Geopolitics Review - 6th January 2025
My 2025 Yearly Scenario Analysis
Contents
Introduction
Africa
Asia
Europe
Middle East
North America
Oceania
South America
World Geopolitical Scenarios
Other Scenarios To Explore
Concluding Remarks
Other News In Geopolitics This Week
Bitesize Edition
I’m not in the game of seeking to predict the future. It’s a futile exercise since we can’t ever predict these black swan events that emerge in the tails. These low-probability events rarely occur, but when they do, they often have a huge impact. Part of their huge impact is that they are often unpredictable.
I am, however, in the game of scenario analysis. These are events that could happen in and around the mean, whether positive or negative. They are easier to imagine and can allow us to prepare for the consequences of these events if they do come to fruition. It’s this exercise that I’ll engage in today.
I’ll explore each continent separately, before diving into some global geopolitical scenarios that could come to be in 2025.
Introduction
In constructing scenarios, I usually explore large, macro-based scenarios, backed by mathematical probability, forecasting techniques, history, and cyclical global occurrences. This can make my “early-year predictions” rather boring, but I’d prefer this than making multiple claims that have little to no chance of occurring.
In this upcoming year, I believe trade, energy, resources, and self-sufficiency will be the biggest trends to keep an eye on. Let’s dive in.
Africa
Sudan Civil War continues as multiple nations continue to meddle, adding fuel to the fire. Turkey has shown an interest in helping to mediate the conflict but the collapse of the Assad regime in Syria has seen many geopolitical pieces moving right on Turkey’s doorstep. Much of their attention will be focused on Syria and the Kurds in 2025.
Somalia sees a greater U.S. presence as it intends to construct five new military bases in Somalia to combat terrorism. A silent geopolitical fight for influence over the Horn of Africa continues to unfold.
Ethiopian Axis emerges against Somalia, including Kenya and Djibouti. Somaliland’s breakaway ambitions continue to gain greater geopolitical attention. The UAE’s investments in Somaliland’s Port of Berbera could see it involved in yet another African conflict as it already is in Sudan.
Nigeria continues to emerge as Sub-Saharan Africa’s geopolitical regional power, fuelled largely by favourable demographics that see Nigeria possess a significant labour force. Over 70% of Nigerians are under 30 years old, and with ample opportunity for investment and development in Nigeria, they will continue to develop for years to come. Lagos is a financial hub, and oil and gas aren’t disappearing anytime soon. These account for around 90% of Nigeria’s export earnings. Despite the heavy reliance on energy income, Nigeria will diversify, especially in technology and services. Finally, Nigeria is a strong voice in ECOWAS and the African Union and possesses one of Africa’s most capable militaries.
Egypt’s food issues will continue. As the world fragments, supply chains are more likely to be disrupted. Egypt is the world’s largest wheat importer, of which a large proportion used to come from Russia and Ukraine. With the end of the Black Sea Graim Deal in July 2023, Egypt will be one of the biggest losers over the coming years. Egypt also has limited arable land and water scarcity issues. Even with the Nile, Ethiopia’s Grand Ethiopian Renaissance Dam further upstream creates worry for the Egyptians that this could one day see less water flow to them. Globally, rising food prices, coupled with Egyptian currency devaluations will make imports more expensive. 2025 could well be the year that this issue rises to the surface.
The military junta states in Africa will increase links to Russia, whether through Wagner Group presence, private security groups, nuclear projects, or resource sharing. Russia is active in 33 African countries, and as influence for the United States, France, and the UK declines on the continent, Russia and China will step into these holes.
South Africa will host the G20 in November, and this will be looked to by the African Union as an opportunity to bring global focus on establishing African institutions and improving the quality of life for the entire continent. A nation that could benefit heavily from this G20 Summit is China via its Belt and Road initiative.
Elections in Ivory Coast, Tanzania, and Cameroon will likely highlight the political directions these nations' citizens will pursue in the future.
Asia
China continues its diplomatic approach to isolate Taiwan. Since 2016, ten nations have rescinded recognition and severed ties with Taiwan in favour of the PRC. This often involves investment, aid, or other economic incentives. China will also perform military exercises to learn more about Taiwan and its potential defensive strategy. I still believe, however, that an all-out war between China and Taiwan won’t come in any year in the future. China is a patient rising power. Perhaps one day, their demographically ageing population will see them attempt to speed up the process of reunification they seek with Taiwan, but I’d argue the losses would be too impactful for China itself. Bloomberg a few years ago predicted a China-Taiwan conflict with U.S. involvement could cost the global economy upwards of $10T. As one of the biggest beneficiaries of the age of globalisation, this would cripple China.
