Stratfor Forecasts: Potential Trends in Global Interactions During the Third Quarter of 2024

Global interactions continue to be governed by escalating crises and ongoing conflicts during the current year. There are still ongoing wars resistant to settlement, especially in Ukraine and the Gaza Strip, not to mention the continued challenges facing the global economy. Several hotspots remain likely to escalate, particularly in Taiwan and the Indo-Pacific region, amid continued competition between the United States and China for influence there, as well as regional countries’ dissatisfaction with Beijing’s policies. Additionally, there is anticipation of potential political shifts in European and American policies in light of far-right gains in European Parliament elections, as well as expectations of Trump’s return to the White House.

In this context, the importance of the “Geopolitical Outlook for the Third Quarter of 2024” report, published by Stratfor in June 2024, comes into focus. The report indicates that the third quarter of the year will witness more escalating geopolitical tensions between the world’s largest economies. The United States and the European Union are imposing higher tariffs on key Chinese technologies, especially electric vehicles, while Beijing adopts retaliatory policies in politically sensitive sectors such as vehicles and agricultural products.

The report points to several general and main trends in expected global interactions, which can be addressed as follows:

The West targeting China’s role in the clean energy industry: During the third quarter of the year, it is expected that the United States and the European Union will impose restrictions on the green technology sector and some important products such as Chinese electric vehicles. This aims to protect domestic production and limit Beijing’s role in technology supply chains. Washington will begin applying tariffs on Chinese electric vehicles, batteries, semiconductors, and many other strategic goods on August 1. However, Western measures will push China towards taking retaliatory measures, and Beijing has already hinted that it may impose tariffs on imported vehicles and agricultural products from Europe.

Continued Western financial and military support for Ukraine: Western financial and military support for Ukraine will continue during this quarter, with the likelihood that the NATO summit to be held in Washington from July 9 to 11 will result in an agreement stipulating that NATO countries provide at least 40 billion euros of annual military support to Kyiv. However, this will not significantly increase its ability to continue waging war or its negotiating leverage towards Moscow, especially since progress in Ukraine’s NATO membership and long-term arms purchases will remain ambiguous, despite political pledges on these issues.

On the other hand, some Western support initiatives may become active during this quarter, such as expanded Western training missions in Ukraine, support for Ukrainian strikes inside Russia with precise Western weapons, and perhaps even the first delivery of F-16 aircraft. However, such initiatives will not radically change the battlefield prospects in Ukraine in the coming months.

At the same time, Russia will receive economic support from its main partners, primarily China, which will continue to provide key inputs to Russia’s civilian economy and military industry. At the Eastern Economic Forum of Russia scheduled to be held from September 3 to 6 in Vladivostok, Russia will urge Beijing to enhance cooperation in energy and investment in the Arctic, urge Chinese banks to increase their presence in Russia, and support the Siberia 2 pipeline. However, progress on these issues is unlikely except on Beijing’s terms, and Chinese military support for Russia will mainly be in the form of dual-use goods.

Azerbaijan using the threat of escalation as a means of pressure on Armenia: Based on the strategy it has adopted in recent years of increasing attacks on Armenian forces during late summer and early autumn, Azerbaijan is likely to intensify shelling of Armenian positions during this quarter. It may also attempt to seize additional small parts of internationally recognized Armenian territory, although this is less likely. Baku’s goal will be to pressure Yerevan to make territorial concessions to avoid further loss of life and loss of more Armenian territory.

Georgian voters split between pro-Western and pro-Russian camps: Parliamentary elections in Georgia will be held on October 26, with the Georgian government mobilizing its base before the vote by proceeding with enacting controversial laws in the Russian style. After passing the so-called “foreign agents” bill in late May, the ruling Georgian Dream party may pursue a law on so-called “gay propaganda”, which is also inspired – like the “foreign agents” bill – by a similar law in Russia. Protests against the Georgian Dream government in Tbilisi are expected to be organized daily during this quarter, although most protests will be on a small scale.

The report believes that the low majority of the Bharatiya Janata Party may hinder the passage of more ambitious structural reforms, such as privatization of state-owned companies and land and labor reforms that opposition parties may resist for fear of a violent reaction from trade unions and farmer groups. As a result, the government is likely to prioritize less controversial economic reforms, such as expanding production-related incentives for export-oriented sectors burdened with high import duties, especially textiles, leather, and equipment.

