Why 2024 is a record year for global politics

While every year is important for global politics, 2024 stands out.

A record number of elections are scheduled, with major elections in the India, Russia, South Africa, the United Kingdom and the United States expected to capture the world’s attention. The consequences of these elections will reverberate not just at the local level but across the world. Here we explore the geopolitical, geoeconomic, and operational macro-risks associated with the 2024 election calendar.

Geopolitical risk

Political change through national elections can generate seismic shifts in a country’s actions on the international stage. The character of political transitions and new leadership often has a bearing on international relationships, security arrangements, and conflict dynamics. Taiwan’s national elections on 13^th January highlighted these risks, particularly with regards to its relationship with China, tensions in the Taiwan Strait, and regional competition between great powers. William Lai from the Democratic Progressive Party (DPP) won the presidential election with 40.1% of the vote and is likely to maintain the Cross-Strait relations status quo. A different election outcome could have changed the status quo, for better or for worse – precedent suggests that China could have pursued a more aggressive military stance following Taiwan’s election, as it did in 2016. Lai’s victory and Taiwan’s domestic political decisions will be critical in determining the direction of regional external conflict risks for the next four years.

Similarly, the presidential election in the United States will have profound consequences for the global order. Conflicts ranging from Ukraine to the Middle East will be affected by whomever is elected to the Oval Office in November. Assuming the presidential race will be between incumbent Joe Biden and former president Donald Trump, both hold incompatible views on United States’ foreign policy and defence priorities. Trump has continually criticised fellow NATO members for not meeting their financial obligations, threatening to pull out of the alliance or not defend allies that are attacked. If elected, Trump will usher in policy changes that significantly alter the future of the Ukraine conflict and the wider European security environment.  

Geoeconomic risk

Many of the national elections in 2024 involve countries with a large stake in the global economic system. Almost half of the G20 have held or will hold elections this year. Specific domestic changes will depend on the country, but governments often make changes to regulations, interest rates and other areas of the economy in the near-term post-election period to attract investors. In the post-Covid environment, governments are more likely to face increased pressure to contend with inflation, unemployment, and high debts due to borrowing, which could lead to more radical policies being implemented and market shocks.

Incumbent governments in South Africa and the United Kingdom are likely to be punished politically for domestic economic performance – unemployment in South Africa has surpassed 32% [1], while the United Kingdom has entered a recession. The outcome of elections can catalyse changes to wider economic policy, as ‘de-risking’ to minimise perceived supply chain vulnerability has become increasingly popular.

Challenges for businesses

Election proceedings can elevate operational risks for businesses.

An incoming government can create individual business, sector-specific, and/or market uncertainty by introducing policy. The election of Argentina’s more radical President Javier Milei in 2023 demonstrated that results have a notable effect on market confidence. With Argentina’s persistent economic issues, markets reacted positively to his inauguration despite uncertainty over what policies Milei would attempt to implement, such as dollarisation or closing the central bank. It remains to be seen whether initial market optimism will be sustained over his presidency.

Election results can underline a deterioration of the political risk environment and democratic backsliding.

An example of this is the growing authoritarianism in El Salvador with President Nayib Bukele’s new supermajority after elections in February. A lack of checks and balances in a legislative context can undermine business confidence in the robustness of the legal and regulatory environments, especially in countries where corruption is rife. Undemocratic systems can also attract international attention, where any imposed sanctions create additional barriers for businesses. As such, businesses will need to be aware, agile, and adaptable to changing political circumstances, particularly in countries where democratic values and/or business friendly environments are slipping.

Protecting staff is part of a business’ duty of care, and elections can often stimulate a temporary deterioration in the security risk environment.

Despite vast geographical distances and risk landscapes, unrest occurred in Pakistan, Senegal, and the Comoros in 2024 due to election-related developments. Accusations of electoral fraud and corruption are frequent drivers behind election-related unrest, which can pose major incidental risks to personnel, both to their personal security and travel plans.

Prepare for heightened risks

Elections provide opportunities, but also risks. National elections tend to heighten geopolitical, geoeconomic, and operational risks both at the national and global level. As highlighted in particular, the results of the upcoming presidential elections in the United States will have significant effects on the future of European security, Middle Eastern tensions, and the global economy. Businesses must ensure they are adequately postured for elections, both in their areas of operation and beyond.

Be one of the first to receive our upcoming report, focussed on key 2024 elections set to have the most impact in the ballots and beyond, helping businesses to get ahead. Register here to receive an early copy.

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