Documentos de Académico
Documentos de Profesional
Documentos de Cultura
EUROZONE
US
NORTH KOREA
PAKISTAN
EGYPT
CHINA
SOUTH AFRICA
As we begin 2012, political risks dominate global headlines in a way weve not experienced in decades. Everywhere you look in todays global economy, concerns over insular, gridlocked, or fractured politics affecting markets stare back at you. Continuation of the politically driven crisis in the eurozone appears virtually guaranteed. There is profound instability across the Middle East. Grassroots opposition to entrenched governments is spreading to countries such as Russia and Kazakhstan that were thought more insulated. Nuclear powers North Korea and Pakistan (and soon Iran?) face unprecedented internal political pressure.
1 2 3 4 5 6 7 8 9 10 *
The End of the 9/11 Era G-Zero and the Middle East Eurozone US North Korea Pakistan China Egypt South Africa Venezuela Red Herrings
Paradoxically, political risk has become so fashionable that its effects are now frequently overstated. Those 2012 political handovers in countries totaling some 50% of the worlds GDP? Theyre not such a big deal this year, whether the democratic elections in the United States and France or managed authoritarian transitions in China and Russia. Moreover, serious challenges to national decision-makers doesnt mean that governments are all poised to buckle under pressure. The eurozone isnt heading toward fragmentation (one of the most consistently over-exaggerated risks out there). The American economy is more resilient than many believe. And a Chinese hard landing? Not if Beijing can help itand it canin 2012. So the big challenge, for risk analysts and for corporate decision-makers and investors, is in carefully weighing the risks in a world of ever-increasing information, data, and commentary (much of it noise). Our top risks of 2012 are meant to provide you with tools, signposts, and our best judgments on where all these stories are headingand on how some stories that youre not reading about elsewhere might prove more important than people think. The most important macro theme for 2012: The worlds key political decision-makers will be focused heavily on questions of domestic economic stability at the expense of international security concerns at a moment when politics is having unprecedented impact on the global economy. This conflation of global politics and markets defines the formal end of the 9/11 era, a moment when decision-makers sought to isolate globalization from international security concerns. The end of the 9/11 era is our top risk for 2012.
THE BIG CHALLENGE IS CAREFULLY WEIGHING THE RISKS IN A WORLD OF EVERINCREASING INFORMATION, DATA, AND COMMENTARY
3 January 2012
THE NEW NIGHTMARES ARE OF SPIRALING DEFICITS, THE EUROZONE CRISIS, AND ECONOMIC RELATIONS WITH CHINA
strategies have created the Hillary Clinton moment in US foreign policy. Secretary of State Clinton has developed a doctrine founded on economic statecraft and a shift in US foreign policy priority toward Asia, despite continuing instability in the Middle East. Asia is the engine of global economic growth; it is also where the long-term credibility of US commitments faces the biggest potential challenge from a competitor (China). It is therefore of the highest geopolitical importance. That (accurately) reflects an environment of both risk and opportunity in Asia. Just as economics is driving geopolitics, politics is now moving markets as never before. The role of politics in global markets is hardly new, but before 2008 the overlap was defined and limited. Only in emerging markets was politics the primary economic driver. Only in these countries were natural resources especially susceptible to resource nationalism and interstate conflict. Elsewhere, markets were driven mainly by economic fundamentals. Geopolitics was primarily a matter for those concerned with national security, not with the Nasdaq. Thats no longer true, for three reasons: 1) Emerging markets are now the primary drivers of global economic growth; 2) Developed states are in structural crisis, and political decisions are an increasingly important determinant of their economic trajectories for the first time since the end of World War II; and 3) An overarching rebalancing is needed between developed and developing states. How quickly and how successfully that rebalancing occurs is primarily a question of political will and political capacity. In short, for the first time in the era of globalization, 2012 reflects the full global convergence of politics and economics. This will fundamentally drive investor sentiment toward risk aversion, as investors focus on the obvious lack of strong and effective political leadership in virtually all of the major players. Intriguingly, it will lead to an overestimation of political risks in several important cases, especially the eurozone, the US, and China. Our red herrings this year are much more important than usual, because baseline expectations for those risks have become exaggerated. Concern about macro risks will erode confidence in an improving American economy, exacerbate concerns of eurozone crisis, and enhance worries that emerging market growth might prove wobbly. Caution will remain an overarching investment principlelending continued support for the dollar, a reluctance to rebalance portfolios dramatically toward the growth economies, and a greater desire to stay in safe havens such as cash and gold. At the end of the 9/11 era, politics is driving the global economy, while economics drives geopolitics. All of this is playing out against a volatile G-Zero backdrop of global leadership in short supply.
