2020 Geostrategic Outlook: Global Rebalancing Raises Uncertainty For Business

Geostrategic Business Group
2020
Geostrategic
Outlook
Global rebalancing raises
uncertainty for business
January 2020
ey.com/geostrategic
2020 Geostrategic Outlook
A
transformative
age
in geopolitics
Contents
Foreword 5
The geopolitical landscape 6
Globalization 9
Technology 10
Demographics 11
Environment 12
Spotlight topics 13
Global trade 14
US-China relations 16
Around the world 18
East Asia and Pacific 19
South Asia 21
Eurasia 23
Europe 25
Middle East and North Africa 27
Sub-Saharan Africa 29
Latin America 31
North America 33
Authors and acknowledgments 35
Endnotes and contacts 36
Note: Unless otherwise noted, all figures are in US dollars.
3
geostrategy
ge·o·strat·e·gy
\jē-ō-stradəjē/
(geo)politics + strategy
4
Foreword
Volatile. Unpredictable. Risky. Challenging. These are just a few of the words business leaders use to describe the
current political environment in a recent survey on managing political risk that we conducted. More than half of
respondents told us the effect of political risk on their company is higher than it was two years ago. Accordingly,
58% of respondents told us that their board is spending more time on political risk.
We are living in a transformative age of geopolitics, a time when both a fundamental growth driver for global
business — globalization — and the balance of power among the world’s largest economies are changing.
Change brings uncertainty. As this transformation unfolds, a more fragmented global economy may emerge,
marked by higher levels of political risk and greater uncertainty associated with cross-border transactions. This
uncertainty and pace of change challenge leaders to craft long-term, global business strategies. Dynamism, agility,
resilience and new ways to manage risk will all be required to thrive amid this geopolitical disruption. Companies
need to incorporate geopolitics into their strategy. This is what we call “geostrategy.”
To strategize and, ultimately, to act, executives need to understand the deeper forces at work in this
transformative age of geopolitics. It is imperative to go beyond the headlines to understand how the primary
interconnected forces of change impact the geopolitical environment in which companies must navigate.
In this outlook, we dive into these primary forces of change and look at how they are unfolding, geopolitically,
around the world in 2020. We analyze how emerging shifts in globalization, technology, demographics and the
environment affect geopolitics and, ultimately, how these shifts are changing the reality in the key markets in
which businesses operate.
Jay Nibbe
Partner and EY Global Vice Chair
Markets, Ernst & Young LLP
Jon Shames
Partner and EY Global Leader
Geostrategic Business Group, Ernst & Young LLP
Mary K. Cline, PhD

Director and Insights Leader
Geostrategic Business Group, Ernst & Young LLP
5
The
geopolitical
landscape
6 | 2020 Geostrategic Outlook

The geopolitical landscape
Scanning the geopolitical environment is the first step in navigating the transformative
age in geopolitics. In this outlook, we offer our scan of the geopolitical landscape in 2020.
The geopolitical outlook in 2020 will be shaped by what we see as the primary
forces of disruption: globalization, technology, demographics and the environment.
These forces have existed for millennia but are now evolving in new ways.
These primary forces manifest themselves in key issue areas, as well as regionally,
shaping the operating environment for companies. In this report, we explore how these four
forces play out within each region. We also spotlight two cross-cutting geopolitical issues —
global trade and US-China relations — critical to the business environment in 2020.
Geopolitics in a world of regions
Europe
Shifting internal and
external equilibriums
North America
Uncertainty abounds ahead of US election
Middle East and North Africa

Volatility and the risk of disruption
The evolution and interaction of

these forces play out around the globe, Sub-Saharan Africa
Economics and elections
driving the news we see every day. create divergent trajectories
Appreciating these forces can help

bring strategic clarity to the volatile
Latin America
and unstable world of geopolitics in Protests and populists
which businesses operate. drive policymaking

Primary forces
Globalization Technology Demographics Environment
The shift from ever-expanding The fourth industrial revolution Risks to political stability are Climate change is becoming a
globalization toward rising promises long-term gains in rising in countries with very old race against time for government,
regionalization of the global productivity yet is accelerating or young populations, even as business and society to develop
economic and political geopolitical competition and the geopolitical balance of power solutions that prevent the worst
systems is accelerating. exacerbating social and economic shifts in favor of economies consequences of this pre-eminent
grievances at the heart of with sustainable working-age global risk to materialize.
populist movements. populations.
Eurasia
Renewed strategic significance
East Asia and Pacific

Evolving role of China shapes the outlook
South Asia
A delicate balancing act

Primary forces
Globalization
Emergence of a new regionalism
The assumption that globalization would Organization (WTO) to govern cross-border to see each other as competitors. The EU
continue to expand helped drive global trade. Technology is another area in which and China relationship will continue to be
expansion over the past 30 years; the interoperability of competing regional complex, characterized by both further
companies tied their economic fortunes systems will increasingly affect companies’ economic integration via the Belt and
and strategic outlook to a relatively ability to conduct cross-border business. Road Initiative (BRI) and rising levels of
predictable global system. competition and distrust.
This global rebalancing is also creating new
That is not the world that companies economic blocs and political centers of Complicating geopolitics further is that
face today. The rise of populism has power. This emerging multipolar system while these poles are consolidating
unleashed strong anti-globalization is anchored by the US, China and the power, the nature of power is changing.
sentiments in countries around the world. EU. Each of these economies has smaller Economic clout is becoming a, if not the,
As governments respond, policymakers regional economies within their orbit. And dominant dimension of power, competing
are now prioritizing regional organizations the governments of each bloc will accelerate with military and political capabilities.
and alliances. This has resulted in a shift their efforts so their standards and systems Also, asymmetric conflict — most notably
toward rising regionalization of the global are adopted throughout their spheres of cyber threats — allows countries with
economic and political systems. influence. Witness, for example, the intense lower levels of traditional geopolitical
competition between the US and China in power to wield outsized influence on
On the one hand, the new regionalism the development of 5G wireless networks. the global operating environment.
reflects a continuation of cross-border The EU’s leadership in technological
economic integration. East Asia is a regulation offers another case in point. As these dynamics play out, the rules
key driver of this trend, first with the of the game are shifting, creating new
Comprehensive and Progressive Trans- As the emerging blocs consolidate their uncertainties around global strategies.
Pacific Partnership (CPTPP) and now with power, relations between them will be The proliferation of bilateral and regional
the Regional and Comprehensive Economic volatile. The US is retreating from its trade pacts, declining influence of the
Partnership (RCEP). international leadership, China is playing WTO, rising use of sanctions, intensifying
a bigger role in geopolitics and Europe is competition between major economies
On the other hand, regionalism represents seeking a more cohesive projection of its and expanding political restrictions on
the increasing fragmentation of the global own power. The US and China are being investment all shift business calculations
economy into smaller blocs. The ability challenged to form a new relationship and strategy around global growth
to effectively conduct business across under the more confrontational approach opportunities and risk management. The
certain regions is likely to decrease as to bilateral relations pursued by the US new regionalism will require multinational
these geo-economic blocs integrate more administration. And although transatlantic companies to develop regional supply
fully internally. This is clearly visible in cooperation anchored global stability for chains and tailor products for regional
the declining influence of the World Trade 70 years, the US and EU are beginning consumer markets.

Primary forces
Technology
Accelerating global competition
The technologies of the fourth industrial Countries that dominate these digital as technology risks coming under fire
revolution promise long-term gains in technologies will occupy a stronger position for contributing to underlying economic
efficiency and productivity, but they relative to their less technologically woes, such as inequality. To maintain
also have disruptive geopolitical and advanced competitors. This is true not domestic political stability in the coming
social consequences. Transportation only in terms of economic competitiveness years, governments will need to manage
and communication costs will drop, and military power, projected through these tensions and collaborate with
while logistics and supply chains will cyber war or remote-controlled drones, companies to retrain workforces to help
become easier to manage. These but also for expanding geo-economic them keep pace with new technologies.
technological improvements hold zones of influence. Technological prowess
the potential to diminish the cost of enhances the ability of a government to Another area in which domestic politics and
international trade, open new markets exercise control over zones of economic technology will increasingly collide is digital
and drive economic growth. and political influence and to determine privacy norms and regulations. As social
the “rules of the road” of political media, connected devices and other digital
At the same time, technology catalyzes and economic cooperation. The US, technologies play an increasingly large role
geopolitical competition. This is China and the EU are at the forefront in people’s lives, public concern about the
especially true in an era of emerging of this competition. None wants to use of their data and necessary safeguards
regionalism in geopolitics. Governments be dependent on technologies that is rising. Governments are taking
are seeking to ensure that they — or could be controlled by foreign political action in various ways, including data
companies headquartered within their influences. This sits at the heart of the localization requirements and new digital
borders — develop the capability to build current debate about which country will privacy laws. These privacy regulations
the crucial technologies of the fourth dominate the rollout of 5G technology. represent another area of geopolitical
industrial revolution. Such technological competition, with the EU currently setting
sovereignty is even more important Although technological advancement the global standard with the General
today because artificial intelligence (AI), is crucial for economic and geopolitical Data Protection Regulation (GDPR).
5G wireless networks and other digital competition, it also creates domestic The US and China will not simply follow
technologies form the backbone of the political risks. One of the most notable risks the EU’s lead, however, so companies
entire 21st century digital economy. is technology’s effect on the labor market. will likely face competing privacy
While estimates of the number of jobs that regulations in the world’s three major
will be destroyed by new technologies vary geo-economic blocs in the coming years.
widely, many economists and policymakers
are concerned about robotics and AI
generating large-scale labor displacement.
This is particularly salient in an era of
populism and anti-globalization sentiments,

