Ian Bremmer's Quick Take:
Hi everybody. Ian Bremmer here and a Happy New Year to you. It is 2023. Can still say Happy New Year because it's the beginning, it's the first week of January. I think all this week, that's perfectly fine. I wanted to spend a couple of minutes with Quick Take on our top risk, something we do every year. Been around for 25 years now as a firm. This is our anniversary. And I always try to give a sense of where the world is heading in the coming year. At the end of the year, we go back, we see what we got right, we see what we got wrong.
And this year, what's interesting about this year, it's kind of two sides to a very interesting coin. On the one hand, democracies, major democracies, and the institutions surrounding them, whether it's the European Union, or it's the G7, or NATO, the United States, and Brazil, and Canada, and Japan, these institutions, the countries, they look pretty stable. They're not about to fall apart.
And some of that is this sense that you really shouldn't overly panic even when you have a really lousy leader, whether you like them or you don't like them. Because there are checks and balances, because the institutions constrain extreme action, because it's really hard to break a deeply entrenched set of political institutions that surround advanced industrial democracies. And even middle income democracies, let's say like Brazil or like Turkey. It turns out it's really hard to break some of those institutions, and that's a good thing.
So four years of Trump, and I was a strong advocate of the "don't panic" school around January 6th, that a coup could not happen because no one was going to listen, either Republicans in positions of authority that were in charge of the ballots in different states, or the judiciary, or the military, or Congress, you name it. And in Brazil, same thing. So that's been a plus. And as a consequence, you don't see rise of populism in this year's risk report. The United States, which is the most powerful country in the world, is only listed number eight. And given that the report is ordered on the basis of impact, likelihood, and imminence, US at number eight, functionally means it's not there. There's a big "don't panic" on the United States in 2023.
The flip side of that is we presently face a small number of individuals, aging autocrats, and tech bros who have an incredible amount of power. They don't have checks and balances on them inside their institutions or their governments. They don't get a lot of input from technocrats or experts on big macro issues. And therefore they're prone to make huge mistakes. They're prone to cause all sorts of uncertainty and volatility and risk. And that is a much bigger concern in 2023 than frankly I've ever seen in the geopolitical environment before.
And there are really four different places where I see that playing out. Three in countries: Putin in Russia, Xi in China, and Supreme Leader Khamenei in Iran. And then fourth, a small number of technology companies and the individuals that control them driving advanced generative AI or weapons of mass disruption. And those are really the top major risks that are aligned with that concern.
And so to go through them at a very sort of quick high level, I would focus first of all on the fact that Putin is not going anywhere. A 4% economic contraction compared to 40% in Ukraine, no domestic instability to speak of, enormous loyalty with people around him. But making huge mistakes with the war in Ukraine and having no way to continue to advance that war on the ground or increasingly even in the air in Ukraine. Which means if he's not going to back down and it doesn't look like he's going to, his escalation options are either weapons of mass destruction or more likely escalation against NATO states, espionage, cyber, fiber attacks, pipeline attacks, terrorism, you name it. And from Russia's perspective, this has been a war against NATO for many months now, from NATO's perspective, it hasn't, but the ability to keep that in check is going to be made much more challenging by Putin feeling desperate and humiliated on the global stage. So that's risk number one.
Second risk, enormous risk, and the only surprise is that it's number two, as opposed to number one, given how big it is Maximum Xi. Xi Jinping having made this extraordinary decision to back completely away from zero COVID individually without any preparation leading to what's almost certain to be over a million deaths in China. And also the likelihood of hundreds of millions of cases that can get more variants, more dangerous variants that we will not have any information about outside China because they're not collecting the data or providing it to anybody else. And that kind of opacity in the Chinese health system and response to the pandemic is likely to also show manifest in the Xi Jinping's control of the Chinese economy. And even over time on national security issues.
So the level of uncertainty, I mean, you've got Mao Zedong's level of power and control combined with a country that has the kind of impact on the global stage, let's say the United States did 10 or 15 years ago, we've never seen that before in our lives. That causes massive uncertainty and instability.
And then finally, focus a little bit on these weapons of mass disruption, the United States was the greatest exporter of democracy when the Wall came down in 1989. Not always for good, not always consistently at all, and frequently hypocritically. But nonetheless, that was the case. You didn't defeat the Soviets without the Americans exporting the ideas around democracy and the tools that allowed citizens behind the Iron Curtain to challenge their own governments. Well, today, barely 30 years later, the United States has become the principle exporters of tools that destroy democracy.
And here, of course, I'm talking about social media platforms. I'm talking about surveillance capitalism. I'm talking about generative artificial intelligence. And increasingly, tools that make it impossible for citizens to distinguish between human beings and bots. And that level of disinformation deployed by actors that are focused on maximizing profit, or even worse focused on disrupting societies, is enormously dangerous to democracies.
It used to be the technology actually supported democracies and undermined authoritarian regimes. That was true during the communications revolution, that is no longer true today. Increasingly, the most disruptive new technologies in AI actually empower the consolidation of authoritarian regimes that use that surveillance and data and undermine democracies. Most so brittle democracies in the developing world, in emerging markets, less countries like the United States, or Germany, or Canada that have stronger, more resilient institutions, but nonetheless, a massive risk.
And also a risk in the marketplace as corporations have to deal with individuals that are angry with the companies, with the brands. And instead of just whistle blowing, they can send bot armies with deepfakes against them. And if you think that the meme stock explosion was an issue with GameStop and the rest, imagine what happens when these bots and their deepfakes first start hitting the marketplace. Very dangerous place to be.
So a lot of things to be thankful for in 2023. Certainly glad to see that we're not seeing continued serious erosion in the United States or the potential for constitutional crisis in the near-term. Nice to see that most of the pandemic is now behind most of the people in the world, and we can start to live with a bit of normalcy again. But some enormous geopolitical risks in the near future and things we're going to spend a lot of time on in the coming months.
Thanks so much and I'll talk to you all real soon. Happy New Year.