3 January 2012
IN THE AFTERMATH OF THE ARAB SPRING, THE UNITED STATES FINDS ITSELF WITH DRAMATICALLY REDUCED REGIONAL INFLUENCE
appetite for intervention, and there is virtually no prospect of regional cooperation to resolve these issues. In Syria, theres little chance of meaningful negotiations between Assad and the opposition, never mind active outside support for removing him from power. Given this lack of leadership, the Arab League process will grind on, extending the regimes life without producing a credible resolution to the crisis. Frustration with this impasse could trigger a regional confrontation, with Iran backing Assad and the Saudis and Turks backing the rebels. In Iraq, greater sectarian conflict is now filling the vacuum left by the withdrawal of American troops. Earlier trends toward mutual accommodation have reversed, and Sunni-Shia tensions are again on the rise. Instead of opposing the Kurds bid for autonomy, Iraqi Sunnis are now pushing for their own autonomous region. Iran, Saudi Arabia, and Turkey each look for more influence. Al Qaeda is back in the game. Until recently the most exciting investment story in the Middle East, Iraqs stability itself now hangs in the balance. Thats a growing danger for Israel, as well. The Arab Spring has generated a surge of populism across the region, roiling Israels relations with Egypt, Jordan, and Turkey. Meanwhile, Israel has less confidence in support from its international allieseven the United States. Ally fatigue, a growing feeling of isolation, and Irans bid to move its nuclear program into bomb-resistant underground facilities make an Israeli strike on Iran more thinkable (though still unlikely), especially in the face of Tehrans provocations. It also undermines efforts at further negotiations with the Palestinians, opening up prospects for more violenceboth within Israel and with Lebanon. The Middle East will provide other potential conflicts in 2012. The G-Zero will complicate efforts to bring a new government together in Libya, save a failing state in Yemen, and limit proxy
3 January 2012
conflict in Bahrain. Egypt merits its own risk (listed below). The only recent case in which outside actors have accepted serious risks and burdens to settle a conflict in this region came with the NATO assault on the Qaddafi regime in Libya. That was only possible because Qaddafi had alienated just about everyone else in the region. In 2012, there are no more Qaddafis in the Middle East. Paradoxically, thats part of the problem.
The major financial upheavals of recent decadesMexicos peso crisis, the East Asian financial crisis, Russias ruble crisis had one fundamental thing in common: the US Treasury Department played a big role along the road to recovery. That wont happen in todays eurozone. Washington will speak loudly but let markets carry the stick, and French President Nikolas Sarkozy learned the hard way that China wont pitch in either. Nor is there a solution involving some combination of emerging and developed markets. But Europe is the most advanced and institutionalized region in the world, and the political and economic will to sustain the eurozone, messy as it is, will provide the space for enough European Central Bank (ECB) intervention to get the eurozone through the worst of this, at least in 2012. Alas, theres still plenty of downside this year. The biggest risk for Europe in 2012 is not eurozone fragmentation (a Greece-plus exit of peripherals) or disintegration (Italian and Spanish exit). The real problem is continued incrementalism. Theres a market view that the eurozone crisis must be
A EUROPEAN RECESSION WILL ONLY MAKE IT TOUGHER TO GET THESE PLANS APPROVED
resolved quickly to avoid the collapse of the European project, but Europes key politicians dont see it that way. In Germany, other core states, and Europes ever more powerful institutional apparatus in the European Commission and the ECB, there is a consensus on the need to do just enough to avoid disaster, while maintaining market pressure to ensure both sustained commitment to austerity and the political breakthrough required for fiscal union. German Chancellor Angela Merkel is articulating this pathway, and though a source of derision in the Englishlanguage press, her pronouncements have provided the closest thing to a signal weve seen from Europe, however problematic the strategy might be. The Merkel formula will ensure that the uncertainty and volatility that have characterized the investment and broader economic environment in 2011 will continue well into 2012. As a result, the gradual move toward a sustainable solutionboth for a final bailout and fiscal unionwill be more difficult, more costly, and less optimal when its finally reached. It will be more difficult because the likelihood of a European recession will only make it tougher to get these plans approved by parliamentsor by voters as various referenda are held. It will be more expensive, because the next round of reform will extend well beyond the sums needed to bail out Greece, Portugal, and Ireland. It will be less optimal because the current approach, privileging fiscal austerity above all else and turning fiscal demands into tests of moral rectitude, will ensure ongoing political turmoil, distrust between the core and periphery, a contraction in growth, and further serious damage to market and corporate confidence. Over the course of 2012, the eurozone will continue to struggle to achieve its self-prescribed solution and will most likely avoid a systemic market event. But the long-term risks will not go away. Even if Europe can get there, the underlying economic problems will not have been addressed. And all this uncertainty raises the near-term risk of recession, which can only make matters worse.
