Transcript: The world in 2024

This is an audio transcript of the Rachman Review podcast episode: ‘The world in 2024’

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Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week’s podcast is our last of 2023. To look forward to next year, I’m joined by a panel of experts. In London, we have the FT’s Martin Wolf and Karin von Hippel, who’s director-general of the Royal United Services Institute. And from New York, Ian Bremmer, president of the Eurasia Group, one of the world’s leading political risk consultancies. 2023 ends on a fairly grim note with wars in Gaza and Ukraine still raging. But will 2024 be any better? One of the pleasures of the last three years has been not having to listen to this man on a daily basis.

Donald Trump in clip
Joe Biden and the Democrat party are incapable of solving any problem. There’s not a problem they’ve been able to solve. Crooked Joe is a low . . . You know this. Did you ever hear this? Crooked Joe is a low-IQ individual.

Gideon Rachman
But in 2024, Donald Trump will be back with a vengeance. And I don’t use that word lightly. He’s repeatedly vowed to take revenge on his political enemies if he secures victory in the 2024 presidential poll. It’s not just America that’s having an important election. India, Indonesia and South Africa will also go to the polls in the first half of the year, and Britain’s likely to have an election around the same time as the US presidential vote. One country that will not be voting is China. But the fate of China’s economy and the country’s international ambitions will also shape the world over the next 12 months. And we’ll be discussing China later in this podcast. But I began our three-way conversation by asking Martin Wolf if it’s inevitable that the US election next November will dominate the coming year in global politics.

Martin Wolf
From what we know now, this is going to be the big political event which we can foresee, and most people will believe that this outcome could have an enormous consequence, not just for the United States, but for the entire world. It could upend everything. But I would also stress that if we know anything about the world, it is that some really surprising things can happen. And it may be that something else, some of which we can already imagine and some of which we can’t, will actually end up overshadowing the world. It might be a war, it might be a nuclear war, it might be another pandemic. It might be some huge political event. Maybe — I’m just putting it out — well, the European Union starts really falling apart. One thing I’ve learned is do not say what is gonna be the big event of the year. If I had been asked in the end of 2019, what’s gonna be the big event of next year, I would not have said Covid.

Gideon Rachman
No. Or indeed the following year you would not have said Russia’s gonna invade Ukraine.

Martin Wolf
Indeed, that’s the point.

Gideon Rachman
But nonetheless, going with the known unknowns, Ian, we don’t know who’s gonna win the US election, but I was just in the US and certainly struck me among the Democrats, there’s almost a palpable sense of panic. They feel this kind of oncoming train called Donald Trump. Or was I misreading it?

Ian Bremmer
No, I think that’s right. And I just came back from Japan. And I mean, that is certainly a government that generally worries about stuff. But there is an urgent sense of panic of my God, what do we do if Trump comes back? And, you know, I certainly think we don’t know who the nominees are going to be, but it is a fairly easy bet that it’s gonna be Trump versus Biden redux. And that means that this election is going to be seen as illegitimate by the losing side, no matter what. That means that Trump is in it to either win or to go to jail. And so the stakes are a lot higher either way for everyone involved. Four years of Biden has done nothing to reduce the political temperature, the tribalism, the animosity and the disinformation inside the US political system. The world’s most powerful democracy is in trouble. That’s the reality. But I also agree with Martin that I wouldn’t want to make the claim that that’s the big issue for 2024, not least of which is because we have two very active wars that are going on, neither of which are getting better, and both of which could easily not be contained in the coming year in ways that you could very easily imagine could be much more dangerous than they presently feel.

Gideon Rachman
Yeah, and we’ll give a bit of time to both of those wars in a minute. But Karin, Ian talked about the mood in Tokyo where he’s just been. You are an American based here in Europe. Do you pick up this growing anxiety in Europe, particularly given all the talk that Trump might pull America out of Nato?

Karin von Hippel
Certainly. And I think the first time around no one anticipated he would win and he did win. This time, people think he might win. So maybe, actually he won’t win, if we’re gonna go on that. But the one thing I worry about is I don’t think governments in Europe and private sector and many others are planning enough for what a Trump presidency would mean for them and how they would respond. And I think we know the drill. We’ve been through it. So there should be a lot more planning of various scenarios and how they’ll get on without the United States, because basically he’ll pull out of any sort of leadership role or people just won’t listen to him. And so I think we need to be encouraging people to be planning for those types of scenarios. But I also think that America’s role as the largest, most important democracy is going to change significantly if Trump wins again. I don’t think people will look up to America anymore. I think that’ll be the beginning of the end, really of that.

