Located all over the world and from various backgrounds and professions, GIS experts have unique insight into the regions and topics they analyze. This allows them to make detailed and accurate forecasts in the scenarios they present in each report.
Warning of a major conflict
As of August 2022, one major war – Russia’s brutal invasion of Ukraine – threatens Europe, while another in Asia, over Taiwan, remains a distinct possibility. At the same time, inflation is raging and countries are finding themselves in ever-deeper economic trouble. Back in 2018, Prince Michael of Liechtenstein predicted that this could all come about, due to irresponsible economic policies that were forcing leaders to take their eyes off of the very dangerous foreign policy challenges they were facing.
“While governments are busy struggling with their self-inflicted problems, the geopolitical framework of security structures, shaped after World War II, is undergoing a tectonic change,” Prince Michael wrote. All this made a large conflict highly probable. “The combination of rapidly increasing global tension among big powers, local armed conflicts, growing protectionism and unsolvable dilemmas in countries’ public finances has created an explosive mix. The eruption of a larger war is becoming more likely,” he warned.
Turkey lifts its veto
In early June, GIS expert Klaus Wölfer wrote that Turkey would soften its stance on many foreign policy issues. He predicted that Ankara would resort to “dramatic turnarounds to repair strained relations with neighbors and important partners,” even if this meant giving up “some of its critical, often abrasive, positions.” On June 28, Turkey announced it had reached an agreement with Finland and Sweden over their NATO bid – an about-face after fiercely opposing granting membership to the two Nordic countries.
Insurgency in Ukraine
In May 2022, GIS expert Federica Saini Fasanotti wrote about the likelihood that Russia would have to wage “a conventional and unconventional war simultaneously.” She predicted that violence against Ukrainian civilians would lead to widespread resentment and a growing number of insurgency-style attacks. Later that month, news outlets reported that mercenary groups are operating in occupied cities, targeting Russian forces in guerilla operations.
Geopolitics catches up with Europe
Some 10 months ago, GIS Founder and Chairman Prince Michael of Liechtenstein was already warning that Europe was woefully unprepared for a major war that could break out around the world in any number of hot spots, including Ukraine. At the same time, he predicted that Russia and China could align more closely, as they did by signing a cooperation agreement earlier this year.
“Russia is justifiably concerned about Western attempts to influence its internal matters. It is also intent on protecting its long borders,” he wrote. “However, the American administration’s harsh attitude as well as European indecisiveness and the resulting sanctions could push Russia, the world’s largest country and a nuclear superpower, to increasingly align with China.”
Europe, he said, was in a weak position and needs to “stop burying its head in the sand and congratulating itself on the success of its assumed soft power and outstanding regulatory frameworks. Geopolitics will catch up with Europe.”
He advised that the continent needed to be more decisive, perhaps following the example of Switzerland, which had just beefed up its defense with the purchase of 36 U.S. F-35 fighter jets. “Switzerland is still aware that the world is a dangerous place and that peace can only be preserved with credible deterrence,” he wrote.
If Europe had done the same, one wonders if Moscow would have been so bold as to attack Ukraine. Instead, as Prince Michael wrote, “Europe persists in its blissful ignorance.”
Israel’s shaky coalition
In early April 2022, Israel’s ruling coalition was left once again without a majority after Idit Silman of the right-wing Yamina party announced her departure. Ms. Silman explained her decision by saying that the government did not reflect the “national, Jewish, Zionist” values of her party’s voters.
In September 2021, Ambassador Zvi Mazel predicted that the Knesset would face this predicament: “The coalition is at the mercy of the defection of one of its components. Its success is not guaranteed. Former opponents who came together to defeat Mr. Netanyahu may feel pressured by their constituents and become restive.”
Food price inflation worries in the Middle East
In mid-March, Egyptian President Abdel-Fattah El-Sisi introduced price controls on bread to combat recent surges. GIS has long warned that rising food prices could lead to instability, especially in Africa and the Middle East.