3 January 2012
be made during the eight weeks between the elections in early November and the end of 2012. Firms and investors will face uncertainty about their taxes, government contracts, and the impact of these policies on economic growth through the course of the year. With an election thats likely to be tight until the very end, there will be few signals along the way about how these questions will be resolvedthough we can expect plenty of noise. Businesses and investors will be forced to wait on the sidelines for resolution or expose themselves to significantly disparate outcomes. Thats problematic for investor confidence and a damper on economic growth.
not as much urgency on this issue as media hype would have you believe, and its not surprising that a politically deadlocked Washington continues to push off tough decisions until after the 2012 elections. The rubber will hit the road very quickly after the ballots are countedbut on two much narrower issues. Theres little doubt that this will be one of the ugliest presidential campaigns in modern US history. Intense partisanship will reinforce the already sour political mood of the country. Continued weak economic performance and Washingtons all-tooobvious political dysfunction will make matters worse. But the election is not the risk in 2012. Despite the loud noise from both ends of the spectrum, we expect an election that is fought over moderates and the centerespecially given that the Sturm und Drang of Republican primaries will likely leave Mitt Romney as his partys presidential nominee. As a result, sharp policy turns after the election are unlikely over China or long-term deficit strategiesdespite the dramatic campaign rhetoric. The United States is structurally bound to seek improved relations with Beijing even as tensions between the two countries increase. And the contours of a long-term deficit deal will have to balance entitlement restructuring with defense spending consolidation and some form of revenue enhancement, though the balance among these elements will depend on the postelection political configuration. So a year in which the United States does little of consequence and looks much better than its developed country peers is a year of low US political risk, right? Right. Until November. Then things get dicey. The contours of long-term deficit reduction are pretty clear, but there are enormous uncertainties in the short term. About $5 trillion worth of tax and savings decisions ($3.8 trillion of Bush tax cut expiration, $1.2 trillion of automatic sequesters) must
KIM JONG-UN MAY REMAIN IN PLACE, BUT HE IS VERY UNLIKELY TO ACTUALLY RUN THE COUNTRY
Dont be fooled by stories of how smoothly the transition is proceeding in Pyongyang. The first rule of analyzing North Korea its the worlds most opaque regime and no one really knows whats going on insidehas not changed. Maybe things really are going smoothly. Maybe theyre already off the rails. We do know that North Korea is a nuclear power, that provocation is its traditional foreign policy tool of choice, and that North Korean collapse is the likeliest way to bring American and Chinese soldiers face to face in an unpredictable and dangerous security environment. Thats why it is precisely the inability of outsiders to evaluate whats really happening in North Korea that creates so much risk there. Will North Korea become historys first leaderless nuclear power? Kim Jong-ils 28-year-old third son Kim Jong-un has been named successor, but only after a
3 January 2012
hastily arranged transition and with no meaningful experience in government. Kim Il-sung took more than two decades to prepare the ground for Kim Jong-il to succeed him, and it still took years for the Dear Leader to consolidate power. Kim Jong-un will have to do more with much less. To be sure, there is no North Korean political spring waiting to bloom. There will be no demonstrations, no opposition. Its a totalitarian state. Theres no reform, no apparent demand for change, and a massive (when they fall, they fall hard) outpouring of emotion ongoing. Just as with the death of Mao and Stalin, those bases are covered. But Kim Jong-un is no Deng Xiaoping or Nikita Khrushchev, and security from within the circle around him is an entirely different matter. Its like what they say about family firms: The first generation builds it, the second hangs on to it, the third destroys it. And there are already warning signs in North Korea that the third time will not be the charmthe quick announcement of events to roll out the new leader revealed that they werent adequately prepared, and a number of high-ranking political figures have died lately in car accidents in a country notably short on cars. In short, the preparations for transition were hurried and violentand the transition is now in motion. Kim Jong-un may remain in place, but he is very unlikely to actually run the country. Those around him and other stakeholdersalmost certainly encouraged by Chinawill have decided that this is the best outcome for the moment. In coming months, we should not be at all surprised to see provocative external acts meant to prove that the government is firmly in place and not to be trifled with. Alternatively, we could pick up signals of infighting at the highest levels of government. Those within the leadership who fear a fall from favor have