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The World in 2023: The Calm After the Storms... Really?

First edition: December 2022

Cover image by Francesco Fadani

The opinions expressed in this publication do not necessarily reflect ISPI’s position.
 ITALIAN INSTITUTE
IL
THEMONDO
WORLDCHE
IN VERRÀ
2023 2023
2022
FOR INTERNATIONAL
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The Calm after the

Storms... Really?
UKRAINE: AFTER WINTER, SPRING?
Mikhail Minakov (Kennan Institute and ISPI) 6

ECONOMY: INFLATION PEAK, RECESSION LOOMING?

Zsolt Darvas (Bruegel) 10

ENERGY: WHICH SECURITY?

Alessandro Blasi (Stanford University) 13

TRADE: WHAT’S LEFT OF GLOBALISATION?

Stormy-Annika Mildner (Aspen Institute Germany), Claudia Schmucker (DGAP) 17

FOOD INSECURITY: FALSE ALARM?

Tommaso Emiliani (EIT) 21

US-CHINA: WHERE DOES COMPETITION LEAD?

Andrew Small (GMFUS) 26

PANDEMIC: ARE WE SAFE NOW?

David Quammen (writer) 29

POPULISMS: BACK TO REALITY?

Matthew James Goodwin (University of Kent) 32

Clouds in the Sky

EUROPEAN COHESION: THE WIDENING RIFT
Erik Jones (EUI) 35

MENA: A THIRD WAVE OF ARAB SPRINGS

Dalia Ghanem (EUISS) 38

GLOBAL SOUTH: FROM MITH TO REALITY

Sachin Chaturvedi (RIS) 41
 ITALIAN INSTITUTE
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2023 2023
2022
FOR INTERNATIONAL
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AUTOCRACIES: REGIME FAILURE?

- Russia, Andrei Kolesnikov (CEIP) 45
- Iran, Aniseh Bassiri-Tabrizi (RUSI and ISPI) 48
- China, Alicia Garcia-Herrero (Bruegel) 51

To Watch 2023
• Countries to watch
geopolitical mavericks
- India, Harsh Pant (King’s College London) 56
- Turkey, Soli Özel (Kadir Has University) 59
• Election to watch
- Nigeria, Idayat Hassan (CDD) 62

• Trend to Watch
- Green Awakening, Samantha Gross (The Brookings Institution) 65
• Crisis to watch
- Migration, Gerald Knaus, Pascal Franz (ESI) 68

5 good news to kick-off 2023

73

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 THE WORLD IN
2023

The Calm
after the Storms... Really?
ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

|5
 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
IN VERRÀ
2023 2022
FOR INTERNATIONAL
POLITICAL STUDIES

T
he Russian-Ukrainian war will definitely
be one of the key factors in determining

UKRAINE: political and economic processes in Europe,

Eurasia, and globally in 2023.

AFTER WINTER, The Russian invasion of Ukraine in February 2022,

as well as the West’s decision to support Ukraine
SPRING? and introduce unprecedented sanctions against
Russia, has put an end to a long period of what
– with some effort – could be called peace and
Mikhail Minakov cooperation in Europe and northern Eurasia. In
reality, for three decades after the end of Cold War
Kennan Institute and ISPI
we saw various bloody conflicts in the region, for
example in the western Balkans, in the southern
and northern Caucasus, and in the Donbas region.
But these hostilities had only a limited influence
on the social and economic life of the continent
and the world at large. On the contrary, Putin’s
decision to launch an invasion, the consequent
Russian-Ukrainian war, and consolidation of the
US, UK and EU alliance around Ukraine in a newly
united West have triggered tectonic changes in

Mikhail Minakov is a Senior Advisor at the Wilson

Center’s Kennan Institute and a philosopher and a
scholar working in the areas of political philosophy,
social theory, development, and history of modernity.
He is also an Associate Research Fellow at ISPI. |6
 THE CALM AFTER THE STORMS...
REALLY?

the world order and dramatically reinforced the as well as destroying Ukraine’s towns, critical
negative socio-economic trends that emerged in infrastructure, industry, and energy system. In
the years of Covid-19 pandemic. this scenario, emigration from Ukraine to Europe
and Russia will continue growing, while those
Though the Ukrainian army has succeeded in
who migrated in 2022 will likely ditch plans to
liberating a great deal of territory, the war has
return home soon. Existing and new sanctions will
not yet ended and prospects for victory over
further undermine Russian economic strength,
the invaders remain remote at the end of 2022.
but will also backfire on Western economies,
In fact, the war is dragging on with stabilised
possibly leading to mass protests in the countries
frontlines, and has every chance of turning into a
worst affected. No economies on the European
long-term, open, military conflict that will divide
continent will be able to maintain the living
Europe and world into camps and blocks. Given
standards enjoyed before 2022. A protracted
this context, two main scenarios are possible for
war in Ukraine will therefore deepen existing and
the Russian-Ukrainian war in 2023: a protracted
engender new risks for all societies in Europe and
military conflict or some form of unstable peace
northern Eurasia.
agreement.
SCENARIO #2:
SCENARIO #1:
AN UNSTABLE PEACE AGREEMENT
A PROTRACTED MILITARY CONFLICT
There is nevertheless a possibility that a sort of
If the war goes on and all sides continue
deal may be reached to dampen or freeze the
increasing the numbers and weaponry of their
conflict for some time. The liberation of the Kharkiv
troops, a protracted war on Ukrainian soil is the
and Kherson regions by Ukrainian forces – with
most probable scenario for 2023. Western allies
the West’s unprecedented military and economic
have already created a system for supporting
support – has shaken the reputation of Russian
the Ukrainian government and army financially
forces as the “second most powerful army in the
and militarily, while Moscow is urgently restoring
world” after the US. Now in late 2022, Ukrainian
its military-industrial complex and creating new
forces have developed into a well-equipped army
allies to supply missing weapon types. Mass
able to hit every Russian position on the occupied
mobilisation keeps feeding more and more
territories and in many southwestern regions
personnel into the Ukrainian and Russian armies
of Russia. Its own weakness, Ukraine’s military
and troop numbers on both sides are likely to
successes, and continued western sanctions
reach around 400-500,000 by March 2023. Neither
may motivate the Kremlin to agree some form of
Kyiv nor Moscow communicate directly and both
armistice or temporary peace agreement with
seem unprepared to enter into peace talks at this
Kyiv. In parallel, the Ukrainian government, despite
stage. This funnel of violence is dragging more
recent military successes, may accept an interim
and more people and nations into the conflict.
peace agreement to stop the destruction of its
A protracted war will continue snowballing the cities, energy system, and critical infrastructure,
death toll among civilians and combatants,

The World in 2023 |7


as well as to prepare more effectively for the next
phase in the war.
In the case of a lasting armistice and a freeze
of the conflict along approximately current
frontlines, Ukraine and its allies will have time to
improve the country’s ability to resist the invasion
both militarily and economically. Reconstruction
of critical Ukrainian infrastructure may also lessen
the burden of the war on the country’s population;
some of the 10 million Ukrainian refugees may
also choose to return home if the shelling stops.
Western and Russian armies may use this time
to replenish their arsenals and increase the
potential of their military-industrial complexes.
This scenario also envisages a certain reduction
in the social and security risks that a protracted
war may bring to Europe.
Still, neither party in the war will have achieved its
aim, and both will retain enough resources and
political will to pursue victory. Peace in Ukraine
can therefore only be temporary: without a full
victory over Russian aggression, there can be
no stable peace for Ukraine or eastern Europe
as a whole.
Whichever scenario emerges in the Russian-
Ukrainian war in 2023, we shall witness certain
common trends both in Europe and other regions
of the world.
Firstly, the nations of the European continent,
and many in Asia too, will probably be forced
into joining one of the two competing blocks.
The member-states of both blocks will have to
securitise their politics, militarise their economies,
and radically revise those developmental models
not compatible with a war footing. These changes
may well run counter to peace-time approaches
Ukraine: After Winter, Spring?
THE WORLD IN 2023
to economic crisis and may increase the risk of
widespread social unrest in the East and the
West alike. Neutral status will become mission
impossible, at least in Europe: countries on the
Old Continent will have to make their choice of
block in 2023. It will become harder even for non-
European countries to stick to neutrality.
Secondly, the geopolitical role of states is
changing within the emerging blocks: certain
countries, once peripheral, have become
elements of the global core in 2022, and this will
probably be even more evident in 2023. Due to
its unshaken resistance, Ukraine has gained far
greater political influence, leading to the creation
of a military alliance with the West, a stronger voice
in international relations, and candidate status for
EU accession. It is quite probable that Ukraine will
deepen its ties with the West to ensure long-term
unity of interests with its new allies. Poland and
some other new European democracies are also
gaining a stronger hand in matters of security and
international relations, while old democracies like
France and Germany seem to be losing the lead
in common European matters.
Thirdly, the war in Ukraine impacts the security
of European and Eurasian nations. Three groups
are emerging, divided on the basis of level
of insecurity. The countries in the first group
(Belarus, Moldova, and at least seven of Russia’s
western and southwestern regions) face a very
real risk that the war unleashed against Ukraine
will spread on to their soil. In the second group of
nations, frozen rivalries stand a growing chance of
renewal while simmering conflicts may boil over
with renewed vigour. These countries include
Moldova, the nations of Central Asia, the southern
Caucasus, and the Balkans. In the third group,
|8
 THE CALM AFTER THE STORMS...
REALLY?

which includes all other European countries,

changing socio-economic models and war-
driven political developments may increase the
chance of populist groups coming to power. This
may also trigger an arms race and drag now free
nations towards illiberalism, or into a third wave
of autocratisation on both continents.
Finally, after failure in the war and with a declining
population and economy, the Russian Federation
may fall into rapid decline as a power. This would
mean a power vacuum in eastern Europe and
northern Eurasia and create opportunities for
the West, China, Turkey, and Iran to increase
their presence in the region in search of regional
influence, triggering new conflicts among
themselves. Isolated and impoverished, Russia
will most likely enter China’s growing area of
influence. If this happens, the East European block
may well become part of a Beijing-led greater
Eurasia, and any future European perspective will
most probably become unrealistic.

The World in 2023 |9

 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
AHEAD
VERRÀ
2023
2022
FOR INTERNATIONAL
POLITICAL STUDIES

2
022 was a year of war and inflation. Russia’s
aggression against Ukraine was largely

ECONOMY: unforeseen. A rebound of pent-up demand

from the pandemic, supply bottlenecks, and

INFLATION PEAK, skyrocketing energy prices spiralled inflation to

around 10% in advanced countries, an inconceivable

RECESSION level since inflation-targeting monetary regimes

were introduced in the early 1990s.

LOOMING? In 2023 we might see positive economic

surprises in Europe (absent an escalation of the
war): better-than-expected growth and lower-
Zsolt Darvas than-expected inflation.
Bruegel Institute Let me start by listing factors that suggest poor
economic performance with high inflation.
High energy prices are likely to stay. Several
companies might not be able to pay them and
thus close. This would reduce production and
push prices higher.
Supply-side bottlenecks remain. When European
companies are asked about the factors limiting

Zsolt Darvas is Senior Fellow at Bruegel Institute.

He is also a Senior Research Fellow at the Corvinus
University of Budapest. | 10

their production, they still put the shortages of
materials and equipment first. Such bottlenecks can
hold back growth and keep the price pressure up.
Core inflation (an inflation indicator that does not
include energy and food prices) has increased
to 5% in the euro area, while the US and UK
have even higher rates. This might suggest that
inflationary pressures have become widespread
in the economy.
Household purchasing power is reduced.
Inflation was much faster than wage growth over
the past two years, which reduced the real values
of salaries. People can purchase fewer goods and
services, lowering demand and production, but
also inflation.
Survey-based confidence indicators have
deteriorated. European households are especially
bearish about their outlook, and business
confidence has also fallen. This could lead to
reduced consumption and investment – lowering
growth and inflation.
Central bank interest rates are on the rise. Rates
have already increased by several hundred basis
points and are set to increase further. This might
hold back growth and slow inflation.
The main forecasting institutions expect a
near-term slowdown. The IMF’s October 2022
forecast suggests that 2023 will have the weakest
global growth rate since 2001 except for the
global financial crisis and the acute phase of
the Covid-19 pandemic, with about a third of the
world economy facing at least two consecutive
quarters of negative growth. In line with this, the
December 2022 European Central Bank forecast
expects negative euro-area growth in the fourth
quarter of 2022 and the first quarter of 2023.
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
Thus, there are reasons to be gloomy about the
global and European growth outlook while forces
to keep inflation high remain, despite the weak
economic outlook.
Still, my main message is that there are prospects
for positive economic surprises in Europe, for
five main reasons.
First, gas consumption in the EU declined by a
staggering 23% in November 2022 compared to
the previous year. The warm weather in the first
half of November helped, but this explains only a
small portion of the decline. There were already
large reductions by industrial users in the summer
when heating was not needed. Thus, businesses
and households could adjust and reduce the
use of the scarcest energy source, which is an
encouraging sign for the future.
Second, some spring 2022 fears suggesting that
a large share of European industry, including
German industry, would collapse in the case of a
stop in Russian gas imports proved grossly wrong.
Russia has cut its gas supply to Europe by about
80%, and in particular, no more gas arrives in
Germany via the Nord Stream pipeline. Yet euro-
area industrial production volume was 3.4% higher
in October 2022 than a year ago, while German
output was essentially unchanged (0.2% decline).
Moreover, the output of the energy sector fell by
8.7% in the euro area and 13.2% in Germany due to
lower energy demand, but manufacturing output
increased by 4.7% in the euro area and 0.8% in
Germany. This suggests that European industry is
more resilient than frequently thought.
Third, labour markets remain robust on both
sides of the Atlantic, with unemployment rates
at historical lows. Labour force participation is at
| 11
 THE WORLD IN 2023

its historical high in the EU. Such strong labour Fifth, while euro-area core inflation increased
markets contradict the gloomy outlook revealed to 5%, it is partly driven by higher energy prices.
by confidence indicators: why keep companies For example, department stores facing higher
hiring if they expect weaker economic conditions? energy prices increase sales prices. But absent
2023 will reveal the solution to this puzzle, yet I an escalation of the war, energy prices might not
would not be surprised if no (major) recession increase further and might even decline. Thus,
follows and companies’ decisions to hire result in the cost-pushed inflationary pressure will likely
increased 2023 output. disappear, lowering core inflation. Wages do not
yet push inflation up and are unlikely to do so.
Fourth, the fears about the impacts of the
Even if wage growth accelerates for a year or
ECB’s rate rises and hawkish statements
two due to indexation or collective agreements
are exaggerated. The ECB’s deposit rate was
to compensate for some of the recent inflation
increased from -0.5% in July 2022 (when inflation
surprises, inflation was so high in 2022, and will
was already 8.9%) to 2% by December 2022, well
likely remain well above the 2% target in 2023,
below current inflation and expected inflation
that the real value of wages will likely remain
in 2023. This will still stimulates (and will not
below their pre-2022 values in 2023 and beyond.
decelerate) the economy in 2023. Since interest
Absent a decline in supply (which is not visible in
rates impact the economy with a time lag, further
industrial production), lower real wages will hold
rate rises might contract output beyond 2023, but
back inflation.
not much, and the current tightening is dwarfed
by the tightening in the 1980s and 1990s. For Some inflation surprises have already come in the
example, after the oil price shocks of the 1970s, US. The headline inflation rate has been falling
the federal fund rate increased to 19% in 1981, and since June 2022, and core inflation also started to
it remained five percentage points higher than fall in October. By the end of 2022, the fall in both
actual inflation on average in 1981-1989. Between headline and core inflation was faster than what
1995 and 2000, the gap was four percentage market analysts had expected.
points. For the current 10% euro-area inflation, this
For these reasons, I would not be surprised to see
would imply an ECB deposit rate of 15% or 14%, not
positive European surprises in 2023: higher-than-
2%. While the equilibrium real interest rate could
expected growth and lower-than-expected
have declined somewhat since the 1980s and
inflation.
1990s, current and expected ECB interest rates
are nowhere in a historical comparison. Thus, the
medium-term impact of the current monetary
tightening on the economy will be smaller now
than in the past. Nevertheless, the super-hawkish
ECB statements can serve a purpose: controlling
expectations.