China will continue to use stimulus to avoid economic weakness. Whether China can pivot to a consumption-based economy remains questionable. Typically, older citizens consume less, and China has an ageing population. The size of China’s population will also continue to decline.
The Khalistan issue ensures tensions remain between India and Canada, but the issue fades into the background, especially as Trudeau steps down in Canada. If the Conservatives come to power in Canada, could they take a harder stance against the Khalistani groups operating in Canada? Or could even a reset in relations between the two nations be enough to set them on a more productive road?
Superpower geopolitics continues to be put on pause. Tariff wars, specifically between the United States and China will likely return under Trump, but relations could actually warm slightly between the Chinese and the Americans. Trump is transactional, and in any transaction, he wants to win the long straw. Still, with China’s economic struggles, and Trump being anti-war because it’s bad for trade and business, there could be some room for cooperation here. Trump hopes to put America First and focus more on domestic American issues. However, he also will likely pay less attention to Europe, and more to the Pacific region. This could be founded on boosting the United States, or limiting China, just as Trump did in his first term with escalatory tariffs and trade restrictions. Thankfully, we won’t have to wait too long to figure out which way U.S.-China relations will trend this year.
China-Philippines tensions will remain elevated over the South China Sea. The two nations clash over a territorial dispute for the Spratly Islands and the Scarborough Shoal. With China publishing maps in the past showing the immense territorial ambitions they have in the South China Sea, it’s likely they will continue to slowly see which buttons they can push without much blowback. The tensions with the Philippines will likely be how they do this.
North Koreans will continue training within Russia.
South Korea experiences the downfall of Yoon’s political party. With Yoon impeached late last year, an election early this year is likely.
Kazakhstan’s position as a key global uranium producer will see its geopolitical status rise. The country is also rich in oil and natural gas, securing them as a key energy supplier in a world where many nations are pursuing flawed energy transitions. They also are geographically in a great location, acting as a bridge to the Caspian Sea, which then heads through the Caucasus and into Europe. For China’s Belt and Road Initiative, Kazakhstan is a key ally. Finally, Kazakhstan is typically a neutral country. When geopolitical tensions arise, it’s often neutral countries who benefit from avoiding the competition. Could Kazakhstan be set to experience such a benefit in 2025?
Georgia’s pro-Russia government continue to maintain they’re hedging both sides, but other actions will indicate a lean towards Russia. Moldova will find themselves doing the opposite, with a pro-EU President Maia Sandu recently reelected, and a recent vote to join the European Union passing.
The Turks and Azeris will continue to pressure Armenia to concessions, as they pursue a connection between Azerbaijan and Nakhchivan. Iran, France, and India will supply Armenia with weapons, with France seeking to undermine Russia for the loss of influence over the Sahel states in Africa, and India seeking to rival the emerging Pakistan-Azerbaijan partnership.
Turkey will launch a minor offensive into Syria against the Kurds. Any outright military action will occur once the United States leaves Syria, which Trump is expected to do during his presidency.
Europe
Ukraine's war is at a stalemate. Peace will depend on Trump. If any peace is achieved, Ukraine will not join NATO and will have to concede territory. If this occurs in January, Russia will have time to address economic issues, as seen by the falling value of the ruble and weak expected growth in 2025. If the Ukraine War continues, will Russia be in a weakened state? Will Ukraine eventually see its front lines collapse? After Trump’s initial attempt, if no peace is achieved, it will be declining Ukrainian strength, which has been admitted to by Zelenskyy, versus Russian economic woes that could emerge in 2025. For years, many analysts have been saying Russia is on the verge of economic collapse. This hasn’t occurred, but could 2025 be the year that domestic economic struggles within Russia ensure the effects of the war are felt more by Russian citizens?
EU fiscal rules are loosened, or France-EU tensions begin to rise. Macron remains throughout 2025 and France finds itself in a state of political and economic turmoil. Article 12 of the French Constitution ensures no election can be called for a year after a previous one has occurred. Hence, this current French National Assembly will last until the summer at least by French law. I predict Macron will continue to drag his feet and will last throughout 2025.
Germany’s economy continues to falter, seeing its automobile industry undercut by cheap Chinese EVs. Its government is likely to be led under a new chancellor, as Friedrich Merz of the Christian Democratic Union looks set to win in February elections.