Primary forces
Demographics
Aging catalyzes global rebalancing
We are in the midst of transformative Aging populations present political and education and skills development and
demographic change. Even though the economic challenges. Domestically, aging foster entrepreneurship and private sector
global population is set to climb to almost populations weigh on economic growth job growth. Without such supportive
7.8 billion in 2020, the growth rate is prospects. With fewer working-age people, policies, a youth bulge increases political
slowing significantly, forecast by the UN governments will need to combat economic risk. Countries with a large number of
Population Division at just 0.98% annually stagnation and ensure the sustainability economically inactive or disadvantaged
during the next five years. Even more of pension systems. This includes young people are prone to social unrest.
notably, the global population is getting measures such as raising the retirement Witness the large protests that erupted in
older, with the worldwide median age set age, encouraging greater workforce Chile, Lebanon, Iraq and elsewhere in 2019.
to surpass 30 years for the first time in participation, welcoming immigrants and
2020. As a result, the global working age increasing the fertility rate. Each of these The aging global population is also
population as a share of the total peaked policies comes with political risks and affecting geopolitics through generational
in 2015. But this aging is not equally require significant fiscal resources, making dynamics in two ways. First, is an
distributed, creating risks to domestic implementation difficult and, in some escalating inter-generational conflict over
political stability in countries with either cases, unlikely. Aging could reduce many key policy issues, such as the environment
very old or young populations and shifting countries’ economic clout on the global and the social safety net. Younger
the geopolitical balance of power in favor stage, resulting in corresponding shifts in generations are taking to the streets,
of economies with sustainable working- geopolitical power. afraid that their economic future and the
age populations. ecological environment in which they will
The youngest region in the world is Sub- live are very much at risk. Second, is an
Europe, where 19% of its residents are 65 Saharan Africa, where the median age is emerging generational handoff in political
years of age or older, is the region with by just 18.7 years. South Africa, in fact, is the power. French President Emmanuel Macron
far the oldest population. Japan has the youngest G20 country, with about 45% of and Saudi Crown Prince Mohammad bin
highest elderly population in the world, its population under 25 years old. More Salman are just two notable examples
though, at 28%. Other G20 economies than 40% of the population in India, Mexico, of this trend. We could see a shift in
must also contend with elderly populations Indonesia and Turkey is similarly young. geopolitical relations as the collective
that exceed 20% of their total population, Countries that harness the economic experience of the world’s leaders ceases
among them Italy, Germany and France. potential of this youth bulge may see their to include the height of the Cold War, the
China, Russia and South Korea are also stature on the geopolitical stage rise in the pre-9/11 era and other defining moments.
aging at a rapid rate. coming years. In this interim period in which multiple
generations are in power, the likelihood of
But successful integration of large youth misunderstandings or miscalculations is
populations into the workforce requires higher, creating greater uncertainty and
government policies that both promote volatility in geopolitics.

Primary forces
Environment
Racing against the clock
Just 30 years after the International Panel Making global governance even more shift the geopolitical balance of power,
on Climate Change issued its first warning challenging are the populist, anti-globalist disadvantaging countries that receive the
that human activities were substantially sentiments in the US, which led to the brunt of its consequences.
increasing the atmospheric concentrations American withdrawal from the Paris
of greenhouse gases, we are beginning to Agreement. This decision left the rest of Climate change may also affect geopolitics
see significant impact today. Greenhouse the signatories at a loss for how to affect by increasing the likelihood of armed
gas emissions have risen at a rate of global change without the world’s largest conflict or causing large-scale migration
1.5% per year over the last decade,1 economy and second-largest polluter.2 flows in the future.
and global mean surface temperature is The way forward is likely to be determined
increasing. The economic consequences by coordination between the EU — which in The fight against climate change is not
of climate change are already significant. December 2019 agreed on a Green Deal just about governments; civil society and
The International Labour Organization that would make Europe the first climate- companies are also engaged. A rising
estimates that nearly 1.2 billion jobs rely neutral continent by 2050 — and China, number of companies are incorporating
directly on the effective management and which is both the world’s largest emitter of sustainability into their core business
sustainability of a healthy environment. greenhouse gases and its largest renewable models, and many companies are also
And climate-related disasters have cost the energy producer. reporting their climate change risks
world an average of almost $200 billion and mitigation strategies to investors.
annually over the last 10 years, according Further complicating the geopolitics of Such actions not only make sense for
to Munich RE. this issue is the fact that the distribution the long-term viability of companies,
of climate change impacts is not equal. but also for short-term performance as
Climate change is a transnational issue Countries with warmer climates, which customers increasingly demand more
that requires a globally collaborative are primarily emerging and frontier environmentally sustainable products.
policy response. It is a race against time markets, suffer more from rising global Civil society is engaged in climate change
for government, business and society temperatures. The International Monetary more broadly as well. This has been
to develop solutions that prevent the Fund estimates that a 1° C increase in the most visible recently in the Fridays for
worst consequences of this pre-eminent median emerging market economy lowers Future movement, catalyzed by Swedish
global risk from materializing. But the economic growth by 0.9 percentage points, teen climate activist Greta Thunberg, in
global rebalancing from a unipolar to a and by 1.2 percentage points for frontier which young students worldwide strike
multipolar world complicates efforts to markets. Natural catastrophes caused by during school on selected days to protest
mitigate climate change because no single a changing climate also have a particularly political inaction on climate change.
country can lead the world on this issue. dramatic effect on people’s livelihoods in
less developed economies, as mitigation
and response efforts are likely to be less
robust. Climate change could, therefore,

Spotlight
topics
Global trade and US-China relations

Spotlight topics
Global trade
Finding opportunity in uncertainty
There is a new normal in global trade. Trade signed “phase one” agreement, the actions by its second largest member
policy now finds itself in the unprecedented structural nature of the conflict and the (China). Moreover, the recent expiration
role as both the driver of macroeconomic mutual lack of trust mean it is unlikely the of the WTO Appellate Body eviscerates
and geopolitical events and subject to two sides will resolve their fundamental the WTO’s dispute settlement mechanism,
geopolitical considerations as geostrategic differences through some form of “grand which calls into question WTO members’
competition and rivalry between the three bargain.” The new normal, therefore, sets ability to manage the inevitable tensions
major economic blocs increasingly trumps the stage for a fundamentally unstable that will arise. This is problematic for
the rules-based trading system. In this new economic relationship between the world’s companies and countries across the
reality, global economic governance will two largest economies for the foreseeable globe, particularly smaller nations
be more competitive and less cohesive, future. The resulting uncertainty has that have relied on this rules-based
providing a greater role to players besides already contributed to the slowdown in the system to even the playing field.
the US. These developments are likely global economy and is likely to continue to
to become a semi-permanent fixture, provide headwinds for growth. These developments will continue to
prompting companies to reconsider how to impact growth and create tremendous
manage cross-border activities. Brexit and its impact on the EU and the challenges for business. There are some
UK also continue to disrupt international positive trade developments, however, in
Trade policy today is driven by larger trade and the global economy. While the the form of regional trade agreements and
concerns over competition between December 2019 UK election brought some the emergence of potentially new global
countries, national security and the role measure of political clarity, the ability economic governance models.
of technology. Populism and nationalism of the UK and the EU to negotiate a fully
in key markets have also led to changing formed trading relationship by the end of The United States-Mexico-Canada
trade relationships. The US, in particular, 2020 seems unlikely, if not impossible. Agreement (USMCA) is a prime example.
has used trade policy as its tool of choice This will continue to create considerable Although it provides little in the way
to address concerns with other countries’ uncertainty for cross-border trade of goods of new liberalization, it does reconfirm
economic models and trade practices. and services between the UK and the EU. the commitment to the North American
Supply chain disruptions have affected trade bloc — no trivial outcome in the
While the current tensions between the growth prospects for the remaining case of the US trade policy. Trade
US and China may have started on the members of the EU. agreements in Asia (CPTPP and RCEP)
trade front, for instance, trade policy also demonstrate that regional models for
is only one part of US-China tensions. The increasing weakness of the WTO economic integration can move forward,
China and the US are seeking to effectively compounds these disruptions. This even without US participation. And the
decouple bilateral technology linkages vulnerability stems from the realization EU continues to negotiate high-standard
through efforts to prohibit the acquisition that the organization has been unable to agreements across the globe, notably with
of each other’s technology products. rein in measures that were incompatible Japan, Vietnam and the Mercosur nations.
Although China and the US have paused with WTO rules by its largest member Given the new EU Commission’s emphasis
the escalating tariff war with the recently (the US) nor address market-distorting to combine regulation with industrial

Various developments will affect the level of trade policy Exports have stagnated as a share of the global economy since
uncertainty that companies face in 2020 the global financial crisis
Increase Decrease Neutral Goods and services exports as percentage of global gross domestic product
(GDP)
Trade development Impact on uncertainty
30%
Ongoing US-China tensions
Brexit
20%
USMCA
WTO dispute settlement and reform 10%
Conflicts over digital taxes

0%
CPTPP and RCEP trade agreements
2002 2006 2010 2014 2018
Source: EY analysis. Source: EY analysis; UNCTAD; WTO and ITC secretariats’ calculations; World Bank.
Note: Services data included 2005–18.
policies that promote competitiveness, it Operations and supply chain

would appear that Europe is seeking to
provide an alternative economic model to
Global supply chains continue to
characterize the world economy, but Issues to watch
the US and China. An EU that avoids the companies are re-examining them as they
excesses of US unilateralism and China’s respond to new protectionist measures. • Can the world’s two largest
state intervention would help to stabilize For many companies, this means assessing economies, the US and China,
the rules-based trading system. landed costs and optimizing sourcing, define and establish a new economic
production and distribution in a more relationship, or will their relationship
Business implications complicated and fluid environment. continue to engender bilateral and
global uncertainty?
Strategy Reputation and compliance
Companies need to monitor global trade High tariffs in certain sectors incentivize • Will the US focus its more
developments and work through the efforts to misrepresent origin, leading protectionist-oriented policies
impacts on their business. Given the to heightened levels of enforcement and on Europe and seek to rebalance
inherent uncertainties, this becomes less of potential negative effects on growth. The its relationship beyond existing
an exercise in forecasting than in building cost and complexity of compliance will contentious issues (e.g., aircraft
resilience and flexibility into their strategic also rise as new export control regimes manufacturing)?
planning process. Capacity needs to be and further restrictions on cross-border
developed to manage this challenge across investments are put in place. As a result, • What will be the supply chain and
the different corporate functions. companies will need to continue elevating regulatory implications of Brexit?
and prioritizing their compliance functions
Finance and tax and integrate them into the companies’ • Will major countries develop
Both the imposition of new tariffs and political and business risk management. a process for addressing WTO
the reduction of tariffs through regional reform that will restore that
trade integration have a significant organization’s role in the rules-
effect on company finances. Executives based trading system?
should use systems and data tools to
understand how this will impact margins
and revenues and then use tax and
supply chain mitigation strategies to
maximize those within the context of
corporate and operational strategies.