Economy: Inflation Peak, Recession Looming? | 12

 ITALIAN INSTITUTE
THE WORLD AHEAD 2023
FOR INTERNATIONAL
POLITICAL STUDIES

O
n 24 February 2022, the modern world
as we used to know it changed. Russia’s

ENERGY: attack on Ukraine has created a huge

humanitarian crisis, bringing war back to the

WHICH SECURITY? heart of Europe after several decades of peace

and sending shock waves through global energy
markets.
A first and immediate consequence of the invasion
Alessandro Blasi
is that we have plunged into the first truly global
International Energy Agency (IEA)
energy crisis. The world has never experienced an
energy crisis of such depth and magnitude before.
For several years, the main actor in the war, Russia,
held the role of world’s largest energy exporter,
with global leadership in oil and gas exports and
contributing to international commodity markets
through the supply of coal and several minerals.
With Russia’s role on international energy
markets being severely questioned, the
importance of this crisis is second to none of

Alessandro Blasi is Special Advisor to the Executive

Director of International Energy Agency (IEA). | 13
 THE WORLD IN 2023

those seen in the past. There are also other an unprecedented level of  global
elements that differentiate the current crisis from debt  – both in absolute value and as a
the one experienced in the 1970s following the percentage of GDP – as several countries
OPEC oil embargo: have implemented huge stimulus plans
for recovery from Covid-19. This could
1. This crisis erupted with  inflation  levels
drain important financial resources from
already at a 40-year high in many
investment and spending capacity in both
economies. In early 2022, before the
the public and the private domain.
conflict started, inflation in the US reached
3. The world today is much more
7.9%, the highest rate since 1982,  while in
interconnected  compared to the time of
the eurozone it exceeded 5%, the highest
previous oil embargos. Global trade is a
level since records began in 1997. As
much bigger component of the world’s
of December 2022, those rates have
economy.
increased further.
4. Finally, the epicentre of the conflict involves
2. The global economy is affected by

Energy: Which Security? | 14


countries, like Russia and Ukraine, which
are also global leaders for the production
and export of food and fertilisers, with
obvious implications for food prices.
Another area of serious concern is the European
industrial system and its future prospects. An
inconvenient truth is that Europe’s industry has
flourished, among other things, thanks to massive
inflows of stable and cheap Russian energy
since WWII. The pact that cemented East-West
mutual interdependence was underpinned
by the construction of massive interconnecting
infrastructure, including gas pipelines linking the
prolific Western Siberian fields with the heart of
Europe. Ironically, the main pipeline that connects
Russia and Europe through Ukraine was called
“Brotherhood”.
As natural gas still remains an important energy
source for the industrial sector today, the risk of
shortages and the very high prices represent a
huge issue for the competitiveness of European
industry. The shock for the European system is
therefore on multiple levels: for households
through energy bills and for the industrial sector
through a gloomy economic outlook and loss of
competitiveness. One lesson from past crises is
that besides difficulties, recession and inflation,
some important elements of innovation can
sometimes emerge. After the 1970s oil crisis, the
world saw the largest development of nuclear
energy in history and massive improvements in
the efficiency of vehicles and appliances.
One major issue that was still out of the radar at
that time was the concept of climate change and
sustainability, which today has become a key
social, economic and technology driver. Even
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
before the Russia-Ukraine conflict, the world was
approaching a turning point for the clean energy
transition. More than 80% of the global economy
has pledged to move towards carbon neutrality
and several new clean energy technologies
are at a decisive crossroads: finally becoming
mainstream or disappointing expectations. In
actual fact,  2021 was a record year for all of the
most promising clean technologies, including:
• record sales for  electric vehicles  and  heat
pumps;
• battery storage deployed at levels never seen
before;
• enthusiasm and interest for  hydrogen  and
Carbon Capture Use and Sequestration
(CCUS) reached new highs;
• renewables  kept dominating new electricity
capacity and marked record after record.
The level of clean energy investment in 2022 is
set to reach a new all-time high, as countries are
deploying large stimulus plans designed for post-
pandemic recovery and new ones in response to the
crisis. The US Inflation Reduction Act, RepowerEU,
Japan’s GX transformation programme and others
are just some examples of the multi hundred
billion dollar plans recently announced for the
development of the industry of the future.
The Western world is not alone in this global
competition. China is already a world leader in
most clean energy technologies: from solar PV
manufacturing to electric vehicles, from battery
production to the processing of the critical
minerals that are the backbone of several green
technologies. Such a leadership position is not
a coincidence but the result of a consistent
and coherent strategy adopted by the Chinese
| 15
 THE WORLD IN 2023

government over 20 years. united in responding to the crisis and in deploying

countermeasures to alleviate the burden on
The current crisis represents a historic turning
citizens and business. But the time for Europe to
point in the energy system and even more for the
have a serious discussion about the future of its
future of European industry. In such a context, the
economic and social backbone is now, including
old motto “innovate or die” has never been more
on what measures can be deployed to conjugate
pertinent for Europe. The continent has excellent
the clean energy transition vision with a long-term
educational skills, resources and innovation
industrial strategy.
potential to be able to overcome the current
crisis. European institutions have also been very Others will not wait.

Energy: Which Security? | 16

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

2
022 was a tough year for the global economy
and economic governance. Just when the

TRADE: global economy was starting to recover

from the Covid pandemic, Russia invaded Ukraine

WHAT’S LEFT and geopolitical frictions intensified. The world

is now facing a triple crisis as a result: an energy

OF GLOBALISATION? price crisis, a food crisis, and a financial crisis. This

comes on top of the health and climate crises.
There are major uncertainties surrounding policy.
Those who hope that the worst is soon behind us
Stormy-Annika Mildner and that 2023 will be an easier year will likely be
Aspen Institute Germany disappointed as governments struggle to buffer
Claudia Schmucker adjustment pains with shrinking fiscal space. To
German Council on Foreign Relations (DGAP) counter inflationary pressures, central banks
around the world have tightened their monetary
policies. The risk of stagflation – sluggish growth
with high inflation – remains high. The 2020s
could easily become a lost decade for economic
and social development.

Stormy-Annika Mildner is the Executive Director

of the Aspen Institute Germany in Berlin. As adjunct
lecturer, she teaches at the Hertie School classes on
political economy; Claudia Schmucker is Head of the
DGAP’s Globalization and World Economy Program.
She has published extensively on European and
transatlantic trade policy, the world trade organization
(WTO) and the Doha Round as well as on the role of
informal global forums such as the G7 and the G20. | 17

GLOOMY GLOBAL ECONOMIC OUTLOOK
According to the IMF’s World Economic Outlook
for October 2022, real global GDP is expected to
grow by 2.7% in 2023, noticeably slower than in
2021 (6%). The growth rate of advanced economies
is forecast to be only 1.1% in 2023. Emerging
and developing countries (EMDE), on the other
hand, are likely to grow by 3.7% in both 2022 and
2023. Europe and Central Asia will be hit the
hardest by the consequences of Russia’s war
against Ukraine. 31 of 72 economies considered
(representing more than one-third of world GDP)
face at least two consecutive quarters of negative
growth at some point in 2022 and 2023. The WTO
expects growth in world trade to slow further from
3.4% in 2022 to only 1% in 2023. While logistics are
expected to run somewhat smoother, geopolitical
and geo-economic uncertainty in supply chains
remains high. Production and supply networks are
changing as governments and companies around
the world place a greater emphasis on resilience.
One dampening factor for trade is likely to be the
US dollar, which is expected to remain strong
in 2023. As roughly 40% of international trade
transactions in goods are invoiced in US dollars,
this will make exports from many countries more
expensive. This further exacerbates the problem
of rising debt for many developing countries.
The poorest countries and the most vulnerable
people will be hit the hardest. Over several
decades, poverty and income inequality had
decreased. Since the beginning of the pandemic,
however, they are on the rise again. According
to an UNDP analysis of 111 countries, 1.2 billion
people lived in acute multidimensional poverty
in 2022. This trend will increase even further due
to the economic slowdown predicted for 2023.
Trade: What’s Left of Globalisation?
THE WORLD IN 2023
Food insecurity is also on the rise. Between 702
and 828 million people are living in severe
food insecurity. This number has risen by about
150 million since the beginning of the Covid-19
pandemic. The FAO warns that acute food
insecurity continues to escalate globally. This
does not bode well for 2023.
The good news is that energy price hikes are
expected to level out; the World Bank even
projects a decline of 11% in 2023. The bad news
is that energy prices will still be 75% above their
average for the past five years. The same holds
true for inflation. According to the IMF, global
inflation is predicted to be 6.5% in 2023. An Ipsos
survey in partnership with the World Economic
Forum finds that 79% of workers expect their real
income to fall in 2023 and the number of people
fearing that unemployment will grow in their
country over the next 12 months (61%) is rising.
This is likely to lead to greater social instability in
many countries.
TRADE FRICTIONS AND GLOBAL TRADE
GOVERNANCE IN 2023
Trade can be a powerful tool for economic growth
and development, and can help absorb shocks
too. However, international trade governance
has become more difficult. Geopolitical and geo-
economic friction has been on the rise for some
years, with China at the centre of the phenomenon.
Russia’s invasion of Ukraine on 24 February 2022
marked a watershed in international relations and
in the world economy. Great power competition
and systemic rivalry are on the rise. Trade frictions
could easily escalate in 2023 as a consequence.
While 2022 marked the successful conclusion
of the WTO Ministerial Conference (MC12),
| 18

widely hailed as a breakthrough for global
trade governance, 2023 will be a year in which
differences will come to light. One of the highlights
of MC12 was the agreement to authorise the use
of patented vaccines (TRIPS waiver). However,
as part of the package, WTO members had
agreed to discuss the extension of the waiver
for therapeutics and diagnostics until the end
of 2022. The United States has now decided to
launch an investigation first and therefore asked
for a new deadline way into 2023. This will have
a negative effect on global trade cooperation at
WTO level, further dampening progress on issues
like the e-commerce moratorium, which needs
to be extended in 2023. 2023 is also the year in
which progress must be achieved on reform of
the WTO’s Appellate Body. So far, only limited
headway has been made. Hopefully, 2023 will
see greater engagement by the United States
on this matter. All in all, only limited progress in
global trade governance can be expected in 2023.
The outlook for transatlantic relationships is
not great either. After a preliminary solution to
the steel and Airbus/Boeing subsidies conflict
in the early stages of the Biden administration,
transatlantic relations have again become
burdened by the ongoing conflict surrounding the
US Inflation Reduction Act (IRA). The transatlantic
partners were unable to solve the problem at the
Trade and Tech Council (TTC) in December. If
there is no solution on the Buy America provisions
for electronic vehicles, the EU and the United
States will likely enter a subsidies race for green
technology in 2023, to the detriment of all.
This conflict happens against the backdrop
of ongoing US-China rivalry. The US National
Security Strategy from October 2022 states: “The
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
People’s Republic of China harbors the intention
and, increasingly, the capacity to reshape the
international order in favor of one that tilts the
global playing field to its benefit”. This view on
China will lead to increased decoupling by the
United States of strategic supply chains (high
tech and security products as well as critical metals
and minerals), more stringent export controls, and
inward as well as outbound investment screening.
In 2023, the United States is likely to ask the EU to
share more of the burden and to follow the same
adopted path.
Asia Pacific will be the only region where some
silver lining may be seen for global trade
cooperation in 2023, even though US-China
rivalry casts its shadow on this region too. The
Comprehensive and Progressive Agreement on
Trans-Pacific Partnership (CPTPP), with a focus
on 21st century trade issues such as e-commerce,
investment, and intellectual property, will likely be
expanded in 2023. The United Kingdom officially
applied to become a member in 2021. South
Korea, China, and Taiwan followed. Indonesia, the
Philippines, and Thailand have also expressed
interest in joining. If the UK proceeds, it could
become a member in 2023. While the other
applications will be much more difficult, they
nevertheless provide a glimmer of hope that
many nations still see the benefit of open trade
and cooperation.
GEOPOLITICAL RIVALRIES WILL INTENSIFY
2023 looks gloomy for the global economy
and global trade governance. After the hope
engendered by gradual recovery from the
pandemic, the Russian war in Ukraine has
provided another shock to the world economy,
| 19
 THE WORLD IN 2023

highlighting the geopolitical risk of dependence

on an autocracy with aggressive ambitions.
Geopolitical rivalries will intensify in 2023,
darkening the economic outlook even further.
The transatlantic relationship remains crucial, but
as the IRA shows, cooperation remains far from
automatic. The hope is that both partners can
avoid a subsidy war in 2023 and that there will be
some progress at WTO level.