clear incentives to derail the process of consolidation of power. That wont happen openly or immediately. (As they used to say in the British special forces, in a hostile environment you shoot the first person who moves. Theres a serious first mover disadvantage in a totalitarian transition). But the initial calm may not last long, and its almost impossible to predict exactly what sort of political risk the elite might produce. As weve seen in recent months, another belligerent international act could be just the thing to provoke a state of crisis and rally North Koreas powerbrokers to the regime. In the worst-case scenario of rapid government collapse, US and South Korean forces would move north to secure North Koreas nuclear sites, while China would likely send forces across the Yalu River to block any flood of refugees and restore basic security, creating the potential for unintended conflict
given the absence of any joint US-China contingency planning. After all, the United States and China remain on opposite sides of the security divide in Asia, a problem that will only get bigger in 2012 (see risk #7).
PAKISTAN IS NOT HEADED FOR STATE FAILURE, BUT THE RISK OF SEVERE POLITICAL INSTABILITY IS GROWING
In 2012, Pakistan will face its most severe challenges since the Bangladesh succession crisis more than 40 years ago. Domestic instability is growing as tensions between civilian and military leaders simmer, extremists continue to expand their presence in core regions of the country, and a severe economic crisis leaves government unable to provide essential public services. The unraveling of ties with the United States adds to the anxiety. Pakistan is not headed for state failure, but the risk of severe political instability and even more direct military interference in government is on the rise. Pakistan also faces mounting threats from across its borders. American soldiers will begin the handover of Afghanistans security to local troops this year. By November, about 33,000 US personnel will have left the country. The security vacuum left behind will become the Pakistani militarys primary immediate concern as Afghan refugees flow into Taliban-occupied areas of the country. Should the Taliban further consolidate territory in southern Afghanistan, those areas could become safe havens for Pakistani Taliban who are challenging Islamabads authority in the tribal areas. The American withdrawal will also fuel fears inside Pakistan that Washington is effectively handing off informal leadership in
3 January 2012
Afghanistan to India, allowing Pakistans longtime rival to encircle the country. Pakistans perceptions are reinforced by Indias large development and diplomatic presence in Afghanistan, which will continue (and potentially increase) after the US withdrawal. Pakistan is hedging its bets on Pashtun groups in Afghanistan that have a higher likelihood of controlling any future government in Kabul. India is focused on strengthening its historical ties to northern alliance groups. As it tries to extend its economic reach into Asia, India will find itself drawn more deeply into the South Asian geopolitical morass, potentially provoking a proxy war that spells trouble for the region. The looming security failure threatens prospects for South Asian economic integrationand just at a time when greater collaboration is needed to meet growing energy, consumption, and production demands.
today: For many countries in the region, Chinas economic development is a source of lucrative new business opportunities, but they want to avoid becoming too economically or politically dependent on Beijing. In 2012, well begin to find out if this delicate balance can be maintained. US-Chinese relations already have their share of tensions, especially over cybersecurity issues and indigenous innovation/ state capitalism. These problems will make regional tensions more difficult to manage. No one wants a security confrontation that would undermine economic growth, but the enhanced US security presence in Asia emboldens Chinas neighbors to take on more assertive policy positions with China, especially on strategic issues. Countries such as Vietnam or the Philippinesboth entangled in boundary disputes with Beijing in the South China Seacould decide that closer defense ties with Washington provide the cover needed to push back against perceived Chinese advances. Either government could create a maritime confrontation that (they hope) might draw in the United States, tilting the balance of force in territorial disputes to their advantage. This (mis)calculation would raise a host of risks for the Asian security environment and for global markets in 2012. There is already high risk that Beijing will produce unpleasant foreign policy surprises this year, given rising nationalism in the country, its ongoing political transition, and the leaderships unwillingness, and perhaps inability, to resolve internal debates about Chinas role in the world. Beijing will therefore be more apt to meet provocation with provocation in months to come, using both its naval and its economic power. A harsh Chinese response to an incident at sea involving an American ally would provide a significant test for the Obama administration, which would then face electionyear pressures to project toughness, adding to already significant tensions on other issues.