Possibility of obstructing some political and social changes in India: While the Bharatiya Janata Party will seek to continue its efforts to adjust public finances, the budget for the next fiscal year to be finalized in July is likely to include a slight increase in populist spending on social welfare schemes and subsidies to appease allies. The Bharatiya Janata Party’s weak position may also prevent it from pushing controversial political changes such as reformulating the widely promoted “One Nation, One Election” principle, which aims to synchronize elections for the Lok Sabha in the Indian Parliament and all state councils. This reform requires a constitutional amendment, but the Bharatiya Janata Party and its allies lack the necessary absolute majority.

Pakistan prioritizing final agreement with the IMF: Pakistan will prioritize finalizing a new IMF program, aiming to secure nearly $6 billion in funding in July, and is likely to request additional funding under the IMF’s Resilience and Sustainability Fund. According to the report, obtaining additional funds from the IMF will help Pakistan restructure its debts.

Sri Lanka’s efforts to restructure debt: Sri Lanka’s main priority during this quarter will be to continue debt restructuring discussions. The government aims to complete by late June, but it could be postponed further into this quarter. While these negotiations have continued, it is unlikely that lack of progress will prevent the IMF from approving funds from the $2.9 billion bailout plan as long as the government remains committed to negotiations with bondholders and adheres to IMF-recommended reforms. The government may also prioritize more feasible reforms including improving tax collection through imposing a progressive property tax, removing tax exemptions for industries such as tourism and agriculture, and combating tax evasion.

Likelihood of President Wickremesinghe announcing his candidacy in Sri Lanka: During the last months of his term, Mexican President Andrés Manuel López Obrador (AMLO) will try to pass a package of constitutional reforms to secure his legacy, some of which would reduce regulatory obstacles and government checks and balances. President-elect Claudia Sheinbaum is scheduled to take office on October 1, but the new Congress will convene on September 1, giving AMLO a month to pass reforms. However, AMLO is likely to face difficulties in passing more controversial reforms, including reducing the Federal Electoral Institute responsible for organizing federal elections, amid opposition resistance. Other proposals that eliminate government bodies would help reduce expenses, but risk reducing checks and balances and allowing Mexico’s corruption challenges to worsen.

Efforts of Mexico’s new President Sheinbaum to connect with leftist governments: On the other hand, Sheinbaum will communicate with leftist governments, such as Brazilian President Lula da Silva’s government in Brazil to strengthen strong relations, with the possibility that key areas of focus will include environmental issues. This communication will give the new president’s policy more momentum.

Possibility of social tensions in Brazil: Domestically, climate issues will create social tensions amid popular frustration over devastating floods in southern Brazil in May, and the likely increase in oil production by the state-owned energy giant Petrobras, including in the northern equatorial margin waters.

Likelihood of Nicolás Maduro’s re-election in Venezuela: Venezuela will hold presidential elections on July 28, and Nicolás Maduro is almost certain to win re-election because the vote will not be free or fair, given the regime’s efforts to prevent popular opposition candidates from running and the possibility of vote rigging. The post-election period will see increasing international criticism of Venezuela, with the possibility of the United States reducing exemptions from sanctions on Venezuelan oil.

Continued tensions between Venezuela and Guyana with full invasion ruled out: Tensions with Guyana over the disputed Essequibo region will continue. Venezuela’s construction of military facilities on the border indicates an increased likelihood of small incursions into the region and harassment of energy sector ships off the coast of Guyana. However, a full Venezuelan invasion remains highly unlikely during this quarter.

East Asia

Moving to the East Asia region, the report points to several potential trends in interactions in the region, as follows:

China limiting economic intervention amid steady recovery: Policymakers in China will choose limited and targeted policies to maintain macroeconomic stability and support economic activity, as China’s growth target of 5% for 2024 approaches. Beijing will continue its gradual approach to managing deflation risks and the real estate sector and maintaining strong economic growth. More measures aimed at stimulating domestic consumption and others aimed at supporting the real estate sector may be taken, although they are likely to be on a small scale. Beijing is unlikely to provide large incentives. This is partly because targeted intervention is more appropriate for managing systemic risks while rebalancing the economy.

Increased tensions between Beijing and Taipei: Tensions surrounding Taiwan will hinder already charged economic talks between the United States and China, especially if the U.S. House Speaker or Senate Majority and Minority Leaders meet with the new Taiwanese President William Lai before the U.S. general elections in November, which is likely to lead to new large-scale Chinese military exercises around Taiwan.

Possibility of a new prime minister in Japan while maintaining foreign policy: Leadership disputes within Japan’s ruling party could lead to the emergence of a new prime minister, but are unlikely to lead to major changes in foreign policy, especially during this quarter. Approval ratings for Japanese Prime Minister Fumio Kishida and his Liberal Democratic Party have been declining for months. In the event Kishida loses the party leadership elections in September, it is likely that the new party leader (who will also become prime minister) will maintain foreign policy continuity through increased cooperation with the United States and South Korea in military affairs.

