Our experts have identified ten low likelihood events that would have high impact for businesses in 2024.
Misinformation impacts the outcome of the US election
Uncertainty around the US presidential election in November will weigh on decision-makers globally throughout 2024. While the elections themselves are surrounded by a lot of uncertainty, a targeted, externally organised cyber misinformation campaign that influences the outcomes of close races in swing states (e.g. Wisconsin, Michigan, North Carolina, Georgia, Arizona and Nevada) might elevate the threat of instability. Any indications of such a campaign could fuel the underlying political polarization and increase the likelihood of domestic instability and political violence in 2024, before, during and after the election.
Iran enters the Gaza conflict
Iran directly entering the Israel-Hamas conflict would upend regional security. It would pose increased security threats to Israel, Saudi Arabia, and US interests in the region. Expanded US sanctions against Iran and elevated threats to Gulf shipping would likely cause an oil price spike that would damage the global economy. Pre-emptive or retaliatory strikes against Iran could increase Tehran’s intent to weaponise its nuclear programme, triggering a regional arms race.
Tensions between Venezuela and Guyana will remain elevated as Caracas presses claims to most of Guyana’s territory (and offshore oil reserves) ahead of elections due in late 2024. Ethiopian authorities say they will “fight” for Red Sea port access that is controlled by Eritrea. Meanwhile, Egyptian politicians periodically threaten force as negotiations falter with Ethiopia over damming the Nile River. Military conflict in each case is unlikely, but each signal that control of vital resources – energy, water and ports – will continue to shape geopolitics in 2024.
West cuts off aid to Ukraine
As evidenced by President Volodymyr Zelenskiy’s recent visit to the US, the gradual erosion of Western consensus about the war in Ukraine could lead to a sharp decline in military, financial and humanitarian support for Kyiv. This would significantly undermine Ukraine’s offensive and defensive capabilities, providing Russia with the opportunity to strengthen positions in recently occupied territories and possibly even seek new territorial gains. Encouraged by the signs of war fatigue in the West, Russia would increase efforts to pressure Ukraine to agree to begin peace negotiations and surrender the already occupied territories in eastern and southern Ukraine.
WASHINGTON, DC - DECEMBER 12: President Joe Biden, right, shakes hands with President Volodymyr Zelenskyy of Ukraine as he hosts a meeting in the Oval office of the White House in Washington, DC. (Photo by Bill O'Leary/The Washington Post via Getty Images)
Overlapping climate crises
On the back of a strong El Nino pattern, 2024 will almost certainly be one of the hottest years on record, fuelling extreme weather events that strain infrastructure and disrupt supply chains. Companies should be prepared for the risk of multiple, overlapping climate crises – from extreme heat to flooding – hitting global operations.
Geopolitical rivalries pose rising threats to key shipping choke points, including the Suez Canal, the Strait of Hormuz, Bab el-Mandeb Strait, Taiwan Strait and Malacca Strait. The interconnected nature of maritime trade ensures that any disruption will propagate globally, with operators needing to assess the risks associated with the limited alternative routes.
Disruption of a satellite network could interrupt global communications, navigation and surveillance. In addition to unintentional hazards like solar flares, geomagnetic storms and collisions, companies should monitor the risks of intentional actions like anti-satellite tests and cyber attacks. In the absence of international space regulations, a targeted attack by a government against a satellite network would significantly raise geopolitical tensions.
Unintentional military escalation in East Asia
Several flashpoints are simmering in East Asia, creating potential for escalation in 2024. Tensions over Taiwan are the most obvious, particularly with the island’s January 2024 elections having produced another president unpalatable to Beijing. However, territorial disputes will also persist in the East China Sea and South China Sea, particularly between China and the Philippines over Second Thomas Shoal. Increased frequency and intensity of air and sea activity by rival militaries, fishing and exploration vessels in these contested areas raises the threat of near misses or accidental collisions (which have occurred previously), or other incidents or miscalculations. While no government is likely to intentionally initiate military conflict, such incidents could be hard to contain in the current geopolitical context. Consequences could include limited military conflict, a major escalation of sanctions and other trade and investment disruption.
A new financial crisis
Although the global economy has shown considerable resilience in 2023, fragility persists. Adverse shocks in major economies, such as China or the US, have the potential to trigger global instability through financial contagion. A "risk-off shock" – such as a major emerging market default or expansion of regional conflict – could also lead to sharp tightening in global credit conditions or commodity price shock, flight to safety, and a collapse in business and consumer confidence. High debt burdens would limit governments and central banks’ ability to support businesses in the event of another global economic crisis in the short-term, with governments likely focusing on monetary stimulus (e.g. cutting interest rates and expanding credit)
A new pandemic
A future global human pandemic is a certainty, but the origin, timing and epidemiology are unpredictable. Factors promoting pandemic emergence include human population growth, urbanisation, travel and migration, deforestation and climate change. Diseases identified as potential candidates for a future pandemic include influenza, coronaviruses, filoviruses and orthopoxviruses, chiefly via zoonotic transmission. The consequences of a new pandemic could be aggravated by climate change, lack of international coordination due to geopolitical competition and the rising trend for protectionism (including vaccine protectionism).