Gideon Rachman
And Martin, I mean, you’ve written a whole book on democratic capitalism. Can you imagine, really, the beginning of the end of American leadership? I mean, when Karin says we need to prepare, that’s such a big thing. I don’t really know how you prepare for that.

Martin Wolf
Yes. Our colleague, if I remember correctly, Edward Luce, wrote a rather good column about this. It is very difficult to prepare for because there are so many possibilities, I mean, gradations. And you don’t want to make a huge investment in the possibility that everything ends because one, it’s very costly and it might not, in which case, you wasted it. So there is a sort of fairly familiar problem in economics, which is how much is it worth paying for insurance? And I don’t know what the answer is. And then there’s a lot of things here, which even though we know the general tendency of a Trumpian administration, we don’t know the granularity of it — how exactly it would work out, how far would it go, how quickly. I agree completely with Karin. The view in the world of America and its future will be fundamentally altered if the US decides, well, we’ve had Trump. We know who he is. We know what he is, and we still like him. Well, that changes things. It’s not something untried, as it was in 2016. And people will respond to that. But even so, working out in sort of detail what it will mean and how best to position yourself in response is going to be very, very difficult. But turning to Ian’s question about Japan, well, they must be asking themselves, maybe we’re gonna have to have nuclear weapons.

Gideon Rachman
Yes, indeed. Nuclear proliferation, I think, is coming back on the table as an issue. But, Ian, you mentioned Ukraine. I mean, I guess for them in particular, the prospect of Donald Trump is scary because he said he’d end the war on day one, which we kind of read as cutting off aid to Ukraine. But generally, it’s been a bad year for Ukraine. Do you think that 2024 risks being the year that the war begins to turn in Russia’s direction? Maybe it already is.

Ian Bremmer
Yeah. I do think between the Trump and 2024 US risk and Ukraine’s challenges irrespective of who the next US president is, that we’ve already passed peak Nato. We’ve passed peak transatlantic alignment on this issue. The Hungarians are getting their game on in pushing back heavily on the Ukrainians getting a lot of EU funding for reconstruction. We’re seeing much greater divides in the United States between Democrats and Republicans. And Zelenskyy gave a pretty gamely performance in front of 75 senators — private meeting a couple of days ago — and got a lot of support from Democrats and Republicans who basically were airing their dirty laundry in front of him, saying we wanna give you the money. Well, we would but, you know, they refuse to budge on the border. The money’s coming. They’ll get $20bn in all likelihood from the US, and that will allow them to continue to defend themselves. But they’re not taking more land. So the idea that the Ukrainians will be seen as winning, that’s really hard.

And you know, Putin, with an economy that hasn’t been damaged all that much by sanctions and a military that still has lots of capability and lots of support from the North Koreans and from the Iranians, for example, their ability to do damage, major damage, in an ongoing way to a country that only has 44mn people and having a much harder time raising their own army, that’s real. And so in the last year and a half, this was looking like a win for Biden, for the United States and for Nato, while increasingly, even though there are lots of things to point to, I mean, Nato expansion and more expense on defence and the rest, it’s gonna be harder to frame the narrative as Nato is winning. I think the momentum will be moving towards Putin and that of course is gonna be a very bitter pill, especially against the backdrop of a deeply uncertain US democracy and 2024 election.

Gideon Rachman
Yeah. So Karin, what would you predict will happen or might happen? Nobody can be sure, obviously. On the Ukraine issue, both on the battlefront in the next year but also, people have been talking ever since the beginning about maybe a political settlement. There’ll be a Nato summit in June. Is it even conceivable that negotiations get going?

Karin von Hippel
Well, look, it’s up to the Ukrainians to decide when they’re ready to stop. And we know that they’re exhausted. But we also know the Russians are exhausted and the Ukrainians don’t seem ready to stop yet. But this war could grind on. As Ian is saying, it’s in a stalemate position. Basically, neither side is doing well enough to deal a decisive blow. Recently released US intelligence said over 315,000 Russians have been killed or injured, which was 90 per cent of the troops they had at the start of that war. And Putin can’t call up reserves before the elections in March, so he can’t call up more troops right now. But certainly later in the year he could.

And then, of course, as we’ve been discussing, the US elections are going to be a factor and I think the Ukrainians realise that. So yeah, I mean I think this could grind on for some time. At some point they’ll go to the negotiating table and they won’t sign a peace agreement because the Ukrainians will never agree to cede the land that they’ve already lost, like Crimea, but they’ll sign some sort of deal and then hope that they get some sort of security guarantees from the United States that they can get on the accession ladder for the EU. That will provide them some protection to prevent Russia from returning and attacking again in the near future.