Despite a laundry list of regional and sub-regional institutions, the basic contours of economic, political, and security integration in Asia remain very much in flux. In recent years, China has driven the economic growth story, raising concerns among others in the region that greater strategic balance is needed. Its no surprise then that 2011 ended with a number of successful Asian security initiatives for the United States. An agreement with Australias government adds 2,500 US marines in Darwin. There will be new coastal combat navy ships in Singapore, and Indonesia purchased 24 new F-16 fighter jets. These moves are disquieting for Beijing, but they highlight the realities of Asia
3 January 2012
the rejuvenated alliance of Islamist and secularist protesters without resorting to violence. That will undermine the popularity of the military and harden the resolve of the protest movementpolarizing politics at a critical time. Thats why Egypt faces the possibility of political disintegration this year, as anger builds between military and civilian political forces, both Islamist and secular. The Muslim Brotherhood and the Salafist Nour party are not headed toward any kind of formal alliance, but Islamist forces will dominate the new legislature to an extent that the military high command may simply reject, especially if the Islamists use their new clout to dominate the writing of a new constitution and back a presidential candidate that the military dislikes. If so, the generals understanding with the Muslim Brotherhood could come apart with the military trying to impose a cabinet largely comprised of technocrats and Mubarak regime insiders. That outcome would be bad for Egypts base-line stability, its economic recovery, and its broader regional role. The fallout would be especially damaging for Egypts all-important tourism sector and the flow of aid from abroad. It could also spill instability into the region, given Egypts central importance for the Arab Spring and its historic role as an Arab bellwether.
President Jacob Zuma and the ANCs top leaders face reelection at the party leadership conference in December. Zuma has disappointed many former allies, and while a united anti-Zuma front has yet to emerge, thats not positive news for markets and investors. One of the biggest question marks is the fate of suspended firebrand ANC Youth League leader Julius Malema, and a central part of Zumas strategy to sideline Malema will be to co-opt at least some of his populist message. Other sources of dispute include the balance between central and provincial governments; the role of labor unions in the ANC; control of the intelligence apparatus; and the use of corruption investigations against Zumas suspected rivals. ANC stalwarts such as Kgalema Motlanthe enjoy broad party support but may fail to mount an open challenge at the party conference. Zuma will likely be reelected party president, but this will not be the product of widespread party support but of intensifying factional, generational, and even ethnic divisions within the ANC. Thats hardly a recipe for a strong and stable Zuma administration, undermining South African governance in 2012 and beyond. These tensions will be visible in the February budget as the treasury battles with slower-than-anticipated growth and revenue. Competing spending priorities (fiscal stimulus for the economy that includes a $100 billion infrastructure package, higher publicsector wages, and social grants for 30% of South Africans) will prove politically difficult to negotiate and could force slower fiscal consolidation. Worse, the mid-year ANC policy conference will raise populist pressures furtherwith resolutions seeking to reaffirm a policy shift to the left. These will include at least some support for the nationalization of mines, which will generate a lot of headlines even if it is unlikely to be adopted. Its not an all-out disaster; there are limits to the populist trend. But 2012 is likely to inflict lasting damage on policymaking and institutions, and its almost certainly a lost year. Thats not the best way for South Africa to join the BRICS clubnot that it really belongs.
3 January 2012
most likely the popular governor of Miranda state, Henrique Capriles Radonski. But if the opposition wins, Venezuelas short-term outlook will be even bleaker. The new government would have to manage a very difficult transition, given the countrys deep economic distortions. It would be hard not to provoke substantial social unrest as Chavezs work is pushed into reverse. And the Chavismo political bloc would still control most of the countrys state apparatus. The worst scenario might well be if Chavez dies or is otherwise forced to abandon the race from ailing health. Then Venezuela would face a near-term political vacuum and serious instability, as there is no clear successor within the Chavista party, while divisions within the opposition would intensify. A possible silver lining is that a sick Chavez could find it harder to put obstacles in front of an opposition-led government, but thats little solace for Venezuela this year.
