Editor’s Introduction
Strategic Survey 2022 charts a geopolitical fault line marked by two decisions. The first was the West’s withdrawal from Afghanistan in August 2021. This ended a 20-year military intervention that was the first act of the now-forgotten ‘war on terror’. The second was Russia’s invasion of Ukraine six months later. This began the biggest war in Europe since 1945.
These twin events will shape world politics for years. They have already thrown up surprises. Few expected that the Afghan government forces would collapse so completely, or that Ukrainians would stay and fight so hard and so well. Few expected, after the calamitous evacuation from Kabul, that a new war would restore Western unity and purpose, or lay bare Russia’s weaknesses across every domain of power, so quickly.
They offer lessons too. On the hubris of power, which drove the West to try to remake a very different state and society, and which led Russia to try to dictate the identity – and deny the very legitimacy – of another people. And on the significance of choices that might have been different. President Vladimir Putin’s invasion of Ukraine despite a visibly unhappy, if compliant, elite unleashed forces that could end his regime. President Volodymyr Zelenskyy’s refusal to leave Kyiv in the first days of the war, against the advice of his aides and Western governments, instilled in state, army and country the will to resist. By preventing a Russian victory, and thus a fundamental change to the European security order, this single decision changed the course of history.
More surprises and lessons will follow as the war and its consequences ripple out into the future. These are not only geopolitical, but also geo-economic. The war has disrupted global commodities markets and fuelled inflation. More fundamentally, it is driving rapid innovation in the theory and practice of economic statecraft. Potent new instruments of coercion and constraint, such as an oil-price cap, are being honed and used against Russia, a systemically important oil exporter. Governments around the world are watching closely. And as states harness global markets for security ends, the private sector must reckon with – and better understand – a dawning era of political risk.
Beyond the war, wider forces are also shifting the landscape of world politics. Strategic rivalry between China and the West is deepening. AUKUS, an agreement between major democracies on three continents to develop and share military technology and research, is the most ambitious response so far to growing Chinese power. Islamic extremism continues to spread in Africa, especially in the Sahel and in Mozambique. An encouraging de-escalatory trend of Middle Eastern conflicts – with Israel–Iran relations the major exception – has set in. Conversely, a spate of violent episodes in Central Asian states point to rising instability.
There are growing signs, too, that the course of world politics, and especially of major rivalries, will be decided as much by the balance of domestic resilience as by the balance of power. Russia’s late and reluctant decision to order a not-so-partial mobilisation is testing support for the war and loyalty to the regime that launched it. China’s uncertain growth, against the background of a rigid zero-COVID policy, may test domestic stability. America’s politics and society appear as polarised as they were during Donald Trump’s presidency – and the revelations of the House of Representatives’ Select Committee to Investigate the January 6th Attack on the United States Capitol show just how serious was the threat to democracy during his last days in office.
War is redefining Western security, may change Russia profoundly, and is influencing perceptions and calculations globally. Shifts in power are exposing unexpected strengths and weaknesses that will shape the international order. The rules and practices of political economy are being rewritten as globalisation – more market, less state – gives way to its opposite, economic statecraft. When the history of this era is written, the fault line of 2021–22 may run as deeply through it as that of 1989–91.
November 2022
Drivers of Strategic Change
Geopolitics is driven by changes in the ability of states to use and resist power. The first depends on power resources, and the second on domestic resilience. Our Drivers of Strategic Change measure and compare key trends in both areas. They illuminate recent shifts in geopolitics and sources of potential future change.
Geopolitics is a craft, not a science: judgement, skill, chance and other immeasurable factors also shape international relations. But they do so within a range of possibilities set by the underlying domestic and external capacities of states. We encourage you to explore the rich data in our Drivers and the insights they yield.
The Drivers begin each geographical chapter. Unless otherwise stated, they chart change over 20 years by plotting data from 2001, 2011 and 2021.
Regional Share of Global Population, GDP and Defence Budget
(Sources: United Nations Department of Economic and Social Affairs; IMF; IISS, Military Balance; IISS, Military Balance+)
The first Driver depicts the region’s share of global population, GDP and defence budget. These are key power resources: the more of each that a country or region possesses, the greater its potential power, especially in combination. This Driver thus shows how the relative power of each region has changed over the past two decades.
The next six Drivers depict data for key selected countries in each region.
Population
(Source: United Nations Department of Economic and Social Affairs Population Division, World Population Prospects 2022)
The second Driver shows population, age structure and median age.
These are important for several reasons. Population is a power resource. A high proportion of young people – a ‘youth bulge’ – is a strong predictor of civil violence. It also presages a ‘demographic dividend’ of higher economic growth through future workforce growth, especially if fertility rates subsequently fall. Conversely, an ageing population means a high dependency ratio of economically inactive to active citizens, creating fiscal and productivity challenges that can limit resources needed to sustain power.
GDP
(Source: IMF)
The third Driver shows GDP and global ranking. The larger a country’s economy, the more of other forms of strength, including military hardware, it can procure.
GDP per Capita
(Source: IMF)
The fourth Driver shows GDP per capita, which has been shown to have a significant impact on the development of social values. Rising affluence leads to robust and predictable changes in political orientation – in particular, a decline in deference towards authority and a rise in demands for inclusion and participation.
Defence Budget and Active Military Personnel
(Sources: IISS, Military Balance; IISS, Military Balance+)
The fifth Driver shows defence budget and active military personnel, which are indicators of hard power.
Human Development Index (HDI)
(Source: UN Development Programme)
The sixth Driver shows Human Development Index scores, a composite measure of human well-being. This indicates a country’s ability to provide well-being and life chances for its population, with positive implications for governmental legitimacy and stability – and, in foreign policy, for the soft power of attraction.
Political System
(Source: Freedom House, ‘Freedom in the World’)
The seventh Driver shows how democratic a political system is. Democratic legitimacy tends to produce stable and responsive government that is more resilient in a crisis. Conversely, the recent decline of democracy in some high-income countries, where the underlying demand for accountability remains high, may presage declining stability.
Regional Trends
The final Driver for each chapter uses a range of data to illuminate region-specific trends.
For Asia, Europe, Latin America and North America:
Trust in Government
(Source: Edelman Trust Barometer)
This Driver shows the general public’s average percentage of trust in government. Falling trust in governmental institutions – a recent feature of many countries – implies a decline in stability and cohesion. Questions that afforded respondents the opportunity to criticise their government were not asked in China, Russia and Thailand.
For Russia and Eurasia:
Approval Rating for President Vladimir Putin, and Assessment of the Current State of Affairs in Russia
(Source: Levada Center)
This Driver shows approval ratings for Russian President Vladimir Putin and popular views about the state of affairs in Russia. Despite setbacks in the war against Ukraine, there has been a large rise in the number of Russians who say the country is going in the right direction. Putin’s popularity has also risen sharply.
For the Middle East and North Africa:
Breakeven Oil Prices
(Sources: bp Statistical Review of World Energy 2022; IMF)
This Driver shows the oil price per barrel needed to ensure that planned government spending will not incur a budget deficit for 2016–22, together with the average annual oil price for 2015−21. It highlights the impact of the post-2014 oil-price decline on the fiscal sustainability of oil-export-dependent states.
For sub-Saharan Africa:
Adults with a Mobile-money Account
(Source: World Bank Global Findex Database)
In Strategic Survey 2021 we showed how education – and thus human capital – is growing rapidly in sub-Saharan Africa. This year, we show the rapid rise in mobile-money payments, which support financial inclusion and drive growth. Sub-Saharan Africa accounts for two-thirds of the world’s mobile-money payments.