Spotlight topics
US-China relations
Navigating strategic interdependence
Over the past few decades, US-China is not the full picture. Bilateral economic signing a limited “phase one” deal in
rapprochement and cooperation interdependence remains strong. January 2020. The modest “phase one”
created one of the world’s most highly Economic impact, loss of growth markets deal relates primarily to trade — removing
interdependent economic relationships. and increase in trade in services all provide some US tariffs on Chinese goods and
Since 2000, the year China joined the WTO, very real disincentives for the complete committing Beijing to increased agricultural
two-way foreign direct investment (FDI) decoupling of these two economies. The purchases. But the shadow of the future
has reached nearly $385 billion.3 In 2018, more accurate characterization of the will weigh on the US-China relationship
China was the US’ largest trading partner Sino-American relationship is, therefore, in 2020. The US Government has a time
with goods and services trade totaling an strategic interdependence. horizon of less than 11 months (i.e., until
estimated $737.1 billion, according to the the presidential election); the Chinese
Office of the U.S. Trade Representative. Locked in strategic interdependence, Government, at least a decade or more,
In addition, the U.S. Department of the US-China relations are increasingly with President Xi Jinping’s term limits
Treasury estimates that China holds defined by growing competition. It has removed. These diverging time horizons will
approximately $1.1 trillion in U.S. become clear that the relationship keep the US-China relationship in a constant
Treasury securities, representing 16.2% between these two powerhouses will state of imbalance and volatility.
of foreign ownership of U.S. treasuries. shape the course of the global economy,
geopolitics and the global business Business implications
Politically, however, the US-China environment for decades to come.
relationship is increasingly strained. Strategy
Beijing seems to see the US as a declining The primary areas of contention are trade, Entering into or expanding in the Chinese
power that is attempting to maintain its market access, intellectual property, market requires business strategies that
political, economic and military dominance currency and Chinese industrial policies. take into account what the US considers
through preventing China’s inevitable And encompassing aspects of many of China’s industrial policies that favor
rise. Meanwhile, in Washington, a political these areas of economic contention is domestic firms over foreign firms, including
argument is being made that China needs technology competition. In addition, non- subsidies, tax breaks, low-cost loans,
even more efforts to move toward a economic areas of contention between the foreign trade and investment barriers,
more open economy and to demonstrate US and China are broad and deep. These technology transfer and joint venturing
a commitment to the rules-based tensions cut across the entire spectrum mandates, and perceived discriminatory
international system. of bilateral political and military relations, IP and technology policies. This policy
including technological security, maritime landscape is shifting, though, with
Efforts to describe this relationship territorial claims, human rights, the supply the new Foreign Investment Law that
as a new “cold war” or as moving of fentanyl and conflicting views on Taiwan came into effect January 1. It further
toward “decoupling” are inaccurate, and Hong Kong. opens the Chinese market and levels
however. While decoupling may help to the playing field for foreign businesses
describe the process of unwinding some The US and China have taken a piecemeal competing with domestic companies,
elements of the US-China relationship, it approach to addressing these issues, potentially creating new opportunities.

Despite trade tensions, there has not been a structural US foreign direct investment (FDI) in China has remained
transformation of US trading relationships consistent in recent years w
hile Chinese FDI in the US has
plummeted from 2 016/2017 highs
Share of US goods imports, monthly
China Mexico Japan India US-China FDI flows
European Union Canada South Korea Vietnam Chinese FDI into the US US FDI into China
25% $50b
15% $30b
5% $10b
2017 2018 2019 2002 2006 2010 2014 2018
Source: US Census Bureau. Source: Rhodium Group.

Note: Not seasonally adjusted. Data includes eight largest import partners as of 2018.
Finance and tax Data and intellectual property

Tougher US screening of Chinese
investments will continue to challenge firms
The “phase one” deal includes a provision
on intellectual property addressing areas Issues to watch
in 2020. The U.S. Treasury reports that the such as trade secrets, pharmaceutical-
number of notices filed at the Committee related intellectual property, geographical • Will the “phase one” deal hold?
on Foreign Investment in the United States indications, trademarks and enforcement Will there be a “phase two”
(CFIUS) increased 265% from 65 in 2009 against pirated and counterfeit goods. deal this year?
to 237 in 2017, and remained at a similarly This provision is unlikely to resolve US
high level in 2018. While the US has yet to executives’ long-standing concerns about • What will be the US-China
finalize the lists of technologies that will be effective intellectual property rights in policy position of the leading US
subject to export controls pursuant to the China, however, so companies should presidential candidates? How will
US Export Control Reform Act, these lists continue to implement safeguards. electoral politics impact the Trump
are expected to expand CFIUS’s investment administration’s negotiating tactics?
review authority. Chinese and other foreign Reputation and compliance
companies considering investment into US and Chinese firms face increasing • How will the performance of the
the US need to monitor such rules and pressure to support their home countries Chinese economy in 2020 affect
enforcement trends carefully. and uphold the values of their respective Beijing’s negotiating position?
governments and societies. Where Western
Operations and supply chain and Chinese policy goals and values • What will the U.S. Department of
Despite the “phase one” deal, trade diverge, firms will face pressure to remain Commerce’s formulation of lists
tensions will continue to impose costs on neutral — or pick a side. Either strategy of “emerging” and “foundational”
supply chains between the two countries. poses reputational risks, so executives technologies subject to new export
Perhaps most notably, the US and China should consider the likely risks and rewards controls signal about technological
are both expanding restrictions on of various scenarios before deciding on a decoupling?
certain technology exports or exports to course of action.
specified companies in the other market.
Executives should continue to monitor
tariff and non–tariff barriers to trade
and evaluate supply chain vulnerabilities
more broadly. Paying higher costs,
passing costs along to consumers or
shifting supplier locations are among the
options companies should consider.

Around
the world
Geopolitics in a world of regions

Around the world
East Asia and Pacific

Evolving role of China shapes the outlook
The rise of China has dominated the The role of the US will continue to loom Demographics
Asian narrative in recent decades. large in the region. Many countries, Beyond the demographic dividend
But Beijing’s tightening control of its notably Australia and several Association East Asia is aging at a rapid rate thanks
economy, the continuing slowdown of Southeast Asian Nations members to dramatic declines in fertility rates in
in economic growth and recent trade (ASEAN), are seeking to balance their recent decades, creating challenges in
tensions with the US have triggered a political and economic interests between maintaining economic growth. In China, the
strategic reassessment of the broader the US and China. One consequence of demographic dividend that helped to propel
footprint many companies have in Asia. the US-China trade tension is that other its rapid economic growth is going into
Asian markets often benefit as companies sharp reverse. Others are further along
Under President Xi Jinping, Beijing no diversify supply chains beyond China. this curve. Japan’s population is already
longer follows the “hide your strength and Vietnam, Thailand, Singapore and Malaysia shrinking, while South Korea’s is forecast to
bide your time” approach in foreign policy. are among the most prominent examples. start shrinking in 2025.
This will be on greater display in 2020 in RCEP, which brings together 15 countries
various arenas. At the same time, Beijing’s of the Asia-Pacific region in a free trade Technology
“redline” topics, such as the continuing agreement to be signed in 2020, is likely to Competing in the global technology race
protests in Hong Kong, are growing, which further reshape geopolitical and economic China, Japan, South Korea and other
could further complicate the business relationships within the region. Asian countries continue to take the
environment in China. lead in building and deploying leading
Primary forces technologies. Among them are 5G
The fierce trade dispute that erupted wireless networks, which will accelerate
between Japan and South Korea in Globalization the economic impact of other fourth
2019 creates the potential for another Playing a central role industrial revolution technologies. Their
geopolitical disruption in Northeast Asia. Arrangements such as RCEP will success in exporting such technologies will
This dispute has highlighted how the solidify Asia’s position in the global largely depend on their ability to set and
region’s complex political history still economic order. Given the region’s control the standards that will enable their
affects the business environment today. strong economic growth and increasing products to compete successfully.
Though tensions receded somewhat by the economic integration, Asian markets
end of 2019, bilateral relations will remain will remain increasingly attractive Environment
volatile. Elsewhere on the Korean peninsula, trade and investment partners for Sharing global responsibility
risks are increasing that the constructive, countries around the world. China is the world’s largest source of
but tentative, dynamic created by the carbon emissions, but also the largest
high-level engagement between the US and renewable energy producer, anticipated to
North Korea will cease. Pyongyang may account for 40% of the total global clean
assume a more confrontational position energy mix by 2022.4 Now that the US has
in 2020, raising the risk profile for South left the Paris Agreement, China will play a
Korea and other neighboring markets. major role at the 2020 UN Climate Change

