of migrants into Europe (particularly from Syria) has been a major catalyst for a number of developments there.

EU in crisis mode and lurching to the right

Though hardly unforeseeable, the refugee flow into Europe has touched off a series of crises that has meant steep challenges to the European Union as a political entity, though, as usual, predictions of the EU’s demise are wildly premature.  Apart from the crisis of dealing with some 1,000,000 refugees entering Europe (with the EU only formally settling a mere 190 of them so far) the refugee influx has invigorated Europe’s far right and helped it to rise to newfound positions of power.

In Germany, the EU’s most powerful state, Chancellor Angela Merkel is “under fire” for her liberal refugee policy, and a right-wing party is polling ahead of all others in Sweden, which threatens Sweden’s position as a bastion of liberal immigration policy. The earlier economic crises have laid open rifts within the European polity that were only made wider in 2015, and while some may take a degree of inspiration in the rise of new populist parties in Spain, the political chaos this has fostered must also be acknowledged.

Voters in Spain, Portugal, and Greece seemed to reject the collective EU solutions for their economic crises (even after a third massive bailout for Greece), casting doubt on the ability of the EU to move forward collectively economically.  Another election has empowered the far right in Poland, and right-wing parties are  performing extremely well in places like Austria and Denmark.

In the wake of the ISIS attacks in Paris, only a unification  by socialists and conservatives headed off a major victory by France’s main far-right party.  Not only in these places, but throughout Europe, the sharp rise of the right is undeniable.  Even some leftist European leaders are now flirting with and mimicking, to a degree, those on the far-right. To coin The Economist’s phrase, this is “[t]he march of Europe’s little Trumps.”

Political chaos in the United States

In case Americans are not aware of this fact, let it be clear: the rest of the world, from Europe to the Middle East, is paying attention to the American two-party political race just enough to be shocked and dismayed at the one-man-phenomenon known as Donald Trump, who has been the Republican frontrunner since July, something very few political-powers-that-be predicted.

Many a pundit claimed that his campaign would implode almost as soon as he entered the race (some did note that it would be foolish to dismiss Trump too easily or too quickly).  The world’s most powerful nation is showing a degree of political chaos and unpredictability not seen in generations.

While smart money would be on Hillary Clinton beating Trump or any of the more extremist Republican political candidates who have been doing well in polling of late, one thing is for certain: the world is watching with a degree of fear and horror at what is coming out of the American presidential race, at least on theRepublican side. The political unraveling of the Republican Party in 2015 may yet move global mountains in the not too distant future, for better or for worse.

Iran

While it is too early to make any surefire, long-term claims about Iran and its regional proxies, 2015 at the very least will be remembered as a year when Iran made it clear that it would not be sidelined, will be there to defend Shiite leaders and people, and is eager to play a larger role in the greater-Middle East.  For naysayers of Iran’s nuclear deal, it should be pointed out that there is, simply, no better realistic alternativethan this agreement.

Furthermore, Iran-sponsored militant Shiite Islam and its accompanying terrorist, militia, and rebel groups have for years  not come anywhere close to the scale of brutality of Sunni Islamist extremist groups like ISIS, Al-Qaeda in Iraq, Boko Haram, and the Taliban. Hezbollah and the Houthis are not taking sex slaves by the thousands, beheading people for internet mass consumption, destroying the world’s great antiquities, or executing thousands of civilians and prisoners.

In fact, they seem rather quaint compared with the mass brutality of ISIS and its affiliates. Under Iran’s leadership, Hezbollah has turned from firing its rockets at Israel to firing them at ISIS. In fact, the Iranian military and Hezbollah have put much more of their military might into fighting ISIS than any Sunni-led states surrounding Syria or Iraq have.

Compared to the Saudi-led Sunni status quo in the region, there are indications that the ascendance of Iran and its Shiite proxies would not only not be worse, but that such an ascendancy might push the region in some positive, less extreme directions.  An Iran eclipsing Saudi Arabia in power and influence, then, may not be a bad thing overall.

If one wants to contest this, ask this question: would anyone prefer to be captured by ISIS instead of Hezbollah?

by Brian Frydenborg

sourche: http://globalriskinsights.com/2016/01/gris-2015-year-in-risk-review/