Trade: What’s Left of Globalisation? | 20

 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
AHEAD
VERRÀ
2023
2022
FOR INTERNATIONAL
POLITICAL STUDIES

E
uropean and international food systems
endured a year of drastic change in 2022.
In February, Russia’s invasion of Ukraine –
FOOD INSECURITY: with the resulting Black Sea blockade imposed on
Ukrainian exports and harsh European sanctions
FALSE ALARM? against Russian and Belarusian manufacturers –
was a rude awakening for those Europeans who
saw large-scale famine as a legacy of the 20th
Tommaso Emiliani century.
EIT Food As the war remains on the European Union’s
doorstep and looks set to continue into the
depths of winter, the public debate on energy
must not overlook the critical state of the
supply, for farming, of such key resources as
grain and fertiliser. Domestically, the resilience
of the single market means Europe is unlikely
to be threatened directly by food shortages, but
soaring energy prices have pushed up agricultural
production costs, pushing down the living
standards of farmers and the purchasing power
of consumers.

Tommaso Emiliani, EIT Strategic Synergies Cluster

Manager. | 21

Outside the Union, the effective absence of
agricultural superpowers Russia, Ukraine
and Belarus from global trade has had serious
repercussions for nations in the Middle East,
and North and East Africa that are structurally
dependent on imports of agri-foods. Great
volatility in Europe and, especially, the
Mediterranean is being exacerbated by an
inability to diversify the supply of cereal crops,
by the limited availability of the fertilisers needed
to cultivate fields in parts of the world that suffer
from less favourable weather conditions and by
the effects of galloping inflation on the budgets
of crisis-hit states.
AN ECONOMIC CRISIS WITH
STRUCTURAL CAUSES
As early as January 2022 – thus before the
Russian invasion –, the FAO Food Price Index, an
indicator that monitors price trends for a basket
of basic commodities in global markets, reached
its highest levels since 2008, the year when the
global food crisis began to cause popular uprisings
and political instability that would ultimately be
among the triggers for the “Arab Springs”. This
situation was generated by at least five orders of
structural factors
1) Demographic trends – the world’s population
reached 8 billion in 2022, with that of North Africa
and the Middle East growing almost fourfold in
the past four decades. Agricultural output has
been unable to keep pace with such a sudden
increase, particularly as these desert-dominated
countries are beset by conditions that render
stable increases in agricultural yields impossible;
2) Disastrous effects of climate change – the
United Nations Framework Convention on
Climate Change (UNFCCC) has labelled the
Mediterranean a hotspot for climate change
Food Insecurity: False Alarm?
THE WORLD IN 2023
since the warming of the Earth is happening 20%
faster there than the rest of the world. This is felt
particularly in countries that suffer from acute
water shortages - places where the increased
aridity and drought drive competition for water
among humans, livestock and crops;
3) Urbanisation – the trend to abandon rural
areas for urban centres, thus creating sprawling
metropolises, has become the norm even in
North Africa and the Middle East, with the added
peculiarity of a lack of mid-sized towns and cities
that can act as a sort of glue between different
realities. Leaving the countryside is tied to giving
up a farming lifestyle synonymous with strenuous
hours and low-paying work in pursuit of Western-
style urban cultural tendencies. Such an
exodus is extremely worrisome, especially as our
new climate-changed world, with its different
production demands, desperately needs the
energy and enthusiasm of a younger generation
that is educated and au fait with technology so as
to foster much needed innovation in agriculture;
4) Globalisation of diets – the globalisation
of behavioural patterns has brought about a
homogenisation of diets that has driven the
introduction of foods not found in local cultures,
highly processed foods and sugary drinks. On
the one hand, this has resulted in a dependence
on imports to source foods that are unlikely
to be grown locally and, on the other hand, a
considerable increase in the so-called double
burden of obesity and malnutrition;
5) Lasting Covid-19 pandemic – lockdowns
have had devastating effects for the most
fragile segments of society and a significant
impact on small and medium-sized businesses.
In North Africa and the Middle East the informal
agricultural economy is prevalent and already
meagre social security measures have been
| 22

precluded for those social groups who do not pay
taxes and are almost invisible to welfare services.
In addition, as tourism has dropped off completely,
it has resulted in the loss of essential revenues
and helped deplete the economic resources
available to states that provide bread subsidies as
a structural part of their stability policies.
This framework of pre-existing fragilities was hit by
the seismic wave of the war in Ukraine, involving
two countries that alone account for 12% of total
calories traded in the world; they are leading
exporters of wheat, corn, barley, sunflower
seeds and potash; and they provide between
60% and 80% of the cereal crops for countries
such as Egypt, Syria, Algeria and Lebanon.
INTERNATIONAL SCENARIO: POWER GAMES
CONFIRM THE STRATEGIC IMPORTANCE
OF AGRICULTURE
The war in Ukraine caused immediate reactions
on the chessboard of international affairs. First,
the global drop in available grain and fertilisers
- due to the naval blockade of Ukrainian ports and
Russia’s refusal to export to a growing number of
countries that it saw as hostile - caused prices to
soar and a rush by some major powers to stockpile
foodstuffs. China is a case in point: it intensified
the process it began during the Covid-19
outbreak to such a degree that, according to
some estimates, it now has half of the world’s
grain reserves in its silos; India is another example:
in May it ordered a ban on exports of wheat flour –
of which it is the world’s second largest producer
– citing the need to protect its people. Such
restrictions have led to calls to form a ‘Grain
OPEC’ i.e., formalised cooperation among some
of the world’s largest producers (US, EU, Canada,
Brazil, Argentina, Ukraine) that would allow, inter
alia, an agreement on export quotas.
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
In opposition to this idea, the United Nations’
governance approach has made clear – through
the stance adopted by the FAO alongside that
of the World Trade Organization – that it is
vehemently opposed to any distortion of the
free market. In contrast, the efforts by the United
Nations (and to a lesser extent the European
Union) to keep the seas open and the trade in grain
and fertiliser flowing has propitiated the only real
diplomatic negotiating success since the conflict
began: in Istanbul, on 27 July, multiple bilateral
meetings between the team of UN Secretary
General Guterres and Turkish Defence Minister
Akar on the one side, and emissaries from Russia
and Ukraine on the other, led to the UN Black Sea
Grain Initiative, an agreement to unblock more
than 11 million tonnes of grain previously held
in silos in Ukrainian ports under a Russian naval
blockade. The agreement was originally due to
expire in November, but it was recently renewed
until 15 March 2023 despite Russia having
repeatedly threatened to withdraw unless the EU
removed the stifling sanctions it is subject to. The
future of the agreement remains in the balance,
but the diplomatic success enjoyed by Turkish
President Erdogan because of the Black Sea
Grain Initiative shows the political capital at stake
for those leaders (European and international)
who prove capable of acting decisively by
combining the pursuit of national strategic goals
with protecting global food security.
EUROPE: THE FALSE DICHOTOMY BETWEEN
INCREASING PRODUCTIVITY AND COMBATING
CLIMATE CHANGE
In the EU, the war in Ukraine has opened a
new chapter in the clash between agri-food
producers and environmentalists over the future
of continental agri-food systems. In European
institutions, this tension is reflected in the
| 23

seemingly opposing geopolitical visions of two
European Commissioners. On the one hand, the
Polish Agriculture Commissioner and conservative
Wojciechowski sees it as necessary to increase
European output to avert any risk of a food crisis,
to ease pressure on global markets by bringing
in European grain, and for Europe to portray itself
as an influential regional player that is working to
support a hungry neighbourhood. On the other
hand, the Dutch Executive Vice-President and
Commissioner for Climate Action and socialist
Timmermans sees it as necessary for Europe’s
increased geopolitical role to inevitably involve
reducing strategic dependence on Russian
fertilisers and, more generally, protecting the
agricultural ecosystem to ensure long-term
productivity.
In truth, this seeming dichotomy of views is
actually a dialectic: a forward-looking policy
has to integrate the two views because science
has proven that, on one side, intensive use of
agricultural soils at current levels would lead
to a drop in European production in the long
run and, on other side, an environmentally
sensitive agricultural policy that fails to meet
the growing need for food would produce even
more catastrophic effects than those caused by
climate change.
POLITICAL AND TECHNOLOGICAL INNOVATION:
NO SILVER BULLETS
2022 was a year of intense legislative and policy
proliferation for agri-food sustainability. For the
first time in the history of climate summits, COP27
included a pavilion focusing solely on adaptation
and mitigation measures to combat the impact
of agriculture on climate change. Although
COP’s conclusions avoid any reference to “agri-
food systems”, favouring a narrower view only
of agriculture, the Koronivia Joint Work Group –
Food Insecurity: False Alarm?
THE WORLD IN 2023
the only operational arm of the UNFCCC dealing
with food security – adopted a new four-year
programme that focuses on rolling out practical
solutions.
In Europe, the National Strategic Plans sent by
the 27 EU countries to the European Commission
as a condition for receiving funds from the new
Common Agricultural Policy were approved
at the very last minute, with the Netherlands
being the last country to get the green light
as the institutions strongly objected to the
environmental impact and the excessive use of
pesticides in the plan.
In terms of measures to protect the environment,
the Commission recently put forward a legislative
proposal to identify standards for carbon farming,
that is, the practice of farmers storing extra
carbon in the soil through their crops, thus helping
achieve the European goal of “zero emissions
by 2050”. The proposal was greeted with equal
acclaim and criticism by European farmers’
associations, providing a clear indication of how
empowering farmers in climate action is seen as
both a threat and opportunity, depending on one’s
geographical and industrial standpoints.
Turning to the fertiliser crisis, the Commission
published a communication on short- and
medium-term measures to curb dependence on
Russian and Belarusian imports. However, the
agri-food industry has continually pointed out that,
in the language of Brussels, “communications”
are different from “strategies” in that the former
are not backed by actual legislative proposals.
At the same time, the European Union has
initiated the legislative process in several areas
that are closely linked to the continental agri-
food industry.  The deforestation bill is designed
to reduce the environmental impact of importing
products made using unsustainable processes
| 24
 THE CALM AFTER THE STORMS...
REALLY?

in other parts of the world. This includes beef,

cocoa, coffee and palm-oil derivatives.  On the
other hand, the new circular economy legislative
package includes a section on food industry
packaging and labels. The stated goal is to raise
European performance in an area in which agri-
food systems have shown particularly marked
inefficiency: food waste.
Finally, an extraordinary and very recent scientific
innovation could have a positive impact on
long-term agri-food sustainability. The
announcement by a US research institute of it
achieving nuclear fusion with a net energy gain
opens up unprecedented opportunities in many
fields, including of course agriculture. In the
future, were the applied use of nuclear energy to
make it possible to replace the fossil fuels used
in farming machinery and power generation with
clean energy, a not insignificant side effect would
be freeing up global arable land currently used
for the production of bio-fuels - that is, oil-derived
fuels for which specific cereal crops are grown and
which bring an increased risk of deforestation. It
is still going to take many years for the scientific
discovery of this nuclear fusion to find practical
application. And so 2023 looks destined to be
another year of intense geopolitical challenges
and far-reaching opportunities for international
agri-food players.

The World in 2023 | 25

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

I
n 2022, the US-China relationship went
through several important shifts. First, the

US-CHINA: China-Russia relationship took on greater

importance for US strategy, as the United States

WHERE DOES sought to ensure that Chinese backing for

Moscow translated into as little practical support

COMPETITION as possible. US policy towards Russia was also

crafted with specific reference to the potential

LEAD? application of the measures pursued – such as

financial sanctions – towards China too. Second,
the US adjusted the parameters of its approach
to export controls on advanced semiconductors,
Andrew Small with ramifications that will cut across the whole of
German Marshall Fund (GMF) the Chinese technology industry. Third, Taiwan
rose to the fore of the bilateral relationship, as a
result of greater US concerns about the risks of a
Chinese military intervention and Beijing’s forceful
reactions to Speaker Pelosi’s visit in August. This
prompted the fourth development of note: the
first in-person summit between Xi and Biden
since the latter assumed the US presidency, with

Andrew Small is a Senior Transatlantic Fellow at the

German Marshall Fund of the United States. | 26

both Washington and Beijing using the meeting to
“place a floor“ under a relationship that seemed to
be on a potentially dangerous slide.
In each instance, we can expect the same trends
to continue in 2023. The new US National Security
Strategy brought to the fore the idea that two
regions – the Atlantic and the Indo-Pacific –
are at the core of US strategy and increasingly
intertwined. For the bulk of major decisions
over US commitments in Europe, and in Ukraine
specifically, China lurks in the background of US
calculations, while there is an ongoing effort to
apply the lessons of the conflict to prepare for
future Taiwan contingencies.
The same holds true of the US decision on
semiconductors, which was only the first step
in a more robust set of national and economic
security measures directed at China. Not only
can we expect new measures in areas such as
outbound investment, we can also anticipate the
application of the same principles in other fields,
from quantum computing to biotechnology.
Neither will Taiwan recede from the two sides’
focus: US concerns about the measures China is
pursuing to coerce Taiwan and change the status
quo in the Taiwan Strait are growing. Nonetheless,
as the summit in Bali indicated, the hope is that
there will be greater scope to manage the related
political and security dynamics more carefully
and at least avoid any miscalculations about each
other’s intentions.
This applies beyond Taiwan too: after a period,
during the pandemic, in which the content of
the bilateral relationship between China and the
United States was kept to a minimum, we can
expect the resumption of something resembling
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
normal great power diplomacy. This will include
finding ways at least to transact with each other
on shared global challenges, even if the scope
for significant cooperation is still understood to be
limited.
For Europe, these developments have a number
of implications. The most important is not to
misinterpret what is going on either in the US-
China relationship or in Chinese foreign policy.
The recent Xi-Biden summit did not represent
a deeper re-engagement or shift in approach
on either side, but was essentially focused on
responsible handling of the competitive and
conflictual dynamics in the relationship. This was
not a return even to the summits of the Trump
administration but rather, as some have dubbed
it, the first summit of the next Cold War.
Similarly, the direction that Xi Jinping signalled
after the 20th Party Congress is very clear: China
is now embarked on a period of struggle not
only with the United States but with the liberal
democracies writ large. Beijing’s aim is to divide
them. This will not translate into a revisiting of the
fundamentals of its relationship with Moscow,
for instance, which is still seen as an essential
partner in this wider struggle. It will also not
result in any deviation from Xi’s push for a set of
international economic relationships that deepen
and weaponise other countries’ dependence on
China while reducing Chinese reliance on the rest
of the world. For all that European leaders claim
they “don’t want to see decoupling”, this is exactly
what China is pursuing – except in discrete areas
where it sees very specific technological needs
that it cannot transcend or political advantage
that it can use. Meanwhile, the China-Taiwan
situation is going to enter an even riskier phase in
| 27
 THE WORLD IN 2023

the period beyond 2023, particularly in the lead-

up to the next Taiwanese elections, making it all
the more important that Europe does its part to
help tilt Chinese calculations against any decision
to go to war.
At present, Europe risks losing out on multiple
fronts – deepening its own reliance on China,
weakening its leverage over China by failing to
team up effectively with other partners or even
pulling together at EU level, and failing to shape
or influence major US decisions on matters
ranging from technology controls to industrial
subsidies as a result of its own lesser imperative
to move on these issues. Europe is always hoping
that it can relegate the China issue from the level
of “urgent” to “important”, given the scale of the
other challenges it faces. In 2023, that is not an
option that is available.