As early as June last year, GIS Founder and Chairman Prince Michael of Liechtenstein mentioned how governments would try to head off the trouble with interventionist policies. “It is possible that the price of food commodities will fall again. But this would be unlikely in the near future, due to more demand. Protectionist policies, trade disputes and sanctions could exacerbate the situation,” he wrote.
He even mentioned Egypt specifically, saying, “Food prices … can affect political stability when they spiral out of control. The Arab Spring started in Tunisia and Egypt because of higher food prices.” It is worth watching whether that political instability will rear its ugly head again, and whether government policies will make the problem worse.
Turkey’s mediation between Ukraine and Russia
On March 10, the foreign ministers of Ukraine and Russia met in Antalya, Turkey, in an effort to hammer out a cease-fire. Turkey lies across the Black Sea from both countries and has an interest in maintaining stability in the region. It has friendly relations with Ukraine, and though its ties with Russia have been fraught at times throughout history, Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin have a mutual respect for each other.
GIS Founder and Chairman Prince Michael of Liechtenstein pointed all of this out back in early February, before the war had even started. He also predicted that Ankara could be an ideal mediator between the two countries. “If Turkey were to mediate, it could benefit Ukraine, keeping it from becoming a geopolitical football that is continually kicked around by the global powers. It could also help to remove some of the exaggerated emotion in the overall security discussion between Moscow and the West,” he wrote.
Germany increases defense spending
On February 27, German Chancellor Olaf Scholz announced a plan to increase military spending in response to Russia’s invasion of Ukraine. Germany will commit 100 billion euros in its 2022 budget to the armed forces and will reach the NATO threshold for 2 percent of gross domestic product on defense expenditure.
Unfortunately, this is too little, too late to avoid a conflict in Ukraine. Perhaps if Germany and other countries had made defense a priority earlier, it might have held Moscow in check. GIS founder and chairman Prince Michael of Liechtenstein has long pointed out that defense commitments, not sanctions, would have been most effective. In 2018, he wrote: “An explicit declaration in 2014 by European countries, notably Germany, that they would increase their military budgets, combined with more active measures together with Washington, would have served the purpose [of deterring the Kremlin] better.”
Instead, the West chose ineffective sanctions, and now must live with the consequences.
The new bipolarity and the threat of conflict
In February 2022, Russia and China signed an agreement formalizing their partnership in resisting the U.S. as the dominant global power. They also agreed to support each other on the issues of Ukraine and Taiwan. Tensions are high, and the potential for conflict seems greater than it has been in years.
Though this division into a new bipolar order of the U.S.-led West against a Sino-Russian axis has caught some off guard, GIS founder and chairman Prince Michael of Liechtenstein saw it coming years ago. In December 2014, he wrote: “Both China and Russia are sensitive to what they regard as Western value-driven interference in their internal, political, social or economic affairs,” adding that “a temporary ‘marriage of convenience’ in opposing the West is happening.”
A scenario in which Russia is driven to be a partner of China “would encourage the development of a new bipolar world with even more conflict zones than there were when the Soviet Union was in existence,” he concluded. We can only hope that it does not come to conflict, since “[a] war between the West and a Russia-China block … could be one of mankind’s greatest humanitarian catastrophes.”
The globalizing gas market
In February 2022, Japan said that it would divert some liquefied natural gas cargoes to Europe. The move came as the European Union and the United States became more worried about a disruption in gas supplies that could come due to a conflict in Ukraine, but is indicative of a turn away from the regionalization of gas supply systems to a more global marketplace.
GIS energy expert Carole Nakhle predicted this development in October 2021, saying that due to the emergence of new LNG suppliers like the U.S. and Australia, distinct markets are becoming “increasingly interconnected” and that “the ongoing commoditization of LNG may give birth to a truly global gas market.”
Rising food prices at the heart of inflation
Food prices continue to rise, forming an important part of the inflation that is causing so much trouble for consumers as the world tries to recover from the Covid-era measures that crippled economies.
