While a lot of Americans know little about international politics, many of them can agree that the subject is important. Problems such as war, sickness, and climate change affect everyone all over the globe.
Sadly, we’ve seen a lot of these geopolitical issues recently. COVID is continuing to spread with no signs of stopping, the move to green energy is still a pipe dream, and China is invading Taiwan.
These are only a few things that 2022 is bringing our way so far. Check out this guide to learn more about what geopolitics is and why you should care about it.
What Are Geopolitical Issues?
So, first things first. What are geopolitical issues? In short, they’re risks that occur amongst nations.
Usually, the root cause of these problems can be boiled down to politics, the military, culture, and the economy.
Between the US election and COVID, 2021 was a geopolitical disaster, and things don’t seem to be calming down in our current year. We’re getting a bit ahead of ourselves, however.
Common Causes of Geopolitical Problems
Before we talk about our geopolitical future, let’s go over what causes problems. These examples include civil unrest, cultural missteps, and of course, violations of human rights.
Nothing can put a halt on supply and production quite like civil unrest and terrorist groups.
Most of the time, it leads to businesses and protestors being threatened. There’s no preventing a state of emergency.
It’s 2022, but that doesn’t mean that personal biases and discrimination are going anywhere. Firms often put strict regulations on foreign companies.
They can still do business, but they have to go through tons of red tape beforehand.
Violations of Human Rights
As you can imagine, human rights violations can put a plug in regular business operations. It often leads to boycotts and expensive lawsuits that are less than stellar for the economy.
The Impact of Geopolitical Issues
Geopolitical risks can have a huge impact on countries and businesses. The most common one is stock market decline.
It can lead to a reduction in foreign direct investment. What this means is that economic growth will slow down.
Slower economic growth means that a country can’t repay its many debts. If problems are allowed to progress too far, the value of a country’s money could plummet. That will cause a massive halt in exports.
Social issues such as wage gaps, corruption, and inequality will become much more common too.
Recent International Politics
Again, there’s been no shortage of geopolitical issues in 2022. The pandemic is still going strong, the climate is in shambles, corporations are being canceled, China is invading Taiwan, and Turkey’s economy has taken a huge hit.
COVID has been sweeping the world since early 2020 and is still going. The worry is that it’s continuing to mutate.
While the Omicron variant spreads faster, it comes with milder symptoms. That doesn’t mean that a stronger variant won’t rear its ugly head.
If that were to happen, it could cause another lockdown, which is bad news for the economy and lives in general.
The other issue is the slow vaccine rollout to developing countries. Without proper medical treatment, the possibility of virus mutation doubles.
Currently, inflation in Turkey is at an all-time 73% high. It’s caused the price of food and energy to sore through the roof, and the value of the lira to shoot down in value.
If the economic trajectory is anything to go by, things are only going to get worse before they get better.
China Invading Taiwan
China invading Taiwan seems to be in the very distant future, but some believe it could happen sooner rather than later.
Right now, however, the invasion is limited to China’s military drills to prepare for what could happen.
Green Energy Is Getting Further Away
Climate change has been an issue for years now. Due to recent energy shortages, it seems like we’re falling even further behind.
Many governments are having to stick with fossil fuels to keep their economy moving. It might be a while before we’re able to expand into more climate-friendly energy sources.
Many corporations find themselves between a rock and a hard place. Today’s consumers are quicker to reject a company for unsavory business practices.
Companies that have a controversial opinion on social issues (or no opinion at all) find themselves getting boycotted. In many cases, the fault for the unfair conditions isn’t with the company. It’s with the suppliers.
That leaves corporations with two choices. They can take the backlash from their consumer base or risk conflict with their suppliers.
How to Prepare for Political Risk?
The main thing that you can do is to watch the news. Look for anything that could cause unrest such as an election or new political parties.
If you’re an investor, you can set up alerts that will let you know of any possible market risks.
Try not to overreact to the news. Just because it seems like the foundation of geopolitics is going south doesn’t mean that it’s time to prepare for disaster.
Exploring Geopolitical News
Many people don’t have a good understanding of international affairs. If you’re one of these people, it’s nothing to be ashamed of.
It’s never too late to get ahead of geopolitical issues. By doing so, you can prepare for a disaster before it strikes and keep yourself afloat until the political world clears up.
For tips that will help you keep your company’s doors open in a declining geopolitical climate, visit the Business section of our blog.