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The world at a crossroads(the hindu )

The outlook for 2017 is anything but optimistic, with a sluggish global economy, widening terror footprint, and geopolitical realignments as the U.S., Russia and China jostle for spheres of influence

The policy outlook for 2017 appears not too promising. Geopolitical risks will remain high. No improvement in the present unstable global order appears likely. New terror patterns will increase the lethality of terror attacks. Digital disruption and cyberthreats are poised to grow.

The economic outlook, likewise, appears pessimistic, with the global economy caught in a low-growth trap. Widening inequality and increasing unemployment will worsen this situation. After a decade of economic lows, the prevailing sentiment in the marketplace will be uncertainty.

In some ways, the 21st century has, so far, proved to be a disaster for the ‘status quoist West’, which failed to recognise the implications of the shift in economic power to the East, even as some countries of Asia turned into new engines of growth. Chinese President Xi Jinping was possibly one of the few world leaders to recognise the nature of the tectonic shift taking place, and came up with the ‘One Belt, One Road’ initiative, accompanied by huge investments in infrastructure to connect China with Europe and the world.

Dominant factors

What are the prospects for 2017? History and nationalism will continue to dictate the course of events; given the exponentially accelerating nature of the changes that are occurring, it will, however, play out differently. For one, unpredictability and a desire to change the status quo, primarily economic circumstance, will increase. For another, populism will increasingly determine ‘political-speak’. Third, mistrust of institutions and institutional power will grow, and personal charisma and expediency will dominate. Additionally, concepts such as exceptionalism and military superiority may gain more traction — U.S. President-elect Donald Trump’s slogan ‘America first’ and his statements expressing a need for the U.S. to increase its nuclear arsenal; Russian President Vladimir Putin’s references to the need to increase the country’s nuclear military potential; and Mr. Xi’s emphasis on Chinese ‘exceptionalism’, alongside strengthening of its military, are reliable indicators of this.

The Trump effect

The year may well see a return to the era of insular policies, and strengthening of the anti-outsider syndrome. Opposition to free trade and open borders will also be more manifest.

The ‘enigma’ that is the U.S. President-elect exacerbates this situation. Anticipating what he might do could be hazardous at this time. Yet, unpredictability was Mr. Trump’s not-so-secret ‘weapon’ in overcoming the odds in his bid for the presidency of the U.S., and the world should prepare for the unexpected.

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Most analysts believe that President Trump will roll back quite a few of the climate change initiatives agreed to by President Barack Obama. It is, however, more difficult to anticipate how the new President will deal with Russia or China. U.S.-Russia relations are at their nadir today. Retrieving this situation will require resort to a series of unorthodox steps. A Trump presidency may be better suited than a conventional one to circumvent the North Atlantic Treaty Organisation’s Cold War logic, arrive at concessions regarding Ukraine and the Crimea, and limit cyberwarfare between the two countries. Additionally, Mr. Trump’s idea of a ‘Coalition of the Willing’ to fight the Islamic State in West Asia may find resonance in Moscow, giving an opportunity for further reduction of tensions between the two countries.

Asia and Europe

Reaching a modus vivendi with China may prove more problematic. Talk of a ‘trade war’ between the U.S. and China is in the air, and the President-elect’s strong words about China’s trade practices make matters difficult. For the present, Mr. Trump has served notice of his intention to pursue a hard line on trade with China by choosing two China critics — Peter Navarro and Robert Lighthizer — to handle trade matters. Whether unorthodoxy will pay off in trade negotiations remains to be seen. The Chinese tend to be patient and could even absorb a Trump ‘first strike’.

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In the geopolitical arena, the competition for influence in Asia between the U.S. and China will continue in 2017. It is possible, however, to envisage both countries taking steps to prevent a total breakdown of relations, and of being able to find common ground to accommodate mutual concerns in the South and the East China Seas. This may leave many of the East Asian and Southeast Asian countries unhappy — given China’s aggressive postures towards them — but may not inhibit Washington.

The U.S. reaction — under Mr. Trump — to certain new alignments forged during 2015-2016 could be a pointer to what the future holds in 2017. Most important would be the U.S. reaction to the ‘strategic congruence’ established between China and Russia (likely to be cemented during 2017), aimed at countering U.S. moves in Asia. As Russia and China fine-tune their economic and security interests in 2017, a moot question would be whether Russia will acknowledge China’s de-facto supremacy in Asia, in return for according Russia a special position in Eurasia.

2017 could turn out to be a defining year for Europe. Brexit, and the decision of the U.K. to leave the European Union, has already led to widespread concerns about Europe’s future. The year may see many of the issues coming to a head.

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Grappling with an existential crisis already, Europe is simultaneously confronting other dangers such as polarisation and the threat to its liberal and democratic policies and image. The migrant crisis found Europe unprepared for the consequences of such mass inflows. Many cities in Europe, for instance, seem to have lost the ability to maintain law and order or contain the consequent surge in violent crime. These problems could be further compounded during 2017.

The terror threat

Terrorism will continue to remain a grave threat during 2017. 2015 and 2016 were two of the worst years in terms of fatalities across Asia, Africa and Western Europe — the highest in almost five decades. The portents for 2017 are none too propitious.

The year has begun inauspiciously. At least 25 people were killed in a suicide attack in Baghdad on December 31. Another 39 New Year revellers were shot dead in a nightclub in Istanbul. Twelve people were killed in a terror attack in a crowded Berlin Christmas market, in an incident very reminiscent of the July 2016 attack in Nice, France.

A sharp increase in ‘lone wolf’ and ‘copycat’ terror attacks is likely and will result in an increase in fatalities in 2017. Russia, which has not witnessed serious terror attacks for some time, could again come into the crosshairs of Chechen and other terror outfits. Southeast Asia may witness many more terror attacks following a call by the Hizb-ut-Tahrir to retaliate for the treatment meted out to Rohingya Muslims in Myanmar. North and East Africa, where terror outfits like Boko Haram and Al-Shabaab, as also the Al-Qaeda in the Islamic Maghreb (AQIM), have been on a rampage during the past two years, will not see any respite in 2017. India, for its part, cannot hope for, or expect, any reprieve from terror attacks from across the border.

India and the neighbourhood

The Asian region will see heightened tensions between China and India, China and Japan, and India and Pakistan in 2017. The overall military power balance is unlikely to shift decisively — Asia already has one of the largest concentrations of military capabilities (China, India and Pakistan) with substantial presence of the U.S. and Russian militaries. However, the accelerated pace of development of China’s military in 2017, including its acquisition of new weapon systems, will be of increasing concern to countries of East, Southeast and South Asia.

For India, a deepening of the China-Pakistan military entente in 2017 will add a further dimension to the overall threat from Pakistan. Relations with Islamabad remain embittered, but in addition India may have to contend with a more aggressive and determined Pakistan, feeling greatly buoyed by the progress achieved on the China-Pakistan Economic Corridor, and the new outreach to, and growing ties, with Russia.

India’s position in Afghanistan in 2017 may well see a downturn, with new equations emerging in the region. With the U.S., China and Russia backing Pakistan’s moves for ‘flexible ties’ with Taliban — ignoring India’s objections — New Delhi’s interests are set to suffer.

Meanwhile, both Nepal and Sri Lanka could see a turbulent 2017. India’s ability to leverage matters in both countries, however, remains strictly limited.

In short, as 2017 dawns, the world and India are at the crossroads.

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