By Alfred Koroma
Most of the shocks and crises the world has seen in the past one to two years are projected to continue in 2023.
Inflation shockwaves, Tik Tok Boom, Water Stress, Energy Crunch, Arrested Global Development and Weapons of Mass Disruption are among the top ten global crisis Eurasia Group report highlighted as 2023’s top risks that should face the world.
According to the report, inflation shock that faced the world in 2022 is set continue with a ripple effects. The report says this will serve as the principal driver of global recession, financial stress that will stoke social discontent and political instability globally.
But the factors are tied to Covid-19 pandemic, Russia’s invasion of Ukraine and the West’s sanctions that strained global supply of energy, food, and fertilizer, leading to inflation rise that most countries has not experienced in 50 years’ time.
Central banks are expected to maintain a restrictive policy stance through much of 2023, undermining global demand. And global credit and financial conditions will continue to tighten beyond this year as past rate hikes work their way through the financial system with a lag, the report says.
The combination of high inflation, rising interest rates, and insufficient fiscal support will push the global economy into recession, Eurasia Group warns, saying the immediate effect of the economic troubles will mounts pressure on incumbents in countries with elections this year.
Vulnerable populations in developing countries are expected to suffer more rising prices, tighter financial conditions, and slowing global growth stoke public which may lead to political anxiety.
Arrested Global Development
Global crisis is threatening global development and this will pose further risk in 2023. Covid-19 pandemic, the Russia-Ukraine war, and the global inflation surge, Eurasia Group says has thrown development progress into reverse and that billions of people will become more vulnerable in 2023 as more economic, security, and political gains are lost.
Referencing last year’s UN report which estimates that five years of human development progress have been lost since Covid-19 hit, and the impact has been global, the report says more than 90% of countries experienced a decline in human development in 2020 or 2021.
According to the report, food insecurity will intensify due to the Russia-Ukraine war and women and girls will suffer the most, losing rights, opportunities, and security as advances in gender equality are rolled back.
The pandemic alone is projected to force an additional 10 million girls into early marriage by 2030 and lead to the first increase in the practice after more than 20 years of declining rates, the report says, noting that Climate change will multiply these threats as extreme weather events disrupt supply chains and trade patterns, adding stress to food and energy markets.
Weapons of Mass Disruption
Social media and the growth of AI technology is one of 2023’s top risks. Eurasia says this year will be a tipping point for disruptive technology’s role in society.
According to the report, a new form of AI, known as generative AI, will allow users to create realistic images, videos, and text with just a few sentences of guidance. And advances in deepfakes, facial recognition, and voice synthesis software will render control over one’s likeness a relic of the past. Fake news will flourish and trust which has already drained in social cohesion, commerce, and democracy will erode further.
Tik Tok Boom
Here again, the report looked at how social media has changed global governance. It refers to the young generation of social media users born between the mid-1990s and the early 2010 as ‘Generation Z’ – a generation with no experience of life without the internet who digital devices and social media have connected across borders, creating the first global generation and making it a new political and geopolitical force.
According to the report, Gen Z currently makes up 30% of the world’s population and is expected to comprise 27% of the global workforce by 2025. The report says Generation Z has the ability and the motivation to organize online to reshape corporate and public policy, making life harder for multinationals everywhere and disrupting politics with the click of a button.
In Sierra Leone, social media with the said generation has already shown that it will be a major challenge in the coming general elections. The new media platform played a key role in the planning and execution of the August 10 atrocity.
For energy, Eurasia Group say tighter market conditions, rising costs for households and businesses will increase fiscal burden on consumer economies, widen the rift between OPEC+ and major consumers, and create yet another source of increased tensions between the West and the developing world.
The Group furthered that high oil prices will place a heavy burden on poorer developing countries, which have limited cash for expensive energy imports and face surging borrowing costs to fill the hole, resulting in energy shortages and social discontent.
Water crisis is always an issue that receives less governments’ attention globally.
The Group projects water stress in this year to become a global and systemic challenge and its consequences will worsen as governments’ ability to handle them will not improve.
Forecasts for 2023 are worse. Water stress will become the new normal: River levels will fall to new lows, and two-thirds of companies globally will face substantial water risks to their operations or supply chains, Eurasia Group says.