The United Nations Foundation points to 5 global issues that will shape 2024: crises occurring everywhere together; a plethora of elections; fixing the financial system and potential shifts in power; safeguarding rights and equity; and future-proofing the UN.

2024 – MAKE OR BREAK?

Introduction

2023 was a year of conflict, shrinking economies in many countries, higher unemployment, inflationary pressures, high interest rates and climate related disasters. While some of these factors seem to be receding, 2024 may be just as bad.

It has been a while since the world found itself in such turmoil and perhaps on the precipice of a global conflict. There is certainly a Cold War, perhaps not in the same vein as post World War 2, but nonetheless, we are in a very uncertain period. The world order does seem to be undergoing a change and it is not clear whether this is for better or worse.

So where are we headed? The Economist, in the editorial of its publication, ‘The World Ahead 2024’, lists 10 themes (some interlinked) that will be prevalent this year. Not all of them indicate good news!

Elections

It is estimated that a little over half of the world’s population will be having elections this year with around 70 being held covering 4.2 billion people of which about half will be eligible to vote. Democracy will be put to the test even though it seems clear that some of these polls will have been predetermined with the incumbents winning by a landslide. Asia will have the most elections including India which is ostensibly the world’s largest democracy. Up to 20 African countries will also go to the polls this year including, Rwanda and South Sudan in Eastern Africa. The European Union will also have elections and in all likelihood the UK, although this one could potentially be in early 2025. Russia will also have a Presidential election in March.

The US Presidential election in November 2024 will be a rerun of the 2020 one between the current President, Joe Biden (81 years old) and the former President, Donald Trump (77 years old). The two are the oldest and second oldest to have served as President in the US. There have been insinuations that both are too old to be President but the current laws in America do not place an age limit. However, whichever candidate is elected, the question will be if they are cognitively capable of serving a 4-year term, and therefore the importance of their Vice-President picks could well be crucial. What is also clear though, is that both President Biden and Mr Trump have vastly different plans for the US which may not necessarily bode well for the world as a whole given the US’s standing in the world order. In any event, the vote count will likely be a close call with a handful of States making the difference.

Russia-Ukraine

This conflict has been ongoing for 2 years now with no clear end in sight. Ukraine showed signs of a strong counter-offensive against Russia but this seems to have petered out. While they will continue to put up a fight, without Western support (the US election result is likely to be critical for them) they may be facing a losing battle, but it is difficult to say how long the war will continue. The potential of the current situation accelerating into a global conflict may well be real. With this comes the fear of a nuclear conflict where of course nobody wins.

Middle East

2023 was a year in which the Middle East seemed to be headed to some form of peaceful existence. The Economist opined that Iran and Saudi Arabia were talking to each other and the conflicts in Yemen, Libya and Syria were continuing but without significant impact in the region. The focus is economic growth.

How quickly things changed. Sudan has erupted and Israel and Hamas are at war. The Middle East seems to be back to where it was many years ago, although some may argue that there has been no change. Will 2024 bring a lasting solution, whatever that may be, to the various issues in the region? As matters currently stand, perhaps not. The conflicts could go in any direction.

World order

The Economist talks of multipolar disorder as wars rage in several parts of the world and a critical election is set to take place in the US. The world’s dominant economies are having a tough time and economic prowess has shifted to countries such as India, Saudi Arabia, Brazil and Turkey. China may have been part of this but their economy is clearly in the doldrums.

The African Continent saw 8 coups during 2023 effectively putting paid to any democratic progress there had been on the Continent. China, Iran, and Russia are seen as all wanting the same thing – an end to American dominance. Many parts of the world have largely ignored the sanctions imposed on Russia. 2024 may well be a game-changer. But the three countries face their internal problems which they need to concentrate on in 2024.

Support for Ukraine is waning, particularly in the US, which makes Europe more critical in the conflict. Even the current conflict in Gaza has split the US from Europe.

A new Cold War but with China

In May 2023, the US and China met in Vienna primarily to restore lines of communication. However, while the talks were extensive, the fact remains that both countries continue to be aggressive towards each other on many fronts.

The potential for a Cold War probably started under the Donald Trump administration when a trade war broke out. The US’s continued support for Taiwan irked the Chinese who could potentially be planning an invasion to bring that country back into the fold.

