Many in the United States look beyond their borders and see a dangerous world with raging wars, surging violence and deepening instability.

But a new report by the Eurasia Group, a leading political risk firm, suggests that Americans would be well advised to look in the mirror and recognize that political dysfunction and threats of violence in the United States are frightening people around the world and constitute a serious threat to international stability.

“The United States is already the world’s most divided and dysfunctional advanced industrial democracy. The 2024 election will exacerbate this problem no matter who wins.” – Eurasia Group

“Fully one-third of the global population will go to the polls this year, but an unprecedentedly dysfunctional U.S. election will be by far the most consequential for the world’s security, stability, and economic outlook,” the Top Risks 2024 report argues.

“The outcome will affect the fate of 8 billion people, and only 160 million Americans will have a say in it, with the winner to be decided by just tens of thousands of voters in a handful of swing states… The world’s most powerful country faces critical challenges to its core political institutions: free and fair elections, the peaceful transfer of power, and the checks and balances provided by the separation of powers.”

The Eurasia Group, which was created in 1998 by political scientist and entrepreneur Ian Bremmer, analyzes global affairs through the prism of political developments and risks. Bremmer, the president of the Eurasia Group, and Cliff Kupchan, its chairman, are the authors of this year’s report, which outlines the 10 top risks the world faces. The report also discusses several issues that are less serious than they appear.

“Three wars will dominate world affairs: Russia vs. Ukraine, now in its third year; Israel vs. Hamas, now in its third month; and the United States vs. itself, ready to kick off at any moment,” the report says.

Political polarization and social disarray in the United States are seen in the report as the most serious global risk. It predicts that this year’s presidential election “will worsen the country’s political division, testing American democracy to a degree the nation hasn’t experienced in 150 years and undermining U.S. credibility on the global stage.”

‘The world’s most dysfunctional advanced democracy’

Not mincing words, the report asserts that both President Joe Biden and former President Donald Trump “are uniquely unfit for office.” Trump’s candidacy is jolting the international system and a second Trump presidency “would deal grievous harm to U.S. democracy,” it says.

“The United States is already the world’s most divided and dysfunctional advanced industrial democracy. The 2024 election will exacerbate this problem no matter who wins. With the outcome of the vote essentially a coin toss (at least for now), the only certainty is continued damage to America’s social fabric, political institutions, and international standing,” the report says.

America’s culture wars are deeply damaging as red and blue states diverge on a range of social and economic issues and the nation becomes a patchwork of conflicting requirements and regulations, the report says.

In 40 of the 50 U.S. states, it says, one party controls the governor’s mansion and both chambers of the legislature. Consequently in much of the country, important public policy is decided by one party with little input from the other, creating anger, confusion and incoherence.

“Forced to navigate conflicting laws, regulations, and court rulings across red and blue states, business leaders will find themselves in a lose-lose environment of higher policy uncertainty and regulatory risk,” it says.

Middle East ‘won’t be quiet for ages’

The second leading risk is political turmoil and violence in the Middle East, which has grown even more dangerous and volatile since the report was published in early January.

U.S. National Security Advisor Jake Sullivan remarked on September 30, 2023, that the Middle East was quieter than it had been in two decades. A week later, on October 7,  Hamas launched its surprise attack on Israel.

“The region is no longer quiet, and it won’t be for ages,” the report says, citing the war in Gaza, attacks by Houthi militants on Israel, American warships, and international commercial vessels, and violence by Shia militias in Iraq and Syria.

“The most dangerous schism, though, remains between Israelis and Palestinians,” it says.  

The report predicts that Ukraine will be effectively partitioned this year, a grim development for both Kyiv and the West. Russia has the battlefield initiative, a massive stash of weapons, and is poised to seize more Ukrainian territory, it says. Ukraine must solve its manpower problems, increase weapons production and develop a realistic military strategy in the coming, critical year.  But in the immediate future,  Ukraine must dig in and defend itself.

“The upshot is that Ukraine must make progress on mobilization, training, defense production, strategizing, and political infighting,” the report says. “If it succeeds in most of these tasks, Kyiv will be in a strong position to defend its existing territory in coming years, with a future that could include hard security guarantees from the West, eventual NATO membership, reconstruction aid, and EU integration—a better geopolitical trajectory than could have plausibly been expected before the Russian invasion two years ago.”

Russia, meanwhile, has suffered a major strategic setback with its invasion of Ukraine, the report argues. As a result of the war, NATO has grown stronger, adding Finland as a new member with Sweden expected to join the alliance soon. The EU may grow as well; Ukraine, Georgia, and Moldova are possible new members. Needless to say, this is not the result Russian President Vladimir Putin sought when he invaded Ukraine in February of 2022.

Uncontrolled AI, axis of rogues, China’s economy

Rapid developments in AI will continue to baffle policymakers, perplex the rest of us, and constitute a serious global risk, the report says.

“Gaps in AI governance will become evident in 2024 as regulatory efforts falter, tech companies remain largely unconstrained, and far more powerful AI models and tools spread beyond the control of governments,” it says. 

“As AI models become exponentially more capable, the technology itself is outpacing efforts to contain it in real time… The longer AI remains ungoverned, the higher the risk of a systemic crisis—and the harder it will be for governments to catch up.”

The report identifies an “axis of rogues” composed of Russia, North Korea, and Iran as a serious danger. ”They are agents of chaos in today’s geopolitical order, bent on undermining existing institutions and the governments and principles that uphold them.” Closer alignment and mutual support among these rogue states will pose a growing threat to global stability as they enhance each other’s capabilities and are increasingly disruptive. 

Another risk is the struggling Chinese economy. Consolidation of power at the top of the political system under President Xi Jinping has stifled policy debate in the country and sapped its economic vitality. Once robust growth in China is a thing of the past, the report says. China needs a “true shift toward bold reform” but is not likely to get it.

Angry, unpredictable voters in a year of global elections

The global inflationary shock of 2021, which triggered high interest rates, continues to constrict economies, the report says. Most large economies are struggling with lackluster growth and some might  fall into recession this year. Economic distress will deepen public discontent and fuel populism in a year in which two-thirds of adults in the democratic world will go to the polls. Angry and fearful voters are unpredictable and threaten sound governance, the report warns.

Tensions between the US and China might ease, the report says, but the “most important geopolitical relationship in the world is still fundamentally adversarial and marked by mistrust.” Several flashpoints, including Taiwan, will exacerbate bilateral tensions throughout 2024 but both nations want to avoid “major decoupling or conflict.”

The least persuasive part of the report is the section on climate change. The phenomenon is not cited as a top risk in the report. Instead, the authors say the world is “on the road to responding—collectively, even though too slowly” to climate change. “It’s just a question of who compromises how much—and who pays what and when,” they say.

The troubling undercurrent to all of these problems is a lack of global leadership, the report says.

“The United States, the world’s sole remaining superpower, doesn’t want to be the world’s policeman, the architect of global trade, or the cheerleader for global values. And no other country is prepared to take that role for itself.”

Click here to read the report.