Gideon Rachman
Yeah. And Martin, I mean, it seems to me, sort of writing about geopolitics, which you also follow, that a moment where the western system felt to be almost overloaded came when Hamas attacked on October the 7th in Israel. And then suddenly, if you’re sitting in Washington or Brussels, you’re dealing not just with this one major war, but with another as well, and an impending democratic crisis in the United States and the European Union that’s not functioning very well. Do you get that sort of general sense that the return of the Middle East as a major issue has kind of overloaded the system?

Martin Wolf
And I think probably, though we’ve all forgotten about it, but I was struck by something I read recently, which I believe is true, that the earlier decision by the Biden administration to abandon Afghanistan shook people, particularly in Asia. I mean, I was in Korea and they sort of said, well, if Afghanistan doesn’t matter at all, do we? I mean, of course they feel more confident than that. But still, after that, with Ukraine, there was sort of feeling, as Ian mentioned, that the west had sort of got its act together, that was revived. That’s clearly not how it’s looking now. There’s very clearly profound disagreement within western countries and between western countries on approach that should be taken to the new war in the Middle East, how dangerous it is in terms of potential rifts with Arab countries, what it might mean if it were to spread possibly to other Iranian proxies and possibly Iran as a whole. There’s a whole new range of uncertainty and the Persian Gulf remains an incredibly important strategic choke point. Something like a third of world oil goes through it. And if a war were to get out of control and spread to that region, which doesn’t seem inconceivable, that would be terrifying. But even leaving that aside, obviously, the question of how this war will end and what sort of politics will come out of it and what that would mean is really very unclear.

Gideon Rachman
Yeah. I mean, Ian, do you have any sense of how the US administration sees this ending? One of the things that struck me is firstly, you know, Jake Sullivan, the national security adviser, made the now ill-advised comments about the Middle East being quieter than for years and then everything breaks out. But also that the Americans are increasingly, obviously uncomfortable with what Israel is doing in Gaza, all aspects of it, but don’t seem willing to use leverage on the Israelis. Do you think that is likely to change?

Ian Bremmer
It is changing. And by the way, I mean, you know, Jake’s position on the Middle East being quiet was, of course, not just Jake’s position. I mean, it’s what all the analytical community and the US foreign policy establishment was basically saying, that the Palestinians were being forgotten and Israel was in a much stronger geopolitical position and the Abraham Accords have been done and the Saudi normalisation was occurring. And you know, you got Qatar back in the GCC fold and the Iranians and the Saudis normalised with China facilitating it. So all of those things are true.

And by the way, even in the context of the Gaza war, which was not in any way anticipated by Jake, you still had the Iranians and the Saudis first and a head of state level chatting on the phone for the first time, and then the Iranian president going to Saudi Arabia, accepting an invitation from MBS. So let’s not throw away the fact that there’s a significantly greater amount of background, resilience and stability among major leaders who view that they have to do it themselves because the Americans aren’t going to and nobody else is coming in. None of that’s gone given the fact that we now have this major war between Israel and Hamas that has the potential to expand.

Now, the United States, Biden, of course, has been a very strong supporter of Israel for a very long time, for decades. And though he truly dislikes Netanyahu and mistrusts him, he has been unwilling to let that be known publicly. He has been criticising privately and he has been pressuring privately. Biden felt like he got assurances from Netanyahu in the war cabinet that they had learned lessons from the early weeks of the war in the north. They were going to pull back significantly on the indiscriminate nature of their bombing against Palestinian Hamas targets and also that they were going to let significantly greater aid and humanitarian support in on an ongoing basis. Biden clearly does not feel like they have made good on the extent of those commitments.

My belief is that Biden needs to be much, much more hostile to Netanyahu publicly in the way that Netanyahu was with Obama and Biden back in 2015 when Netanyahu didn’t like the JCPOA, the Iranian nuclear deal, and came and gave a very provocative speech to the House of Representatives in the Senate trying to torpedo Obama’s deal. And I see no reason. I mean, Netanyahu is despised in Israel. He is seen with good reason as being responsible for the failures of Israeli security on October 7. I think Biden should go over there and say this is how your prime minister is not representing the interests of the country. He’s corrupt, he’s unfit, he should be out of office and I and the United States will be supportive of Israel going forward, but not of this. And I think that they need to hit him. And they’re not doing it. They’re not being willing. And I think as a consequence, Biden looks stapled to one of the most unpopular leaders in the geopolitical environment today, to Biden’s own detriment.