US-China: Where Does Competition Lead? | 28

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

T
hree years ago, almost exactly, the first
PANDEMIC: cases of an “atypical pneumonia” began

ARE WE SAFE
to appear at hospitals in Wuhan, China.
Two years and eleven months ago, the agent

NOW? causing those cases was identified, as a “novel”

coronavirus, and its genome sequence was
released to the world, thanks to the work and the
courage of a scientist named Yong-Zhen Zhang
David Quammen and his colleagues in Shanghai and Sydney,
Writer and author of Breathless Australia. The virus was “novel” in the sense that
it had never before been detected in humans. A
month later, it had a name, conferred by the World
Health Organization; it was dubbed SARS-CoV-2,
and the disease that it causes became Covid-19.
One month more and the WHO declared officially
what disease scientists already well knew: that
Covid-19 was a pandemic.
It still is a pandemic. The virus is everywhere,
it is still transmitting swiftly and invisibly from

David Quammen is an American science, nature, and

travel writer. He is the author of Spillover. His last book
is Breathless (2022). | 29

person to person, it is still causing serious disease
among susceptible people, and it is still causing
death – roughly 1,500 deaths each day in the
world, as I write this. If that doesn’t constitute a
“pandemic,” how would you define the word?
Some sensible people, including Joe Biden,
have said, “The pandemic is over.” This cheerful
declaration is sometimes supported by saying
that the virus has entered its “endemic” phase,
a situation supposedly less severe and alarming
than pandemic. But what does “endemic” mean?
That the dangerous thing remains permanently
present in a particular area, and disease outbreaks
there will be continuous or recurrent. Should that
be reassuring as applied to Covid-19? Not very.
What’s to be the “particular area” of Covid-19
endemicity? Planet Earth. Does this mean that
we no longer need concern ourselves with the
virus? No. Malaria (not a viral disease, but an
ancient killer) is endemic to sub-Saharan Africa
and it still causes a half million deaths there every
year. Endemicity is not the name of a long-term
solution to Covid-19. It’s the name of a fatalism
reflecting absence of a long-term solution.
Another form of false reassurance, sometimes
offered by half-informed people, is that this
virus like other viruses will grow less virulent
over time, less harmful to people, as it reaches
accommodation with its human hosts. It will
shrink in ferocity and become merely a nuisance,
like viruses causing the common cold. Aren’t
some of those cold viruses also coronaviruses
themselves?
Yes . . . but. It’s true that four other coronaviruses
do infect humans, causing respiratory symptoms
like a common cold – their names are 229E, NL63,
OC43, and HKU1. But none of those four seems
Pandemic: Are We Safe Now?
THE WORLD IN 2023
to have been ferocious when it first infected
people, none are known to have caused an initial
pandemic, and none are known to have evolved
toward being milder in humans. (That list doesn’t
include SARS-CoV-1, the original SARS virus of
2003, or the MERS coronavirus, which is another
killer.) In fact, the whole notion that viruses
necessarily evolve toward lesser virulence
in humans is a mistake, based on failure to
understand the basics of evolutionary theory.
So long as a certain strain of virus is achieving
successful transmission – infecting more people
– it will be favoured by evolution, whether it kills its
victims or not. Darwinian natural selection has no
say in the fate of infected people after they have
passed the virus along. If a milder variant of the
virus proves more successful at transmission, if it
infects more people more quickly, that variant will
spread and predominate, yes. And it’s possible that
the Omicron variant reflects that principle, being
less lethal than the dominant variant preceding
it, Delta. But even Omicron is still killing people
today and, as it diversifies wildly, exploring other
possible avenues to evolutionary success.
This virus, safe to say, will never be eradicated
from the human population. Eradication of a
human-infecting virus is rare, a very high goal,
and though we have achieved that with smallpox,
we have failed to achieve eradication of the
measles virus or the polio virus, despite decades
of concerted and expensive efforts. Furthermore,
measles and polio are both human-only viruses,
not zoonotic pathogens (which pass between
nonhuman animals and humans) that can also
hide out in bats, rodents, or some other animal
host. SARS-CoV-2 has shown itself to be an
especially versatile virus, capable of infecting not
| 30
 THE CALM AFTER THE STORMS...
REALLY?

just people but also dogs, cats, tigers, lions, snow year, or in five years, or in ten. Meanwhile, before
leopards, gorillas, hamsters, and mink, among that next pandemic threat arrives, we need to
other mammals. It has gone back to the wild in strengthen our national capacities in health
some creatures, notably white-tailed deer in care for all, and our international support for
the American Midwest. By now it’s all around us. training of health-care professionals and disease
SARS-CoV-2 will be part of the human future, not scientists (including veterinarians) in low- and
just a bad memory from the years 2019-2022. middle-income countries; we need to bolster
the international networks of pathogen detection
But we can deal with it. We can constrain it, as
and outbreak surveillance that exist, and to vastly
we have constrained polio and measles and
increase the number of tendrils in those networks,
other formidable viral enemies. We have science
so that menacing disease events can be detected
and money on our side – we need to trust and
early and contained; and we need to be more
support the former, and to spend boldly of the
watchful especially at all the dangerous places
latter. We have intelligence and wisdom – yes,
where humans come into disruptive contact with
even nonscientists like you and me! We need to
natural ecosystems, including wildlife and the
spend those resources also, by electing national
viruses they carry.
leaders who appreciate the seriousness of this
problem, by filling the airwaves and the internet We can’t allow ourselves to be so tired that we
with accurate journalism and rational commentary close our eyes, sleepily, to the lessons of Covid-19.
(to weigh against all the misinformation and Take a deep breath, with the turn of the new year,
melodramatic falsity), and by educating our 2023, and onward we go. We will summon our
children, even from a relatively young age, in the strength and determination. I think the word in
wonders and realities of science, and in history, Italian is inesauribile? We will be inexhaustible.
and in critical thinking.
Is it possible to educate an 11-year-old girl or boy in
critical thinking? I believe it is. You start by alerting
them to two tools of discourse and judgment,
tools that already exist in their vocabularies. You
encourage them to apply those tools whenever
they read, hear, or encounter a dramatic or suspect
assertion. The first tool is the question Why? The
second tool is the question How do you know?
We are all tired of Covid-19, but we still have
work to do. We need to steel ourselves for
the continuing battle against this virus, and to
prepare ourselves for the next one, still another
“novel” virus that will appear among humans in a

The World in 2023 | 31

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

2
022 was another vintage year for national
populism. Contrary to predictions after the

POPULISMS: Brexit and Trump revolts, in 2016, and then

during the Covid-19 pandemic, when analysts

BACK TO REALITY? forecast that public support for populism would

fade as experts returned to the forefront, during
the last year we have seen the opposite.
In France, Marine Le Pen and National Rally
Matthew James Goodwin
enjoyed their strongest ever result at presidential
University of Kent
and then legislative elections. In Italy, Georgia
Meloni and Brothers of Italy seemingly came from
nowhere to finish first at nationwide elections
and enter government. And in Sweden, Spain
and Hungary national populists attracted record
support. Even in cases where they lost power or
seemingly underperformed expectations, as in
Brazil or the midterm elections in America, they
have continued to mobilise considerable support
and, as we argued in our 2018 book, National
Populism, look set to remain as serious political
players for the foreseeable future.

Matthew James Goodwin is a British academic. He

is Professor of Politics in the School of Politics and
International Relations at the University of Kent. As for
September 2022 he is a Commisioner of the Social
Mobility Commission. He is co-author of National
Populism: The Revolt Against Liberal Democracy. | 32

What explains this sustained support? On one
level, national populism is continuing to benefit
from four, deep-rooted currents which have
been visible for many years. They are tapping
into widespread public distrust with established
political parties, media and institutions which
are failing to give sufficient representation to
workers. They are benefitting from widespread
feelings of relative deprivation, with many people
in contemporary capitalist societies no longer
believing that, relative to other groups in society,
they are no being treated with the same degree of
respect, social status and cultural honour, which
is especially true for working class men. They are
also increasingly prospering from growing fears in
Western societies about the actual or perceived
destruction of established cultures, traditions and
ways of life, especially due to mass immigration
and a more radical “woke” progressivism which
are stoking fears about cultural loss. And, lastly,
they are being helped by the way in which Western
democracies have now entered a new era of
dealignment, in which the old bonds between
voters and the established parties are now
rapidly breaking down, which is making it much
easier for new parties and populist outsiders to
breakthrough. In Western democracies such as
Britain, for example, no less than 60 per cent of
voters have switched between parties over the
last decade.
On another level, national populists are now also
clearly benefitting from the more recent fallout
of rising inflation and a cost-of-living crisis due
to the war in Ukraine, the energy crisis and the
economic fallout of the Covid-19 pandemic which
has increased debt and volatility. Already, across
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
Western democracies, we can see the political
implications of inflation reflected in the way in
which, throughout 2022, incumbent governments
have either been thrown out of power or
dramatically weakened. This is consistent with
what research on inflation suggests, namely that
it tends to coincide with a sharp decline in popular
support for incumbent governments, which get
blamed for rising prices and presiding over the
crisis.
Growing industrial unrest in the form of strikes
and protests has also been shown to damage
incumbent governments, with one study finding
that large-scale strikes erode public support for
governing parties, which in turn makes it easier
for outsider parties and populist challengers
to breakthrough. With much of the West now
teetering on the brink of recession, or already
in recession, this difficult backdrop looks set to
remain in place for 2023, and beyond. Within the
Eurozone, a major corruption scandal, the growing
economic divergence between northern and
southern member states due to higher interest
rates and continued public anxiety over legal
and illegal migration will also stoke this ongoing
potential for populists.
If one of the key messages of the 2010s was
that populists thrive against the backdrop of a
major economic crisis then it seems likely that
the 2020s will continue to deliver further political
shocks. While it might be comforting to think
that liberal democracy has reasserted itself, any
objective assessment of the evidence would
lead us to a very different conclusion. National
populism remains as strong as ever and may yet
reach even higher peaks.
| 33
 IL MONDO CHE VERRÀ 2023

THE WORLD IN
2023

Clouds in the Sky

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

T
he European Union needs to be strategic
in its engagement with the outside world

EUROPEAN in 2023. This is particularly true in relations

with the United States, China and Russia. That

COHESION: strategic engagement will involve making hard

choices – choices that too often hide behind

THE WIDENING the phrases that show up in European strategy

documents, like principled pragmatism, effective

RIFT? multilateralism, cooperative regionalism and

strategic autonomy. Europeans have a strong
sense of shared values. They believe in the
importance of democracy, human rights, the rule of
Erik Jones law, environmental sustainability and the peaceful
European University Institute (EUI) resolution of conflict. Where Europeans struggle
is when those values appear to be in tension with
one-another either because resources are limited
and priorities differ from one European to the
next, or because outside forces and actors force
Europeans to make compromises. These are the
moments when values are not a good guide,
because they exist on all sides of the argument.

Erik Jones is Director of the Robert Schuman Centre

for Advanced Studies at the European University
Institute. | 35

The transatlantic relationship presents a host
of tough decisions. Europeans and Americans
have different ways of thinking about public
procurement, for example. This has become
a major concern in the European response to
the Biden Administration’s Inflation Reduction
Act. Europeans believe strongly in levelling the
playing field; Americans want the home team to
have a local advantage. This difference in public
procurement has always existed. Europeans have
no more hope of convincing Americans to stop
buying local than Americans have of convincing
Europeans to abandon their rules for state aid
when different Member States have such different
abilities to distort market competition.
By the same token, Europeans have a strong
interest in seeing the United States take
effective climate action. Despite its name, the
Inflation Reduction Act is the most important piece
of climate legislation passed through Congress
in recent memory. Europeans should be hoping
for the success of that legislation. Europeans also
have a strong interest in encouraging greater
transatlantic trade and investment. Most important,
Europeans need to work with the United States in
matters of security, technological innovation and
the joint exercise of global leadership. Whatever
Europeans choose to address in this tangled web
of concerns, that choice should be strategic.
The choices Europeans face in dealing with
China should be strategic as well. Europeans have
a long history of making difficult compromises
where China is concerned. China’s record in
terms of human rights and the rule of law is no
secret. Neither is China’s approach to foreign
direct investment, public procurement or market
competition. In many ways, the obvious nature of
European Cohesion: The Widening Rift?
THE WORLD IN 2023
the compromises required to do business with
China made it easy to focus on the economic
gains to be had from engagement. The European
Union did not play a strong role in the deepening
involvement of European governments, firms
and individuals in China; these actors were free
to make their own compromises in the pursuit of
unique advantages.
Now it is clear that this individualistic approach has
reached its limits. China is too influential and the
compromises the Chinese government can demand
from individuals, firms and national governments are
too important for Europeans as a collective to ignore.
Moreover, the Chinese government has a different
agenda in those areas where European values
are most affected. If Europeans are to assert their
interests, they will have to do so together. Indeed,
China may be powerful enough that Europeans
will only have an effective voice when working in
partnership with the United States. That is a choice
Europeans will have to make.
A third set of choices concerns Russia and Ukraine.
The European Union responded to Russia’s war
on Ukraine with unity, determination and flexibility.
The introduction of sanctions, the provision of
assistance and the reception of innocent civilians
displaced by the conflict has been impressive. So
has the ability of European institutions to redeploy
finances, to coordinate assistance and create new
forms of institutional solidarity for the people of
Ukraine, Moldova and Georgia. The hard choice is
what to do next. This war represents a major turning
point in European political development where
muddling through is not an option. Having Member
State governments use the war as an opportunity
to play games with the European Union’s decision-
making procedures should not be an option either.
| 36

