As the rise of populism continues, the geopolitical environment is the most dangerous it has been in decades, says political risk consultancy Eurasia Group. 

The international order is being challenged by a group of unpredictable nationalist leaders. Alongside with US president Donald Trump, these include Kim Jong-Un, Jair Bolsonaro, Recep Tayyip Erdogan, Vladimir Putin, Benjamin Netanyahu, Matteo Salvini and Mohammed Bin Salman, says Eurasia Group in its latest report.

As protectionism grows, a ‘global tech cold war’ has developed, with technology competition growing extremely political in 2018. Investors and markets will feel its impact this year, as the financial and human capital available to drive the next generation of emerging technologies decreases, says the report.

For example, due to the ongoing China-US trade war (expected to continue this year), various US firms have shifted portions of their supply chains out of China to south-east Asia, Latin America, and in some cases back to the US. Meanwhile, visa restrictions will impede the flow of creative talent between China and the US. The EU and Japan are likely to follow the US in imposing new restrictions, predicts the report. 

Regarding US domestic politics, Eurasia Group contends that, although markets proved resilient to articles of impeachment in the past, an impeachment of Mr Trump could yield unpredictable results.

Eurosceptics could gain a stronghold during the EU parliamentary elections in May 2019, thereby further polarising and undermining the EU, contends the report.

Presidential elections in Ukraine will occur in March, with Russian attempts at interference, predicts the report. The Kerch Strait affair is indicative of the tensions between Russia and Ukraine, and Eurasia Group expects similar incidents this year.

Risks surrounding Nigeria’s presidential elections are also noteworthy. Both the incumbent, Muhammadu Buhari, and his younger opponent, Atiku Abubakar, are surrounded by uncertainty. It is also possible that the election will be inconclusive, leading to instability, if neither candidate has a legitimate claim to power.

The last set of risks revolve around cyber security. Cyber deterrence is difficult because hackers are often non-state actors and therefore face lower stakes. However, cyber deterrence might not work well against states either. For example, isolated North Korea may not have much to lose were it to employ such tactics, says the report.