In a post-nancial crisis world, the lack of viable internationalleadership is in stark relief. As the Global Agenda Council onGeopolitical Risk’s 2012 report highlighted, the effectivenessof global institutions and the rise of regionalism are overarch-ing themes dening world events. In 2013, this breakdownof international coordination will go increasingly local: in sucha world, governments will focus more on their domesticagendas, which will create new risks in and of itself. Mostimportantly, the growing vulnerability of elites makes effectivepublic and private leadership that much more difcult tosustain. Leaders of all kinds are becoming more vulnerable totheir constituents, generating more reactive and short-termgovernance. Whether one looks at the dismal approvalratings of the U.S. Congress or the impact that more openows of information is having on the Chinese ruling elite, it isclear that people are becoming more and more uninspiredby their governments. When it comes to unemployment, thewidening disparity of wealth, or environmental degradation,highly complex or even intractable issues set politicians upfor failure in the eyes of their constituents.Underperformance erodes elites’ legitimacy, making itthat much harder for them to lead effectively. States capturedby corruption or special interests, or that exhibit a lack of transparency, growing disparity of wealth, or a perceivedindifference to the lives of the citizenry, will increasingly fallvictim to this ‘legitimacy decit.’ Corporate and NGO leaderswho act with impropriety can also nd the ground shiftingbeneath their feet, sometimes overnight. Rapid news cyclesand social media can allow dissident movements to arisewithout warning, creating new challenges for those in charge. Against this backdrop, a host of key 2013 risks andopportunities takes shape. Tensions between China andJapan are likely to worsen. The spill over from the Syriancivil war will have severe knock-on effects throughout theregion. The Iranian nuclear threat, Afghanistan-Pakistanconict in the wake of US 2014 withdrawal, and eurozonecrisis response are other key risks. Opportunities could arisefrom a brighter US outlook and continuity in its government. A growing awareness of the lack of international leadershipmay impel political leaders to deal with issues locally, andcould result in better crisis response. In addition, there area host of wildcards—on the downside and upside—thatcould prove game-changers over the coming year.Discussion will break down into categories as follows:
A. Overview: The Vulnerability of Elites
The vulnerability of elites cuts across emerging marketsand advanced economies, democracies and authoritarianstates, public and private institutions, and a wide array of issues. This is the challenge: as their legitimacy gets calledinto question, political actors struggle to react to instability,crises and opportunities in the most effective manner.Whether it is the growing disparity of wealth, or the evolving
The Vulnerability of Elites:
Geopolitical Risk in 2013
Categorizing the major themes, risks, opportunities, and wild cards—based on discus-sions of the Global Agenda Council on Geopolitical Risk in Dubai, November 2012.