Geopolitical and Business Risks and Opportunities in 2024
As the global business landscape enters 2024, a spectrum of geopolitical and business dynamics driven by electoral shifts, social movements, and regional conflicts presents various business risks and opportunities. This briefing focuses on areas and examines the potential impacts of global events and trends on business. This summary offers a quick guide to geopolitical and business risks and opportunities in 2024.
Global Political Instability
UK and US businesses must monitor global hotspots, including tensions in the Middle East and Indo-Pacific, as these can cascade effects on international markets and supply chains.
US-China Relations Trade Relations
Ongoing tensions with China, encompassing trade disputes and technological competition, could impact US businesses, especially in sectors like technology and manufacturing.
UK-EU Post-Brexit Dynamics
UK businesses will continue to navigate the post-Brexit landscape, dealing with challenges in EU trade relations and regulatory changes.
Global Election Dynamics
Over 70 Countries Holding Elections: Unpredictable policy shifts and market volatility. Opportunity to engage emerging markets and adapt to new policies. The risk of political instability may disrupt trade and investments.
European Political Landscape
Rise of Euroskepticism and Right-Wing Groups: Potential challenges to EU unity. Opportunity to Navigate new market dynamics in a transforming EU. Possible disruptions in EU trade and regulatory frameworks.
South Africa’s Election Scenario
Government Shortcomings Impacting Election Outcomes. The prospect of policy reform and economic revitalisation. Probably prolonged socio-economic instability affecting operations.
India’s Parliamentary Shift
Potential Third Victory for Modi’s BJP. Expect continuity in business-friendly policies with escalating political tension and democracy-related concerns.
Elections in Pakistan, Taiwan, Indonesia
Potential to Exacerbate Global Trends. Opportunity to leverage new policies for market entry and partnerships. The usual chance of regional instability impacting trade and investments.
US Presidential Election
Significant Global Impact Expected. Possible benefit from favourable business and foreign policies. There is a high chance of domestic and international market uncertainty as the US people choose the least popular option.
Given the similarities between Conservatives and Labour, very little change within UK politics will be expected in 2024. However, the new right of the centre, the Reform Party, may be a fly in the ointment. Unlikely but possible, but not likely to dramatically transform the political landscape. Famous last words.
Emergence of Right-Wing Populism
Global Populist Surge: Influential figures like Trump, Le Pen, Wilders, Bolsonaro. These are interesting times with a possible disruption to international order and existing trade agreements.
Ukraine’s Ongoing Conflict
Stalled Ukrainian Counteroffensive, suggesting the US doesn’t want a winner other than their defence sector. Expect prolonged instability impacting regional trade while Putin tries to extract himself from the meat grinder mess while still looking powerful.
The Kurdish Regional Dynamics
25th Anniversary of Abdullah Öcalan’s Arrest and Kurdish Solidarity. Opportunity to form new alliances and trade routes. More likely, there’s a risk of regional geopolitical tensions affecting stability and crossing over to the Caucasus regions, Turkey, Syria, Russia, Iraq and Iran.
Iran’s Political and Nuclear Ambitions
Heightened tensions over Iran’s nuclear ambitions and its role in Middle Eastern geopolitics. Their involvement in escalating regional conflicts is more likely, and stricter sanctions could severely impact global oil markets and regional stability. Companies should closely monitor Iran’s nuclear developments and international responses. Those with interests in the Middle East need to prepare for potential shifts in regional dynamics and evaluate the impact of sanctions on their operations and supply chains.
Myanmar’s Civil War Escalation
Myanmar has been embroiled in a civil war since the military coup in February 2021, which ousted the democratically elected government. The coup led to widespread protests, resulting in a violent crackdown by the military and escalating into armed conflicts with various ethnic armed organisations (EAOs).
China has historically maintained a complex relationship with Myanmar. It’s balancing its need for stability on its border and its regional strategic interests. Post-coup, there have been indications of China’s (all but confirmed) support for some rebel groups. Particularly those operating near the China-Myanmar border. China’s desire to secure its investments in Myanmar is likely driven it’s business involvement. Especially projects under the Belt and Road Initiative and maintaining regional influence.
Syrian Conflict Developments
Role of Kurdish Militias and AANES’s Constitutional Changes. Engaging in reconstruction and development initiatives is possible, but continued instability in the Middle East is highly likely. The Syrian conflict, ongoing since 2011, has resulted in a complex and fragmented political landscape. The situation remains volatile, with various factions controlling different parts of the country. Kurdish militias, primarily the Syrian Democratic Forces (SDF), have been key players in the conflict. Initially focused on combating ISIS, but also involved in broader territorial and political disputes. Autonomous Administration of North and East Syria (AANES). This is a largely Kurdish self-administered region. It has declared autonomy and enacted its constitution. They aim to establish a multi-ethnic, democratic, and decentralised governance model.
Developments in the Syrian conflict could have broader implications for the Middle East, affecting political alliances and security scenarios. The evolving role of the SDF and AANES in Syria’s future will be significant to monitor, as it could impact the regional balance of power and the future of Kurdish political aspirations in the Middle East.
Africa’s Evolving Landscape
Rapid economic growth, political transitions, and persistent security issues characterise Africa’s landscape. But there’s significant growth potential in the telecom, agriculture, renewable energy, and infrastructure sectors. Increasing urbanisation and a young population offer vast market opportunities. Political instability in certain regions, infrastructural challenges, and governance and corruption issues can threaten business operations and investments. Collaborate with local entities to navigate market complexities and understand cultural nuances.