Continued causes of political conflict in Vietnam: Vietnam’s National Assembly elected a new group of leaders in May 2024, leading Vietnam on a path to restore a sense of political stability and revitalize investor confidence during the third quarter. However, competition for succession is still ongoing, meaning that internal fighting is likely to resume after this quarter. In a more extreme scenario, the resignation of more senior leaders or the incapacity or death of the General Secretary of the Communist Party of Vietnam Nguyen Phu Trong would throw the reorganized succession process back into chaos.

Expansion of the AUKUS agreement: New Zealand, Japan, and South Korea will take steps to join the second pillar of the AUKUS agreement, which seeks to enhance their security and technological capabilities and share some of the burden of deterring China on the United States with additional partners in the Asia-Pacific region. According to the report, the urgent need to strengthen AUKUS is linked to the U.S. presidential elections in November, as allies seek to establish such arrangements before a potential Trump administration abandons them. For the United States, the expansion of AUKUS would distribute the burden of regional defense and deterring China more broadly. Including additional countries in the Asia-Pacific region would simultaneously increase China’s perception of the threat and push it further towards seeking parity or superiority in technologies such as quantum computing, artificial intelligence, and hypersonic weapons. The expansion of AUKUS would also further motivate China’s deep security relations with Russia and North Korea.

Latin America

Latin American forecasts, according to the report, point to several main trends as follows:

Stabilization of macroeconomic contraction in Argentina: Argentina’s economy contracted significantly in the first half of 2024 due to public spending cuts and tax increases aimed at achieving a fiscal surplus and reducing inflation, leading to a sharp decline in economic activity. However, these policies led to a slowdown in monthly inflation, which will remain in single digits in the third quarter. Buenos Aires will also maintain its fiscal surplus, and the Argentine Central Bank will continue to increase its dollar reserves. Despite a weaker-than-expected harvest due to unexpected weather, increased foreign cash flows early in this quarter will lead to stabilization of macroeconomic conditions. This may lead to slight improvements in economic activity during this quarter.

The outgoing Mexican president pushing for constitutional reforms to secure his legacy: During the last months of his term, Mexican President Andrés Manuel López Obrador (AMLO) will try to pass a package of constitutional reforms to secure his legacy, some of which would reduce regulatory obstacles and government checks and balances. President-elect Claudia Sheinbaum is scheduled to take office on October 1, but the new Congress will convene on September 1, giving AMLO a month to pass reforms. However, AMLO is likely to face difficulties in passing more controversial reforms, including reducing the Federal Electoral Institute responsible for organizing federal elections, amid opposition resistance. Other proposals that eliminate government bodies would help reduce expenses, but risk reducing checks and balances and allowing Mexico’s corruption challenges to worsen.

Efforts of Mexico’s new President Sheinbaum to connect with leftist governments: On the other hand, Sheinbaum will communicate with leftist governments, such as Brazilian President Lula da Silva’s government in Brazil to strengthen strong relations, with the possibility that key areas of focus will include environmental issues. This communication will give the new president’s policy more momentum.

Possibility of social tensions in Brazil: Domestically, climate issues will create social tensions amid popular frustration over devastating floods in southern Brazil in May, and the likely increase in oil production by the state-owned energy giant Petrobras, including in the northern equatorial margin waters.

Likelihood of Nicolás Maduro’s re-election in Venezuela: Venezuela will hold presidential elections on July 28, and Nicolás Maduro is almost certain to win re-election because the vote will not be free or fair, given the regime’s efforts to prevent popular opposition candidates from running and the possibility of vote rigging. The post-election period will see increasing international criticism of Venezuela, with the possibility of the United States reducing exemptions from sanctions on Venezuelan oil.

Continued tensions between Venezuela and Guyana with full invasion ruled out: Tensions with Guyana over the disputed Essequibo region will continue. Venezuela’s construction of military facilities on the border indicates an increased likelihood of small incursions into the region and harassment of energy sector ships off the coast of Guyana. However, a full Venezuelan invasion remains highly unlikely during this quarter.

Eurasia Shifts

Stratfor assumes that the Eurasia region will continue to face major challenges, as follows:

Continued Russian military pressure on Ukraine: The third quarter of the year is expected to see an intensification of fighting in Ukraine, with Russia continuing to advance on a small scale in multiple locations, where its forces continue to prioritize gaining ground in the Donbas region, as well as in the Kharkiv region. Russia may also open new fronts in the Sumy and Chernihiv regions of Ukraine in order to spread and deplete Ukrainian resources more quickly to pressure the Ukrainian government and Western governments to enter negotiations. However, such incursions are somewhat unlikely because they are not entirely necessary for Russia to continue its gains on the ground and weaken Ukrainian forces.

