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PS Commentators’ Predictions for 2023

While no one knows what the future holds, it helps to enter a new year with an appreciation for the big issues that will likely dominate the global agenda. If one thing can already be said with certainty, it is that 2023 will not be boring.

Every December, Project Syndicate commentators identify the trends to watch in the coming 12 months. In addition to the now-perennial issues of climate change and COVID-19, Russia’s war in Ukraine and the global economy’s lowering outlook are understandably commanding much of the attention in this year’s installment. Still, with some commentators pointing to “green shoots” of renewed international cooperation in public health, climate, and other areas, it is not all doom and gloom.


The protests in Iran will continue to make headlines. But because they will be unable to fracture the regime’s coercive elements – from its Basij shock troops to the larger Islamic Revolutionary Guard Corps – the Islamic Republic will endure. America’s Middle East policy will continue to drift as it focuses on great-power competition and tries to forget its forever wars. US allies such as Israel, Saudi Arabia, and the United Arab Emirates will also stray, pining for Donald Trump’s return to the White House. But regardless of what happens in the United States, they will continue to strengthen their mutual ties.

The region’s less wealthy countries, such as Algeria and Egypt, will continue to march in place as the broader shift from hydrocarbons to green energy accelerates. They have chosen to divert their indigenous manna to increasing subsidies, propping up state-owned enterprises, and expanding bloated bureaucracies, rather than expanding education, health, and investment. They are therefore destined to be left behind as their windfalls begin to dissipate.


The recent increase in global poverty is not just a dismal statistic; it is a sign of dark times ahead. We are entering an era of high and rising debt, precarious jobs, a crisis of care, inflation, climate change, and food insecurity. And despite the urgency of these problems, we are not “building back better.”

While some political changes in Latin America offer hope for progressives, social discontent and the demand for results have created a pressure cooker, threatening the stability of many governments. The developed world is once again turning to Latin America for oil, lithium, and food, and the region is desperately in need of hard currency, because it is still grappling with the economic effects of the pandemic. It’s a lethal combination. It means that while advanced-economy leaders gather for summits in resort towns to sign new “green” agreements, predatory extractivism in Latin America will continue apace.

Confronting today’s challenges will require creativity and new thinking, but mainstream economic theory is stuck in the past. The great challenge in 2023 will be to change course while there’s still time.


Inflation will finally be lower in 2023, both in the United States and around the world. But it won’t be low enough for central banks to feel fully comforted. The debate will shift from whether inflation is about to fall to 2% to whether inflation needs to fall to 2%. I don’t expect any countries explicitly to embrace a higher inflation target in 2023 (that will be a long, gradual process). But I will be looking to see whether some countries appear willing to tolerate permanently above-target inflation and, if so, how markets and other countries react.


The sentiment that US President Joe Biden expressed this September when he declared the pandemic “over” has largely defined the second half of 2022 for much of the world – and is likely to deepen in 2023. But as China’s COVID surge warns us, we must not let hubris replace humility. We must remain alert to both the virus and its lessons about our own fragility. The crisis of the last few years highlighted deep inequalities between and within societies, critical gaps in governance (particularly at the global level), and a separate pandemic of misinformation (the “infodemic”).

Fortunately, the pandemic also showed that rapid, ambitious innovation – both in technology and in terms of policy – is possible. One of its lasting legacies may have been to sow the seeds of genuine global governance. I am buoyed, for example, by the World Health Organization’s work toward a legally binding pandemic accord, which would do for global public health what the 2015 Paris climate agreement did for action against global warming. At least seven million people have lost their lives in this tragedy. We owe it to them and their loved ones to demonstrate that meaningful international cooperation is the legacy of their loss.


In 2023, the worst of the energy crisis will be behind us – though Europe still will need to make a concerted effort to fill its natural-gas stores without Russian supplies. The world’s focus will turn to China, where one hopes to see the end of the last big experiment with COVID-containment measures. The government has been under growing political pressure to end its sweeping lockdowns, but its population is not yet vaccinated at a rate anywhere close to most Western countries. Though Chinese authorities have announced a broad easing of restrictions, they will need to balance the desire for normalization against the risk of a surge in infections, which could have a massive negative effect on not only public health but also the economy. The coming months will confirm that China’s big problem is not its zero-COVID policy, but rather its failure to bring effective vaccines to the Chinese population.


The long-enduring COVID-19 pandemic, supply chain disruptions, and Russia’s war against Ukraine – all of which have a causal connection – have placed a premium on effective and efficient governance. It was bungled government responses that ultimately discredited Donald Trump in the US, Jair Bolsonaro in Brazil, Boris Johnson in the United Kingdom, and so forth. The new year will bring more protests against governments – both democratic and autocratic – that fail to raise their game and demonstrate competent management of complex problems. The regime most vulnerable to criticism and discontent is Russian President Vladimir Putin’s.