China’s GDP grew 6% in the third quarter of 2019, a 27-year low The Regional Comprehensive Economic Partnership signatories
account for $24.8 trillion, or 29%, of global GDP
Chinese year-on-year GDP growth, quarterly RCEP signatories
8% Australia
Brunei
Cambodia
China
Indonesia
7%
Japan
Laos
Malaysia
Myanmar
6% New Zealand
Philippines
Singapore
South Korea
Thailand
5% Vietnam
2014 2015 2016 2017 2018 2019
Source: National Bureau of Statistics of China. Source: EY analysis; World Bank; Association of Southeast Asian Nations.
Conference, as its leadership is needed to Operations and supply chain

maintain momentum toward achieving a
robust global climate policy.
Despite the recent “phase one” deal,
US-China trade tensions will continue to Issues to watch
impose costs on supply chains between the
Business implications two countries. Given the risk that the trade • How will the “phase one” trade
tension may ramp up again, companies deal between the US and China
Strategy should continue to explore ways to diversify affect investment, trade flows and
East Asia and Pacific will continue to their production and sourcing locations in geopolitical dynamics across Asia?
be among the key anchors of the global the region. The planned signing of RCEP
economy for the foreseeable future. Many later this year should help facilitate cross- • To what degree will economic
economies in the region are experiencing border flows among its 15 members. interdependencies between Japan
robust growth. Combined with the and South Korea help to stabilize
emergence of a more integrated regional Reputation and compliance bilateral political relations?
economic system, global companies should Executives should closely monitor new
continue to consider the region as a central regulatory announcements from Beijing • How will North Korea’s nuclear
part of their business strategies. and how they are enforcing existing ambitions play out in 2020 and
regulations. Executives must be cognizant beyond?
Data and intellectual property of the reputational risks that may arise in
The US-China trade tensions have their home market as they comply with • To what extent will RCEP consolidate
accelerated Beijing’s push for economic regulations in both mainland China and regional economic relations and
self-sufficiency in select sectors. The most Hong Kong. create a more unified market across
notable of these is technology. Rather than the region?
risk isolating its economy, Beijing is seeking
markets for its indigenous technologies
abroad. Such efforts may enable China
to build spheres of technological and
economic influence within Asia and further
afield. Executives should monitor where
Chinese technologies gain market share,
and adapt their technological and data
operations in those markets accordingly.

Around the world
South Asia
A delicate balancing act
As economic growth slows in most South military and the judiciary after the clear from India’s decision to opt out of
Asian countries in 2020, governments Supreme Court in November 2019 blocked the RCEP. Even within South Asia, regional
will need to balance public spending the prime minister’s bid to extend the integration is minimal. According to the
programs with fiscal pressures driven by army chief’s term. And Pakistan’s ability KOF Globalisation Index, South Asia is the
ongoing budget deficits. At the same time, to continue to attract foreign investment second-least globalized region of the world,
the foreign policies of most South Asian will be an open question. Moody’s rating behind only Sub-Saharan Africa.
governments will continue to be dominated agency recently upgraded Pakistan from a
by the need to strike a balance between negative to stable outlook, but investments Technology
India and China. in Pakistan will still carry risk if the country Focus on data privacy
continues to be included on the Financial The most significant technology policy
Even though Prime Minister Narendra Action Task Force’s gray list for money issue in India in 2020 will be data privacy.
Modi governs with a commanding laundering and terrorist financing. Policymakers and the public will continue to
majority following the 2019 elections, debate the privacy and protections citizens
India’s political environment will On a broader scale, geopolitics in South should have for their data and when it is
likely remain volatile in 2020. Slower Asia will continue to be dominated by the acceptable for apps to share data with the
economic growth is one reason for this, tenuous balance of power between the government. This issue is supercharged
particularly given persistent high levels region’s largest country, India, and its by the fact that most Indians’ mobile
of inequality and unemployment. The northern neighbor, China. India remains phones and computers are imported from
mass protests that erupted in the wake of wary of Chinese influence throughout China, leading to suspicions that Beijing is
the government passing the Citizenship South Asia and will keep a close eye on monitoring their activities.
Amendment Bill in December 2019 BRI infrastructure projects in Pakistan,
also cloud India’s political outlook. Bangladesh, Sri Lanka, Nepal and the Demographics
Maldives. These countries also have close An underutilized youth bulge
Sri Lanka’s political outlook largely mirrors political and economic ties with India and Almost half of the regional population
that of India’s after an election fraught with will likely attempt to play China and India (45.6%) will be under 25 years old in
violence brought Gotabaya Rajapaksa, the off one another. Pakistan is the exception, 2020. Such a youth bulge can be a boon
former defense chief during the country’s remaining firmly aligned with China. for economic growth, if new entrants to
civil war, to the presidency in November the working-age population are educated
2019. Both countries now face growing Primary forces and there are jobs to be had. This is
concerns that policies emphasizing currently not the case in much of South
majority rights will intensify sociopolitical Globalization Asia, however. In India, the International
tensions between ethnoreligious groups. Opting out of integration Labour Organization estimates that almost
India will continue to pursue its one-third of youth are not in employment,
In Pakistan, the domestic political independent and somewhat protectionist education or training.
environment will be shaped by tensions policy stance with respect to international
between the civilian government, the trade and investment. This posture is

South Asia remains one of the world’s least globalized regions Pakistan accounts for more than 40% of Belt and Road Initiative
investment in South Asia
KOF Globalisation Index
BRI investment by country
South Asia Middle East and North Africa East Asia-Pacific
Europe and Central Asia Latin America and Caribbean Sub-Saharan Africa
$60b
North America
$50b
80
$40b
$30b
60
$20b
$10b
40
0
2002 2006 2010 2014 2018 Pakistan India Bangladesh Sri Lanka Nepal Afghanistan Maldives
Source: Savina Gygli, Florian Haelg, Niklas Potrafke and Jan-Egbert Sturm, The KOF Globalisation Index – Revisited, Source: “China Global Investment Tracker,” American Enterprise Institute website,
Review of International Organizations,2019, 14 (3), 543-574. (https://www.aei.org/china-global-investment-tracker/), accessed 2 January 2020.
Note: Data is the total investments in US dollars from 2005–19. Full year 2019 data was not available at time of publication.
Environment surrounding data privacy. This could have

Increasingly unpredictable monsoons
The annual monsoon is perhaps the most
implications for cross-border data flows,
data localization and foreign technology Issues to watch
important driver of economic growth in company access to the Indian market.
South Asia, as all countries in the region • Will India enact a new data privacy
depend upon it for agricultural production. Operations and supply chain law? How will it affect foreign
Global climate change, however, is making With India opting out of the RCEP, South technology firms’ access to the
the monsoon season increasingly erratic. In Asia will not be integrated into the East country?
2019, the rains arrived late and with such Asian supply chain in the foreseeable
intensity that they caused massive flooding future. Sourcing from the region, therefore, • Will governments be able to stabilize
in India, Nepal, Bangladesh and Pakistan. may continue to be less competitive than or reignite economic growth?
In 2020 and beyond, governments what is available from alternative locations.
throughout the region will face challenges Logistics could improve, however, if BRI • How will BRI projects be viewed by
in dealing with the economic and and other infrastructure projects continue the local populations affected by
humanitarian aftermath of unpredictable to move forward. their construction?
monsoons.
Growth • Will India’s budget for 2020, due
Business implications Despite the slowdown in regional to be presented in February, reveal
economies, South Asia will remain one of anything new about the agenda of
Human capital the fastest-growing areas in the world. the second Modi administration?
South Asia enjoys an abundance of labor, Middle-class consumers in India and
making the region an appealing location for beyond enjoy greater purchasing power
labor-intensive manufacturing. Companies than in the past, and this should grow in
should proactively mitigate any socially the coming years. Regulatory barriers to
driven political risks by engaging with these markets could remain high, however,
employees and the communities in which and executives should evaluate whether
they operate. One such strategy is to locate the long-term growth potential outweighs
production in economically disadvantaged these costs.
areas, while another is to partner with local
educational institutions to ensure a strong
pipeline of talent.
Data and intellectual property

Data privacy will be a hot issue in India
in 2020. Executives should closely
monitor the evolution of the debate

