While investors focus on recent market turmoil in China, tensions in other hotspots continue to flare. Ian Bremmer, president of the Eurasia Group and foreign affairs columnist at Time, sees three other areas that are key to understanding the destabilizing themes in the global marketplace.
Russia bombs Syria amid Turkish protests
“I'm quite amused that four years after the United States has had no policy on Syria, the Russians have finally decided to take advantage of that. And, we don't know what to do…The thing I would worry about most [is that] the war is going to intensify,” says Bremmer.
Relations between Turkey and Russia have soured, as Russia has violated Turkey’s airspace to bomb Syrian targets. Recently, Russia changed course, using its navy to conduct bombings via the Caspian Sea, traversing Iran and Iraq instead of Turkey. Nevertheless, tensions are heightened.
“I do worry that we could end up with fighting between Russia and Turkey, which is a NATO ally. Because the Turks, in particular, really want Assad out…If the Russians are fighting the Kurds directly, the potential for the Turks to get mixed up in that is not negligible. That would be a trip wire for the United States,” says Bremmer.
There is no easy or palatable solution for the U.S., according to Bremmer. He says, “Assad's going to be there longer than Obama is…And at the end of the day, Syria [has] failed. The Russians are going to get a say diplomatically and militarily in any outcome. We're going to have to find a way to accommodate that. Not very easy given the Russians have basically shown that the emperor has no clothes, both on Ukraine and now on Syria."
Refugee crisis in Europe intensifies
Europe currently faces the biggest refugee crisis since World War II, as over half a million people have traversed the Mediterranean to seek asylum. Bremmer notes that only 5% of the refugees have actually made it into Europe, with most of them remaining in MENA and Turkey. The Schengen Agreement allows free transit among certain European countries, including Germany, which is set to take in 800,000 immigrants. Of these, 120,000 will likely be resettled elsewhere, which poses another problem, according to Bremmer.
“Unless you suspend Schengen, they're going to move back. So this undermines the fabric -- the legal fabric as well as the social fabric -- the common values that the European Union was actually based in. It's going to lead to more populism -- more xenophobia. [It] even makes a British exit more likely. So I'm really worried about the future of Europe in a way that during the Greece crisis, I really wasn't.”
Middle class woes -- what happens to Brazil when Uber goes driverless?
Concerns over wealth inequality and the dwindling middle class continue to grow. Bremmer is specifically worried about the role of technology in the disintermediation of labor from the global middle class.
“Thomas Piketty wrote this book about inequality…But we're pretty wealthy. We have a way to handle that, we've got a social safety net, people live with families in wealthy countries. When that starts hitting real global middle classes, like in India and China and Brazil, when they don't have the consolidated institutions, they don't have the political legitimacy, they don't have the safety net and the resilience, then you can see massive instability,” says Bremmer.
Losses in manufacturing jobs in developed countries, such as the U.S., have typically been recovered in the service sector. However, Bremmer notes this will not necessarily be the case in developing countries.
“In the service sector, when Uber goes driverless, I don't know where those jobs are going to come from in a country like Brazil…It's one thing for manufacturing jobs to go away and we all go into service. But if you just don't need the employment, for countries that don't yet have the wealth to handle that, I don't know what happens.”
This, in turn, could lead to much greater instability, according to Bremmer.
“I think we're moving into a much more destabilized period. [There] will be winners and losers, but they're going to be so much more concentrated on the top and that balance is very destabilizing globally. And, I don't know how the United States reacts to that.”