Complication of Geopolitical Risks: The Great Shift of the Axis

An instable world

Since the COVID-19 pandemic, clashes between great powers and geopolitical crises have been intensifying everywhere in the world. With the Russia-Ukraine war still ongoing and conflicts between the liberal and authoritarian camps rising, it appears inevitable that the world will witness the advent of a new cold-war system to dominate international order.

The US-China power struggle is raging, with neither of them yielding even an inch, while military tensions are rising over Taiwan and the South China Sea to the extent that a war could break out at any time. The rise of Trumpism and isolationism in the United States and the consequent security vacuum are heightening the Iranian nuclear crisis and unrest in the Middle East. Furthermore, new forms of terrorism threaten the cyberspace beyond the physical world.

Over the next five years to come, a wide range of geopolitical risks will disrupt the international order, causing more confusion and unrest – so much so that the period could be called an "age of geopolitics". At times like this, finding a strategy to ensure national survival and prosperity is not only essential but also is the key that makes or breaks the destiny of a nation. In 2022, the K.E.Y. PLATFORM will present a "survival strategy" to prepare for the age of geopolitics and overcome widespread risks.

Global risks that will determine the next five years

In 2022, the global economy has entered an age of austerity with interest rate hikes. It managed to narrowly escape a crisis by pumping an astronomical amount of liquidity and implementing fiscal stimulus policies, but inflation due to soaring energy prices and supply chain disturbances will pose the biggest risk to the global economy in the future.

In an age of austerity, emerging economies are likely to face a more serious crisis than before. The adverse effects of interest rate hikes and belt-tightening across the world may manifest themselves as an economic hard landing, such as real estate bubbles, shadow banking, and debt crisis, especially in China. In some emerging countries, crashing currency values and soaring import prices are causing concerns not only about a possible default and severe food shortages but also about political instability, such as a "Second Arab Spring." While the intensifying technology war over semiconductors between the United States and China is likely to add to the possibility of hard landing for the Chinese economy, it is also highly likely to reshape the global supply chain and even trigger new trade disputes.

“Carbon Neutrality by 2050” and green energy transition policies will continue to be pushed ahead. Ironically, however, they can also cause a boomerang effect: fossil fuels run short of supply, driving up energy prices. As a result, the world could end up struggling through difficulties in transitioning to green energy and addressing climate change issues, while global cooperation could be delayed or could fall through. In the meantime, catastrophes, abnormal climate, and unpredictable natural disasters caused by global warming, such as shrinking glaciers in the polar regions, will greatly threaten the survival of the global economy and humanity. Technological advances and digitization will provide new opportunities for economic growth. At the same time, they can also pose a major threat to individuals, businesses, and countries as the risks of hacking, security breaches and cyber terrorism increase.

The future ahead of us – next five years to be ushered in by the new government – is fraught with risks as mentioned above. It is no exaggeration to say that our future depends on how closely we identify these risks and make thorough preparations. You can check out at the K.E.Y. PLATFORM 2022 Conference what the global risks forecasts are by top Korean and foreign experts and leading global research institutions, what scenarios will unfold in the future, and what responses we should make.