Around the world
Eurasia
Renewed strategic significance
As the bridge between Asia and Europe, inward focus, has left a vacuum. Russia will Demographics
Eurasia will continue to gain in strategic also continue to build its influence across Seeking immigrants to stabilize
importance, both politically and Western and Central Europe. populations
economically, in 2020 and beyond. Demographic change looms large for
Domestically, politics in many Eurasian Eurasia, as aging populations continue to
After the end of the Cold War, the post- countries continue to be characterized by decline. Once again, Russia is very much
Soviet countries appeared destined autocratic rulers, corruption and a strong at the center of developments. As its
to become less significant actors in a role for the military. In addition, several population declines, the Kremlin has made
global economic system created by and rulers have been in power for decades and it a priority to provide Russian citizenship
dominated by the West. The rise of China, are now seeking to transfer power to their to between 5 million to 10 million migrants
and Asia more broadly, has shifted that chosen successors. Kazakhstan, Tajikistan from countries with a strong Russian-
political and economic outlook. China has and Turkmenistan are notable examples. speaking population.
emerged as a viable commercial alternative And in Russia, President Vladimir Putin has
to the West, with Russian exports to China been in power for 20 years. Although the Technology
multiplying tenfold since 2001, making it constitution currently requires him to step Prioritizing cyber power over broader
Russia’s largest export market behind the down in 2024, Putin’s recent state of the connectivity
EU. With a new gas pipeline that opened in union address included proposed changes Military, nuclear and cyber technology are
December 2019, Russia’s exports to China to the constitution that could enable him to largely the focus of the region’s, and in
are set to grow even further. remain in power for longer. particular Russia’s, technology prowess.
To that end, Russia will remain one of the
China’s BRI, the vast infrastructure Primary forces world’s top cyber powers. In contrast, the
network connecting East Asia with region’s role in the emerging technologies
Europe, is strengthening Eurasia’s Globalization of the fourth industrial revolution will
geopolitical clout. The success of the Uncertain outlook remain limited. Case in point, the EEU’s
BRI ultimately depends on the proactive Slowing growth of key trading partners digital agenda, which promises to develop
support and involvement of Eurasian (China and the major EU economies) an integrated digital infrastructure and
countries, notably that of the dominant weighs on the Eurasian economic outlook. expand Internet access, remains stalled.
regional power, Russia. Nevertheless, Russia is building a strategic
energy relationship with China, opening the Environment
The US–China rivalry and the eroding Power of Siberia pipeline and consolidating Capitalizing on the Polar Silk Road
transatlantic relationship also provide its access to European energy markets Receding ice in the Arctic Sea has opened
Russia with more geopolitical room to by pursuing the Nord Stream 2 project. the prospect that the Northern Sea Route,
maneuver for influence. Moscow will Within the region, the Eurasian Economic which circuits the Russian Arctic coast,
continue to use its more prominent position Union (EEU) continues to face challenges could one day become a global shipping
on the world stage to move into policy in deepening economic integration with artery. Russian ice breakers are active
arenas in which the US, with its current member states. on the route during the summer months,

Control of corruption is low but slowly improving for Eurasian countries are becoming crucial transit corridors
many countries in the region between East Asia and Europe
Control of corruption
Norway
Kazakhstan Kyrgyzstan Russia
Tajikistan Turkmenistan Uzbekistan
-0.4 Belarus
Moscow
Russia
-0.8
Ankara
-1.2
Kazakhstan
-1.6 Shanghai
2014 2016 2016 2017 2018 Tehran China
Source: “Worldwide Governance Indicators,” World Bank website, https://info.worldbank.org/governance/wgi, Source: “Belt and Road Europe,” OBOReurope website, https://www.oboreurope.com/en, accessed 3 January 2020.
accessed 3 January 2020.
Note: Scores range from -2.5 (weak) to 2.5 (strong) governance performance.
and a global shipping company conducted Reputation and compliance

an exploratory voyage in 2018. The
commercialization of this so-called Polar
The lack of government transparency
in many Eurasian countries can create Issues to watch
Silk Road would dramatically alter global significant challenges for corporate
shipping routes and shift the geopolitical governance. Any breaches of anti- • How will BRI projects evolve in 2020
dynamic around the Arctic region. corruption laws would cause not only and beyond?
compliance issues, but also reputational
Business implications damage in home markets. Executives need • How sustainable is Russia’s pivot to
to exercise continued due diligence when China, given the strategic rivalry the
Finance and tax conducting business in the region. two countries have for influence in
Russia continues to face US and EU the Eurasia region?
sanctions for its role in the Ukraine
crisis that began in 2014. While the EU’s • How will European companies
sanctions are set to expire at various balance the risk of US sanctions
points in 2020, they are likely to be against opportunities across Eurasia?
extended once again. The US Congress
is also considering additional sanctions • How will data localization policies
on Russia in response to its alleged evolve in Russia and other key
meddling in the 2016 presidential election. countries?
When assessing business prospects in
the region, executives should evaluate • Will any political risks associated with
the likely evolution of these sanctions brittle governments in the region be
to determine Eurasia’s geopolitical risk- realized?
adjusted commercial attractiveness.
Operations and supply chains

China’s BRI holds great promise to
significantly upgrade the region’s
transport infrastructure network, making
it an attractive route for trading goods
between China and Europe. Companies
should monitor the progress of these
infrastructure projects and evaluate
how the BRI affects the economics
of their supply chain logistics.

Around the world
Europe
Shifting internal and external equilibriums
Europe is witnessing the most profound To that end, EU policy debates will the EU will continue to be fiercely protective
transformation of its internal politics continue to proactively re-evaluate of the established principles of competition
and external relations since the end of options toward Russia and China in within the single market, it will develop
the Cold War. an effort to improve Europe’s strategic more proactive industrial policies to bolster
sovereignty. Although EU relations European competitiveness abroad.
The rise of extreme populist and nationalist with Russia have been in a stalemate
movements challenges the vision of a more for several years now, France is among Demographics
integrated Europe. This has superseded, if the EU members that are beginning to Political realities of aging
not replaced, Europe’s traditional political question whether Europe needs to rethink With a median age of 43.8 years in 2020,
party landscape, historically dominated by this approach and reopen a strategic Europe is by far the oldest region in the world
social democratic and socialist parties on dialogue with its Eastern neighbor. (North America is the second oldest, at 39.4
the left and centrist and conservative parties years). Rapidly aging societies create vast
on the right. The result has been a further Moreover, although the European political challenges, which include paying
fragmentation of the political spectrum Commission has identified China as a for pensions and maintaining economic
across Europe, hindering coalition building “systemic rival,”5 many EU Member States growth with a smaller labor force. One
and government formation. are engaging proactively with Beijing. Given option would be to increase immigration,
the commercial attractiveness of China’s but this creates political challenges in an
The most prominent example of this economy and converging international age of identity politics and populism.
new political reality is Brexit. The exact interests (such as a commitment to the
contours of the Brexit arrangement, which Iran nuclear deal, China’s increasing Technology
will emerge throughout 2020 and beyond, engagement in Africa and climate change), Seeking technological sovereignty
will not only be crucial for future EU-UK the EU will continue to develop a more As the race for technological supremacy
relations, but also for intra-EU relations. nuanced, pragmatic perspective in its between the US and China heats up,
Brexit will accelerate a significant geopolitical relations with China. Europe is increasingly focused on achieving
reorientation across the political alliances technological sovereignty. Though Europe
within the EU, placing more focus on Primary forces is behind in developing a number of critical
the Franco-German relationship as the technologies, it remains the leader in
gravitational center of European politics. Globalization defining global standards for the new
Aligning economic and political interests generation of technologies (e.g., data
In its external relations, the EU’s The more competitive geopolitical privacy and localization). Europe’s choice
commitment to a rules-based global environment and Europe’s growing concern of suppliers for 5G infrastructure will seek
order will remain robust. But Europe about the increasingly state-centrist and to balance the commercial attractiveness
will increasingly be challenged to nationalist economic policies of the world’s of engaging with China with the security
embrace a more realist perspective in its other major economies have prompted a concerns voiced by the United States.
geopolitical relations given that national reconsideration of its economic strategies
interest-based politics are on the rise. and overall commercial philosophy. Though

42% of Europeans view the EU positively, down slightly from Changing of the guard in Europe
the last two surveys yet above post-European debt crisis low
New EU leaders shift the bloc’s policy agenda
Perception of the European Union
Total “positive” Total “negative” Ursula von der Leyen
President of the European Commission
Neutral Don’t know
Mainstreaming a green agenda
60%
Charles Michel
President of the European Council
42%
40% 37% Maintaining the EU’s unity
Josep Borrell
High Representative of the Union for Foreign Affairs and Security Policy
20%
20%
Strengthening multilateralism and a rules-based global order
Christine Lagarde
0% President of the European Central Bank
2006 2010 2014 2018 2019
Reforming the ECB
Source: “Public opinion in the European Union,” Standard Eurobarometer 92, autumn 2019. Source: EY analysis.
Environment Finance and tax

Blending sustainability with
competitiveness
Europe’s climate policies are likely to create
new opportunities and markets, but they Issues to watch
Climate change protests have received will also impose new costs on companies
overwhelming public support, leading to operating within the bloc. Companies • Will populist political parties
the acceleration of legislation implementing will need to monitor new climate change continue to grow in power, and what
national commitments under the Paris regulations and ensure that they are in consequences will they have on
Agreement. While staking a strong compliance. Executives should engage with policymaking? Have we seen “peak
leadership position on climate change policymakers and other stakeholders (at populism” in Europe?
regulations — the European Green Deal the local and EU levels) to inform the policy
will make Europe the first climate-neutral debate on key areas that enable businesses • How will Brexit shift the EU’s
continent — will likely position the EU to continue to grow and innovate in a internal policy dynamic, and what
economy well in the long run, it could sustainable and competitive way. In consequences will it have for Franco-
also lead to short-term competitiveness addition, executives should be aware of German relations? How will it shape
challenges. the growing attention their investors and the UK’s approach and focus on
consumers are paying to climate change. Commonwealth economic partners
Business implications and politics?
Operations and supply chain
Strategy European economic growth remains • How aggressively will the European
The ongoing realignment of Europe and dependent on a well-functioning global Commission move forward with its
EU Member States creates challenges trade regime. This includes both industry, technology and climate
for corporate strategy. Executives must maintaining access to traditional markets in policies?
account for the instability of transatlantic the Americas and building new markets in
affairs and Europe’s evolving relations emerging economies, particularly in Asia. • What effect will the US presidential
with China, Russia and other emerging With the WTO increasingly undermined as elections have on the future shape of
economies when designing their strategies the custodian of global trade regulation, the transatlantic alliance?
for the region. Perhaps the most notable executives must be aware that Europe’s
issue that companies should monitor in regional trade relationships will become • How will EU members’ relationships
this regard is how the EU balances its more prominent in securing market access. with Russia and China evolve, and to
relationship with the US and China on 5G what degree will this cause tensions
infrastructure. among EU members?