The choices Europeans face in the Russia-Ukraine
war will have global implications. They will have
a powerful impact on relations with the United
States and China. They will also have an impact on
how the European Union relates to Ukraine and
Russia. Somehow Europeans will have to balance
the desire for peace with the requirements for
stability, both now and over the longer term. More
fundamentally, the European Union will have to
decide whether to treat Ukrainians and Russians
as “European” – as actors and not objects in this
collective decision-making. That choice may
sound like a matter of identity politics, but it
is strategic. How the European Union chooses
to treat Ukrainians and Russians in resolving this
conflict will determine how those people regard
their position in Europe. And it is a choice that
Europeans cannot escape.
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
Unfortunately, this kind of strategic decision
making is easier said than done. The European
Union is capable of great solidarity and focus, as
the early response to the war in Ukraine illustrates.
The incoming Swedish Presidency will work hard
to maintain that level of unity to begin preparing
for the huge efforts that will be required to help
Ukraine recover once the war comes to an end.
And yet the governments of Europe are also
easily distracted and divided. The debate over the
Inflation Reduction Act is likely to continue focusing
on the needs of individuals sectors, like automotive
or batteries. The debate over China will take place
primarily at the national level, with countries like
Germany and Hungary seeking to carve out special
relationships. The challenge for the European
Union will be to avoid such distractions and focus
on the wider European interest.
| 37
 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
IN VERRÀ
2023 2022
FOR INTERNATIONAL
POLITICAL STUDIES

T
he Arab Spring, which started in Tunisia
in 2011, reaching Libya, Egypt, Syria, and

MENA: Yemen, lay dormant for over a decade until

2019, when it shook four other countries which

A THIRD WAVE OF stood on the sidelines in 2011: Algeria, Sudan,

Lebanon, and Iraq. This second wave, with more

ARAB SPRINGS or less the same collective action repertories,

showed that the spirit of revolt was still very much
alive and that the Arab Spring is not dead. It is a
ongoing process.
Dalia Ghanem
Although the outcomes differed, autocrats
EU Institute for Security Studies (EUISS)
provided citizens with generous handouts (when
available) in exchange for political calm and a
sufficient dose of repression to silence the last
voices of dissent. The demonstrators’ demands
for political participation, less corruption and
nepotism, more social justice, jobs, and dignity
were not met anywhere.
On the eve of the year 2023, the fundamental
causes of the Arab Spring continue to simmer
under the surface of Arab politics. State policies

Dalia Ghanem is a Senior Analyst at the EU Institute

for Security Studies (EUISS) in charge of the Middle
East and North Africa portfolio. | 38

in the MENA region continue to neglect social,
economic, and political grievances, which may
again plant the seed for instability in the region.
The revolts of 2011 produced those of 2019, which
will morph into a new protest wave, which might
be less silmiya (pacific) and hadhariya (civic) than
in 2011 and 2019. The triggers of a potential third
wave are related to 1) immutable socioeconomic
challenges, 2) government-related challenges,
and 3) globally connected challenges.
While it is true that the war in Ukraine is offering
oil- and gas-rich countries opportunities to
sustain their inefficient economies a bit longer, it
is beyond argument that the rentier state is not
sustainable, and the size of the carrot is shrinking.
In many countries, basic needs are not met, food
prices are skyrocketing, and the war in Ukraine
aggravated the food security crisis.
Countries have not been hit evenly: Egypt,
Lebanon, Tunisia, Sudan, and Yemen have been
hit harder than Jordan, Morocco, and Algeria.
Lebanon imports 80% of its wheat from Ukraine,
Tunisia 48%, and Sudan imports 90% of its wheat
from Russia. On the other hand, Jordan imports
only 17%, Morocco 7%, and Algeria less than 4%.
However, food insecurity plagues majorities of
citizens in six out of 10 countries surveyed by the
Arab Barometer in 2021-2022. Majorities ranging
from 53% in Libya to 68% in Egypt report running
out of food before having the funds to purchase
more. In nine out of ten MENA countries, more
than half of the population is concerned about
running out of food before they can obtain more.
The Covid-19 pandemic also aggravated already
fragile economies. Inflation rates stood at 6% in
the Middle East against 7.2% in North Africa. There
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
has been a massive loss of jobs during Covid-19.
In Algeria, for instance, no less than half a million
people lost their jobs due to the pandemic.
In Jordan, 47% of those employed before the
lockdown (1-5 March 2020) were out of work a
year later. A majority of Arab states cannot afford
to provide jobs even at the local level because
of the serious weakness of the industrial sector,
the decline in agriculture, and the massive
urbanisation exacerbating territorial inequalities.
This has an impact on citizens’ trust in the
government. Trust in institutions has eroded
throughout the pandemic: only 10% in Libya, 19%
in Iraq, 19% in Lebanon, 20% in Tunisia, and 33% in
Sudan, to give a few examples from the latest Arab
Barometer. To add a layer of complexity, there is
no intergenerational transition and an aging elite
that sees itself and is perceived by many in the
population as the last bulwark against the political
vacuum.
During the Covid-19 pandemic, which impacted
the health and education sectors, citizens saw
how catastrophic crisis management was. While
there is little spending on education and health,
defence spending exploded in the region. In 2020,
defence spending represented 6.7% of GDP in
Algeria, increasing to 9.1% in 2021; 6.5% in Kuwait;
and 15.5% in Libya.
Finally, global issues will also contribute to
triggering the third wave, such as climate change
and its effect on water. Current water usage
patterns and the consequences of climate change
will lead to serious water scarcity in the MENA.
Worldwide, 12 of the 17 most water-stressed
countries are situated in the MENA: Algeria, Libya,
Egypt, Syria, Jordan, Yemen, Kuwait, the United
| 39
 THE WORLD IN 2023

Arab Emirates, Saudi Arabia, Qatar, Bahrain, and

Oman. Water demonstrations broke out in Libya
and Algeria, among others. Lebanon is another
example: Shortages of funding, fuel, and supplies
have affected water pumping, restricting people’s
access to safe water.
The above factors might lead to another wave
of upheaval in the next five years. There is also a
serious risk of intra-regional conflicts as conflicts
start to expand, and everything is connected and
thus more complicated to solve. The regional
rivalry between Iran, Saudi Arabia, Turkey, and
Israel must be taken into account when thinking
about Arab futures as well.

MENA: A Third Wave of Arab Springs? | 40

 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
IN VERRÀ
2023 2022
FOR INTERNATIONAL
POLITICAL STUDIES

T
he rise of the global South is no longer a
matter of imagination and aspiration alone.

GLOBAL SOUTH: It is emerging as a reality. Its integration

into the global economy has generated many

FROM MITH opportunities, as the share of the South in

intermediate products increased from 40% in 2002

TO REALITY? to 53% in 2021. Even if China is removed from the

South, the rise of the rest of the South follows the
same trend. Greater global integration, however,
also means greater vulnerability.
Sachin Chaturvedi
Within the last 10 months, more than 55 developing
Research and Information System (RIS)
and least developed countries have knocked at
the door of the IMF for support. The IMF would
have to consider surcharge reduction for the
next 2-3 years, extend access limits for another
two years after 2023 and re-channel SDRs to call
for more pledges than have been seen so far. This
would also require urgent attention on further
capitalisation of regional development banks for
supporting the Global South.

Professor Sachin Chaturvedi is currently Director

General at the Research and Information System for
Developing Countries (RIS). | 41

In the forthcoming G20 Presidency, India has
proposed the idea of being the voice of the South.
Prime Minister Narendra Modi has also shown a
willingness to work closely with the G7 and Russia.
THE GLOBAL SOUTH AND NORTH
In the recent past, the relevance of North and South
partnering together in third countries has gone up
remarkably. The term “triangular cooperation” is
now widely used to describe such engagements
in the realm of development finance. However, it
has gone far beyond this to other areas of global
governance. The current G20 Presidency of
India is trying to further build on the success of
Indonesia to bring together North, South, East and
West. The world has to go beyond the Ukraine
crisis and consequent disruption of supply chains.
The current context of geopolitical confrontation
needs to be replaced with cooperation and
partnerships. The current approaches have
pushed the world into today’s quagmire of
polycrises and millions below the poverty line. The
North-South partnership or triangular cooperation
is probably the only way forward, if platforms like
the G20 are to remain relevant.
The current competitive positioning of the US
and China has exacerbated polarisation and
disruption, leading to inflation and eventually
to global recession. As global history tells us, no
winners emerge from confrontations of this type:
only losers.
SELF-GOVERNANCE
The rise of the South also matters because of
its inclusive character and its ability to carry all
countries along. There is hardly any economy
Global South: From Mith to Reality?
THE WORLD IN 2023
in the South which is not engaged in taking the
fraternity forward, in a spirit of partnership, to
sharing with compassion and engagement. The
idea, however, also requires self-governance for
better outcomes.
The ability to support fellow developing countries
should not end up in narrow commercial interests
or in going off the rails due to an absence of
good governance. The nations under transition
from LDCs to developing country status require
a focused strategy with clear commitment,
timelines and resources.
While the outside world, including the global
South, may provide resources, the governance
part has to come from national leaderships
from these countries themselves. In the near
future several countries, including Nepal,
Bangladesh and Bhutan will need financial
support and handholding. In March 2022, the UN
also recognised 15 more countries for the next
decade. The UN Committee for Development
Policy, which established the category of Least
Developed Countries (LDCs) since 1971, has
evolved multivariate criteria for graduation.
The other source of friction across the global South
is the global debt crisis. The experience across
African and some other countries has shown
that recipient countries, in the name of being
provided with development assistance, have
been entrapped in debt crises. The polarisation
and fragmentation of the Paris commitments and
other global instruments have further complicated
debt resolution for LDCs and other developing
countries. The crisis of Sri Lanka and other
developing countries has clearly demonstrated
the power of collective action. Global debt relief
| 42
 THE CALM AFTER THE STORMS...
REALLY?

by official creditors was made available through

the G20 Debt Service Suspension Initiative (DSSI),
which the IMF, together with the World Bank,
helped to support. The initiative took effect in May
2020 and delivered $12.9 billion in debt relief to
48 countries before it expired in December 2021.
In 2023, if the global South is to move together,
it must introduce these elements of self-
governance and desist from greed, self-
aggrandisement and vainglory. The global South
must remain firmly committed to the Buenos
Aires Plan of Action and Addis Ababa Action
Agenda of collectively moving forward on the
path of achieving sustainable development goals
(SDGs). The Southern value systems and the
importance of ethics in international relations,
financial architecture and technology (including
AI) will play a vital role in avoiding any further
fragmentation.

The World in 2023 | 43

ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

RUSSIA, IRAN, CHINA:

REGIME FAILURE?

| 44
 ITALIAN INSTITUTE
IL
THEMONDO
WORLDCHE
IN VERRÀ
2023 2023
2022
FOR INTERNATIONAL
POLITICAL STUDIES

Russia
Andrei Kolesnikov
Carnegie Endowment for International Peace (CEIP)

T
he most plausible scenarios of Russia’s
development (or degradation) are inertial.
However, sometimes this development
becomes abrupt, and shocks appear. Like, for
example, the capture of Crimea in 2014, the
nullification of Putin’s terms and the poisoning of
Alexei Navalny in 2020, or the beginning of the
“special operation” in 2022. There have already been
several shocks within the war. For the population
of Russia, in addition to the start of the war itself,
the second shock is the partial mobilisation. For the
population of Ukraine, in addition to the ground
nightmare, it is the missile war.
Nevertheless, the inertial sluggishness of events
is no less important than the shocks. Big poll
numbers, dominant sentiments and the socio-
economic situation are all subject to erosion, but
slowly and inertially. It is erosion that will eat away
at the social and state fabric of Putin’s Russia next
year: the erosion of socio-economic indicators,
including the real disposable income of citizens;
the erosion of consumer sentiment; and the
erosion of the labour market, accompanied by
technologically regressive import substitution and
the primitivisation of the economy and, therefore,
jobs – all leading to an accumulation of anxiety
and discontent. But this will be slow and adaptive,
without collapses, disasters or mass protests.
THE NEW ABNORMAL
Violence, militarism, the sacralisation of the
state, the glorification of death for the fatherland,
imperial feelings, pride in dark and mythologized
pages of history – all of this is becoming an
encouraged social norm. Anticipatory obedience,
indifference, inability to think independently,
borrowing opinions from television and officials
(“the bosses know best”) – all of this has become
a mass phenomenon. And despite the high level
of anxiety and the fact that war fatigue is already
being felt and more people in recent months
would like to have peaceful negotiations, this trend
– the cultivation of obedience and indifference by
Russians – will continue to manifest itself in 2023.
There is a difference between those who
aggressively support Putin and the “operation”

Andrei Kolesnikov is a Senior Fellow at the Carnegie

Endowment for International Peace. He also works
with the Gaidar Institute for Economic Policy. | 45

and those who hesitate, have no opinion and
behave opportunistically only in order to live
relatively peacefully. There is also a difference
between these two categories and the roughly
20% of the population who do not openly support
Putin and the war. There is a generational
difference: the elderly, especially women (in fact,
many men in Russia do not live to a respectable
age), who repeat the mantras of Kremlin TV talk
shows, are more inclined to support any initiatives
of the authorities, the young are less so. But
overall – because of the demographic structure
of the society – the older generations decide
for the younger ones how they should live and
what (or whom) they should die for. They voted
for Putin, they are the main group that supports
authoritarianism and war, they express their
satisfaction with the military mobilisation and the
tightening of legislation on foreign agents, LGBT
people, etc.
All these factors will continue to apply by inertia
in the coming year. A significant part of the
population behaves as it would under occupation:
cautiously and in a conformist way. And Russia will
continue to lose its able-bodied and educated
population at the best ages in terms of economic
development: these people will flee from a
possible new mobilisation or seek education and
work abroad, seeing no prospects in Russia.
HOSTAGES OF AN AUTOCRAT
Putin has built an authoritarian “garrison state”
– a state organised to serve primarily its own
need for military security – with elements of
totalitarianism, forcing part of society to share
responsibility for the war; teachers are forced to
indoctrinate children and ideologists write special
Autocracies: Regime Failure? Russia
THE WORLD IN 2023
ideological courses for students. Moreover, for
many categories of citizens who depend on the
state for their jobs, silence is no longer enough –
sometimes they must publicly support the regime;
partial mobilisation has turned almost every man
into a potential soldier of Putin.
This model has not caused serious protests,
except for a few isolated cases, and is unlikely to
provoke them in the future. Yet the level of anxiety
among the population that resulted from the
mobilisation, as well as the increase in the number
of those willing to negotiate peace, indicates if not
an accumulation of discontent, then a clear war
fatigue. Putin will have to refresh his messages
to the population several times in 2023, alternating
between calm and mobilisation (primarily in the
emotional sense, but probably also in the military
sense) periods. So far, these messages have not
been formulated. And they are necessary because
in 2023 preparations for the main mobilisation
campaign of 2024 will begin – Russia’s presidential
elections. It makes no sense to cancel them. They
are a tool to demonstrate to the wavering masses
that the overwhelming majority of our compatriots
still support the dictator, and the best way to
survive in this system is to accept this as a fact.
We are unlikely to witness a split in the Russian
elites. At least they can’t do it publicly. No
conspiracies are possible when the establishment
members are afraid of Putin and, most importantly,
of each other. They are all hostages of the autocrat,
they are in the same submarine with him, and will
either resurface together or sink together. And so,
they prefer to serve him. Or at least pretend loyal
service.
| 46