Gideon Rachman
Yeah. I mean, Karin, it’s a very interesting scenario Ian paints. I cannot see any American president doing that, but what do you think? And more broadly, how do you see this playing out? Or put it another way, do you think in six months time this will still be the huge issue it is today, or might it calm down a bit?

Karin von Hippel
Well, I think this conflict is gonna end in several weeks, this war. But I don’t think America would do that, not only because Israel is a sovereign state and makes its own decisions, but also because, of course, Biden wants to be seen as pro-Israel in the run-up to the US elections because Trump would push that quite hard. Netanyahu, as we all know, is fighting for his own political survival. And so he’s not going to give up easily, and he’s pushing very hard. I don’t think there is a way out for him. I don’t think he does survive this politically. But the sooner the Israelis oust him, the better. But I don’t think it would be very good or wise or practical for the Americans to make that happen publicly.

Gideon Rachman
OK. Now, Martin, let’s move on to China, because you’ve written a fair bit about it. Its future in the end will do more to determine the fate of the world and what’s happening in the Middle East. And it’s such an interesting moment. There’s this sudden feeling that maybe the Chinese economic miracle that dominated the last 30, 40 years is over. What’s your feeling about it?

Martin Wolf
Well, the dominant theme of my articles was that what is almost emerging is a consensus view in the west that we are past peak China and therefore we should worry less about its eclipsing the west is, if you look at the idea carefully, overblown. It’s a complicated one. If you look at the potential of the country and its underlying resources and capacities, it’s absolutely clear it’s never again going to grow at 10 per cent a year. In fact, it’s never again going to grow at 7 per cent a year. But you can tell a pretty decent story in which it grows quite comfortably at 4 per cent a year in the next decade or so. And that is almost certainly twice as fast as the western countries together will grow. And quite probably more than that, US might grow say, 2, 2.5 and Europe probably and Japan 1, 1.5.

And that gives you a situation in which China is still growing relative to these countries. It is upgrading its technology without a doubt, though it’s clearly still behind in some areas. It has very powerful trading relations with countries with weight — commodity producers like Brazil and South America and of course, countries in south-east Asia and east Asia, which even if they don’t like it very much, it’s a very, very important trading partner and it’s also a very important trading partner for Europe.

So while I think the idea that China is going very quickly to become the overwhelmingly dominant power in the world, particularly given its relatively weak alliances, is not plausible, the view that the Chinese economy won’t continue to rise relative to ours despite its demographic problems and its structural macroeconomic problems. That view is, probably from our point of view, as it were, too optimistic, which I’d bet on the assumption that China, because it is still really relatively poor, relatively unproductive, with vast potential. The idea that it will continue to rise relative to the west is the most plausible view, I believe, of the future.

Gideon Rachman
Right. And now Ian, I mean, I know you just paid your, as well as being in Japan you went to China for, I think, your first visit since the end of the pandemic. Did you find that you were facing a fundamentally different China from the one you knew before the pandemic or not?

Ian Bremmer
Not fundamentally different at all. But the smile diplomacy, the charm offensive was in full display. They were very happy with the Biden-Xi meeting and indeed the readout that the US foreign policy community got privately from the Chinese ambassador to Washington was the most overwhelmingly positive official document I have seen in at least a decade from China. So they want this relationship to get better, and that’s the military-military engagement, that’s the reaching out to the CEOs and the high-level access and the giving them licenses. That’s the trying to deal with the espionage point with the Japanese, the fentanyl deal, you know, you name it. The Chinese are trying to show, no, no, no, we wanna work with you guys.

And here’s the point. I agree completely with the nuanced response that Martin just gave you on China not being past its peak economically. I completely agree with that. But it is possible that China is past its peak geopolitically, at least for the next few years, because they have really overplayed their hand. You know, massive belt and road announcements and a lot of those investments don’t go so well. And now they have to invest a lot more domestically and they’ve got real debt problems and they’ve got real real estate problems and they’ve got to deal with headwinds from industrial policy in the US and in Europe. And there’s the de-risking, which could be decoupling. And they’ve got export control problems with semiconductors. And the Indians have a bad relationship with them and so they can’t actually control the Brics as their own counterweight to the G7 because India has zero interest in that. And they are much more of a leader of the global south. And the Philippines are offering the Americans eight military bases and the Indonesians just plussed up the US relationship to be on par officially with that of China. And, you know, the European EU leader, von der Leyen, refers to China as an adversary the way the Americans do and, you know, on and on and on.

The geopolitical environment for China looks a lot more challenging in the coming years than the economic environment does. And I think that’s a big reason why I was treated so well, why my colleagues that have been travelling over there the last few months, the CEOs, why the Australian prime minister has been treated so well, the Japanese and the South Korean foreign ministers in their trilat now with China have been treated so well. Like, this is not just a couple pieces of data. This is a structural shift.

