A Pessimist's Guide to the World in 2015
December 17, 2014
Skirmishes in the South China Sea lead to full-scale naval confrontation. Israel bombs Iran, setting off an escalation of violence across the Middle East. Nigeria crumbles as oil prices fall and radicals gain strength. Bloomberg News asked foreign policy analysts, military experts, economists and investors to identify the possible worst-case scenarios, based on current global conflicts, that concern them most heading into 2015.

Syria

Potential Flashpoint:

Violence from Syria spills over into Lebanon, Jordan, Turkey and beyond after Islamic State and the Assad regime defeat the last vestiges of the moderate opposition.

Israel

Potential Flashpoint:

A third Palestinian uprising against Israel breaks out after the March elections. It turns into a violent struggle involving increasingly fundamentalist Palestinian and Israeli fringes. Militants from neighboring countries flock to the fray.

Iran

Potential Flashpoint:

Iran, failing to reach agreement with world powers on limiting its nuclear program, pushes through with development of a nuclear weapon. Israel moves to stop Iran’s efforts, setting off a regional war.

West Bank / Gaza

Potential Flashpoint:

Hamas, seeking to gain more political clout, opens a new front with Israel from the West Bank or renews attacks from its Gaza Strip stronghold.

Saudi Arabia

Potential Flashpoint:

King Abdullah, 90, dies. The current crown prince, Salman, is 79. A succession takes place at a sensitive moment as the Saudi Air Force keeps bombing Islamic State, which thousands of young Saudis have joined.

Baltics

Potential Flashpoint:

Vladimir Putin undermines NATO members by stirring up trouble with Russian minorities in Estonia and Latvia, and with Russia’s Kaliningrad exclave between Poland and Lithuania. Recent airspace encounters show Russia’s willingness to test NATO’s capabilities.

Russia / Ukraine

Potential Flashpoint:

Putin-backed rebels, supported by Russian forces, drive further west in Ukraine to create a land corridor to join up with Crimea. That triggers deeper economic sanctions from the U.S. and the European Union and forces them to accelerate military support to the government.

South China Sea, East China Sea

Potential Flashpoint:

Confrontations break out between Chinese navy vessels and fishermen in South China Sea; Chinese and Japanese fighter jets engage in a dogfight over the disputed Senkaku/Diaoyu Islands. The escalation brings in allies, inflaming nationalistic tensions.

Nigeria

Potential Flashpoint:

Militants from the Boko Haram Islamist group increase their attacks, gaining control of more territory for their self-styled caliphate in northeastern Nigeria. President Goodluck Jonathan’s military fails to stem the rise of the insurgency in Africa’s most populous nation.

Afghanistan / Pakistan

Potential Flashpoint:

Taliban militants in the mountainous Pashtun-dominated regions of Afghanistan and Pakistan link up with Islamic State. They make progress in their quest to take power in Kabul and Islamabad as the U.S. reduces its troop presence.

India / Pakistan

Potential Flashpoint:

A terrorist attack occurs on the scale of Mumbai in 2008, when luxury hotels and a train station were attacked by a Pakistan-based militant group. Prime Minister Narendra Modi’s Hindu nationalist BJP (Bharatiya Janata Party) is pressured into a harsh response, triggering a crisis between the nuclear-armed neighbors.

North Korea

Potential Flashpoint:

A North Korean submarine sinks a South Korean ship claiming it was spying. Citing the sinking of South Korean ship Cheonan in 2010, South Korea retaliates by sinking a North Korean vessel.

Arctic

Potential Flashpoint:

Growing tensions among Russia, the U.S., Norway, Denmark and Canada over who owns the right to natural resources in the Arctic leads to direct standoffs between vessels. Disputes arise over territories such as Svalbard as climate change melts more Arctic ice and increases the commercial potential of the region.

Iraq

Potential Flashpoint:

Islamic State militants ignite a full-blown sectarian war, pitting the Shiite Muslim majority against the Sunni minority. This disrupts the country’s oil production and draws U.S. and regional powers into the conflict.

Greece

Potential Flashpoint:

Greece’s government falls, bringing to power anti-euro opposition leader Alexis Tsipras and weakening Greece’s status among euro countries, some of which face extremist movements of their own. Hamstrung European policy makers fail to respond. Contagion spreads through the region’s bond markets, reigniting the euro-zone crisis.

SOURCES:

Interviews with academics, researchers and investors around the world by Gregory Viscusi, Nicole Gaouette, David Tweed, Jonathan Morgan, Olivier Renick and Glen Carey

Bloomberg News survey of 84 economists by A. Catarina Saraiva.

GRAPHIC:

Mira Rojanasakul and Blacki Migliozzi