In 2023, Putin will continue to play into the idea
of a “world majority”, i.e. Asia, Africa and Latin
America, which are supposedly supporting him.
However, being a prisoner of this illusion, he
will only alienate the former Soviet republics
(especially Kazakhstan) and increase Russia’s
dependence on China.
Possible new waves of military mobilisation,
martial law, the closure of the country, the use of
nuclear weapons, more mass repression within
the country – all these options remain more or
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
less plausible for 2023. For future generations,
these problems will be solved by the elderly, the
predominant age cohorts in society who are also
at the top of the power pyramid. Each of these
events could disrupt the relatively smooth flow of
the inertial scenario. There are rational arguments
against their occurrence. However, there were
a lot of rational arguments against the possible
invasion of Ukraine a year ago. And they did not
work.
| 47
 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
IN VERRÀ
2023 2022
FOR INTERNATIONAL
POLITICAL STUDIES

Iran
Aniseh Bassiri Tabrizi
Royal United Services Institute (RUSI) and ISPI

2
023 will be a crucial year for Iran  on the
domestic, the regional and the international
stages. The challenges the country will
face in each of these key areas and how the
establishment will handle them will shape the
future of Iran for years to come.
On the domestic front Iran will continue to
grapple with  tensions between state and
society. These have been growing over the past
few years but have been particularly acute in
2022, the year of the  “Women, Life, Freedom”
demonstrations.  What started as protests
triggered by rage over the killing of Mahsa Amini,
a 22-year-old woman of Kurdish origin detained
and then killed by the morality police simply
for loosely wearing the hijab, quickly evolved
into a  wider anti-government protest  across
the country. Nearly three months later,
demonstrations have still not been contained by
the regime, despite the crackdown by the security
forces. At the same time,  the leadership seems
unwilling to grant any concession or respond to
the protesters’ demands. The de facto stalemate
is likely to continue for the time being and, even
with demonstrations ending, the establishment
is unlikely to work towards mending the gap
between state and society. This means that, while
the stability of the regime might not be at risk, at
least for now, other demonstrations and sources
of tensions could emerge in the coming year,
potential drivers being the state of the economy
and the pressure on the day-to-day lives of a
large share of the population, or the broader
dissatisfaction with civil liberties.
The domestic picture will also continue to
affect Iran’s relations with international players,
particularly Western ones. With the Iranian
regime continuing its repression towards protests
and its lack of reforms, the West will most likely
gradually pursue its path towards downgrading
ties with Tehran.  Over the past few months,
besides condemning the violent crackdown on
demonstrators, several Western countries (EU, UK,
US and Canada) have introduced new sanctions
against individuals and entities  identified as
responsible for their role in the death of Mahsa

Aniseh Bassiri Tabrizi is a Senior Research Fellow

at the International Security Studies department,
Royal United Services Institute (RUSI), and she is an
Associate Research Fellow at ISPI. | 48

Amini and the violent response to the recent
demonstrations in Iran. Germany’s foreign office
went as far as to announce a downgrading of
bilateral relations with Iran – a policy which might
be adopted by other countries across Europe as
well. The supply of drones by Iran to Russia for
its war in Ukraine further decreases the chances
of an improvement of ties between Iran and the
West and, instead, increases the likelihood that
Iran will be isolated and subject to even more
pressure and sanctions. The trajectory therefore is
one of condemnation of Iran’s repression, support
for demonstrators and a focus on ways to curtail
Iran’s supply of weapons to Russia, thus moving
away from engagement and dialogue.
One of the clear repercussions will be on the
chances for the 2015 nuclear deal, known
as the  Joint Comprehensive Plan of Action
(JCPOA),  to be restored. Negotiations over the
summer seemed to lead those involved to be
cautiously optimistic that an agreement was
within reach between the two sides. However, the
glimmer of hope rapidly vanished after Tehran
submitted a new series of requests which both the
EU and the US did not deem reasonable. Since
September, talks have not resumed, partially due
to a  wait-and-see strategy  on both sides but
mostly as a consequence of recent developments.
Already in October, the US claimed that reviving
the 2015 Iran nuclear deal «is not our focus right
now». A few days later, France and the UK added
that, by supplying drones to Russia, Iran was in
breach of its obligations under parts of the JCPOA.
With talks stalled,  the potential for the nuclear
issue to become a major crisis drastically
increases. Iran has continued advancing its
nuclear activities, most recently beginning to
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
enrich uranium to 60% at the underground Fordow
nuclear facility, bringing the country closer to
weapons grade material. While Tehran continues
to deny its desire to build a nuclear weapon, the
recent nuclear activities significantly shorten the
so-called “breakout time” needed to create a
bomb. As concerns by the EU and the US intensify,
the lack of meaningful options available, without
dialogue on the table, mean that  the risk of an
escalation and even a confrontation is getting
ever closer.  This is even more the case given
the recent re-election of Benjamin Netanyahu as
Israeli Prime Minister and the likely rise in Israeli
actions against Iran and its nuclear programme, in
line with his past behaviour.
The overall picture is thus one of  escalation on
multiple fronts, including the regional one. The
protests have already had an impact on Iran’s
foreign policy, leading Tehran to adopt an even
more securitised approach towards neighbouring
countries. Over the past few months, for
instance, Iran has intensified its drone and missile
attacks against the Iraqi Kurdistan Region after
accusing Iraq-based Kurdish militants of
fomenting the unrest inside Iran. Iran’s perception
of a threat, inside and outside the country, could
induce Tehran to pursue similar actions elsewhere,
including by intensifying its support and funding
for its proxies across the region. This will all come
at the expense of dialogue and de-escalation
with countries in the region, particularly Saudi
Arabia. Initiatives such as the bilateral dialogue
between Tehran and Riyadh mediated by Iraq
have been suspended  for months and their
resumption seems more and more challenging.
While the two sides might indirectly engage in
talks on specific issues, such as on Yemen, as
| 49
 THE WORLD IN 2023

currently seems to be the case, the prospects for

a restoration of diplomatic ties and for some sort
of security arrangement across the region seem
meagre. 
With the challenges ahead on the domestic,
international and regional front, it remains to be
seen whether Tehran will be able to not just talk
the talk but also walk the walk, without enduring
consequences on its stability and security.

Autocracies: Regime Failure? Iran | 50

 ITALIAN INSTITUTE
IL MONDO
THE WORLDCHE
IN VERRÀ
2023 2022
FOR INTERNATIONAL
POLITICAL STUDIES

China
Alicia Garcia-Herrero
Bruegel Institute

T
he Chinese economy has faced intense
challenges over the past year because of
the Omicron outbreak, which is expected to
result in a much lower GDP growth rate for 2022
than the one initially targeted by the government.
Against this backdrop, and in the light of growing
protests and disruptions in the countries’ major
factories, particularly Foxconn, China suddenly
chose to swiftly move away from zero-Covid
in late November, which has led to a massive
increase in Covid cases.
The November data has turned out to be even
worse than expected, due to even lower mobility
as lockdowns accumulated prior to the opening-
up. The December data will probably be very
poor too, but for a different reason. A wave of
cases is bound to stop production in factories
and heavily slow down the provision of various
services. The first quarter of 2023 could be difficult
in more remote provinces, but the largest cities
will probably peak before the Chinese New
Year. This means that pent-up demand should
start pushing up consumption in a few weeks
and especially from the second quarter of 2023.
Investment sentiment may take longer to fully
recover. This is not only because of investors’
cautious attitude towards the opening-up but also
because headwinds remain, both on the external
front, in the form of rapid deceleration in the US
and Europe, and in the real estate sector, with
continuing double-digit negative growth in home
sales. Furthermore, China’s external demand is
plummeting as clearly shown in the November
export data, and it is hard to see a recovery in
2023, certainly not within the first half. That said,
we still expect China’s GDP to enjoy a fast and
significant rebound in 2023 because of the low
base in 2022 and pent-up demand. This equates
to GDP growth reaching 5.5% in 2023. This surge
in growth, though, is still rather limited compared
to the exit from the previous pandemic wave in
2021 (8.1%) and is bound to decelerate structurally
thereafter so that our projection for 2024 comes
down to 4.5%
The economic acceleration will exert upward
pressure on demand-induced inflation in 2023,

Alicia Garcia-Herrero is a Senior Fellow at Bruegel

Institute and Chief Economist for Asia Pacific at
Natixis. | 51

especially for food prices in Q1 due to the low
base this year. But the rising momentum of food
prices will fade for the rest of the year as the base
effect falls. Also, both China’s PPI and export unit
price have also been decreasing in recent months,
signalling headwinds ahead. As such, we only
expect inflation to moderately increase for 2023.  
The PBoC is likely to have more room to
manoeuvre its monetary policy thanks to low
inflation and also the likely peaking of the Fed’s
hiking process in March 2023. However, it will still
be cautious, as the current interest rate is already
low in China. Since the key to supporting China’s
growth is to channel liquidity into supporting
growth, the PBoC will focus more on injecting
funds to maintain the current liquidity rather than
to pushing the interest rate significantly lower. In
Autocracies: Regime Failure? China
THE WORLD IN 2023
the meantime, the Chinese authorities will also
continue to impose capital controls to avoid large
capital outflows. Against this backdrop, we may
start to see some rebound in the RMB as the
dollar starts to moderate after Q1 2023.
All in all, 2023 should be a reasonably positive
year for the Chinese economy, certainly when
compared with 2022, but this benign scenario is
not free from major risks. The most obvious and
immediate one relates to a chaotic exit from
zero-Covid policies. The lightning speed at which
China has opened up after three years of zero-
Covid policies has led to a massive surge in cases.
This is particularly worrisome given the still rather
low vaccination rate for the elderly (less than 40%
of people over the age of 80 have received a third
dose). Furthermore, the limited scope of China’s
| 52

health care system increases the chances
that a very difficult health situation may reverse
the opening-up or, simply, collapse China’s
production capacity. This tail risk would have very
significant consequences for the rest of the world,
as China is the world’s largest exporter and plays
a central role in the value chain. In other words,
supply chain disruptions and renewed pressure
on global goods prices cannot be ruled out. The
second risk could stem from the property market,
if the current support measures do not fully work.
Given that the exiting measures are targeting
the healthiest developers, there is still a chance
that more developers will default, with negative
consequences for China’s financial system.
Thirdly, Chinese local government finances
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
could further worsen if their revenue does not
significantly recover or there is a surge in fiscal
expenses related to a swift, but difficult, opening-
up. Fourth, the US-China geopolitical situation
may deteriorate further, as can already be seen
from the additional containment measures taken
by the US in the last few days and in October with
the semiconductor export ban.
All in all, the Chinese economy should do better
in 2023, due to the positive base effect and pent-
up demand released by the exit from Covid
lockdowns. However, risks are piling up, especially
in relation to the exit from Covid measures, which
could end up being less smooth than originally
expected.
| 53
 IL MONDO CHE VERRÀ 2023

THE WORLD IN
2023

To Watch
ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

COUNTRIES TO WATCH

GEOPOLITICAL MAVERICKS?

| 55
 THE WORLD IN 2023

I
n December 2022, the World Bank revised
upwards its GDP growth forecast for India to

INDIA
6.9% for 2022-23, underlining the fact that the
Indian economy was showing higher resilience
to global shocks. In its India Development
Update, the World Bank said the revision was
Harsh V Pant due to higher resilience of the Indian economy to
King’s College London global shocks and better-than-expected second
quarter numbers. Earlier India had emerged as
the world’s fastest-growing large economy and
replaced Great Britain as the world’s fifth-biggest
economy. The long-term trajectory of the Indian
economy seems set with India expected to
emerge as the world’s fourth largest economy,
overtaking Germany, by 2027. It would be even
more remarkable as of the four top economies,
three are expected to be in the Indo-Pacific by
2027 – China, Japan and India.

