LIVE: Top Risks of 2023 | GZERO Media Live
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What are the Top Risks of 2023? We dive into the newly-released annual Eurasia Group report forecasting the political risks most likely to play out and how they could impact governments, the private sector, and the world.
GZERO's publisher, Evan Solomon, moderates a discussion with the authors of the report, Ian Bremmer and Cliff Kupchan, along with Eurasia Group experts Anna Ashton, Franck Gbaguidi, and Rob Kahn.
Speaking during this GZERO Media live event are: Ian Bremmer, President and Founder, Eurasia Group and GZERO Media Cliff Kupchan, Chairman, Eurasia Group Anna Ashton, Director, China Corporate Affairs and US-China, Eurasia Group Franck Gbaguidi, Senior Analyst, Climate, Energy & Resources, Eurasia Group Rob Kahn, Managing Director, Global Macro-Geoeconomics, Eurasia Group Evan Solomon, Publisher, GZERO Media (moderator)
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Eurasia Group argues that 2023's top geopolitical risks stem from a paradox: major democracies and institutions show resilience, but a small number of unconstrained autocrats and tech entrepreneurs with concentrated power and poor information flows pose unprecedented global disruption risks, with Rogue Russia becoming the primary threat due to Putin's miscalculation and inability to climb down from Ukraine.
- While pandemic ends and NATO/EU unify, aging autocrats and tech bros with no checks/balances drive extraordinary uncertainty
- Putin's destroyed military and economic isolation leave him no path to recover pre-invasion status, forcing escalation toward NATO confrontation
- Surveillance capitalism and AI-enabled disinformation exported from US democracy are dismantling weaker democracies globally
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Water stress will become a top global risk in 2023 because only 3% of planetary water is fresh water, companies underestimate water's true cost by 3-5x, policy makers are ignoring the problem despite population reaching 8 billion and climate change increasing scarcity, creating a vicious cycle of increasing demand, decreasing supply, and lack of prioritized solutions.
“more than 70 of the planet is covered by water let's see only three percent of it is fresh water companies take it for granted too most of them underestimate the cost of Water by three to five times its actual true cost and then to make matters worse policy makers are either ignoring or not responding adequately to the problem so while we've been ignoring the issue the issue just kept growing we just crossed the 8 billion people Mark which means huge water needs”
Xi Jinping has consolidated power to a level not achieved by any modern Chinese leader except Mao, controlling all top leadership posts with allies unlikely to push back on his decisions, which increases his capacity to implement goals quickly but also increases risk of miscalculation and policy mistakes without checks and balances.
“Xi Jinping has now succeeded in consolidating power like no one else in recent Chinese history like few in the world frankly he's amassed power to an extent uh not achieved by any other modern Chinese leader except for Mao and his command of the country is basically unrivaled he seated all of the top leadership posts with his own allies who are unlikely to push back on his decisions he's going to be able to get a lot done a lot faster”
Fragile democracies with brittle institutions are most at risk from tech-enabled disinformation because anti-establishment populists on the far right or far left, empowered with social media disinformation tools they can manipulate and control, can destroy democracies—a risk amplified by new AI capabilities.
“the US is not the country that's principally at risk the countries that are principally at risk are the ones that have the most brittle institutions they're the weakest democracies they're the ones where you know anti-establishment populists on the far right or on the far left empowered with disinformation social media media they can manipulate and control disinformation can destroy democracies and that especially with new AI Trends”
Recession will reverse prior wage gains and income distribution improvements seen in pre-pandemic developed economies, increase political discontent both between low-income consumers and affluent populations and between developed and developing nations, and make central bank tightening decisions far more politically divisive as policymakers face blame for raising unemployment and lowering real wages.
“in the Run prior to the pandemic we were seeing across much of the industrial World in particular but also in merchant markets real wage gains we were seeing really a well-performing a global economy with relatively low uh unemployment rates a lot of those and we saw income distribution narrowing in many important countries a lot of that's been lost”
Putin made the worst geopolitical decision by any leader since Eurasia Group's founding 25 years ago, with no good climb-down available because he cannot withdraw without losing his job and potentially his life, making the nuclear standoff with NATO unprecedented in risk since the Cuban Missile Crisis due to absence of any off-ramp.