Continued movements by Ukraine and Russia to mobilize more recruits: Although Russian forces are likely to have momentum during the first part of this quarter, Ukrainian manpower will see support as a result of the mobilization law and weapons delivery authorized in the second quarter of the year. This will help stabilize Ukraine’s overall strategic situation near the end of the third quarter, ultimately pushing Russia to increase bonuses and monthly wages for volunteer soldiers, increasing inflation and labor shortages in the country, and forcing Moscow to consider more mobilization after this quarter.

Ukraine and Russia’s efforts to obtain external support: Western financial and military support for Ukraine will continue during this quarter, with the likelihood that the NATO summit to be held in Washington from July 9 to 11 will result in an agreement stipulating that NATO countries provide at least 40 billion euros of annual military support to Kyiv. However, this will not significantly increase its ability to continue waging war or its negotiating leverage towards Moscow, especially since progress in Ukraine’s NATO membership and long-term arms purchases will remain ambiguous, despite political pledges on these issues.

On the other hand, some Western support initiatives may become active during this quarter, such as expanded Western training missions in Ukraine, support for Ukrainian strikes inside Russia with precise Western weapons, and perhaps even the first delivery of F-16 aircraft. However, such initiatives will not radically change the battlefield prospects in Ukraine in the coming months.

At the same time, Russia will receive economic support from its main partners, primarily China, which will continue to provide key inputs to Russia’s civilian economy and military industry. At the Eastern Economic Forum of Russia scheduled to be held from September 3 to 6 in Vladivostok, Russia will urge Beijing to enhance cooperation in energy and investment in the Arctic, urge Chinese banks to increase their presence in Russia, and support the Siberia 2 pipeline. However, progress on these issues is unlikely except on Beijing’s terms, and Chinese military support for Russia will mainly be in the form of dual-use goods.

Azerbaijan’s Use of the Threat of Escalation as Leverage Against Armenia: Based on the strategy it has adopted in recent years, characterized by increasing attacks on Armenian forces during late summer and early autumn, it is likely that Azerbaijan will intensify its shelling of Armenian positions during this quarter. Azerbaijan may also attempt to seize additional small parts of internationally recognized Armenian territory, although this is less likely. Baku’s goal would be to pressure Yerevan into making territorial concessions to avoid further loss of life and more Armenian territory.

Voter Division in Georgia Between Pro-Western and Pro-Russian Camps: Parliamentary elections in Georgia are scheduled for October 26, with the Georgian government rallying its base before the vote by pushing forward controversial Russian-style laws. Following the adoption of the so-called “foreign agents” bill in late May, the ruling Georgian Dream party might pursue a law regarding so-called “gay propaganda,” another law inspired – like the “foreign agents” bill – by a similar law in Russia. Protests against the Georgian Dream government are expected to be organized daily in Tbilisi during this quarter, although most will be small-scale.

While some opposition forces may call for more intense protests before the October elections, there will be no serious attempts at protests akin to the “Maidan” protests during this quarter. This is because the opposition believes it can mobilize its supporters more effectively after the vote rather than weeks before the elections.

South Asia

The report highlights several key trends expected in South Asia during the third quarter of 2024:

India prioritizing less controversial economic reforms: The low majority of the Bharatiya Janata Party may hinder the passage of more ambitious structural reforms, such as privatization of state-owned companies and land and labor reforms that opposition parties may resist for fear of a violent reaction from trade unions and farmer groups. As a result, the government is likely to prioritize less controversial economic reforms, such as expanding production-related incentives for export-oriented sectors burdened with high import duties, especially textiles, leather, and equipment.

Possibility of obstructing some political and social changes in India: While the Bharatiya Janata Party will seek to continue its efforts to adjust public finances, the budget for the next fiscal year to be finalized in July is likely to include a slight increase in populist spending on social welfare schemes and subsidies to appease allies. The Bharatiya Janata Party’s weak position may also prevent it from pushing controversial political changes such as reformulating the widely promoted “One Nation, One Election” principle, which aims to synchronize elections for the Lok Sabha in the Indian Parliament and all state councils. This reform requires a constitutional amendment, but the Bharatiya Janata Party and its allies lack the necessary absolute majority.

Pakistan prioritizing final agreement with the IMF: Pakistan will prioritize finalizing a new IMF program, aiming to secure nearly $6 billion in funding in July, and is likely to request additional funding under the IMF’s Resilience and Sustainability Fund. According to the report, obtaining additional funds from the IMF will help Pakistan restructure its debts.