Matters have not necessarily improved under the current Biden Administration. The Russia-Ukraine conflict has also raised differences between the US and China, as mentioned above, China seems aligned against the US. The visit by Nancy Pelosi to Taiwan in 2022 went against China’s “One China policy”.

The US continues its policy of not granting access to advanced technologies to China which will further enhance the possibility of a Cold War between the two. The difference, at least at the moment, is that this may not be on a military basis, which was pretty much the basis of the world’s first Cold War.

Energy

As the world attempts to move – albeit extremely slowly – towards a net zero planet, major changes are likely to happen, although over a period of time. Renewable energy is becoming the order of the day much to the detriment of countries like Uganda who enter the hydrocarbon market at a late stage and are facing severe difficulties (see Uganda section).

With the largely green resources that the Global South can boast of, there may well be a benefit for them. That is not to say that fossil fuels will simply disappear in 2024 – these will be around for at least the rest of this decade if not longer. According to the Economist, “Competition for green resources is shaping geopolitics and trade, and creating some unexpected winners and losers”. This change has already started and may be a critical feature of 2024.

Economy

The IMF in their January 2024 Economic Outlook, projects global growth in 2024 of 3.1% (an increase of 0.2% from their October 2023 Outlook projection primarily due to resilience in the US and several larger and developing economies) rising to 3.2% in 2025. The 2023 global economy has grown by 3.1% so the world is largely static in this area. Interestingly, growth in the US is projected to drop by 0.4% in 2024. To put this into perspective, the global economy grew by 3.8% in the period 2000 to 2019 despite various shocks in that period.

Inflation is also following a downward trend globally and is expected to be 5.8% in 2024 and 4.4% in 2025. Indeed, the IMF notes: “The global economic recovery from the COVID-19 pandemic, Russia’s invasion of Ukraine, and the cost-of-living crisis is proving surprisingly resilient”.

The IMF sees the upside risks in 2024 as faster disinflation, slower than assumed withdrawal of fiscal support, faster economic recovery in China and Artificial Intelligence and supply side reform.

Downside risks on the other hand are seen as commodity price spikes amid geopolitical and weather shocks, persistence of core inflation that requires a tighter monetary policy stance, faltering growth in China, and, a disruptive turn to fiscal consolidation.

On balance and given the number of conflicts in the world today, the downside may well outweigh the upside. As the Economist says in one of its Leaders: “Soft landing. Don’t count on it”.

Artificial Intelligence

ChatGPT was launched on 30^th November 2022 and evolved during 2023 at an extremely rapid pace. It is now being used in various industries and is capable of remarkable things – provided you ask the right questions! It has been updated to April 2023 from September 2021 when it was launched.

In an article written in December 2022, McKinsey said that ChatGPT would be used by businesses in the areas of marketing and sales, operations, IT engineering, risk and legal, and R&D. Despite this, they advised caution given that it was new, kinks were still being ironed out and practical and ethical issues will emerge. The reality has been exactly this.

However, ChatGPT and other Artificial Intelligence tools are the future and there is no doubt, they will evolve even more in 2024. So, watch this space!

Climate change

2023 has been tagged as the hottest year on record and 2024 is unlikely to be different. The impact this will have on basic commodities used and relied upon everyday could be devastating. Throw in floods, drought, snow in areas that haven’t seen it in years, water issues, and rising disease, and the imagination is mind boggling. Unfortunately, this is now a reality.

One world?

Probably unlikely but there are certainly some things that might unite us even for short periods. The three that the Economist cites are the Paris Olympics, more adventures to the moon perhaps even manned, and the T20 Cricket World Cup which is to be held in the US and West Indies. The last one is indicative of how much ethnic combinations have changed around the world, after all, who would have thought that the Americans would want to watch cricket?

Conclusion

Perhaps, the single most important event in 2024 will be the US elections in November. It may well determine the direction the world heads in – inward-looking or internationalist. The Economist see this as the most critical elections of the 70 that will take place in 2024. In their words in a Leader entitled “Democracy in danger”: “Nothing, however, will compare to America’s election, either for grim spectacle or potential consequences. It is hard to believe the most likely outcome is a rematch between two old men, both of whom the majority of voters wish were not candidates”. Much of what happens in 2024 and subsequently could well be determined by the US election.

This is a commentary and comments are welcome by email to info@eaa.co.ke

Commentary: 2024- MAKE OR BREAK