“foreign Mr Putin you know who made the mother of all bad decisions Ian talks about bad decisions this is probably the the worst one I mean he obviously had horrible information the he thought it was going to be greeted as a Victor you know roses nothing like that the nuclear standoff I think ultimately is underpinned by the fact that there's no good climb down here there is no way that Putin can can withdraw give up like Khrushchev did in 1962 and still and still keep his his job and if not his life so that's ultimately what makes it really really scary”
The geopolitical recession (absence of a country or group able and willing to lead globally) continues to deepen structurally and will persist, meaning cooperation on climate and technology will remain limited while security sphere cooperation (via NATO/US) continues due to Russia's threat.
“the geopolitical recession continues to deepen it's structural it flows from g0 the no country or group of countries has you know the ability and the willingness to lead the global war it's not going to happen so so that's that's going to keep going I think in climate in in technology those sorts of spheres we're not going to see much cooperation or agreement what is interesting though is that in the security sphere we're still kind of in a uniplier world and the war has made it very clear that you know you don't wait in 1-800 Washington when you get a land war in Europe”
The trilogy of shocks—war in Ukraine, the pandemic, and the inflation shock—ties together multiple geopolitical risks including energy crises, recession, and human development setbacks.
“inflation which Rob will talk about higher inflation than countries have seen in years and years and years we think that Global recession U.S recession on the energy Side High Energy prices a big contributor to inflation uh you know gonna drive a lot of OPEC U.S tensions bad USA relationship will get spiked a lot of knock-on effects there and then human development who really pays for these things it's a big K curve effect going on when the ultimate bill goes to poor people we're going to get poorer from what's going on so I think Evan that's kind of the second uh the thread let's say that ties a bunch of these risks together”
The possibility of revolution or sweeping political change in China is minimal because Xi has built power safeguards through control consolidation, there is no opposition faction with real power to organize resistance, and most Chinese citizens have experienced improving living standards during Xi's tenure, making revolution unlikely despite zero-COVID protests.
“there's really not much risk of a revolution or sweeping political change in China right now the reality as I said is Xi Jinping has built a lot of safeguards into the system through his expansion of power and his expansion of control and there's there's not an opposition faction with any real power right now”
China is currently experiencing the worst COVID outbreak in the world while maintaining complete non-transparency with the global community—not counting cases, not sharing data, not providing information on new variants—creating an unprecedented pandemic risk because the world has no visibility into potential dangerous mutations emerging from China.
“the fact that China now is the epicenter of the worst outbreak in the world and they are completely non-transparent with the rest of the world around what's happening with it they're not counting the cases they're not sharing the information we have no idea about new variants what if they're dangerous are they going to tell us no that's a serious problem that's an unprecedented problem”
China will not invade Taiwan in the near term because military success is uncertain, Chinese and US military leaders do not believe invasion is likely, and invasion contradicts China's core interests; however, escalating US rhetoric and Congressional pressure over Taiwan recognition may trigger Chinese military action short of invasion.
“the situation is not primed for China to invade Taiwan um there's very little likelihood that they would succeed uh neither our military leaders nor theirs seem to believe that that is a possibility right now um there is a shifting balance of military power in the region and it is a thing that is driving the worries of of military and political leaders here in the United States um but it is really utterly against most of China's core interests for China to invade Taiwan right now”
Putin's military is destroyed, his economy is being forcibly decoupled from the West, NATO is expanding, and Ukraine is becoming the best-trained, best-armed, most effective intelligence army in Europe facing Russia, leaving him unable to succeed militarily and forcing him to escalate (asymmetric attacks, cyber, disinformation, espionage against NATO) as the only remaining option.
“at least the Cuban Missile Crisis you talk about like there's this incredible chance of Armageddon and then both sides step back and they were able to do business as usual that can't happen right Putin is he's destroyed his military um he he's um got an economic position a country which is being forcibly decoupled from the West that's not coming back NATO is expanding Ukraine is now going to be the best trained best armed most effective intelligence best you know uh Army in Europe facing Russia”
In 2023, the Turing test will be smashed by AI, meaning many people will not be able to distinguish between human beings and AI bots deployed by malevolent actors to manipulate political orientation, views, and actions, making this a top-three geopolitical risk.