Harsh V Pant is a Professor of International Relations

with King’s India Institute. He is Director, Studies and
Head of the Strategic Studies Programme at Observer
Research Foundation, New Delhi. He is also Director
(Honorary) of Delhi School of Transnational Affairs at
Delhi University. | 56

Indian policymakers too have underlined India’s
emerging role as the “second most important
driver of global growth after China” with India’s
growth financed primarily by domestic savings.
Compared to 18% for China and 16% for the US,
India’s share of global GDP already stands at
7%. This is happening at a time when the global
economy has been facing negative headwinds as a
result of rising food and energy prices, China’s zero
Covid strategy and Russia’s senseless war against
Ukraine. The Indian economy has continued to be
resilient partly because of government intervention
and partly because of its unique structure.
Of course, this is not enough and as has been
pointed out by many India’s per capita income
remains far behind nations that it is overtaking in
economic growth rates. And a sustained policy
effort would be needed to ensure that the present
trajectory continues and is not merely seen as a
post-Covid bounce. Serious reforms are needed
to make India more investor friendly, particularly
at a time when China has run out of favour. As
investors seek new venues, Indian policymakers
should be bold enough to take advantage of this
unique moment in India’s political economy.
This economic trajectory of India also gives India a
distinct place in global politics today. There is a
reason why the West, despite its differences with
India over Ukraine, has continued to substantively
engage with New Delhi. In fact, India’s ties with
the West have actually grown significantly amidst
all the negative press India has received in the
West. Where journalists remain prisoners of their
short-term outlooks, policymakers in the West
recognise the real story – the rise of India as a
credible geopolitical and geo-economic player
in the XXI century.
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
Even as the courtship with the West continues,
India continues to maintain its partnership with
Russia. Putin wants to show the West that despite
western sanctions, he is not alone. He has the
support of big powers like China and India. New
Delhi wants to have its channels of communication
open with Moscow, given their defence ties as
well as regional security convergence. But also
because New Delhi would like to make an effort till
the last moment to ensure that the China-Russia
axis does not become a fool-proof alliance. The
future will be decided by how Russia fares in its
war with Ukraine and India will have little control
over the outcome but so long as the window is
open, New Delhi will continue to make this effort.
China too finds itself in a bind and India’s stiff
resistance to its aggressive pursuit along the
Line of Actual Control has put paid to the Chinese
Communist Party’s narrative that its time has
arrived. India’s standing up to China has ignited
a process of a broad pushback across the Indo-
Pacific and beyond. And with a plethora of
domestic challenges being faced by Beijing, there
is once again a premium on internal consolidation.
India, as a consequence, finds itself in a
“geopolitical sweet spot” that it should make the
most of. In the past, New Delhi’s inability to exploit
the extant balance of power to its advantage cost it
dearly. A prudent nation should be able to identify
the opportunities in the existing structure of
global politics and shape its external engagement
accordingly in the pursuit of its interests. Pursuing
unrealistic ideational constructs can often do
more damage to a nation’s standing.
For India today, the most serious challenge is the
rise of China and how it has managed to constrain
| 57
 THE WORLD IN 2023

India’s options. New Delhi’s first priority in the consensus on key global issues. New Delhi has
coming years will be to internally consolidate been vociferous in giving voice to the aspirations
its capabilities so that it can stand up to Beijing’s of the Global South, at a time when few global
nefarious designs on a more sustained basis. powers have either the time or the resources to
This will have to be supplemented with building cater to the most vulnerable – occupied as they
serious partnerships that are capable of adding are with their own domestic woes. The pressures
value to India’s growth story. As a large part of the of global disruption are being absorbed most by
world sours on China, there is a need to become the poorer economies and few powers are willing
an attractive partner. This will require making to consider their challenges with the seriousness
some choices – choices that New Delhi has often they deserve. By hosting one of the highest-profile
been shy of making. The basis of these choices international gatherings ever at a time of great
should not be to make the world multipolar or turbulence, New Delhi is signalling its readiness
enhance any chimerical strategic space. The only to think big and deliver big – something that much
basis should be how these choices strengthen of the world had long expected from India.
India’s long-term capabilities to emerge as a
This is an inflection point for the global order and for
singular player on the global stage in its own right.
India. India is on the cusp of achieving something
India’s G20 Presidency will be aiming to move dramatic: not only a topic-tier economic power
the world away from polarisation towards a that is also a multicultural democracy but also
greater sense of solidarity. Its own reality of being a top-tier geopolitical player that can lead, not
a multicultural democracy should guide it well in simply balance. The choices that New Delhi will
bringing together highly diverse stakeholders to make over the next few years will define the
cogitate, and act, on global challenges. The theme contours of that rise.
of G20 India 2023 – Vasudhaiva Kutumbakam: One
Earth, One Family, One Future – encapsulates
India’s conceptualisation of the global order and
its own role in it. And New Delhi has shown that
it does not dwell merely on rhetoric. In 2020 as
Covid-19 first surged, it insisted on the need for
the international community to work together and
help those struggling with the least resources,
even as developed nations focused inwards,
some of them hoarding enough vaccines to
inoculate each adult five times over.
The G20 is unique in so far as it brings together
developed and developing nations to discuss and
create solutions to global governance challenges.
India can effectively bridge this divide by forging

Countries to Watch: Geopolitical Mavericks. India | 58

 ITALIAN INSTITUTE
THE WORLD IN 2023
FOR INTERNATIONAL
POLITICAL STUDIES

T
his year in the Turkish calendar is
a momentous one. The country will

TURKEY
celebrate the centennial of the founding
of the Republic, whose principles and aspirations
have been battered considerably in the past few
years. The founders’ domestic arrangements and
Soli Özel goals, and their Western aspirations, have been
Kadir Has University derailed or subverted, and at a time of deep
crisis for nearly all democracies across the world
Turkey’s politics have also in taken a sharp turn
away from democratic ways, separation of powers
and the rule of law. In foreign policy orientation
and identity, Turkey’s firm strategic Westernness
is increasingly questioned by friends and foes
alike, although its membership in NATO and the
Council of Europe and its near-fictitious candidacy
for membership in the EU continue. While it is
premature to declare the end of that strategic
identity, it has been significantly dented as a

Soli Özel is Professor of International Relations at

Kadir Has University in Istanbul, a Fellow at the Robert
Bosch Academy, and a columnist for the Turkish
daily Habertürk. He also is a Senior Fellow at Institut
Montaigne. | 59

result of recent years’ dramatic developments,
most notably Turkey’s use of its veto power over
the admission of Sweden and Finland as NATO
members.
With so much at stake, the country is to make a
historical – indeed existential – decision about
its own future. By mid-June at the latest, voters
will go to the polls to elect a new President and
the members of Parliament. The results of the
election will likely determine the trajectory of the
Republic as it enters its second century. A vote
for the current President and the alliance that
supports him means a continuation of a Sultanist
Presidential system. The opposition, in turn,
promises a return to a “fortified” parliamentary
system more in line with Turkey’s experiment in
democratic politics.
The voters’ choice will determine whether the
electorate as a whole admits it made a mistake
when it accepted the sui generis unrestricted
Presidential system in the 2017 referendum.
Their choice will also indicate whether the
Republic will remain faithful to its founders’
project, inspired by Enlightenment principles
and a Western orientation, or be reimagined by
a religiously-inspired authoritarian alternative, a
movement that was shaped by opposition to the
original design.
In some sense these elections, together with the
direction Turkish foreign policy will follow, with the
Ukraine war in the background, will help crystallise
the country’s relationship to the Atlantic Alliance
and the valued components of the Westernisation
project as well. The domestic battle for Turkey’s
identity, what some authors call its Kulturkampf
between a religious-nationalist authoritarian and
Countries to Watch: Geopolitical Mavericks. Turkey
THE WORLD IN 2023
a secular-democratic vision, is part and parcel of
the battle to shape the country’s foreign policy
orientation and the principles that will guide this.
On both these counts, the elections in Turkey
will have significant regional and global
repercussions. If a well-entrenched, electoral
authoritarian rule that is gravitating towards even
more repression is rejected through the ballot box,
this will provide a heartening example and give
hope to all democratic opposition movements
globally, much like the Brazilian elections did. If
the new government manages to restore Turkey’s
relations with its allies and reconfirms its Western
strategic orientation, this will also boost the efforts
to reconstruct the Atlantic Alliance, with NATO as
its core institution, in the wake of the geopolitical
earthquake that the Russian invasion of Ukraine
was.
Such a dramatic change in Turkey’s politics may
lead to a recalibration or rethinking of the relations
between the European Union and Turkey as well.
Currently, the lack of imagination on the part of
the EU, the indifference if not the antipathy of
the Erdogan government towards the European
project except economically, and the dearth
of trust between the two parties reduced their
relationship to crass transactionalism. It is not an
exaggeration to suggest that a Europe that needs
to be reimagined economically, strategically and
in terms of overall security will need to forge a
different type of relation with republican Turkey.
This is an imperative if Europe wants to remain
relevant in the new global geopolitics.
Similarly, in a so-called “polycrisis” world that
will be organised along economic clusters as the
| 60

previous version of globalisation is in disrepute and
the turn towards localism is gaining momentum,
Turkey will need to consolidate its position in the
European economic cluster and partake of its
markets and its impending technological surge.
It also needs European investment in order to
get out of the hole that the current government’s
unorthodox (read irrational) economic policies
had buried the country’s economy in. In short,
Turkey must participate in the reconstruction
of the Western alliance and the new European
imaginary, and not merely be a bystander. For it
to do so a change of government is the necessary
condition.
On foreign policy three issues will stand out,
and need to be monitored carefully. The first
one concerns relations with Greece, which
have deteriorated considerably since 2020. Both
countries have elections this year within weeks
of one another and tough talk reaps benefits
domestically for the incumbents. On the other
hand, the belligerent language used by President
Erdogan overshadows Turkey’s legitimate
concerns and solidifies the block of Greece’s
defenders and its network of partners in Eastern
Mediterranean. The second issue, as noted
earlier, is the decision Ankara will ultimately make
about NATO enlargement. It is clear that the two
countries will only go so far in meeting Turkey’s
demands to break the stalemate and Erdogan will
probably not let admission go forward before the
elections. This might jeopardise Turkey’s purchase
of upgraded F-16’s and modernising kits for its
ageing fleet.
Finally, relations with Russia will continue to play
an important role in Turkey’s foreign policy as well
as its economic fortunes. Ankara critically blocked
The World in 2023
THE CALM AFTER THE STORMS...
REALLY?
Moscow’s use of its navy fleet in the Black Sea
by calling the invasion and the ensuing military
engagement a “war” and invoked the Montreux
Convention, which enables it not to allow the
passage of belligerent parties’ battleships
through the Turkish straits. It does not recognise
the annexation of Crimea, supports Ukraine’s
territorial integrity, and sustains Kyiv’s war effort
by supplying it with drones and other military
materiel. At the same time though, it keeps its line
of communication with Vladimir Putin open, does
not close its air space, does not join the sanctions
regime, welcomes Russian refugees and
oligarchs (and their yachts and money), and helps
broker agreements such as the grain corridor with
the UN that alleviates a global problem of grain
shortage and food price hikes. Nevertheless,
it gets sternly warned by the US Treasury for
its attempts to bust financial sanctions. Putin
openly supports Erdogan’s re-election and even
sent some emergency money to Turkey through
Rosatom. How long Turkey can continue this
balancing act, which increasingly appears to be
titled towards Russia, remains to be seen.
Domestically, safeguarding the free and fair
nature of the elections is Turkey’s main challenge.
The change in the electoral law, the shaping of
the high electoral council and the change in the
composition of it, a draconian “disinformation” law
interpreted by a nearly totally partial judiciary are
cause for concern. On the other hand, the Turkish
public takes the ballot box and the sanctity of its
vote very seriously and ultimately its vigilance is
the insurance policy for these existential elections.
| 61

ELECTIONS TO WATCH
NIGERIA
Idayat Hassan
Centre for Democracy and Development (CDD)
N
igeria’s 1999 constitution limits presidents
to two elected terms, each of four years.
In the 2023 election, for the first time
since 2007, the more than 96 million Nigerians
who have registered to vote will not have the
option of choosing an incumbent president
when they cast their ballot as Muhammadu
Buhari steps down after eight years at the helm.
Eighteen candidates are vying to head Africa’s
most populous nation and have been seeking
to convince voters that they have the answers
to address prevailing economic and insecurity
challenges since the long electioneering period
began on 28 September.
The presidential race is set to be shaped
and contested by more than just two main
protagonists, with Peter Obi and Rabiu Musa
Kwankwaso – both former state governors –
looking set to offer a sustained challenge to the
ruling party candidate Bola Ahmed Tinubu and
perennial contestant, and former vice-President,
Idayat Hassan is a lawyer, Director of the Centre for
Democracy and Development (CDD).
THE WORLD IN 2023
Atiku Abubakar. A presidential run-off, triggered
when no candidate is able to secure majority of
the vote in the first round, with at least 25% of
the vote in two-thirds of the states, is a distinct
possibility and would be a first in Nigeria’s Fourth
Republic.
IS THE ELECTION COMMISSION READY?
The success of any electoral process is dependent
on the credibility, transparency and efficiency
of stakeholders that manage, regulate and
secure the process. The Independent National
Electoral Commission (INEC) has demonstrated
substantial improvement in the conduct of
elections since the electoral nadir of 2007, first
under the tenure of Attahiru Jega (2011-2015) and
then under current chairman Mahmood Yakubu.
The 2023 vote will be the first general election
to be conducted under the 2022 Electoral
Act. Among its provisions are a Bimodal Voter
Accreditation system and an election result
| 62

viewing platform, technology that many believe
will make the process harder to rig and which can
improve the credibility of the process.
But technology has its limitations and INEC
must undertake a significant logistical operation
to ensure that voting materials and staff are
deployed to the more than 176,000 polling units
across the country. These efforts continue to be
complicated by attacks on INEC facilities, with six
incidents recorded in November and December
alone, and 50 since the conclusion of the 2019
general election, in which offices were burned
down, valuable equipment lost and, in the recent
cases, permanent voter cards destroyed.
WHAT IMPACT WILL INSECURITY HAVE?
Nigeria is beset by insecurity across its six
geopolitical zones. The Boko Haram insurgency
in the northeast remains ongoing, banditry in the
northwest has grown significantly since 2019,
The World in 2023
THE WORLD IN 2023
separatist agitators in the southeast continue to
pose a threat and herder-farmers’ conflicts and
kidnapping are increasingly prevalent across the
country. The level of insecurity has required the
deployment of the military in operations in all but
one of Nigeria’s 36 states.
The ability of INEC to access, let alone hold,
elections in significant numbers of polling stations
in the northwest and southeast remains in question
and could have implications for the validity of the
electoral outcome. So too could the challenge
of voting for internally displaced persons (IDPs)
within the country, a reality experienced by over
2 million Nigerians. Although INEC has a legal
framework for IDP voting, developed ahead of the
2019 polls, this can only be deployed when an IDP
situation has been declared. No governor in the
northwest has done so to date.
| 63
 THE WORLD IN 2023

WHO WILL VOTE? AND HOW? MORE THAN PRESIDENTIAL POLLS

Turnout will be a key determining factor in the 2023
race, but it remains difficult to estimate. Just under
35% of Nigerians who were eligible to vote chose
to do so in 2019, and a similar outcome in 2023
would likely favour the establishment candidates
Atiku and Tinubu. Obi, whose political movement
has generated significant online interest and
support, particularly from younger Nigerians,
will be looking to convince a significant number
of the 71% of the 12 million new registrants who
are aged 18-35 to vote for him. Increased turnout
will likely aid his overall chances of upsetting the
establishment.
Beyond the presidency, Nigerians will also be
voting for 28 state governors, 109 Senators, 360
House of Representatives and over 990 other
State Assembly representatives in polls spread
across February and March. The increased
mobilisation along ethnic and religious lines
drives up the chances of a spilt ballot in 2023. In
such a scenario the winner of the presidential race
may not see his party win an absolute majority in
either house of the National Assembly, nor secure
the largest share of powerful state governors.
Unchartered territory for Nigeria’s still nascent
democracy.

