As the world grapples with the ongoing COVID-19 pandemic, the global economy is facing a multitude of challenges. The Eurasia Group has released its report on the top risks for 2021, and it’s clear that the world lacks leadership in this time of crisis.
A Divided U.S.: A Key Risk for the Global Economy
The report highlights the difficulties facing the Biden Administration in a divided U.S. as one of the key risks for 2021. The world’s preeminent superpower faces big challenges of its own, and it’s unlikely that it can restore predictability in times of crisis. According to Eurasia Group President Ian Bremmer and Chairman Cliff Kupchan, "In decades past, the world would look to the U.S. to restore predictability in times of crisis. But the world’s preeminent superpower faces big challenges of its own."
COVID-19: Not the Biggest Risk to the Global Economy
While COVID-19 is a significant risk to the global economy, it’s not the biggest one according to the report. The pandemic will continue to have a broad impact on the global economy, and uneven recoveries, variance in vaccine access, and stimulus plans that fall short will push up debt levels, leave workers displaced, and fuel opposition toward incumbent leaders.
The Risks: A Detailed Analysis
The Eurasia Group has identified 10 key risks for 2021. These include:
- The Biden Administration’s ability to manage domestic crises: The report notes that the Biden administration will have difficulty gaining new confidence in U.S. global leadership as it struggles to manage domestic crises.
- K-shaped recoveries in developed and emerging economies: This type of recovery, where some countries experience strong growth while others lag behind, is a major risk for the global economy.
- Debt levels: The report warns that uneven recoveries, variance in vaccine access, and stimulus plans that fall short will push up debt levels.
- Financial troubles in emerging economies: The debt crunch could lead to financial troubles in emerging economies, according to the report.
- Relations between Biden and ‘Trump’s fellow travellers’: While some concerns are more likely to be ‘red herring’ risks that have been overplayed, relations between Biden and leaders such as Turkey’s Recep Tayyip Erdogan, Brazil’s Jair Bolsonaro, the U.K.’s Boris Johnson, and Israel’s Binyamin Netanyahu are a key risk for 2021.
- A global backlash against U.S. big tech: Fears over a global backlash against U.S. big tech are seen as lower risks.
Conclusion
The world lacks leadership in this time of crisis. The Eurasia Group’s report highlights the difficulties facing the Biden Administration and the challenges that lie ahead for the global economy. By understanding these risks, we can better navigate the uncertain times ahead and work towards a more stable and prosperous future.
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