Around the world
Middle East and North Africa 2010
Volatility and the risk of disruption
The politics of the Middle East and North its supply coming from the Middle East. As Primary forces
Africa will remain fragmented and volatile a result, China is increasing its diplomatic
in 2020 and beyond. The shifting dynamic engagement in the region, taking an Globalization
of geopolitics requires governments in the extremely cautious approach to local Geopolitical tensions affect
region to seek a new balance, likely altering political and security challenges. economic flows
business environments in those markets. The region’s economic outlook will be
Russia will also continue to present itself clouded by its proximity to geopolitical
Geopolitics within the region will likely as a regional power broker, maintaining its risks. These include US-Iran tensions, the
be even more volatile in 2020. As the presence in Syria and seeking to extend trade tension between the US and China,
aftermath from the recent US killing of its influence in the Gulf region. The EU politically driven oil price volatility and
an Iranian general continues to play out, will remain active in promoting gradual international sanctions. Persistent regional
there is an elevated risk of further attacks economic and political reforms throughout tensions, such as the Saudi-led blockade
— conventional, cyber or other asymmetric North Africa to help reduce inward of Qatar, further complicate cross-border
methods — either by or against Iran. The migration to Europe. economic flows.
fate of the Joint Comprehensive Plan of
Action (JCPOA) and its effect on global Fragile domestic politics will also continue Demographics
oil markets will create significant business to cloud the outlook throughout 2020. Dramatically shifting fertility rates
uncertainties throughout 2020. In addition, The Syrian civil war goes into its ninth year, According to The World Bank, fertility
while the blockade that Saudi Arabia, the the Libyan into its sixth and the Yemeni rates have dropped dramatically across
United Arab Emirates, Bahrain and Egypt into its fourth year — all with no apparent the Middle East from about seven births
have imposed on Qatar since 2017 might end in sight. Popular unrest swept through per woman in the 1960s to about three
be lessened in 2020, tensions are likely to Algeria, Lebanon, Iraq and Iran in 2019, today. The average fertility rate in Iran
remain high. And Israeli-Palestinian peace and underlying sociopolitical dynamics dropped even more dramatically from
will remain as distant as it has ever been. suggest more protests are likely this year. above six births per woman in the early
And Israel is heading for an unprecedented 1980s to about two today. While youth
Importantly for future policy stances, third election within a year after party unemployment remains a pressing issue
the involvement of international players leaders once again failed to form a coalition today, lower fertility rates will, over
in the region is shifting. Even though the government. This just adds to the growing time, reduce some of the pressure on
US is less dependent on energy from the uncertainty facing the region’s business governments to create jobs as they seek to
Gulf, thanks to the development of its and investor communities. accommodate a growing labor force.
shale gas industry, the US still maintains
a strong military presence in the region — Technology
and, in fact, is increasing its presence in Opportunity and risk
an effort to contain Iran. In contrast, since Technology is a double-edged sword in the
2015, China has become the biggest global region. On the one hand, the attack on Saudi
importer of crude oil, with almost half of Arabian oil installations last summer was

Persistent low global oil prices will create fiscal pressures GCC economic complexity is in the middle of the pack of the world’s
for oil exporters largest oil exporters
World oil prices, per barrel Economic complexity index rankings
$110 Gulf Cooperation Council (GCC) states

1.5
1.0
Kazakhstan
$90
Bahrain
0.5
Nigeria
Kuwait
Oman
Qatar
Iran
0.0
$70
United States
Canada
Russia
Saudi Arabia
United Arab Emirates

-0.5
$50 Forecast -1.0
-1.5
2010 2012 2014 2016 2018 2020 2022 2024
Source: International Monetary Fund, World Economic Outlook Database, October 2019. Source: “The Atlas of Economic Complexity,” Center for International Development at Harvard University website,
Note: Global oil prices are presented as the simple average of three spot prices in US dollars per barrel: http://atlas.cid.harvard.edu, accessed 3 January 2020.
Dated Brent, West Texas Intermediate and the Dubai Fateh. Note: Index values are for latest available year (2017) and range from -2.13 (least complex) to 2.28 (most complex).
conducted with the launch of drones and gas markets. Executives should closely
missiles, which highlights the destabilizing
consequences of the proliferation of
monitor these situations throughout the
year and develop contingency plans to Issues to watch
military technology. On the other hand, the ensure the continuity of operations.
Middle East seeks to be a stakeholder in • How will Iran’s nuclear ambitions play
the unfolding fourth industrial revolution. Strategy out, and what consequences will they
To that end, Israel has developed a robust, The Middle East continues to be a have for regional balance of power
home-grown tech ecosystem, and Gulf geopolitical hotspot, with various trade and dynamics?
investors are vying to present themselves as investment sanctions significantly affecting
powerful backers of the global tech industry. whether and how multinational companies • Will Saudi Arabia make progress on
can do business there. The US maintains a its economic reform agenda?
Environment strict sanctions policy on Iran, for instance,
Need for economic diversification while the embargo against Qatar has • How will the shifting involvement
As a key producer of the world’s oil, the forced Doha to adjust its external economic of great powers in regional politics
Gulf region is exposed to the outcomes of relations. Companies need to tailor their affect the viability of current supply
global climate change and the geopolitics strategies to the current political realities in chains and operations?
around it. Climate change not only affects the region, while also designing strategies
demand for oil exports as a result of the to be agile enough to adapt to future shifts • Will Israel’s politicians be able to form
energy transition to renewables, but also in a volatile geopolitical environment. a stable government after elections
affects energy costs of Gulf countries. The in March?
International Energy Agency estimates that Finance and tax
almost one-fifth of the growth in global Economic and financial diplomacy that
energy use in 2018 was due to hotter tie outside powers to the Middle East will
summers driving up demand for cooling. remain a prominent element in the region’s
business environment. While this has been
Business implications the case for decades when it comes to the
politics of oil, financial assets are now also
Operations and supply chain being used to build and support alliances
Business activities across the Middle East with strong external players. Executives
will remain exposed to disruptions caused should keep in mind that capital allocation
by military conflicts and large-scale social decisions will continue to be driven by such
unrest. The consequences will ripple political calculations.
through the global air travel, shipping and
energy industries. Shipping disruptions in
the Gulf of Aden and Persian Gulf have a
particularly harmful impact on the oil and

Around the world
Sub-Saharan Africa
Economics and elections create divergent trajectories
The political and economic fortunes In contrast, Rwanda, Ethiopia, Cote Primary forces
of countries in Sub-Saharan Africa will d’Ivoire, Uganda and Kenya are among
increasingly diverge throughout 2020, the fastest-growing economies in the Globalization
intensifying the need for a market-by- region because they are less dependent Losing momentum on the AfCFTA
market approach to doing business in on commodity exports, have better Although the African Continental Free
the region. South Africa and Nigeria, the governance, or both. Several of these Trade Agreement (AfCFTA) was signed
region’s two largest economies, have the countries have elections in 2020, though. to much fanfare in 2019, it is only a
most troubled outlook, while elections Ethiopia’s election could highlight ongoing framework agreement. Rules of origin,
elsewhere will create policy uncertainty. ethnic divisions in the country, despite the tariff concessions and the like still need
government’s efforts to promote unity. In to be negotiated. As always, the devil is in
In South Africa, social tensions will Cote d’Ivoire, the president may decide to the details. With so many regional powers
likely rise as the government attempts run for a third term, which would postpone facing elections and internal governance
to implement much-needed structural an expected generational handoff of power challenges, there is likely to be little to no
reforms as the economy continues to and could provoke unrest. Kenyans may progress on the AfCFTA in 2020.
stagnate. The ruling African National also get the chance to vote in a referendum
Congress party’s popularity will likely slide on proposed changes to the country’s Technology
further, opening it up to challenges from executive branch of government. Politicization of internet use
the Economic Freedom Fighters and other Even as internet penetration is rising
political movements. If the government’s Geopolitical maneuvering also plays rapidly, almost half of African governments
reform efforts fail, the risk of a more an important role in Sub-Saharan have imposed network blackouts in recent
populist policy agenda will rise. Africa’s 2020 outlook, as China, years, primarily in attempts to quell social
Russia, Europe and the US vie for unrest. Unsurprisingly, the less democratic
Political risk is also high in Nigeria. The IMF influence. Much of this new geopolitical the government, the more likely it is to
forecasts that economic growth will be only competition in Africa comes in the form order telecommunications companies to
about 2.5% in 2020, despite — or perhaps of foreign investment, particularly in disrupt internet access. Some governments
because of — the government asserting infrastructure. While such investment are taking less dramatic measures to control
more control over the economy. The land provides a welcome economic boost, internet content instead, including through
border trade ban imposed in August 2019 it also risks creating tensions between imposing taxes on social media apps.
will likely continue, complicating supply Sub-Saharan African countries that align
chains and dampening economic potential. themselves with rival external powers. Demographics
The government’s task to deliver promised Opportunities and challenges of a
benefits to the public will be made more youth bulge
difficult by low global commodity prices In 2020, fully 42% of the Sub-Saharan
and rapid population growth. African population will be under the age
of 15, compared with just 25% of the
global population. Whether this youth

