Ian Bremmer

2012 – the year of the primary, the election, the Diamond Jubilee, the superstorm, the flying dictator, the escaped dissident, the embassy attack, the empty chair, the tech protest, the Olympics, and dozens of other stories already forgotten. It was a busy year and a terribly volatile one, too. Which of these stories will actually matter five years from now? By my count, three:

1)     China rising

2)     The Middle East in turmoil

3)     Europe muddling along

They’re the good, the bad, and the ugly of 2012.

The Good: For the sake of our listless global economy, thank goodness for China’s rise. The country’s Commerce Minister is promising that China will hit its GDP growth target of 7.5 percent for the year. (In the first three quarters of 2012, it grew 7.7 percent.) China’s ability to power through the financial crisis provided global markets with much-needed energy, and its momentum, despite the crisis in the Eurozone, a key trade partner, has helped limit the damage. If it wasn’t for the resilience of the world’s second-largest economy, we’d all be a lot worse off.

The Bad: In 2012, almost every key story in the Middle East has gotten more complicated and more dangerous. Syria, Israel, Gaza, Iran, Jordan, Iraq, Yemen, Egypt. Israel has become increasingly isolated within the region, facing Palestinian rockets, a nuclear-driven Iran, and the prime minister of a former ally dubbing it ‘a terrorist state’. Egypt’s president pulled off a power play, and the Syrian nightmare deepened. Iraqis struggled to build a new society in the wake of U.S. withdrawal, and (supposedly allied) Afghans killed a record number of U.S. troops before they could reach the exits. When the Arab Spring first began to take shape, many observers hoped it would be just that – a rebirth. But you can’t spin it now. It’s bad and getting worse.

The Ugly: Europe was a mess in 2012. Reform of the euro area is moving in the right direction, but the halting progress that European leaders made in crafting a new eurozone could not avert record unemployment rates and a return to recession. The term ‘Grexit’ was coined in response to the persistent threat of Greece leaving the euro. Widespread protests against tough austerity measures, the rise of nationalist political parties, and huge governance and implementation challenges have compounded the problems of a continent still groping for credible, lasting solutions. In 2012, we’ve seen moderate progress — and a whole lot of ugly.

What do these three trends mean for the next five years?

In the Middle East, the various emerging conflicts are too expensive, too intractable, and too risky for outsiders to try to manage. Regional powers will have to manage these problems on their own. The bad will remain bad.

Earlier this month the National Intelligence Council released its Global Trends 2030: Alternative Worlds report — a document that comes out once per presidential administration — mapping out likely geopolitical trends over the next two decades or so. As usual, it’s a must-read, offering comprehensive analysis of the disparate factors that will drive global politics through 2030.

Further, the NIC took bold steps to correct some previous weaknesses in past reports. In the past the report nailed the “what” more often than the “when.” That is particularly the case with its treatment of the United States, for which “past works assumed U.S. centrality.” This time around the NIC sets an increasingly “multi-polar world” — which I call the G-Zero — as the backdrop of its report, acknowledging that the lack of global leadership has accelerated in the wake of the global financial crisis of 2008-09. America’s status as a “hegemonic power” is eroding, and no country is likely to take its place.

This multipolar world is the foundation for the rest of the NIC’s predictions. The report is organized around subsections that range in probability: There are the megatrends that are sure to have an effect, the game-changers that could go a number of ways, and the four potential worlds of 2030.

Eurasia Group is posting our favorite political risk articles of the week on Foreign Policy, which I’d like to share here as well.  As always, feel free to give us your feedback or selections @EurasiaGroup or @IanBremmer. This is being reprinted from ForeignPolicy.com.

Must-Reads

1. “South Korea’s Presidential Election: A Homecoming”

Banyan Asia blog, The Economist

On Wednesday, Park Geun-hye was named president of South Korea by a small margin, making her the first woman to hold the post in the nation’s history. How will her presidency differ from Lee Myung-bak’s? What are the implications for North-South relations?

2. “The Importance of Shinzo Abe”

Sanjaya Baru, The Hindu

A much more momentous Asian election took place this past weekend, as Shinzo Abe and the LDP returned to power. Many are focusing on the possible conflicts that the election could provoke between China and Japan, but this piece asks: Are Japan and India the “natural partners in Asia?” In light of the conflict over the Senkaku/Diaoyu islands, it seems Japan is pursuing an ABC policy (Anybody But China). Why not India?

Entering 2012, we were staring at a host of critical elections and transitions in countries that represent about half the world’s gross domestic product. You would think those elections and political handovers would have been some of the most important events of 2012. Yet they were largely red herrings.

In China, the consensus view is that even with a change of leadership, China is largely the same as it was; if anything, the Chinese leadership has doubled down on the approaches of its former government. In Russia, Vladimir Putin went from running the country as prime minister to running the country as president. In France, Nicolas Sarkozy was voted out and a socialist, François Hollande, voted in, but that hasn’t changed France’s stance toward the European Union, its most important relationship. And in the U.S., Barack Obama swatted aside Mitt Romney while Congress remained divided, making four more years of the status quo likely.

Yet in one major economy an election really did matter, and really will change the way a country behaves in the global arena. That place was … Japan.

Eurasia Group just started posting our favorite political risk articles of the week on Foreign Policy, which I’d like to share here as well.  As always, feel free to give us your feedback or selections @EurasiaGroup or @IanBremmer. This is being reprinted from ForeignPolicy.com.