“this is the year that the Turing test will be smashed by Ai and what that means is that many of us will not be able to distinguish between human beings and AI Bots that are being deployed by human beings in many cases with malevolent intent to get us to change our actions our views um our political orientation”
AI bots and disinformation could be used to fake corporate CEOs and senior employees, enabling competitors, disgruntled employees, or malicious actors to manipulate stock prices through coordinated AI-driven social media campaigns, analogous to meme stock explosions but driven entirely by false information about company leadership.
“if you're the CEO of a corporation what happens when you or or when other senior employees of your firm can be faked and manipulated um by by AI Bots by someone that wants to bring your company down by a competitor by a disgruntled employee by someone that doesn't like your products by people that otherwise historically would have demonstrated or would have been whistleblowers and now instead they're supporting disinformation that literally overnight can bring masses of AI Bots to drive down the price of your stock I mean imagine the meme stock approach of a GameStop suddenly exploded by Ai disinformation and you can see the types of sudden staggering movements of Econo to deploy billions and billions of dollars that will destroy corporations”
Emerging market commodity-importing countries face the highest recession and debt crisis risk in 2023 because they have higher debt levels, are subject to sudden capital flow stops, have exhausted monetary and fiscal policy capacity after the pandemic, and face populations frustrated and demanding unmet needs while lacking the policy tools to respond.
“if you ask me where I'm most concerned right now it really starts and and ends with the emerging markets and particularly the commodity uh importing Emerging Markets why is that they're more vulnerable their debt is higher uh they're more subject to sudden stops of capital flows that make it harder for them to finance their the policies they have in place their their policy space their capacity to use monetary and fiscal policy has been exhausted in in in response to the pandemic”
Iran's supreme leader may die in 2023, and the succession process is opaque and not institutionalized, creating risk that the Revolutionary Guards use the leadership transition to consolidate power into a military dictatorship more aggressive in regional operations.
“the main risk to watching Iran cliff the main risk is if supreme leader how many dies they're in unshorted territory there's a very opaque and not established succession process will the Rev guards use the opportunity to turn Iran into a garden variety military dictatorship the risk would be that they're much more aggressive in the region I think that's real”
Putin has little near-term risk of losing power because he has surrounded himself with loyalists, built institutional protection (presidential guard, security services), and the Russian security apparatus consists of intelligent operators rather than simple enforcers; the main risk to Putin comes from security services (3-5 year horizon) and public discontent from sanctions only at 5-10 year horizon.
“I spent a lot of time around the guy he's a very smart guy despite making a very dumb decision you know this year he last year he uh will protect himself layers of protection the presidential guard now the head of the processary is very inclusive and very very loyal to him he's not routed himself by loyalists it's kind of a classic militarized autocut machine”
The war in Ukraine creates a short-term acceleration of fossil fuel reliance in developed markets (energy security fears) but longer-term shift toward renewable energy and domestic renewable sources, particularly in Europe, as nations recognize the failure of Merkel's dependence on Russian cheap gas and seek strategic energy independence.
“especially in Europe yeah people realize that merkel's dependents on Russia for cheap gas and they use it and they make products of dollars the model doesn't work anymore and they're going much much more much Greener”
The inflation shock of 2022-2023 results from both supply disruption (COVID persistent disruption, Ukraine war crippling energy/food markets) and demand pressure (particularly US fiscal stimulus exceeding available supply by 2.5 percentage points of inflation, vs 0.5% in UK), meaning disinflation will be hard, markets will remain volatile, and central banks must maintain restrictive policy for longer than desired to avoid repeating 1970s stagflation mistakes.
“the supply side's easier to understand the co uh the covet disruption was deeper and far more persistent than we thought it was going to be and then of course the war crippled energy and Food Markets which are so important particularly for low-income elements of of economies um but demand no doubt played an important role particularly in the U.S pouring fuel on the fire the monetary and fiscal stimulative policies”
The US and West are engaged in a hot war with Russia via Ukraine proxy while publicly denying it and trying to limit escalation to avoid direct NATO-Russia confrontation, using slow-roll military aid (Patriots take time, ammunition withheld, no long-range systems) and diplomatic cover to nudge Ukraine toward negotiation while maintaining NATO unity.