Predictions are scary because they just might come true. Consider scenarios in which the West gives in to Putin’s nuclear blackmail, Russia wins its criminal war against Ukraine, or Putin at least is allowed to “save face” (and his regime) through some truce. In these possible futures, Putinism will regroup and strike again, mobilizing far-right forces around the world against democracy. Might makes right will become the only law.

By contrast, if the West remains united and Ukraine wins, Putin’s regime will collapse. Russia will undergo a much-needed process of decolonization, and many people across the huge territory that it occupies will be liberated. So, too, will Russians themselves. After living in the only former European great power that still seeks to rebuild its empire, they will be freed from their imperial complex. Yes, this process may also lead to a bloody civil war. But that is all the more reason why the West needs to remain united and push for the Kremlin’s demilitarization.


Russia’s war on Ukraine will continue to have significant repercussions on both sides of the Atlantic in 2023. For European politicians, the biggest challenge will be the energy crisis and related financial vulnerabilities. As Europe seeks alternatives to Russian energy inputs, the US and China will step up their competition for dominance in the clean-energy industry.

Turkey’s strategic role in the transatlantic alliance will grow because of the war and the energy crisis. With the country holding a critically important general election in June 2023, there is a chance that President Recep Tayyip Erdoğan’s 20-year reign could end. Whatever the outcome, it will have far-reaching implications for Turkey’s foreign policy and transatlantic relations. This election will determine whether the country is heading toward further consolidation of autocracy and one-man rule. If the democratic opposition alliance wins, re-democratization could be in the offing, and its electoral strategy will be incorporated into the anti-populist playbook globally.


The parallels between our current moment and a previous era of apocalyptic American politics – the decades just prior to the Civil War – will intensify. As one nineteenth-century congressman said of the period, “Almost everything was reduced to a Constitutional question, in those days.” The dynamic was similar during the early 1930s, when the Supreme Court struck down major parts of the New Deal. Now that so many political, economic, and social debates are again featuring constitutional questions, the role of the Court – and the tensions among deep-rooted values of democracy, judicial power, and the rule of law – will continue to be the subject of intense controversy to an extent not seen since then.


The new year brings more questions concerning the future of liberty, dignity, and human life itself. Beyond the issue of climate change – which we can still control, notwithstanding the media’s apocalyptic pronouncements – the single most important task is the defense of democracy, which remains the only political system worth advocating.

The threat to democracy is an existential one, as illustrated by Russia’s war of aggression in Ukraine. Though Russia has already lost, Ukraine has not yet won. The West therefore must not relax its military and strategic assistance. The world also must not turn its attention away from Iran, where heroic young protesters are showing that they would rather die than support a regime that, like the Taliban regime in Afghanistan, represents hardline theocracy at its worst. Nor can we ignore the growing threat to Taiwan now that the Chinese government has crushed democratic movements elsewhere and broken its word in Hong Kong.

If democracy isn’t revitalized in 2023, the year will have been wasted.


The lack of sufficiently ambitious measures to address extreme weather and other disasters will oblige the world to embark on a new phase of global climate discussions. An international financial system that was created to maintain growth and stability must be reformed for an era in which sustainability and resilience are equally important. Policymakers must devise new forms of regulatory, trade, and tax policy to discourage carbon intensity across the economy; but the effectiveness of such measures depends on whether existing asymmetries in access to finance are also addressed. As matters stand, the financial system remains a part of the problem, rather than a source of solutions.

We also need new policies to ensure that technology, research and development, and intellectual property are aligned with the goal of protecting the planet. How we direct and share innovation will have to change, as will our assessments of risk. Many scenarios that once seemed unlikely are becoming increasingly plausible, such as famine, sharply increasing poverty, mass displacements of people, cascading sovereign debt defaults, widespread energy shortages, and recurrent global health-induced disruption. All represent tragic reversals of progress.


Climate change will remain a major topic of discussion in 2023, because developed countries still have not upheld their funding commitments. Fortunately, countries across the Global South – including Nigeria, Ghana, and Barbados – are demonstrating global leadership by adopting ambitious, data-driven energy-transition plans.

This will also be a milestone year for voluntary carbon markets, which will allow developing countries to generate sorely needed revenues from carbon-abatement projects. There has been important progress on this front in recent years, with the launch of the Africa Carbon Markets Initiative and the Energy Transition Accelerator. A key task now is to ensure that credits are of the highest integrity, and to continue to work toward establishing a globally diversified pipeline of negative-emissions credits.

Finally, while the COP27 agreement on a new “loss and damage” fund represents a major step forward, the operational details will still need to be worked out in 2023. COP28 thus will be another critically important summit. Governments and other stakeholders will need to come to the table with new plans for expanding just and equitable energy partnerships, strengthening decarbonization commitments, mobilizing climate finance, and facilitating capacity building and technology transfers to support the Global South.


In 2023, global economic headwinds will likely gather force. The years of undisciplined central banking and ultra-low interest rates have created the need for monetary-policy tightening, and the effects of this have been compounded by energy and consumer price increases. As China’s economy reopens, it is likely to benefit from a post-pandemic bounce. But the Sino-American geostrategic competition and decoupling will intensify, and Southeast Asia will be more divided as a result. Finally, the global climate agenda will remain on firm ground. But progress will have slowed now that energy-security imperatives and growth have taken precedence.