Divergent economic growth across the region Sub-Saharan Africa’s dramatic youth bulge provides
both opportunities and challenges
Annual GDP growth Share of population by age group
Less than 15 years old 15–64 years old 65 years old or older
Rwanda
10% Forecast 3%
Ethiopia
9.3%
Côte d’Ivoire
8%
Tanzania
54.9%
6% Uganda
65.2%
Kenya
4% Ghana
Nigeria
2% 42.1%
South Africa
25.4%
2017 2018 2019 2020 2021 2022 Sub-Saharan Africa World
Source: International Monetary Fund, World Economic Outlook Database, October 2019. Source: United Nations, Department of Economic and Social Affairs, Population Division (2019),
World Population Prospects 2019.
bulge translates into greater economic is needed. Such political risk analysis is
growth will depend on whether government
policies support education and training,
particularly important when commodity
prices decrease because fiscal pressures Issues to watch
promote entrepreneurship and enable increase, raising the risk of social unrest
private-sector job creation. The risk of and dramatic shifts in policy. • Will South African President
future social unrest will rise if young Cyril Ramaphosa succeed in
Africans lack economic opportunities. Operations and supply chain pushing through his economic
With so many elections occurring reform agenda?
Environment throughout the region in 2020, the risk
Growing climate change vulnerabilities of social unrest is high, particularly in • How will the populations view the
The majority of Sub-Saharan African countries with weak economic growth or transparency of the electoral process
countries are at extreme risk of climate in which electoral irregularities occur. Any in Ethiopia, Cote d’Ivoire and other
change. Already, the increased frequency significant social unrest is likely to disrupt countries that are holding elections?
and severity of droughts, floods and business operations, particularly in major
extreme storms is worsening food and cities, creating the need for executives to • Will negotiators make progress
water insecurity, facilitating the spread prepare contingency plans. In addition, on crucial details of the AfCFTA?
of diseases, causing forced migration although the AfCFTA offers great promise And how will Nigeria’s role
and increasing the appeal of militant to establish integrated supply chains across in the AfCFTA evolve?
groups such as Al-Shabaab. If national the continent, executives should keep
governments struggle to address climate in mind that this is a future vision, not a • To what extent will the economic
change issues, the likelihood of additional current reality. and geopolitical interests of external
climate change protests — led by the powers clash in Sub-Saharan Africa
younger urban generations — will rise. Human capital in 2020?
Labor is abundant in markets throughout
Business implications Sub-Saharan Africa, but finding the right • How will the young, urban
talent could prove challenging in some middle classes affect politics
Growth markets. To capitalize on excess labor, and policymaking in countries
Sub-Saharan African markets are companies should consider partnering throughout the region?
diverse and their diverging political and with local educational institutions to
economic trajectories will become even provide training in needed skills. This would
more apparent in 2020 and beyond. not only improve the talent pipeline, but
Companies cannot take a one-size-fits-all also help reduce sociopolitical tensions by
approach to market entry or expansion in providing greater economic opportunities
the region. Rather, a market-by-market to the local population.
assessment of growth potential, including
an analysis of the impact of political risk,

Around the world
Latin America
Protests and populists drive policymaking
Latin America was uncharacteristically Peronist government more leeway, as Peru. In 2020, Ecuador may also join the
late to join the populist wave that began President Alberto Fernández only came to bloc, which would mark the first expansion
in 2016, but the region is more than power in December 2019. since it was established in 2012. Mercosur,
making up for its tardiness now. Political a trade agreement among Argentina,
and economic grievances are bringing The highest level of political risk in the Brazil, Paraguay and Uruguay, will also
populists to power and sending the region will continue to be in Venezuela. be in the spotlight as animosities between
masses to the streets. These two forces The increasingly authoritarian government the presidents of its two largest members
will shape policymaking in key countries of President Nicolás Maduro has presided threaten the future of the bloc.
throughout the region in 2020, creating over an economy that has been shrinking
uncertainty for the business environment. since 2014. In 2020, the opposition Technology
President of the National Assembly, Juan Strategic decisions on undersea cable
Street protests erupted in several Guaidó, will likely continue to be frustrated A planned undersea fiber optic cable that
countries in 2019, including Chile, by his efforts to unseat Maduro. This will connect Asia to South America via
Colombia, Ecuador and Bolivia. While the will result in further deterioration in the Chile raises strategic questions about how
proximate causes differed, the underlying economic and political environment, even to finance this project, who will control the
issues were similar — all of which will as China and Russia continue to support infrastructure and how secure it will be.
continue to be politically salient in 2020. the Maduro regime. This cable could get caught up in broader
These include enduring high levels of US-China technology tensions.
inequality, persistent low economic growth The role of these external actors points to
and political corruption scandals. Further a broader trend of geopolitical competition Demographics
street protests are therefore likely, in Latin America. While the US still views A flood of Venezuelan refugees
which will result in governments shifting Latin America as its backyard, China As the economic crisis in Venezuela
policies to address popular demands. has become an increasingly important continues, more Venezuelans will join the
Some of these policy shifts could prove investment partner for the region. almost 5 million of their countrymen who
consequential for businesses, such as Chinese demand for Latin American have already fled abroad. The biggest
Chilean President Sebastián Piñera’s move commodity exports could fall, however, as recipients of these refugees will continue
to increase the country’s minimum wage. Beijing seeks to manage a slowdown in its to be neighboring countries, most notably
domestic economy. Colombia, Peru and Chile. A lack of
Policymaking is also likely to be somewhat international aid for this refugee crisis
volatile in Mexico, Brazil and Argentina, Primary forces will further exacerbate social and political
thanks to populist governments. In Mexico tensions in these and other host nations
and Brazil, where the current governments Globalization throughout Latin America.
have been in power for more than a year Pushing the Pacific Alliance and Mercosur
already, popular discontent is likely to The regional trade liberalization agenda will
rise if they fail to deliver on their electoral continue to be led by the Pacific Alliance
promises. Argentines may give the new countries: Chile, Colombia, Mexico and

Most of Latin America’s major economies remain dependent Through October 2019, 4.5 million refugees and migrants
on commodity exports have left Venezuela
Commodities as a percentage of merchandise exports Venezuelan refugees and migrants by country
Fuel Agriculture Ores and metals Venezuela
Colombia
1,400k
Venezuela
Ecuador
330k
Colombia
Brazil
Peru 212k
Peru 860k
Chile
Chile
Ecuador 371k
Brazil
0% 20% 40% 60% 80% 100%
Source: World Bank. Source: International Organization for Migration.

Note: Latest available data presented for each country.
Environment business growth and expansion

Commodity dependence conundrum
Latin America’s major economies remain
opportunities in the region, particularly for
consumer-facing companies. Executives Issues to watch
largely dependent on commodity exports, need to take lower growth trajectories for
including hydrocarbons, metals and Latin American markets into account when • Will the new government in Argentina
agricultural products. The extraction setting growth targets for the region. reach agreement with international
of these resources both contributes to debtors or implement a more populist
environmental degradation and is at risk Finance and tax economic policy agenda?
from future climate change effects and Argentina’s new government is likely to
policies. Despite this interdependence, reorient economic policies, which will • Will indigenous communities and
governments throughout the region have affect the country’s international financial other groups draw more attention to
yet to prioritize climate change, focusing position and its cost of capital. More the climate change agenda in 2020?
instead on more immediately salient issues, broadly, populist governments may impose
such as inequality. higher taxes on companies or mandate • How will the political, economic
new regulations granting greater domestic and humanitarian crisis in Venezuela
Business implications control of key industries. Executives should continue to unfold?
monitor any such policy proposals closely
Operations and supply chain and conduct scenario analysis to determine • Will the geopolitical alignment of
Widespread protests would likely disrupt how these changes would affect their Latin American countries shift
operations and supply chains in major companies’ finances and operations. further from the US to China?
urban areas throughout the region. In such
situations, continuous communication with Reputation and compliance
company employees will be crucial. As the Companies in the extractive industries
Pacific Alliance countries continue their have long faced reputational risks in
liberalization agenda, the falling costs of dealing with indigenous communities
producing in or sourcing from these markets throughout Latin America. These risks
may present new business opportunities. are likely to intensify in 2020 as global
Executives should monitor developments attention to climate change continues
around Mercosur closely. The trading bloc to rise. The Venezuelan refugee crisis
presents both upside and downside risk. similarly poses reputational risks — on
the upside as well as the downside — for
Growth companies that are involved in refugee
After dramatic gains for the middle class relocation, service provision or employing
during the previous global commodity displaced Venezuelans. Executives
boom, Latin America’s economy has should engage with local stakeholders
sputtered. This, in turn, has reduced to proactively manage these risks.

Around the world
North America
Uncertainty abounds ahead of US election
North America will remain a source of Relationships with the country’s top three Technology
political and economic volatility in 2020, trade partners will evolve in 2020 as part A trust crisis
especially in the run-up to the November of the USMCA and US-China “phase one” Data-reliant technologies are becoming
election in the US. Canada will be more trade deals. ubiquitous, raising concerns about the use
stable, but will continue to be challenged and misuse of consumer data and creating
to balance its foreign policies between its Canadian policy will similarly remain the need for revamped governance
relationship with the US and its objectives focused on the economy. Entering his structures. Barring a crisis, the US
elsewhere. second term, Prime Minister Justin Congress will not take legislative action in
Trudeau will work to strengthen trade an election year, though, instead ramping
This will be a monumental year for the relations, manage an economy at risk of up criticism of data-rich businesses on the
US, as an impeached president vies for entering recession and devise climate- campaign trail. Use of AI is only likely to
re-election. A Democratic winner in the oriented policies that do not alienate intensify distrust.
presidential election could herald a wave provinces that rely on natural resource
of socially minded, perhaps ultra-liberal, exports. Renewed separatist movements, Demographics
programs. A Trump victory, however, such as oil-rich Alberta’s “Wexit,” will Shifting foreign talent base
would provide a renewed mandate for continue to create political volatility. Between 2016 and 2018, applications for
the “America First” agenda. While these two key US visa programs fell, seemingly in
implications will not play out until 2021, Primary forces response to inordinate processing backlogs
the uncertain political future will affect the and an intimidating political environment.
business environment in 2020. Globalization Meanwhile, Canada attracted more than
Diverging global aims 20,000 high-skilled immigrants in the first
Maintaining economic momentum will The Trump administration will continue two years of a new work permit program.
remain the top US domestic policy to focus on bolstering American Ottawa will likely accelerate efforts to
objective. The US outpaces the rest of producers and shielding low-skilled attract foreign students and workers in
the G7 economies in growth, and equity labor from competition, even if it 2020, recognizing the economic potential.
markets regularly reach record highs. But results in disengagement from the
business investment has cooled in the global economy. In contrast, Canada Environment
context of geopolitical tensions and mixed will continue to pursue expanding trade Divides around climate change
economic signals. The administration is relations, particularly in Asia (where While some US states have enacted
therefore likely to focus on incentivizing it is a CPTPP member) and Europe measures to combat climate change, there
business investment in 2020. And it will (through the Canada-EU Comprehensive remains skepticism at the federal level,
continue to favor statecraft rooted in Economic and Trade Agreement). even as the US faces pressure to do more
economic leverage as its primary form of as a key source of emissions. By contrast,
foreign policy, at the expense of diplomacy. the issue remains a top political concern
Sanctions, CFIUS reviews and tariffs in Canada, as the country has experienced
are likely to continue making headlines. double the global average of warming