However, for most voters who cast their ballots

in February, the decision will not be one made
based on issues. Factors such as religion, ethnicity
and vote-buying remain critical in Nigerian
electoral politics. 2023 is the first time since 1979
where three frontline candidates will represent
Nigeria’s three dominant ethnicities: Hausa/
Fulani (Atiku), Igbo (Obi), and Yoruba (Tinubu). The
faith of candidates, and their running mates, is also
under scrutiny, particularly after the decision by
the ruling party to stand a Muslim-Muslim ticket in
contravention of prevailing conventions that see
them “balanced” between Christian and Muslim
candidates. These factors increase the likelihood
of votes being cast along religious and ethnic
lines, potentially even complicating the ability of
a winner to emerge in the first round. In addition
to winning more than 50% of the total vote, the
Nigerian electoral system requires a presidential
candidate to secure at least a quarter of the votes
in two-thirds of the states to be declared the
winner.

Elections to Watch: Nigeria | 64


TRENDS TO WATCH
GREEN AWAKENING
Samantha Gross
The Brookings Institution
T
he “energy trilemma” is a term often used
to describe the challenge of supplying
sustainable, secure, and affordable
energy. The emphasis in recent years, especially
in Europe, has been on the sustainable and
affordable attributes. The EU’s Fit for 55 plan
promises a 55% reduction in greenhouse gas
emissions by 2030, on the way to net-zero
greenhouse gas emissions by 2050. Plummeting
costs for renewable electricity have been making
those goals a bit easier to achieve. Between 2010
and 2020, solar electricity costs fell by 85% and
wind electricity costs fell by 56%. Renewable
electricity today is often cheaper to produce than
electricity from fossil fuels.
However, with Russia’s invasion of Ukraine,
the secure portion of the trilemma is the key
issue for 2023. The situation in energy markets is
different from past crises, turning old ideas about
energy security upside down.
Samantha Gross is the Director of the Energy Security
and Climate Initiative and a Fellow in Foreign Policy at
Brookings Institution.
THE WORLD IN 2023
The world is experiencing its first global natural
gas crisis. Before liquified natural gas (LNG)
was widely traded, pipelines linked sellers and
buyers of natural gas in a long-term exclusive
relationship, rather like a marriage. Pipelines are
still crucial – in 2020 pipelines supplied about
three-quarters of Europe’s imported natural
gas. But the advent of LNG trading means that
regional supply crunches can now ripple through
global natural gas markets, as LNG is attracted
to markets with high prices. Russia’s cut off of
natural gas supply to Europe is rippling through
markets in Asia, Africa and Latin America. A
slowdown in China’s economy due to COVID is
helping to keep LNG prices down somewhat, but
that may not continue. I fear that Europe has not
seen the high point of natural gas prices.
Global oil markets are also experiencing
something completely new. Oil consumers
are weaponising demand for oil, unlike the oil
crises of the 1970s when producers withheld
| 65
 THE WORLD IN 2023

supply to punish consumers. The EU and G7 intensive to replace. For instance, natural gas
have sanctioned maritime shipping and finance heating is prevalent in much of Europe. Changing
of Russian oil, but are allowing sales to avoid to electric heat pumps means replacing the
the sanctions if the oil is sold subject to a price heating systems in millions of individual homes
cap. It remains to be seen how well the price will and businesses.
work; enforcement is difficult and the initial price
The great challenge for policy makers and the
cap is close to the price the Russians are already
energy industry is that the world wants more
getting for their oil from customers outside the
fossil fuels right now, but not forever. We need to
EU and G7. But oil markets are in uncharted and
feed the energy system we have today while we
uncertain territory.
work to transform it into the system we want for
Clearly, an energy system based on renewable the future.
electricity and other non-fossil sources would
The key to achieving both of these goals at once
have prevented this mess, but the world just isn’t
is to find ways to meet current energy needs
there yet. Even for renewable electricity, which is
in future-friendly ways. This involves avoiding
affordable and feasible today, the transition takes
lock-in of fossil fuel infrastructure, through
time and investment capital. In other industries,
financial or technical means. Financially, that
the technologies to move away from fossil fuels
might mean structuring financing and contracts
are immature, such as those required for steel or
for new LNG import facilities in Europe such
ammonia production. Other uses of fossil fuels
that they can recoup their costs faster. This
are diffuse and particularly time- and resource-
would allow investors to achieve return on their

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 THE CALM AFTER THE STORMS...
REALLY?

investment while still shutting down the facility

when it is no longer needed. From a technical
perspective, it might involve building natural
gas pipelines that could carry green hydrogen
in the future. Not all natural gas infrastructure
can be adapted to hydrogen. Hydrogen is a
much smaller molecule that is more prone
to leaks, and hydrogen requires different
metallurgy to prevent pipelines carrying it from
becoming brittle and cracked. But if pipelines
are designed to carry hydrogen up-front, they
could be repurposed later. This is particularly
relevant for pipelines from North Africa, an area
with an abundance of natural gas and renewable
resources. Even running coal plants past their
planned retirement dates, or turning on retired
coal plants, could be good decisions in the short
term. Although these plants will result in greater
greenhouse gas emissions now, they are an
inexpensive way to keep the lights on in a time
of crisis, allowing focus on investments for the
future.
Europe is going through a particularly difficult
time when achieving all three energy supply
goals – sustainable, secure, and affordable
energy – seems nearly impossible. Nonetheless,
a future energy system less dependent on fossil
fuels will be less prone to crises such as the one
we are currently experiencing. Europe and the
rest of the world will weather the energy market
storm caused by Russia’s aggression in Ukraine
and come out stronger in the end.

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 THE WORLD IN 2023

CRISIS TO WATCH

MIGRATION
Gerald Knaus, Pascal Franz
European Stability Initiative (ESI)

I
n June 2022, as every summer, UNHCR publi-
shed its Annual Global Trends report. UNHCR
reported that the number of forcibly displaced
people in the world had risen to 89 million. It
also noted that the number of refugees under its
mandate – individuals who received international
protection, either as a group or following a posi-
tive asylum decision –stood at 21.3 million in De-
cember 2021.
This was a striking figure: the number of refuge-
es under the UNHCR mandate worldwide had
been 19.9 million in December 2017. While much
of the communication of UNHCR focused on the
headline figure of 89 million, the fact that in four
years – from the end of 2017 to the end of 2021 –
the number of refugees in the world had only in-
creased by 1.4 million – should have led to serious
reflections. Even more so, as UNHCR also noted
that one of the most important ways in which this
number increased was the births of an estimated
350,000 children to refugee parents each year.

Gerald Knaus is the European Stability Initiative’s

(ESI) founding chairman. In 2021, he received the Karl
Carstens Award by the German Federal Academy for
Security Policy; Pascal Franz is a Junior Fellow at ESI. | 68

There is a widespread assumption in many global
discussions on refugee trends that the number of
refugees in the world is bound to increase sharply
in the future, partly because of the misleading
impression that it has increased sharply in the
recent past. The language of “migratory pressure”
appears to suggest that this is an era of ever-
growing refugee numbers, due to demographic
trends and displacement driven by climate
change. But this is misleading. Understanding
why is key to predict what might happen in 2023
to refugee and irregular migratory movements.
The number of refugees in the world under
UNHCR’s mandate increased by only 1.4 million
in four years because the single most important
variable determining it is politics – the policies of
governments trying to stop irregular crossings of
their borders. Conflicts or natural catastrophes
trigger displacement. What they do not determine
is whether those displaced are then able to
The World in 2023
THE WORLD IN 2023
leave their country, even if they wish. When
governments close their borders by force, build
walls and fences and engage in violent pushback,
refugee numbers will increase little. There were
few new refugees crossing Turkey’s borders in
2022, because Ankara’s policy had changed (and
fences had been constructed) since 2015. There
were no Syrian refugees crossing Israel’s borders
since 2011, because Israeli policy was to prevent
it. Where borders are closed by force, as is the
case today in countries surrounding Syria and
Afghanistan, and across much of the world, the
number of displaced who are able to become
refugees drops dramatically. When governments
allow people in need of protection to cross
borders, grant protection and ensure sufficient
accommodation, the number of refugees in the
world increases.
1.4 million: this is the number of refugees who
fled from Ukraine to the European Union in just
| 69
 THE WORLD IN 2023

a few weeks following the Russian invasion on 24
February. They could enter the EU legally, without
smugglers or risking their lives, and were granted
immediate temporary protection. As a result, by
the end of 2022 more than 4.6 million Ukrainians
had applied for protection in the EU alone. They
could do so because of a political decision. It is
politics, not unmeasurable “migration pressures”,
that determines the numbers of refugees in the
world.
Politics is the key variable when it comes to
understanding refugee movements in 2022 and
2023. The cause of the largest refugee movement
in Europe since the 1940s has a name: Vladimir
Putin. There were no Ukrainian refugees in the EU
before the Russian president made the decision
to attack his neighbour in February 2022. The
course of the war, and in particular the success
of the Ukrainian military to push back the invading
army from April onwards, led to significant returns
of Ukrainian refugees back to their homeland.
From late February to mid-December there were
8.4 million crossings from Ukraine to Poland, but
6.6 million crossings the other way. The same
happened at other EU-Ukraine borders.
So what will be the number of Ukrainian refugees
in 2023? How many might flee, how many return?
The only good answer is that it all depends on the
outcome of the war. In case of a Russian defeat,
it is plausible to assume that millions of Ukrainian
refugees would return. In case of a Russian victory,
or further destruction of essential infrastructure
during a cold winter, it is responsible to prepare
for millions more to flee. In that case, European

UKRAINIANS WHO APPLIED FOR PROTECTION – LEADING EU STATES

6 DECEMBER 2022 UNHCR

COUNTRY UKRAINIANS POP (MIO) PERCENT

Czech 466,872 10.52 4.44
Republic
Poland 1,529,355 37.65 4.06
Estonia 40,510 1.33 3.04
Lithuania 71,367 2.81 2.54
Bulgaria 146,659 6.84 2.14
Cyprus 18,972 0.9 2.1
Total 2,273,735 60.05 3.79
Source: UNHCR, Ukraine Refugee Situation Dashboard

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 THE CALM AFTER THE STORMS...
REALLY?

democracies will face a refugee stress test unlike
any since the 1940s.
So far, most Ukrainians have been hosted
privately in a small number of European countries
(see tables). This remains the key to hosting so
many decently: that private households continue
to welcome them, and that European countries
which welcomed few so far will accept more
in 2023. France, Spain and Italy have together
welcomed fewer Ukrainian refugees in 2022
than the Czech Republic (with less than 11 million
inhabitants). Much will depend on whether this
changes in 2023.
Other movements were significantly smaller. 2022

UKRAINIANS WHO APPLIED FOR PROTECTION – WHERE FEW APPLIED SO FAR

6 DECEMBER 2022 UNHCR

COUNTRY UKRAINIANS POP (MIO) PERCENT

Romania 91,766 19.04 0.48
Sweden 49,181 10.45 0.47
Netherlands 79,250 17.59 0.45
Slovenia 8,234 2.11 0.39
Hungary 32,628 9.69 0.34
Spain 156,753 47.43 0.33
Malta 1,541 0.52 0.30
Italy 173,231 58.98 0.29
Greece 20,955 10.6 0.20
France 118,994 67.84 0.18
Total 732,533 244.25 0.30

Source: UNHCR, Ukraine Refugee Situation Dashboard

The World in 2023 | 71

 THE WORLD IN 2023

saw some 143,000 people cross the Mediterranean

irregularly. Here the single most important factor
has been the stark contrast between different
routes. Almost 100,000 crossed to Italy, far more
than reached Greece and Spain combined.
The low numbers in Greece are the result of a
government policy of aggressively pushing back
migrants. The result: fewer Syrians and Afghans
reached the EU in 2022 irregularly than Tunisians.
The main nationalities currently arriving across the
Mediterranean rarely qualify for refugee status.
And the rest of the world? There remain a
significant number of Venezuelans – who are
not counted by UNHCR as “refugees under its
mandate” in its statistics – in neighbouring states.
In the US, the Trump-era politics of pushing
people back at the border with Mexico based on
pandemic legislation has remained in place. It is a
matter of politics and court decisions whether this
continues. Asia remains an asylum desert, with
borders largely closed to refugees. Most refugee
movements outside of Europe have taken place
in Africa in 2022. This is likely to continue.
The most important global trend in 2022 has
been one that surprises many observers: Europe
remains the main continent of refugees. It looks
like this may remain true in 2023. As a result, the
policies of European states and the course of war
in Ukraine remain for now the most important
determinants of global refugee movements.

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 IL MONDO CHE VERRÀ 2023

THE WORLD IN
2023

5 good news
to kick-off
 THE WORLD IN 2023

In the year of the war in Ukraine, the energy crisis in Europe and the return of double-digit inflation,
good news has inevitably taken a back seat. But they were there. The pandemic worldwide is now
far less deadly than a year ago. At the beginning of 2021, daily new deaths due to Covid amounted to
15.000. In the past three months, to less than 2.000.

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 THE CALM AFTER THE STORMS...
REALLY?

Positive news can also be found in the European response to the unprecedented exodus of 5 million
Ukrainians. Even the Visegrád group’s countries played their part. Above all, Poland has taken in more
refugees from Ukraine than any other European country.

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 THE WORLD IN 2023

For a war that begins (in Ukraine), one (in Ethiopia) sees a possible resolution. In November, the
government of Ethiopia and the Tigray People’s Liberation Front signed a peace agreement. Fingers
crossed: the truce established in March was short-lived, with a rekindling of the fighting during summer.
Moreover, not all the actors on the ground (aka Eritrea) were involved in the negotiations. Nonetheless,
this interruption of the conflict has to be welcomed. In the past two years, the Ethiopian war has caused
an estimated half a million military and civilian deaths, millions of internally displaced persons, and a
severe food crisis.

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 THE CALM AFTER THE STORMS...
REALLY?

Despite the Ukraine war and repeated lockdowns in China, global logistics seems to be past its most
challenging period. The end of draconian measures under China’s ‘0 Covid’ strategy should prevent a
recurrence of bottlenecks like the one we observed in late April at the port of Shanghai. Staff shortages
caused by forced quarantines created a traffic jam of almost 500 container ships (5% of the world fleet)
waiting to enter the port. On that occasion, the Global Supply Chain Pressure Index reached its second
all-time high.

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 THE WORLD IN 2023

Finally, there’s some much needed good news from the energy sector. A few weeks ago, a group of
American scientists succeeded in achieving energy for the first time from nuclear fusion, generating
more energy than they put into the system. Between high energy prices and the challenge of moving
away from fossil fuels as soon as possible, nuclear fusion seems like the breath of fresh air the world
needs. It is an almost unlimited, safe (it does not generate radioactive waste), and above all, clean (as it
does not produce greenhouse gases) source of energy that investors are increasingly hinging on.

5 good news to kick-off | 78