If Trump puts less focus on NATO, an alliance he has openly critiqued, then the UK will step up in NATO, and in addressing the shifting sands in European security, potentially via a UK-EU Defence Pact. This could also improve relations with the EU. As the UK’s largest trading partners, this would be prudent.
Remaining with the UK, and for years it has been suspected they want a U.S.-UK free trade agreement. With Trump eyeing Greenland, Canada, and the Panama Canal, as much as he states it is a joke, it does imply that Trump would have high standards for any deal. These concessions would likely increase UK reliance on the United States when they should be rebuilding relations with the EU and other partners due to these being the UK’s strongest trade relationships. I don’t believe a US-UK free trade agreement will occur under a Trump government, especially after he attempted to sue the Labour Party for election interference after they clearly supported the Democrats in the US election buildup.
Middle East
Syria descends into chaos again. Israel pushes to expand settlements in the Golan Heights, and to secure a larger buffer zone, coming within kilometres of Damascus.
Turkey pushes towards the Kurds in Northern Syria, but not without communication with the Americans first.
Trump promotes Israeli security and Iranian containment as his two key aims in the Middle East. This includes targeting Iran’s nuclear ambitions with heavy sanctions.
Trump will pursue an expansion of the Abraham Accords, hoping to introduce normalisation between Israel and Saudi Arabia. This would essentially lead to a peaceful Middle East outside of Israel and Iran, which I argue will continue for years to come. If a normalisation between Israel and Saudi Arabia includes a defence pact for Saudi Arabia, this will guarantee them as one of the biggest geopolitical rising powers over the coming decades. For the Saudis, this would be conditional on the Gaza conflict coming to an end and Palestinian statehood. I don’t believe this will happen in 2025 because Israel has stated it will remain in the Gaza Strip throughout 2025, but during Trump’s Presidency, I would expect it.
Iran is weakened. They could heavily pursue nuclear weapons in 2025, or find themselves pursuing a domestic rebuild. Iran still has influence in the energy sector through its geographic control of the Persian Gulf and the Strait of Hormuz, but any weaponisation of this geography through closing the Strait would hurt Iran just as much as the rest of the world. Hence, I believe Iran will be contained, but not squeezed. As their land bridge collapsed with the fall of Assad in Syria, Iran will rebuild internally. In the coming years, I believe they will shift their focus to Iraq. If the United States does pull out in 2026, increased Iranian influence could start building in 2025 as a precursor to this change. Without a land bridge to Lebanon, Hezbollah also faces a rebuild in isolation, with large numbers of their upper leadership taken out by the Israelis, or injured heavily by the exploding pager incident.
North America
Trump’s America First policy will redraw geopolitical spheres of influence around the globe. This will be especially obvious in the Middle East. Trump wants to leave Syria to it and has stated he will pull out of Iraq by 2026. Looking beyond 2025, does this lead to China preserving the peace between Saudi Arabia and Iran as they did with the deal they brokered in 2023, or do clashes for control emerge in these Middle Eastern vacuums?
I predict that Donald Trump will do very little to begin preparing the Republicans for life after him. However, the Democrats will begin the slow work to reimagine their party, promoting new members to higher-ranking positions. Many commentators argued that Trump’s strong performance in the Rust Belt is what hurt Harris and the Democrat’s chances. Could Pennsylvania’s Josh Shapiro rise in the Democrats to seek to address this? Could Harris try again, or even a return of Hillary Clinton? Regardless, 2025 will be a year of the Democrats figuring out what they want to look like moving forward, and this could come with high internal tensions and in-fighting.
One of Trump’s biggest issues will be tackling the Federal Reserve. Will Powell’s hawkish stance from the previous Fed meeting lead to higher interest rates once again? It will depend on Trump’s actual approach to tariffs. If Trump is seeking concessions in deals with other nations and is using the threat of tariffs to achieve this, then the potential inflationary pressures that could come with tariffs wouldn’t occur. Still, if the US economy continues to look strong, and no new inflationary pressures emerge, rates could be cut at a slower pace.
Trump has threatened tariffs against both neighbours, Canada and Mexico. This is likely to seek concessions, or to impose pressure on both countries, and in my opinion won’t be committed to. Both nations are large trading partners with the United States, and the blowback on Trump would be large. Many in U.S. politics, regardless of whether they’re Democrat or Republican, would likely work to oppose this if it was pursued as an actual policy.