There is a good chance that 2023 will be an improvement over 2022. Ukraine, against all odds, is winning the war against Russia. China, after enduring much pain, seems finally to be abandoning its zero-COVID policy. And soaring inflation has begun to ease, at least in the US. For many countries, the challenge in the new year will be to strike a difficult balance between political and economic concerns, and between domestic and international interests. Ukraine’s allies must balance their own economic challenges with the ongoing need to help fund a $1 trillion post-war reconstruction effort. Germany must balance the need to increase its defense spending with its reluctance to pursue rearmament. And China and the US must balance their economic reliance on trade with their increasingly adversarial politics.


The 2022 protest movement will make 2023 a year of difficult choices for Iran, with the regime forced to decide between outright force to suppress the uprising and an offer of concessions to alleviate some of the pressure. After the 2009 protests, the regime embarked on the latter path, giving hope to the middle class. A moderate president, Hassan Rouhani, successfully negotiated a nuclear accord with the US and other powers, offering the promise of relief from sanctions and rapprochement with the West.

This time will be different. The regime will show no interest in improving Iran’s relations with the West, and it will limit its concessions to relaxing some social restrictions. After all, the nuclear accord failed to deliver the benefits it had promised. With the West again showing heightened concerns about human rights (partly in response to the regime’s crackdown on the protests), an easing of sanctions is not on the agenda. Iran can be expected to move closer to China and Russia, which will offer economic support without raising the issue of human rights.


In 2023, the world’s autocracies will push back against the world’s democracies in a much more coordinated fashion, making Biden’s vision of the current international scene into a self-fulfilling prophecy. After two years of lockdown, Chinese President Xi Jinping is now traveling abroad again, and it is noteworthy that one of his first stops was Saudi Arabia. In the coming months, he will almost certainly go to Moscow or summon Putin to Beijing.

Russia’s war of aggression will grind on, inflicting terrible costs on Ukraine and all countries that depend on grain and natural-gas shipments from the region. China and Russia will court low- and middle-income countries that are saddled with debt to Western banks and angry at Western governments for pulling back sharply on global trade. As Russian and Chinese domestic turbulence increases, both governments will use Biden’s framing of contemporary geopolitics – “democracies versus autocracies” – to deflect blame to a foreign enemy.


This will be the year that Europeans realize the designed irrelevance of the European Union. The quagmire in Ukraine’s killing fields will bring on the realization of the need for a diplomatic process to end the war, but also the realization that the EU is radically incapable of playing any significant role in it. Who will represent Europe in these talks? The EU’s eastern and Nordic governments trust neither Paris nor Berlin – without whom, however, there can be no EU role.

On the economic front, the German mercantilist economic model will remain broken even as inflation abates – with dire repercussions for a eurozone still reliant on German surpluses. Europe’s deepening economic and geopolitical woes will, naturally, reinforce America’s hegemony and, with it, exacerbate its chosen policy of escalating a new cold war with China. Caught up in all this, humanity will be spending another year not investing in the green transition on which our species’ future hinges.


First, here’s an easy prediction: Carbon dioxide will continue to accumulate in the atmosphere at record levels, regardless of what happens with China, Ukraine, or the global economy. That’s the bad news.

The good news is that the global clean-energy race will accelerate, especially in the US. That also means the race between “fossil-flation” and “green-flation” will become more decisive. While increased demand for the materials used in renewables and electrification will inevitably become an excuse for inaction, this impulse must be resisted. The answer to slightly higher solar-panel or heat-pump prices is to build the clean-energy supply chain. By doing that, we can not only address climate change but also outcompete China, mitigate the fallout from the war in Ukraine, and possibly avert a recession.


From a lone protester hanging an anti-Xi banner from Sitong Bridge to the widespread “White Paper Movement” protesting Xi’s signature “dynamic zero-COVID” policy, the political prospects of China’s new lifetime dictator have been directly challenged. In 2023, the government will make significant concessions by further relaxing COVID restrictions. But it will also shift its repression and surveillance apparatus into high gear to crack down on dissent, including by targeting virtual private networks (VPNs) and other means of bypassing online censorship.

The health code will certainly continue to function as an extremely effective surveillance and control tool, and its role may be expanded beyond public health to ensure “governance” of every Chinese citizen. While doubling down on digital totalitarian repression, Xi will continue to foment nationalist outrage to keep public attention focused on some external enemy. An escalation of tensions in the Taiwan Strait is the most likely possibility.


In 2023, China will scrap all its COVID-19 restrictions and the Chinese economy will rebound sharply. As China’s leaders pursue economic stability, we are likely to see more government efforts to stabilize the property sector. Chinese tech firms will recover from a long slump, though they, too, could be subject to a resurgence of regulation in some areas. The US and China are likely to resume a broader diplomatic dialogue, but the relationship will remain rocky and highly unpredictable.