“I wish we were in a cold war with Russia that would be upside win a hot war with Russia and the West is trying not to admit that and is trying to limit what it does so it's not putting troops on the ground in Ukraine it's not doing a no-fly zone”
The United States in 1989 was the most important exporter of democracy in the world, but 30 years later it has become the strongest exporter of tools that destroy democracy, particularly through surveillance capitalism business models that maximize profit while eroding civil society, and this export damages weaker democracies more than the US itself.
“in 1989 when the Wall came down the United States was the most important exporter of democracy in the world sometimes for good sometimes for bad but certainly that was the driver that's how the Wall came down that's how the Soviet Union Was Defeated it was Ideology Now today 30 days 30 years later um the United States has become the most important the strongest exporter of tools that destroy democracy”
The Ukraine war will likely not end during Putin's lifetime; it resembles the Israel-West Bank conflict where both sides claim the same land, making long-lasting peace impossible and instead creating cycles of ceasefires and peace deals that repeatedly fail, serving as a long-term geopolitical irritant.
“I don't think it ends as long as Putin's live I think it's kind of like you know a West Bank thing Israel West Bank they both love the same land and it's very difficult to have a long lasting solution you know there'll be ceasefires that fail there'll be peace deals that fail but I don't think this thing ends”
The pandemic's end, NATO and EU unity, and cheaper renewable energy create positive conditions, but these are counterweighted by a small group of aging autocrats and tech bros who have amassed extraordinary power with no internal checks and balances and poor information access, driving more geopolitical uncertainty than any point in the past 25 years.
“on one side it seems positive the pandemic's ending NATO and the EU are more united renewable energy is getting cheaper but then the report says wait a second there's a counterweight on uncertainty due to what the report says are a small group of individuals who have amassed an extraordinary amount of power and are driving a concerning set of risks”
The Western response to Russia's Ukraine invasion (NATO/G7 alignment, Ukraine aid) reflects double standards: wealthy Western nations defend Ukraine (a European white country) with unprecedented economic and military support while ignoring or supporting similar invasions in Sub-Saharan Africa and the Middle East, causing developing countries to view Western hypocrisy and refuse to support Ukraine sanctions despite understanding invasion's wrongfulness.
“I also think that it is a force that is driving greater gaps between the wealthy countries in the world and the poorer countries in the world I mean the NATO and the G7 are fully aligned uh in punishing the Russians and defending the ukrainians as a consequence of this Invasion there are virtually no developing countries in the world that are supporting that policy proactively they're not and it's not because they like the idea of the Russians invading Ukraine but they really don't like the economic hit that they are taking”
Uncertainty about 2023 risks is driven by the difficulty of changing the behavior of powerful individuals (autocrats, tech entrepreneurs) who want to disrupt the global environment, and the resulting powerlessness citizens feel about their ability to influence their own futures drives anxiety about the year ahead.
“much of the risk this year comes from individuals who want to disrupt our environment they want to make the world worse for us as we perceive it and yet we can't really do a lot to change their thinking we can't do a lot to constrain them we can't do a lot to stop them and I do think that the powerlessness drives a lot of anxiety”
The United States is politically divided to an extent that is being exported globally through social media and political modeling, even to neighboring Canada, creating far-right connections between Alberta and Texas and far-left connections between Ontario and New York that increasingly supersede federal capital relationships
“and increasingly I think that the connections between the United States and Canada that stitched the two countries together are going to have more to do with Far Right meaning far right between Alberta and Texas for our left meaning far left between you know political members of Ontario and New York than it is between between the federal capitals of the two countries and that's a danger to be avoided but it's also a structural reality that is increasing”
The divide between rich and poor economies will continue to grow because the climate fund created for emerging markets remains unfunded, destroying trust between wealthy and developing nations, while emerging market voices will grow louder and more disruptive as a reaction, coordinating within multilateral forums
“the the whole fund that they created last year on the climate side for emerging markets people are going to ask us the money and the money is going to be nowhere to be found so does that trust level between rich and poor countries is going to just be lower and lower uh and then the other thing that I'm also seeing on this side is that the voices of Emerging Markets though will continue to be much louder and much more disruptive as a reaction”
There is potential for mutually assured destruction due to accidents and miscalculations in the Russia-Ukraine conflict at higher risk in 2023 than at any time since the Cuban Missile Crisis in 1962
“War there is a potential for mutually assured destruction due to accidents and miscalculations that will be higher in 2023 than at any time since the Cuban Missile Crisis in 62”
Global cooperation on water issues will be very slow and minimal in impact; the first UN Water Conference since the 1970s will occur but will not produce any coordinated global roadmap of action, and solutions will take years to materialize even if started immediately.
