In Other News – The Geopolitical Landscape heading into 2023 – 1/4/2023

As we head into 2023, it’s a good a moment to acknowledge that the world is in the thick of a significant geopolitical shift, and many key drivers of our collective future are in flux. Having a comprehensive understanding of what is at stake, and what levers for action exist, will be essential for strategic decision-making in the coming year. Below, The Arkin Group shares some of the central geopolitical themes to consider while navigating the new and evolving world order.

Putin Will Persist, But Ukraine Will Continue to Prevail
As Russia continues its relentless winter assault on Ukraine, Putin must also manage an increasingly disenfranchised, underequipped and untrained military force, as well as an economy under pressure from enduring sanctions. And if we learned anything in 2022, it’s that while Putin is still hoping for a victory, Ukrainian resilience is an indomitable force. NATO, its member states, and its allies are all working to supply Kyiv with ever more sophisticated weaponry to resist and reclaim lost territory. Many see the makings of a stalemate, likening Eastern Ukraine to the 37th parallel, but the forces working against Putin both on the battlefield and the domestic front will eventually erode Russian resolve and capability to continue in Ukraine. The recent offers for peace negotiations are a tacit acknowledgement that Russia has no real options other than to continue the war. Though that doesn’t mean that Putin won’t persist to his continued detriment.

The Stability of the Global Order is at Play on the Front Lines in Ukraine.
Russia’s invasion has had a global inflationary effect as energy and food prices soar, supply chains are disrupted, and instability disrupts the global economic recovery from the pandemic. But even more critically, whether Putin is able to successfully invade and occupy an independent, sovereign country will have lasting impact on the legitimacy and strength on the global international order. If Ukraine is usurped, what next for the Baltic States and Poland? And what fate for Taiwan? There are countless lingering territorial disputes that could explode into conflict if countries believe that they will not be held to account for violating a longstanding international norm for the respect of territorial integrity.

The Russian invasion of Ukraine also rightly prompted a rapid acceleration to advance alternative energy not only for environmental but security purposes. Concurrent to this development, we have made a critical advancement in nuclear fusion technology. These developments have laid out a clear path to a carbon-free future. Still, the intermediary resurgence of coal as a stopgap solution to a shortage of Russian supply as well as ever-increasing reports of severe weather, flooding, and water scarcity underscore the fact that we need to work faster.

Russia and China’s Autocratic Missteps have created a real opportunity for the West and Democratic Allies.
NATO’s renewed sense of purpose and commitment to investing in our common security will be a lasting and welcome trend from 2022. Putin’s blunder, along with China’s continual and repeated missteps in handling Covid-19, have shown the world how the even purportedly efficiently run autocracies are inherently sclerotic. Information flows are greatly impacted by fears of reprisal for speaking truth to power. The healthy debate that is critical for decision making in matters of national security and crisis management are impossible in societies where there is absolute control in one decision maker. This summer, Xi cemented his hold on power for the foreseeable future echoing Putin’s deft maneuverings a decade hence making us nostalgic for the erstwhile decision-making bodies of the Soviet Politburo and the previous iterations of the People’s Party’s Congress, which were more stable and predictable because there was more than one set of opinions. Turkey’s Erdogan and Saudi Arabia’s MBS should take note.

The rest of the world – the Global South in particular — is looking for leadership and alternatives to the offerings of these autocracies. The change in global dynamics have opened a variety of opportunities to the West whether it be the U.S. leveraging China’s faltering Belt and Road initiative to make overtures to Africa and the Global South more generally, or the recognized importance for businesses to divest or at the very least diversify their supply chain away from China. The West needs to continue to seek our diplomatic and economic partnerships with countries in Africa and Latin Africa, which are considered critical suppliers of key minerals and rare earths, to counter China’s decades-long courting. If viable economic and political opportunities can be provided to countries like Cambodia, Vietnam, Indonesia, Malaysia and elsewhere as companies look for alternative production sites to China, and the U.S. seeks to create a security corridor in South China Sea, then more global consensus will emerge for this new path.

Good Governance is a Matter of Global Security
And if the world needed more examples of the nefarious effects of undemocratic societies, the tragic and heartbreaking stories (often away from the headlines) from Afghanistan and Iran show how dangerous autocratic rule can be, especially to women. It also demonstrates how inherently unstable these societies are. Another challenge was highlighted by Qatar’s skillful manipulation of FIFA and now the emergent scandal of its influence campaign targeting the European Parliament – but this was just the most recent and flagrant display of the greatest vulnerabilities in our open society. The revelations of the Panama Papers, the Paradise Papers and the Pandora Papers – in addition to the raft of sanctions against Russia and Putin’s Oligarchs – have made compliance a real challenge to global corporations as we realize how dirty money penetrates the whole of our global economic system. Mitigating corruption is essential to managing the emergent reality of enormous wealth inequality across the whole of the global economy, and to ensuring security and the rule of law so that individuals and corporations have recourse to justice.

Good Corporate Tech Governance is a Matter of Global Security
Microsoft and StarLink have delivered extraordinary and definitive support to the war in Ukraine. When Elon Musk tweeted the outlines of Putin’s peace agreement suggesting it was a reasonable path, it affected the debate and demonstrated how tech billionaires are now overtly influencing both climate policy and foreign policy. The fallout from the egregious scandals of FTX, Nikola Motors, and Theranos have resulted in billions of investor losses. These events — along with our growing awareness that Facebook can be an effective disinformation tool for election interference and TikTok a deleterious tool for our collection ability to concentrate as well as a huge threat to privacy– added to our understanding of the inherent perils imbedded in the growing influence of tech firms. These tech companies now have a level of influence on par with certain countries or certain international institutions, and it is a troubling thing to posit that our security, election integrity, and enduring privacy and freedom are dependent on the whims of these entities.

Good Intelligence is Critical
If there is one overarching lesson to take from 2022 into 2023, it’s that nothing can be done without good information and analysis. It was the excellent U.S. intelligence that foretold the Russian invasion and allowed Kyiv and the West to organize. But it was also our overestimation of the Russian capability and underestimation of the Ukrainian capacity for resistance that complicated our readiness. On the other hand, Russia completely botched its assessment of Ukrainian opposition to the invasion and misread Western commitment to Ukrainian security. Yet another example to highlight is that, as we head into a third year of complications from the covid pandemic, visibility into China remains limited. Because press coverage is stifled and even the local provincial governments are incentivized to only report what the central government wants to hear, reliable sources are scarce and unbiased assessments even more scant.

To make calculated decisions in the coming year, it’s necessary to understand the entrenched effects of China’s Belt and Road initiative and the Wagner Group’s actions in Africa, which can only be acquired through local collection and sound regional expertise. Another area of strategic ambiguity is that there appears to be yet another Pink-ish or Leftist Tide moving across Latin America, with the shifts in leadership in Brazil, Argentina, Brazil, Chile, Mexico, Uruguay, and Peru, but political stability seems generally more tenuous as governments grapple with crippling economic pressures.

Navigating this rapidly evolving environment means understanding what’s really going on, perhaps even in some cases on a street-by-street level. There is real volatility in the world today and the evolution of the varying dynamics that will drive these geopolitical realities is rapid and often counterintuitive. First and foremost, good intelligence will allow governments and companies to effectively traverse these uncertain waters. In the private sector in particular, corporations need to invest heavily in their capability to collect and understand intelligence that will provide them with the wherewithal to make critical strategic decisions.