Must-Reads

1. “Why the Reset Should Be Reset”
Thomas E. Graham and Dmitri Trenin, New York Times

In light of Vladimir Putin’s State of the Union address on Wednesday, a speech which signaled more of the same on the home front, it’s worth tracking the shifting dynamic between Russia and the United States. With relations deteriorating, is a grander “longer-term strategic framework” out of the question?

In a country balanced on the precipice of a “fiscal cliff,” we sure are talking a lot about the next secretary of state. In his second term, President Barack Obama will also likely have to name a new treasury secretary, defense secretary, transportation secretary, Securities and Exchange Commission chairman and Central Intelligence Agency director, at the least. But, despite an imminent fiscal cliff, suffocating unemployment and a widening disparity of wealth across the United States, it is the anticipation of Hillary Clinton’s replacement that has sparked the most discussion.

Largely, this is because of Susan Rice. Rice, a longtime foreign policy adviser to Democrats, has been Obama’s United Nations ambassador for four years. Obama, reports suggest, would like to nominate her to be the new secretary of state. Republicans, reports are clear, are having none of it. Rice’s involvement in the administration’s initial confusion over the embassy attack in Libya — she repeated the administration’s misinformed talking points — has made her the target of withering critiques before she is even officially nominated.

So what is Obama to do? If he nominates Rice, he will have an unnecessary fight on his hands. No matter how competent she might be, it is not clear that she would be confirmed, which is what matters most. And in a moment when bipartisan negotiation is — at least ostensibly — the most important goal in Washington, launching a politicized candidate into a nomination battle may not fly.

As China obsessives know, it is tough to read tea leaves when the water is as opaque as that surrounding China’s Politburo. In the wake of the Chinese leadership transition, we’re left to sift through the news in search of answers. There is plenty we do not know about the process or what its outcome will bring, but when it comes to underlying themes we can understand, it is possible to make some predictions.

Start with solidarity. In the most telling example of Chinese political unity, the Politburo, the elite political body that makes all of China’s major decisions, went from nine people to seven to consolidate control of the political process. The Communist Party is now more unified than before and is less likely to tolerate dissent from within. The stability of the Communist Party is paramount. All else will fall in line.

Note what happens to those who don’t. If the Bo Xilai incident demonstrated anything, it’s that, in China, nails that stick up will be hammered down. There is no room for leaders who stray from the party platform.

This month, a curious thing happened in the annals of diplomacy. A country offered up a peace plan to put an end to a seemingly endless civil war in Syria. This country was not one of the usual foreign policy suspects — it was not the United States, it was not in Europe, and it wasn’t Syria’s neighbor. It was a country that has no real experience in playing the world’s policeman. But, seeing a world filled with retired officers, it decided to try on the uniform for itself. China has taken another step into the spotlight of the world stage.

This is what happens in a G-Zero world — a world without any specific country or bloc of countries in charge. China has long been content to watch world events play out and then react, trusting that another country would step in to put volatile situations to rest. But that’s not happening with the Syrian conflict and its spillover into the broader Middle East. Americans feel that the issue doesn’t affect them enough to intervene. Europeans, as a Union, don’t seem to be particularly interested, even if some smaller countries are. And with those powers on the sidelines, suddenly the Chinese have a much bigger problem — a civil war that could metastasize into regional instability. The Chinese have far too much at stake in Iraq and Iran for that to happen: 11 percent of China’s oil imports come from Iran, and it is on track to be the chief importer of Iraqi oil by 2030.

And so China stepped in, offering a peace plan. The details — cease-fire, a committee that negotiates a political solution to the war, etc. — are not as important as the plan’s mere existence. It’s symptomatic of China’s new approach, one that Hu Jintao hinted at in one of his final addresses as Chinese president. He said China would “get more actively involved in international affairs, (and) play its due role of a major responsible country.” In the wake of downturns in the West, there is a new diplomatic structure emerging. China is determined to be one of its architects.

This week — chads willing — Americans will finally put an end to four years’ worth of electoral Sturm und Drang. Only then can the country begin to ask the question that matters much more than who will win: Will anything change? On foreign policy, it’s increasingly clear that the answer is, for the most part, no.

Likewise, this week — politburo willing — the Chinese will finally put an end to a year of bureaucratic angst. The powers that be hope that once a new president is installed, the Communist Party can put months of scandal behind it (Bo Xilai’s trial and Wen Jiabao’s family fortune, to name just a couple) and start to answer the question they’re most eager to put to bed: Will anything change in a new regime? On foreign policy, it’s increasingly clear that the answer is — you guessed it — for the most part, no.

In a volatile world, American and Chinese foreign policies appear, at least for the next few years, set in stone.

With Election Day 10 days away, there has been no “October surprise.” The economy plods slowly forward. Iran has not exploded. No shots have been fired in the South China Sea. Syria’s carnage continues, but the two candidates agree that U.S. troops should remain outside the line of fire. Republicans have tried without much success to use the killing of the U.S. ambassador in Benghazi to backfoot the president.

Just when it seemed we’d have an election without a last-minute wildcard, along comes Sandy. The storm has claimed lives, destroyed homes, cut power — and created uncertainty. The media and the country have turned away from the election toward the disaster’s startling images and human toll.

We can’t yet know if the storm will boost either candidate, but it has certainly added new variables, new questions, and new tests as the two campaigns make the final turn toward judgment day. Now that the clouds are parting, what’s next in the forecast?