Gideon Rachman
OK. Well, that’s a very interesting note on which to begin to round up, Ian, because there’s a lot of gloomy stuff out there. We talked about Ukraine, we talked about the Middle East. But it is the case that at the beginning of the year I was really struck when I was in Washington by how much open talk there was of a possibility of a US-China war. Maybe that’s all still possible. But that mood between Washington and Beijing has clearly improved over the course of the year. And to kick off the last round, Ian, you made, I think, a very worthwhile effort to point to some things that are actually going right in the world. What would you point to aside from the US-China?

Ian Bremmer
Well, US-China’s one, and not because there’s suddenly trust in the relationship, but just because compared to the conversations we’ve been having so far in this podcast, both the Americans and the Chinese working with each other actually are adults and they want more stability in the relationship. And so at least for the near future, I think that’s a positive.

India’s a positive not just because Modi’s at 76 per cent approval and he’s about to resolve Kashmir as a domestic issue in addition to so many others he’s been dealing with. But even more importantly, because he is seen increasingly as the leader of the global south, but as someone who wants to have a strong bridge to the Americans, the Japanese and the Europeans. Only Canada’s his bad relationship there and they don’t really matter much strategically. That’s a really big deal. I mean, imagine if India had that leadership role in the global south, but a policy orientation more like Ramaphosa in South Africa. The Brics would look very different. China geo-strategically would look more adversarial. It would be a much more challenging world. So I think India’s a really big plus.

And let me also say that despite all the populism inside Europe, the fact that the EU continues to be strong and capable of driving unified regulations, whether it’s on the hard-fought AI Act, which goes a lot farther than the American executive order, or whether it’s on climate, or whether it’s on energy and how much they’ve been able to do to respond to complete decoupling from the Russians over the last couple of years. You know, you don’t want to forget, don’t wanna sleep on the world’s most important experiment of supranational governance.

Gideon Rachman
OK. Well, those are all good reminders. And I think, you know, you’ve made the point that obviously, as they say in the news business, if it bleeds, it leads; that bad news tends to crowd out good news. But, Karin, do you have any causes for optimism in the year ahead?

Karin von Hippel
Well, I think the way I would interpret some of the points Ian was making about China’s power not being as important. I see the world shifting in different ways, that the US and China is no longer these binary superpowers that can tell other countries what to do. Other countries are asserting themselves in different ways, especially the middle powers, but also poorer countries are doing so. And so neither the US nor China can necessarily rely on countries to follow them willy-nilly, no matter what the causes. They have to work harder for those partnerships and for relationships. And I actually think that’s a positive thing because I think the world is much better if the superpowers aren’t quite so arrogant and if they listen more. And so that’s sort of how I would interpret what’s happening with China and the US at the global level. But also, I’m very nervous about the next year because, of course, if Donald Trump wins, things could go south very quickly. And if the Democrats or Biden or whoever ends up being there at the end do win, I think we’re going to be at least on a more positive trajectory.

Gideon Rachman
Yeah, although possibly facing another contested election. But, Martin, what did you make of Ian’s list? And I think it was good that he reminded us of India, which I think you’ve visited quite recently. Is that a country that you feel optimistic about, or does the politics there crowd out some of your view?

Martin Wolf
Well, I certainly would be happier with India leading the global south than the alternatives. I have some problems with Mr Modi, but his domestic success is extraordinary and he is creating a new India. And that’s really important, that which might be very significant over the next generation. I think the list of optimism is right, and back to the point. I mean, I do think that the US and China are trying very hard to bridge the biggest gaps between them and stabilise things. And what I think I would say from my perspective as an economist, since economics really does change this, one of the most remarkable positive things is in the last three to four years we’ve gone through massive shocks and the impact on the world economy and particularly our economies — on the poor it’s worse, and there are big problems we haven’t discussed — has been actually remarkably muted. The impact, for instance, of the huge oil energy shock on the western economies has been remarkably muted. The breakdown of relations with China hasn’t had a dramatic effect. The world economy is extraordinarily resilient, which is actually quite cheering.

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Gideon Rachman
That was the FT’s chief economics commentator, Martin Wolf, ending this edition of the Rachman Review. I was also joined by Karin von Hippel and Ian Bremmer. Many thanks to all three of them. And thank you for listening. I’m told the audience for this podcast is growing steadily all over the world. So that’s one piece of good news to end the year on. We’ll be back in the new year with more news and analysis of the trends shaping our world. In the meantime, happy Christmas and New Year to listeners and please join us again in 2024.

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