“there's gonna be some some early stages of global cooperation on it but it's going to be very very slow and very minimal in terms of impact now to be fair you're going to see the U.N Water conference which is going to be the first Water conference since the 70s so I guess in and of itself it's a pretty big deal and it kind of like goes on to show that the topic is slowly but surely emerging as a priority but it's very very slow and you will not see any kind of coordinated Global roadmap of action that will come out of it”
Zelenski is demanding reparations and war crimes trials for Ukraine's eight million refugees and tens of thousands of alleged Russian war crimes, which are reasonable Ukrainian demands but not reasonable things for Americans to provide, creating potential alliance tension in 2023.
“and his willingness to take risks that the Americans far away would consider intemperate but the ukrainians with eight million refugees and tens of thousands of war crimes committed against them think are absolutely the only thing they could be doing never mind demanding reparations and you know war crimes trials and all the rest of course that's a reasonable thing for the ukrainians to ask for but it's not a reasonable thing for the Americans to provide”
Belarus will likely open a northern front in the Ukraine war in 2023 but probably without Belarusian soldiers because Lukashenko doesn't want to risk his regime through military entanglement, and Zelenskyy would oppose Belarusian involvement due to both geopolitical risk and territorial security concerns
“so see why in the war is a tough one on balance I think they'll open some sort of a northern front this year but probably without Bella Russian soldiers because they would call them you know he's had risks with lukashenko over the years God knows I think it's because of seismic risk the belarusians really don't want to enter the war”
Zelenskyy faces greater risk to his political survival than Putin because Ukraine's economy contracted 40% (vs Russia's 4%), creating pressure on Zelenskyy to take military risks Americans consider reckless but Ukrainians consider necessary for survival, while US restrains Ukraine military aid to prevent Crimea conquest that could trigger nuclear use
“if you're zelenski and your economy has just contracted not by the four percent of Russia in 2022 but by 40 percent and and there's a lot greater threats to zelenski's ability to stay in power still than there is to Putin because of that economic reality because of the military reality because of the the need to try to keep together a country that's fighting courageously against an invading country that's so much more powerful than they are I mean zielinski's fighting for for life right now”
Maximum Xi makes China the only top risk that didn't make number one despite Xi's unprecedented power consolidation because Rogue Russia's combination of nuclear weapons, military capability, and desperate strategic position creates even greater geopolitical uncertainty
“and the only thing that's staggering about maximum sheet in this year's list is that they didn't make number one there was something actually worse right”
The United States House Speaker crisis demonstrates continued constitutional dysfunction and deep Republican Party internal divisions, marking the first contested House Speaker race since 1923, signaling deeper institutional fracture than typical legislative disagreement.
“I want to congratulate the Republicans um we've not seen um a a second vote um on house speakership since 1923 so we're going to be making history um in short order in the United States it's always great to see that happen in my country so congratulations to the GOP”
45% of surveyed social media followers expect 2023 to be better than 2022, driven primarily by expectations that the pandemic will be perceived as ending, despite risks outlined in the 2023 top risks report suggesting many headwinds.
“compared to 2022 45 of people said they they expect it to be better which I thought was a pretty fascinating number higher than I thought 28 said worse and about the same 27”
G Zero Media social media poll showed that when asked which presents the greatest global threat in 2023, 38% of respondents selected 'Russian aggression', which aligned with Eurasia Group's #1 risk assessment, while 25% selected 'democracy is in danger', 20% selected 'climate change', and 17% selected 'widening inequality'.
“which of these presents the greatest Global threat in 2023 is it Russian aggression democracy is in danger climate change or widening inequality and here are the results widening inequality 17 percent climate change 20 democracy is in danger 25 and the number one risk that our poll found was 38 Russian aggression”
The risk name 'Weapons of Mass Disruption' was written by ChatGPT as an experiment, and Bremmer notes they should have used it for other risk names too because it was a good title.
“it's the first time in 25 years that the name of one of our risks was ever written by an AI bot was actually written by chat GPT we didn't write it maybe we should have used it for other ones too because it was pretty good as a title”