RED HERRINGS
Hugo Chavez underwent cancer treatment in 2011, and his health problems have since generated plenty of market speculation. Is Venezuela finally on the verge of a new and more positive era? Over the long term, maybe. But for 2012, the outlook is grim both economically and politicallywith or without Chavez. The big political story in Venezuela in 2012 is the 7 October presidential election. If Chavez remains healthy, he will probably win what is shaping up to be a very tight race. His popularity remains at about 50% despite the countrys many difficulties, and the government will embark on a massive spending spree to stoke economic growth in the run-up to the vote. Venezuela will continue to issue large amounts of debt to finance spending and provide dollar-denominated assets to local agents in order to sustain this growth and ensure Chavezs reelection. This profligacy will aggravate current financial distortions and lead to a further deterioration of fundamentals after the election. Economic policy remains unchanged with a Chavez victory, with a bit more room for adjustments such as a currency devaluation. As a result, economic conditions will steadily worsen. Chavez would also try to further tighten his grip on power, something that could threaten stability and undermine any chance for a rebound in the investment climate. Sadly, thats the good outcome. Whats the alternative? The opposition has gotten its act together, at least compared to the past. It will have a primary in March to select a unity candidate,
IF CHAVEZ REMAINS HEALTHY, HE WILL PROBABLY WIN WHAT IS SHAPING UP TO BE A VERY TIGHT RACE
3 January 2012
10
making process. Its rule by consensus. Were long past the days of Deng Xiaoping or Zhu Rongji, and it will take a year minimum for that new group to come together and start implementing a new strategic plan, which itself will represent only an incremental change from what weve seen for the past five years. Its big headlines, not much impact. In Russia, despite unprecedented popular protests in recent months, theres not going to be a lot of suspense on election night as Vladimir Putin retakes the presidential reins. Despite the impressive crowds of recent days, there is no Arab Spring on the horizon in Moscow. Kremlin-sponsored opposition parties will take considerable wind from the sails of Russias demonstrators. President Dmitry Medvedev may well be left by the wayside, but thats not going to affect Russian governance. For 2012, Putin will spend money and co-opt elites to ensure that everything goes as close to Kremlin plan as possible. Theres room for a little embarrassment, a rogue uncle turning up at the party, getting drunk, and embarrassing his family. But the holidays go on, and so does Russia. Not much to see here. In France, Sarkozy looks weak, no question. At this point, its tempting to call the election for Franois Hollande. That could very well change, but the candidates positions on the issue that matters most for marketsthe fate of the eurozoneare quite similar.
Further, there is no effective political mechanism for a eurozone breakup. Its conceivable that an individual country might voluntarily leave the eurozone without such a mechanism, but for a real dissolution scenario to have any plausibility, a formal process would have to be created. If you think expanding funding for the European financial stability fund is hard, try organizing a breakup mechanism.
Eurozone breakup
This is probably the single most overrated risk of 2012. Its driven in large part by European observers (especially in Britain) who dont much like the eurozone. The political will to maintain the eurozone remains strong among all the major political parties in the core eurozone states, almost across the board in the European periphery and, just as importantly, among eurocrats in the ever-growing European bureaucracy. To be sure, this could change over time. Well see what happens if Europes leaders totally fail to restructure the institutional machinery of the eurozone. But thats not a story for this year.
Mayan apocalypse
Just isnt happening. And if it does, well, sorry.
eurasiagroup.net
Executive office 475 Fifth Avenue 14th Floor New York,NY 10017 +1 212.213.3112
London office 3031 Great Sutton Street 1st floor London EC1V 0NA United Kingdom +44.20.7553.9820
This material was produced by Eurasia Group for use by the recipient. This is intended as general background research and is not intended to constitute advice on any particular commercial investment, trade matter, or issue and should not be relied upon for such purposes. It is not to be made available to any person other than the recipient. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or otherwise, without the prior consent of Eurasia Group. 2012 Eurasia Group. Photo credit: Reuters