AI Regulatory Environment
Increasing scrutiny and varied approaches worldwide could lead to ethical AI development and standards. Risks include navigating diverse regulations and compliance costs.
Revising tensions over the Falkland Islands could strain Argentina-UK relations. Risks include trade disruptions and altered bilateral relations that could affect regional markets. Without assistance, the Argentinians could not retake the Falklands even if they wanted to.
Venezuela’s Persistent Instability and Guyana Conflict
Territorial disputes with Guyana compound ongoing economic difficulties in Venezuela. Geopolitical opportunities include humanitarian aid, infrastructure projects, and resource exploration in the disputed area. Risks in 2024 will be continued instability and potential escalation of border conflicts impacting regional security.
Venezuela has long-standing territorial claims over the Essequibo region of Guyana, which have intensified recently. The discovery of significant offshore oil reserves in the contested area has heightened the stakes. Venezuela grapples with deep economic challenges, including hyperinflation, political corruption, and a collapsed infrastructure. These issues have led to a humanitarian crisis, with widespread shortages of necessities. The dispute with Guyana could escalate into a more significant conflict. It is potentially involving other players and impacting broader regional security. The UK is now being drawn into the situation, and Venezuela is reacting with claims of British imperialism.
Companies operating in Venezuela must navigate international sanctions imposed by various countries, including the United States. This situation requires careful compliance with international laws and regulations.
Global Rise in Left-Wing Protests
There has been a surge in left-wing protests globally, focusing on issues like economic inequality, climate change, and social justice. Opportunities include aligning business practices with social causes to gain public support and market access. Develop CSR initiatives aligned with protest causes and plan for operational contingencies in protest-prone regions.
Russia’s Political Uncertainty Post-Ukraine
Shifting Political Landscape: Russia faces internal and external challenges following the Ukraine conflict. There may be diplomatic and trade openings in a post-conflict scenario, especially if sanctions are eased. But continued sanctions and geopolitical tensions affecting international relations and trade will continue.
Key Issues Impacting UK and US Businesses
As the world recovers from the COVID-19 pandemic, businesses will face a landscape of economic rebalancing, potentially leading to market volatility.
Inflation and Monetary Policy
Anticipated shifts in monetary policy in response to global inflation could impact both countries’ borrowing costs and investment climates.
Energy Prices and Supply Security
Fluctuating energy prices and concerns over energy supply security, partly due to ongoing conflicts like in Ukraine, will be crucial for businesses, especially energy-intensive industries.
AI and Cybersecurity
Rapid advancements in AI and increasing cybersecurity threats pose opportunities and risks. UK and US businesses must adapt to evolving technological landscapes and regulatory frameworks.
Data Privacy Regulations
With potential changes in data privacy laws, including modifications to GDPR in the UK and evolving US state-level privacy laws, businesses must stay compliant with diverse and changing regulations.
ESG and Climate Change Policies
More focus on environmental, social, and governance (ESG) criteria and climate change policies will impact business operations. Companies must adapt to stricter environmental regulations and increased scrutiny of sustainability practices.
Social Movements and Corporate Responsibility
Growing social movements, particularly around issues of inequality and justice, will require businesses to engage more actively with corporate social responsibility initiatives.
UK Domestic Political Uncertainty
Ongoing political shifts within the UK, including potential changes in leadership and policies, could create an uncertain regulatory and business environment.
Scotland and Northern Ireland Dynamics
The potential for increased calls for Scottish independence and ongoing Northern Ireland protocol negotiations may have implications for businesses operating in these regions.
US Domestic Policy Shifts
The outcomes of the US midterm elections and preparations for the 2024 presidential election could lead to significant policy shifts, impacting sectors like healthcare, technology, and energy.
US-China Tech Rivalry
Escalating tech rivalry with China, encompassing issues from trade to intellectual property, will be critical for US tech businesses.
Strategic Considerations for UK and US Businesses
Adaptability and Resilience
Businesses must adapt strategies to manage geopolitical uncertainties and economic shifts.
Investment in Technology and Innovation
Keeping pace with technological advancements and regulatory changes will be crucial for maintaining competitiveness.
Proactive Engagement with Global Issues
Engagement in global issues, including environmental sustainability and social responsibility, will be increasingly important for reputation and long-term success.
Strategic Business Considerations
- Proactive Monitoring of Global Elections to adapt strategies to political shifts.
- Geopolitical Flexibility. Adjust operations and investments amid changing landscapes.
- Commitment to Ethical AI and Compliance. Invest in ethical practices and prepare for regulatory changes.
- Inclusivity and Diversity in Business Practices. Leverage gender diversity as a competitive advantage.
- Regional Strategy Adjustments. Tailor approaches to specific geopolitical developments.
- Risk Mitigation and Opportunity Exploitation. Stay ahead of global changes to maximise growth and minimise disruptions.
- Monitor developments closely, evaluate supply chain resilience, and consider diversifying trade partners.
Geopolitical and Business Risks and Opportunities in 2024
In 2024, businesses will operate in an environment marked by significant geopolitical shifts, economic uncertainties, and rapid technological changes. Successfully navigating this landscape will require firms to be adaptable, proactive, and strategically aware of the global context in which they operate. Businesses must proactively monitor these global developments, adapting their strategies to political shifts, ensuring ethical compliance, and leveraging inclusivity and diversity as competitive advantages. Tailored regional strategy and risk mitigation measures will be essential for maximising growth opportunities while minimising disruptions in an increasingly complex global landscape.