Oceania
Albanese will have to fight to get re-elected in Australia’s election. The Australian Labour Party, currently in government with Albanese as Prime Minister, are set for a close race with the Liberal-National Coalition. A change in leadership in Australia would lead to new foreign policy and geopolitical approaches.
Relations will slowly improve with China and Australia, albeit without small spikes in tensions as China eyes the Pacific as its geopolitical realm of influence.
The Pacific Islands will continue to improve relations with China due to Chinese investment and infrastructure buildout.
South America
Milei continues to improve inflation in Argentina but faces an issue with poverty. He has to ease on his strategies to alleviate stress amongst Argentinian people, but the Argentinian pivot to the United States and the US Dollar continues.
Brazil holds the BRICS Presidency in 2025. On the sideline of the G20 last year, Lula signed many trade agreement deals with Xi Jinping. Lula hosting BRICS this year will likely see Brazil lean more to the Chinese side of the world order than the American side since relations have been cooling with the United States over recent years. Brazil will also host COP 30 in November. The nation will certainly be in the limelight on multiple occasions in 2025, and will hope this will reflect positively on them as an important geopolitical power in South America.
If Maduró remains in power, Venezuelans will continue to leave the nation due to its declining quality of life. If Maduro loses power, millions could return with hope for a better future. Maintaining control will depend on Maduro maintaining the support of the military.
World Geopolitical Scenarios
More nations will seek to join the UN Security Council, with France calling for India, Japan, Brazil, and Germany to join back in 2022.
As the Cost of Living remains an issue that is presenting itself as political unhappiness around the world, incumbents will continue to have little success. Populism will continue to rise as people seek stronger leaders, or those who present themselves as such.
If Trump does propose tariffs, will this be naturally inflationary? If inflation returns, expect Trump’s polling to suffer, domestically, and especially abroad. Some have predicted that China will lower tariffs in response, seeking to build relations with U.S. companies that are against the protectionist strategies of Trump. Trump is aiming to build a United States that focuses inwards to grow stronger. Could this hoped strength begin to crack from within?
In elections, Lukashenko will remain in Belarus, and the dictatorship in Tajikistan will remain in control in February since their country is a one-party system. Interestingly, both regimes benefit heavily from their connections to Russia and Putin. AfD will perform well in Germany, especially in the east in states such as Brandenburg and Saxony, but they will still be far from power in Germany.
The Arctic, for transportation and resource extraction, will continue to become the newest geopolitical field of competition, or conflict. The international market for ice breakers will quietly rise in the background, as they will become recognised as a necessity for arctic transportation. Russia is leaps ahead of other nations, owning 37 icebreakers, but Finland, Canada, the United States, Sweden, and China also possess icebreakers. China is working to construct a nuclear-powered icebreaker.
The multipolar world, led by Russia, slowly continues to emerge.
Other Scenarios To Explore
Strategic Bitcoin Reserves - Up until now, in large part due to Gary Gensler and the SEC, crypto has been outlawed as public enemy number one in the United States. The incoming Trump administration promises an almost 180-degree turn on cryptocurrencies and has even proposed starting a Bitcoin strategic reserve. Firstly, many countries already possess bitcoin, and when the volatile cryptocurrency market is doing well, as it currently is, other nations are benefitting. The United States can get involved in enjoying these good times in the cryptocurrency space, as long as they are willing to navigate the bad times, which certainly will come again. Also, a key positive of Bitcoin is its scarcity. Only 21 million Bitcoins will ever exist, and hence this ensures Bitcoin acts like many hard-backed currencies we have seen throughout history. One of the biggest advantages of these currency systems is that they aren’t inflationary. In an age where the world is fragmenting, and supply chain disruptions can arise, having a non-inflationary store of value could be prudent. Finally, with scarcity comes value. Each bitcoin requires greater effort to mine over time because of the halving, which occurs every four years and reduces the amount of bitcoin rewarded for mining each block. This naturally makes the price of bitcoin rise over time since more people are competing for one bitcoin at a given time. If, in general, this does increase the price of Bitcoin over time, could this reserve be used to pay down some of the high levels of US debt held in dollars? In contrast, this could also go the other way, and a US reserve could damage Bitcoin which is seen as a decentralised method of exchanging value. If the United States collected enough bitcoin, would it become another weapon of the US world order? Or if the United States gathers large amounts of Bitcoin, could the value of Bitcoin be weaponised against the United States? In this scenario, there are a lot of unknowns, and I think it will be unlikely to occur. It will have gained Trump some voters in the election, and I believe the greatest positive takeaway here is that this will give cryptocurrencies a platform upon which it can be discussed as to how it can implemented to impact the future of finance, trade, and currency.