The 2020 US presidential election will be determined Canada and Mexico are the US’s second and third largest goods
by voters in swing states trading partners, respectively
US two-way trade in goods
Swing states that voted Obama in 2012, Trump in 2016 Other swing states
Canada Mexico
MN
$600b
WI NH
MI
IA PA
NV OH
$400b
CO VA
NC
$200b
FL
0
1994 2000 2006 2012 2018
Source: FiveThirtyEight. Source: U.S. Census Bureau.
according to the Council of Canadian Growth

Academies. There is also a generational
divide in both countries, with youth
Public pressure is growing to reform
antitrust enforcement to address evolving Issues to watch
increasingly demanding leaders put more business models and the importance of
resources toward climate action. network effects in a digital economy. Any • Will the Federal Reserve continue
changes would likely rely less on consumer making cuts to the federal funds
Business implications welfare as the sole determinant of antitrust rate? And how rapidly?
violations. Technology companies are
Finance and tax particularly vulnerable, as many grow • Which foreign policy issues will
US corporate debt is at an all-time high, revenues through collecting users’ data receive focus from US presidential
at around $10 trillion for large companies, rather than dollars. Companies should candidates?
and a growing portion is held in low- consider whether potential M&A deals
grade bonds. An economic slowdown could be construed as anticompetitive • How will traditional and social media
could distress financially overextended under likely future antitrust policies. companies navigate potential foreign
businesses. Moreover, as US businesses influence attempts on the 2020 US
paid taxes at one of the lowest rates Data and intellectual property election?
on record in 2019, corporations are Partisan gridlock and a Congress
likely to continue to attract public ire struggling to keep pace with the evolving • Will Canada join its Five Eyes partners
from the political left — and perhaps technological age are pushing US states in restricting Chinese telecoms from
more broadly in a future downturn. to take the lead on regulatory issues installing 5G technology?
from privacy and clean energy policies
Reputation and compliance to drug pricing and more. For instance, • Will an increasing focus on climate
A Pew Research Center report finds that the California Consumer Privacy Act, change lead to investments in
most Americans do not trust business which came into effect in January, will upgrading physical infrastructure?
leaders to act in the best interests of become the effective national standard
the public. Coupled with historically on data privacy given its application to
high income inequality and a populist any business dealing with Californians.
surge, societal anger toward political and Companies will need to increasingly
business elites is likely to rise. Boycotts follow state-level legislative agendas.
of businesses viewed as harming the
public good will likely increase in tandem.
Executives should find ways to demonstrate
their commitment to the communities they
serve and the issues they care about.

Authors
Mary K. Cline, PhD

Insights Leader, Geostrategic Business Group
Ernst & Young LLP
Courtney Rickert McCaffrey

Deputy Insights Leader, Geostrategic Business Group
Ernst & Young LLP
Kyle P. Lawless
Associate Director, Geostrategic Business Group
Ernst & Young LLP
Sven Behrendt, PhD

Senior Advisor, Geostrategic Business Group
Ernst & Young AG
Acknowledgments
The authors would like to thank the following individuals for their assistance with this report:
Jason Adam, Jonas Akelis, Jon Alterman, Antonio Barroso, Douglas Bell, Ruchi Bhowmik, Ben-Ari Boukai,
Igor Buyan, Robert Carroll, Scott Chapski , Luis Cornago, Patrick Dawson, John de Yonge, Anne Fruhauf,
Gurbaksh Gandhi, Rich Goode, Mark Gregory, Steven Haines, John Hallmark, Matt Hanify, Tobias Harris,
Bob Herrera-Lim, Andrew Hobbs, Bruce Holt, Erica Hurtt, Gautam Jaggi, John Jarrett, Kevin Kajiwara,
Christine Le, Malte Liewerscheidt, Mario Marconini, Anne McCormick, Doug Milbrodt, Sampada Mittal,
Bridget Neill, Jay Nibbe, Aditi Phandis, Michael Pifko, Shreya Popli, Alexandra Rogan, Bob Schellhas,
Jon Shames, Sanjeev Singhal, Dan Staps, Shauna Steele, Andrius Tursa, Oliver Voigt, Tim Volkmann,
Ben Wareing, Nicholas Watson and Gabriel Wildau.
35
Endnotes
1. Emissions Gap Report 2019, Executive Summary, United Nations Environment Programme, 2019.
2. CO2 Emissions from Fuel Combustion, International Energy Agency, 31 October 2019.
3. “The US-China Investment Hub,” Rhodium Group, 2 December 2019.
4. Rob Smith, Three countries are leading the renewable energy revolution, World Economic Forum, 26 February 2018.
5. “European Commission and HR/VP contribution to the European Council: EU-China — A strategic outlook,” European
Commission website, 12 March 2019.
Unless otherwise noted, the source for all economic growth forecasts is the International Monetary Fund and the source for all
demographics data is the United Nations Population Division.
Contacts
Jon Shames Regional contacts

EY Global Leader
Geostrategic Business Group Scott Sarazen
Ernst & Young LLP Americas
jonathan.shames@ey.com Geostrategic Business Group
Ernst & Young LLP
Mary K. Cline, PhD scott.sarazen@ey.com
Insights Leader
Geostrategic Business Group Oliver Jones
Ernst & Young LLP EMEIA
mary.k.cline@ey.com Geostrategic Business Group
Ernst & Young LLP
oliver.jones@uk.ey.com
Nobuko Kobayashi
Asia-Pacific
Geostrategic Business Group
Ernst & Young Transaction Advisory Services Co., Ltd.
nobuko.kobayashi@jp.ey.com
36
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About EY Geostrategic Business Group
The EY Geostrategic Business Group (GBG) helps organizations

incorporate the risks and opportunities of the shifting global political
landscape into their business strategy. By harnessing our global
footprint and local knowledge, we help organizations translate global
politics into business strategy.
EY member firms collaborate with third-party firms to bring an added

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Geostrategic Business Group

The geopolitical landscape 6

Around the world 18

East Asia and Pacific 19

Middle East and North Africa 27

Authors and acknowledgments 35

Endnotes and contacts 36

Note: Unless otherwise noted, all figures are in US dollars.

Mary K. Cline, PhD

6 | 2020 Geostrategic Outlook

Geopolitics in a world of regions

Middle East and North Africa

The evolution and interaction of

Appreciating these forces can help

7 | 2020 Geostrategic Outlook

East Asia and Pacific

8 | 2020 Geostrategic Outlook

9 | 2020 Geostrategic Outlook

10 | 2020 Geostrategic Outlook

11 | 2020 Geostrategic Outlook

12 | 2020 Geostrategic Outlook

13 | 2020 Geostrategic Outlook

14 | 2020 Geostrategic Outlook

WTO dispute settlement and reform 10%

Conflicts over digital taxes

policies that promote competitiveness, it Operations and supply chain

15 | 2020 Geostrategic Outlook

16 | 2020 Geostrategic Outlook

2017 2018 2019 2002 2006 2010 2014 2018

Source: US Census Bureau. Source: Rhodium Group.

Finance and tax Data and intellectual property

17 | 2020 Geostrategic Outlook

18 | 2020 Geostrategic Outlook

East Asia and Pacific

19 | 2020 Geostrategic Outlook

Conference, as its leadership is needed to Operations and supply chain

20 | 2020 Geostrategic Outlook

21 | 2020 Geostrategic Outlook

Environment surrounding data privacy. This could have

Data and intellectual property

22 | 2020 Geostrategic Outlook

23 | 2020 Geostrategic Outlook

and a global shipping company conducted Reputation and compliance

Operations and supply chains

24 | 2020 Geostrategic Outlook

25 | 2020 Geostrategic Outlook

Environment Finance and tax

26 | 2020 Geostrategic Outlook

Middle East and North Africa 2010

Volatility and the risk of disruption

27 | 2020 Geostrategic Outlook

$110 Gulf Cooperation Council (GCC) states

United Arab Emirates

$50 Forecast -1.0

28 | 2020 Geostrategic Outlook

29 | 2020 Geostrategic Outlook

2017 2018 2019 2020 2021 2022 Sub-Saharan Africa World

30 | 2020 Geostrategic Outlook

31 | 2020 Geostrategic Outlook

0% 20% 40% 60% 80% 100%

Source: World Bank. Source: International Organization for Migration.

Environment business growth and expansion

32 | 2020 Geostrategic Outlook