Sri Lanka’s efforts to restructure debt: Sri Lanka’s main priority during this quarter will be to continue debt restructuring discussions. The government aims to complete by late June, but it could be postponed further into this quarter. While these negotiations have continued, it is unlikely that lack of progress will prevent the IMF from approving funds from the $2.9 billion bailout plan as long as the government remains committed to negotiations with bondholders and adheres to IMF-recommended reforms. The government may also prioritize more feasible reforms including improving tax collection through imposing a progressive property tax, removing tax exemptions for industries such as tourism and agriculture, and combating tax evasion.

Likelihood of President Wickremesinghe announcing his candidacy in Sri Lanka: With presidential elections scheduled between September and October, President Ranil Wickremesinghe is likely to announce his candidacy, especially amid announcements from key opposition leaders. In an attempt to gain popular support, the government may scale back some austerity measures, possibly delaying tax increases and maintaining subsidies.

India and Pakistan preparing to face a range of climate challenges: The monsoon season and potential heat waves pose significant risks to India and Pakistan, including floods and damage to infrastructure, homes, crops, and energy supplies. Stagnant water left by floods increases the risk of water-borne diseases such as malaria and dengue fever, while population displacement and infrastructure damage will lead to economic losses and disruptions in affected areas, exacerbating regional economic challenges.

Africa’s Challenges

Several key trends are expected to dominate interactions within African countries:

Reduced likelihood of structural reforms in South Africa: The new South African government is unlikely to pass major economic reforms as the African National Congress and Democratic Alliance attempt to formulate a common political agenda. The main opposition party (former President Jacob Zuma’s “Spear of the Nation” party) is likely to adopt a confrontational approach against the new government, which may include protests that could turn violent.

Worsening security challenges in Nigeria due to ongoing cost of living crisis: The cost of living crisis in Nigeria will continue, likely leading to worsening security challenges that could exacerbate food inflation and cause ongoing difficulties in expanding the country’s oil production. Inflation will remain high amid continued weakness of the naira, which will, along with the recent elimination of some electricity subsidies, lead to a continued cost of living crisis in the country, threatening to deteriorate Nigeria’s security environment. In this regard, the report indicates that crises in Nigeria may lead to swelling the ranks of criminal groups in the Niger Delta targeting onshore oil infrastructure, which would pose an ongoing threat to Nigeria’s oil production.

Continuation of civil war in Sudan and its threat to regional stability: With the Sudanese Armed Forces continuing to refuse participation in peace talks with the Rapid Support Forces, the civil war in Sudan is likely to continue, threatening the stability of neighboring Chad and South Sudan. According to the report, the continuation of the war will provide opportunities for external powers to expand their influence in the country as both the Sudanese Armed Forces and Rapid Support Forces look to secure additional weapons. The Sudanese Armed Forces are likely to help Russia begin establishing a naval supply point near Port Sudan in exchange for military support, enabling Moscow to expand its regional influence. Russian support for the Sudanese Armed Forces will also enable greater synergy in Russia and Iran’s approach to Africa, facilitating Tehran’s access to other Russia-friendly states on the continent.

Escalation of terrorist activity in Mozambique and delay of energy projects in the country: The Islamic State – Mozambique Province is likely to expand its attacks across Cabo Delgado as the Southern African Development Community mission in the country ends, threatening to delay major LNG projects by France’s TotalEnergies. This would deprive the European Union of a new source of natural gas. The delay in TotalEnergies’ LNG project is likely to affect ExxonMobil’s Rovuma LNG project in Mozambique, as both projects share common facilities. Moreover, the ruling Mozambique Liberation Front (FRELIMO) may exploit the escalation of jihadist attacks to consolidate power ahead of the October general elections, potentially paving the way for protests by the opposition Mozambican National Resistance (RENAMO) movement.

In conclusion, the main feature of global interactions during the third quarter of 2024 is the continuation of existing conflicts in Ukraine and the Gaza Strip with the possibility of these conflicts expanding. The clash between Beijing and Western countries led by the United States will continue, while many countries will continue to suffer from economic crises. Political instability will remain one of the main features in several different regions, especially Africa, which is witnessing extended conflicts that have also called for external interventions and competition between many powers for influence.

SAKHRI Mohamed
SAKHRI Mohamed

I hold a Bachelor's degree in Political Science and International Relations in addition to a Master's degree in International Security Studies. Alongside this, I have a passion for web development. During my studies, I acquired a strong understanding of fundamental political concepts and theories in international relations, security studies, and strategic studies.

Articles: 14402

Leave a Reply

Your email address will not be published. Required fields are marked *