Nuclear Renaissance - The nuclear rebuild is underway. The triple nuclear initiative at COP 28 has a large number of signatories and gained the support of 14 of the largest banks in the world in 2024. Another tailwind is the technology companies and their pursuit of AI data centres. The demand on the electricity grid for these data centres is incredibly large, and so the biggest tech companies are seeking to secure their own electricity to power their data centres. Amazon partnered with Talen Energy in March last year. Microsoft partnered with Constellation Energy to restart Three Mile Island. Google signed a deal with Kairos Power. These data centres require constant electricity supply which can’t be achieved by intermittent renewables such as wind and solar. Hence, the nuclear rebuild is upon us. This will continue into 2025 with more nuclear power plants being reopened in the United States, such as Palisades in Michigan, and the extension of Diablo Canyon beyond 2025 when it was set to close. As for China, they are leading in developing advanced generation three and generation four nuclear reactors that could change the industry heading forward. Russia also has a sodium-cooled fast reactor and India is seeking its own nuclear technology that will use thorium as a fuel instead of uranium.
The Space Race - Last year, I predicted rapid shifts in the space race. It didn’t pan out this way, but some progress was made. Russia reportedly launched an antisatellite weapon into space, and they also vetoed a UN resolution to ban nuclear weapons in space. Countries will continue to make moves in space, but private companies will advance at an even faster pace. These private companies will compete for control of low earth orbit, whereas the nations of the world are looking towards the moon and its resources. The United States delayed their Artemis missions until 2026 and 2027, meaning we won’t see them on the moon in 2025. Will any other nations make a return to the moon in the next year?
AI and Quantum - These races continue to unfold, with key American and Chinese companies wishing to make key breakthroughs in the industries that will lead to innovation in the future.
Concluding Remarks
Predicting is a dangerous game. However, in considering all of these potential scenarios, we can be better prepared to understand and adapt to these situations if and when they do emerge.
In this upcoming year, there will be other events that we cannot predict because they’re so unexpected that no signs yet exist that they will occur. Such events are called black swan events due to their rarity and high impact when they do occur.
2024 was a year of elections, and now the world has been shaped politically for the next few years. One of the biggest changes to be thrown in the works this year will be Trump’s return to the White House in a few weeks. He will steal headlines, and he certainly seems committed to ensuring 2025 will be a year where a lot will happen. With his transactional nature, and his tendency to sharply change his mind, even against the wishes of his advisors, 2025 could be a year of expecting the unexpected. Let’s strap in.
Is there anything you predict for 2025, or any country or topic I didn’t mention that you believe deserved to be included? Let me know in the comments below. Also if you disagree with any predictions I made, let me know also!
Other News In Geopolitics This Week
Biden Attempts New Offshore Drilling Ban In Atlantic and Pacific To Undermine Trump
Blinken Heads To South Korea, Japan and France As Final Visits
China Buildup Military In Disputed Border Area of Tawang Valley with India
Denmark: Russian Warships May Start Escorting Shadow Fleet Tankers
France Launches Air Raids Over Syria For First Time Since Assad Fell
Hillary Clinton and George Soros Receive Presidential Medal of Freedom
Honduras Threatens To Remove U.S. From Key Military Base Over Looming Mass Deportations
Slovakia Demands EU Action To Address Russian Gas Transit Halt
Trump Calls On UK To Open Up North Sea And Get Rid of Windfarms
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Sources:
https://www.ey.com/en_gl/insights/geostrategy/2025-geostrategic-outlook
https://www.chathamhouse.org/publications/the-world-today/2024-12/world-2025
https://www.weforum.org/stories/2024/11/5-geopolitical-questions-for-2025/
https://www.cfr.org/article/what-were-watching-around-globe-2025
https://www.teneo.com/insights/articles/what-to-watch-in-2025-outlooks-for-the-year-ahead-from-teneos-geopolitical-risk-team/
https://www.project-syndicate.org/onpoint/ps-commentators-predictions-for-2025-by-ps-editors-2024-12
https://en.m.wikipedia.org/wiki/2025_national_electoral_calendar