10 Biggest Geopolitical Risks to Watch Out for in 2014

10. Turkey

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In 2014, Eurasia Group says many significant economic, security and social risks will intensify in Turkey -- which could have a big impact on businesses and markets in the region. The consultancy says that Turkey is particularly vulnerable to spillover effects from a civil war in Syria and the aftermath of Turkish protests last year, which could impact investor confidence. The aggressive behavior of Turkey’s prime minister could unhinge market confidence, the consultancy says.

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9. Russia

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Eurasia Group says Russian President Vladimir Putin is the most powerful individual in the world. But with Putin’s popularity slipping and Russia’s economy stagnating (not to mention the Sochi Olympics), 2014 could be an unpredictable year for the nation and its neighbors. Eurasia Group says Putin’s policies have already become more erratic and lacking in vision, and good fiscal policies that have been implemented are being undermined by retrograde moves. As things get tougher at home, Eurasia Group predicts Putin will play more of an outsized role in the international community. Look for brash geopolitical behavior from Russia in 2014, Eurasia Group says.

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8. Middle East Unrest

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Stabilization in the Middle East is highly unlikely in 2014, the Eurasia Group predicts. From the war in Syria to ongoing questions about Egypt’s stability, 2014 might continue to be one of instability for many of the nations in the Middle East. Syria’s neighbors will be particularly affected by war, especially Iraq. Meanwhile, in North Africa, Egypt and Tunisia look to have elected governments in place by the end of the year, which could bring a new set of challenges to both nations.

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7. Al Qaeda

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Eurasia Group says that over the past couple of years, Sunni extremism and the Al Qaeda brand have experienced a resurgence. With democratic transitions failing in the Middle East region, and the Syrian conflict turning into a powerful recruiting tool for jihadists, Al Qaeda’s message is gaining traction in the Middle East and North Africa. Western interests and allies might be at risk this year.

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6. Strategic Data

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In the digital era, corporations have learned to monitor and analyze consumer preferences. In 2014, Eurasia Group predicts that governments will outstrip corporations as the most powerful entities dealing with data. The consultancy says this year the Internet will become more fragmented, and strategic data will change the way that politics and markets interact. And as mastery of the cyber world continues to provide massive economic opportunity, inefficiencies and inequalities are set to continue.

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5. Petro states

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In 2014, Eurasia Group predicts that there will be an accelerated spare capacity growth for oil, bearish price pressures, and heightened competition among producers. An increased supply of oil will drive energy markets this year, but don’t expect cooperation among OPEC producers. In the middle of the year, negotiations between the West and Iran on a nuclear agreement could have a big impact on prices.

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4. Iran

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The dynamics surrounding Iran’s nuclear issues have shifted in the past year. An agreement between Iran and the West on the Middle Eastern nation’s nuclear program might result in the lifting of sanctions and an improvement in Iran’s economy. But there are a lot of obstacles standing in the way of a deal -- with strong opposition coming from some of Iran’s own neighbors. The possibility of a deal could create significant risks given tensions in the region. And without a deal, military strikes could be a possibility.

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3. New China

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Expect China’s leaders to embrace long overdue reforms, Eurasia Group says. With the Chinese government aiming to make far-reaching reforms, there’s an air of uncertainty surrounding China, creating potential upsides and downsides that could meaningfully impact the Asian nation’s growth. Among the changes to expect: a rebalancing of China’s economy, an effort to rebuild the Communist Party’s legitimacy, and a consolidation of power.

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2. Diverging Markets

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This year, voters in six of the biggest emerging economies will head to the polls and choose lawmakers and presidents. In each of these nations -- Brazil, Colombia, India, Indonesia, South Africa and Turkey -- the incumbent party will have ruled for more than a decade. While the dynamics at play in each of these nations differ, expect policy changes intended to help each party stay in office. Eurasia Group expects substantive reform in each of these nations to be stalled, creating a troubled year for these emerging economies.

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1. America's Troubled Alliances

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The U.S. is no longer in economic decline, but it’s foreign policy is, says Eurasia Group. America’s allies perceive the U.S. as being weaker than in years past and see a reduced role for the nation in global decision-making. That will impact America’s relationships with various nations in different ways. For instance, don’t expect America’s second-tier allies, like Germany, Turkey, and Indonesia to align too closely with the U.S., says Eurasia Group. That could have huge implications -- and cost the U.S. -- in different ways (such as corporations facing a tougher international landscape and a weakening of international standards).

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