Geopolitical Outlook in 2024

State of the world

Taiwan’s elections are now done, with a result of the Democratic Progressive Party winning. That’s significant as they are pro-independence, which naturally mainland China is not happy about.

The biggest of the next 70 elections this year is of course the US election, however even after Iowa and New Hampshire results, it’s too early to tell what will happen in November. A strong economy and strong market is helpful for Biden, while any potential weakness/recession will be favorable for Trump.

If you’re curious how these races can change over time, Trump this time in Jan 2016 was slightly lagging behind other Republican candidates Marco Rubio and Ted Cruz before gaining support over the following months, so while the economy is one of the variables to watch in the states, the important thing is that nothing is set in stone.

There are 68 other elections still to take place this year elsewhere around the world. Russia and India will likely be the ones with the most media attention, however both are likely to have known outcomes, given Modi’s popularity & recent growth in India and a lack of viable opposition against Putin in Russia.

But the elections with the most implications will likely be for the EU Parliament (which for instance could affect European support to Ukraine) and the UK (with a possible swing to Labour).

Global chokepoints

As for the state of the world, right now there are 22 armed conflicts which are ongoing. The most talked about one at the moment is the crisis in Gaza between Israel and Hamas. Now, what’s going on there is horrible and both sides need to find a way to resolve this latest chapter in the violence, but it is not ultimately consequential on the global market.

This contrasts with what’s going on further south in the Red Sea, given the Houthis in Yemen, who continue to interrupt global trade die to their proximity to the Suez Canal. With about 15% of world shipping traffic (including roughly 30% of global container trade) passing through Suez Canal, they stand uniquely positioned to interfere with global supply chains. The big question mark is on how long they can continue with so much global trade going through Suez, especially with 8 military bases from various nations across the strait in Djibouti – incl. US/UK/Germany/Spain/Japan/Saudi Arabia/China – keen to put a stop to the difficulties facing international trade as a result of their actions.

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