In a world where everything seems uncertain, geopolitical relations are an extremely significant factor in ensuring peace and stability worldwide. The dynamic of the countries has changed immensely in the past decade and predictions say that it will continue to change in 2024.
What Exactly is Geopolitical Risk?
Geopolitical relations in simpler terms refer to the political relations of the countries influenced by geographical factors such as supply chains, security, alliances, global initiatives, environmental concerns, climate changes, financial exchanges, disputes regarding territory, trade relations, exports-imports, investments, topography, and numerous others. Geography & economics, along with politics, play a vital role in influencing the relations of the countries, ultimately contributing to the global risks. Geopolitical risk refers to the acts that pose a threat to the usual peaceful functioning of a country, they are the risks that arise from the interaction between countries.
Presently, our global landscape appears increasingly turbulent, marked by divergent narratives and escalating living expenses alongside heightened interest rates in numerous regions. Depleting resources & steaming geopolitical disputes have instigated various conflicts worldwide. Moreover, environmental emergencies, like severe weather occurrences, have exacerbated economic instability for both nations & businesses, chipping away at profit margins & disrupting supply chains.
Getting a Closer Look to the Major Geopolitical Risks
We all know that the years before 2024 & the years itself have been swirling like a rollercoaster. As we step forward, global geopolitical risks or threats are still evolving, creating uncertainties and challenges for global industries. Let us look forward and analyze some of the major geopolitical risks.
The Russia-Ukraine war is one of the most talked about geopolitical risks that molded or affected numerous industries or economies. It was & is the major crisis that has been posing geopolitical risk worldwide. The war has posed a humanitarian crisis citing a threat to several economies. The Russia-Ukraine war has damaged the human capital, production, economy, and market, affecting Ukraine on a more prominent level.
The Middle East comprising of 22 countries, namely Iran, Iraq, Bahrain, Kuwait, Lebanon, Syria, Libya, etc., has always been a problematic scenario in the global aspect. Ranging from the Civil War of Syria, the Yemen Crisis, the Iran-Saudi conflict, and several others, have all led to the majority of the Middle East becoming a third-world country. These crisis across the Middle Eastern countries, comprises major problems such as rising unemployment, poverty, female suppression, overpopulation, underdevelopment, and many more.
The COVID-19 Pandemic, the worst nightmare for every nation globally. The outbreak of this disease made every nation of the globe suffer, leaving no space for numerous businesses to gain even a percent of profit. In 2024 and beyond, potential disruptions include new virus mutations, global health governance challenges, and supply chain effects. COVID-19 significantly impacted trade, leading to border closures and travel restrictions. Uncertainty persists, raising the risk of future lockdowns and manufacturing interruptions. Weaknesses in global health governance have also been exposed, necessitating investment in disease surveillance & vaccine development.
Global warming, untimely floods, droughts, wildfires, hurricanes melting glaciers, and increasing heatwaves are all results of extreme climate changes, and several initiatives have been taken by the governments of various countries to combat this, as they are indirectly affecting the global markets. Climate changes affect the overall geographical factor and economic factors of a country since several industries are dependent on climate, especially agro-based, it also affects the trade route.
As we explore the intricate geopolitical landscape of 2024, we would get aware & recognize every nich detail, including numerous challenges & risks that are to come or to be experienced throughout the year. To foster the geopolitical risks, every nation strives to work together to build a stable, prosperous, and secure world. Further, to achieve this, every market needs to work at a pace that could lessen the effect of the geopolitical risks.