In June 2021, GIS founder and chairman Prince Michael of Liechtenstein predicted this state of affairs, writing, “The danger of real inflation is looming now, especially in the area where it hurts consumers the most: rising food prices. This could be harmful to the not so well-to-do in all societies, but especially in the poorer regions of the world.”
Government overspending and loose monetary policy are to blame, he said. Unfortunately, those are factors that look unlikely to change in the near future.
It was reported in November that the United Arab Emirates is taking steps to de-escalate tensions with Iran, despite differences between the two countries.
GIS expert Ambassador Zvi Mazel predicted this development in May of 2019, writing that the UAE wanted to “defuse tensions with Iran” because it is now “primarily focusing on its own economic interests to the exclusion of everything else.”
The trend, he wrote, could lead to further tensions between Abu Dhabi and its longtime ally, Riyadh.
The young chancellor’s woes
In May 2021, GIS expert Karl-Peter Schwarz wrote that young Austrian Chancellor Sebastian Kurz might well be “past his prime.” He predicted that the 34-year-old politician would face difficult days, and that he was “no longer riding a wave of public enthusiasm; he has to swim against the tide.”
On October 11, 2021, Mr. Kurz resigned from the chancellorship amid a corruption scandal that threatened to topple his coalition.
Trouble for China’s economy
While many economists were still arguing that the meteoric rise of the Chinese economy would continue for years, GIS expert Professor Enrico Colombatto correctly foresaw that economic trouble was afoot.
Ahead of the Evergrande crisis, he wrote that “Chinese policymakers have indeed acknowledged the presence … of too many bad projects and poorly managed companies.” He added that “unease in Beijing’s economic circles is rising – more than today’s current statistics reveal.”
This farsighted analysis was proven accurate in September 2021, when one of China’s largest property developers reportedly faced a cash crunch.
The Balkans: Common market but no EU membership
As enthusiasm for European Union expansion remains low within the bloc, the prospects for Balkan countries joining grow ever slimmer. In a May 2021 report, Dr. Blerim Reka predicted that an EU-Balkans economic zone might be seen as a palatable alternative.
“If the proposal were implemented, Western Balkans countries would be part of the EU common market, but not full EU members. They would gain lucrative free trade with the bloc, but no decision-making power in setting its rules.” he wrote.
Just a few days later, at a speech in Vienna on May 19, EU Enlargement Commissioner Oliver Varhelyi said the bloc was working on doing just that. “[W]e are also looking at ways to integrate more and more closely the Western Balkans in the EU’s Single Market. This means that in certain sectors we would like to see the Western Balkans to participate in EU policies even before they become EU Members,” he explained.
Europe toughens its stance on China
In late May, the European Parliament stopped ratification of the China Comprehensive Agreement on Investment, which had been hastily agreed upon in December 2020. At the heart of the matter is a dispute about allowing European countries greater access to the Chinese market.
GIS founder and chairman Prince Michael of Liechtenstein had urged Europe to lessen, not enhance, its economic dependence on China already a year earlier. “Europe will not change China. China will not become democratic. But Europe can reduce its dependence on China and diversify more toward other Asian markets. Doing so will also strengthen Asian countries’ position toward China. This, and not appeasement, could help Europe gain the Chinese leadership’s respect and help it deal with Beijing on a level playing field, allowing the trade and investment relationship to forge ahead.”
If Europe continued to tolerate bad behavior from China, including discrimination and abuse of religious groups, then “the Communist Party leadership will see it as clear proof of indifference and weakness,” he wrote.
In October 2020, GIS expert Ambassador Zvi Mazel hinted that once the uncertainty of the U.S. elections had passed, Israel and Saudi Arabia could move to strengthen ties more publicly: “Security relations and cooperation between Saudi Arabia and the Jewish state are long-standing. Riyadh has no doubt given its blessing to the [Abraham Accords] … but its position is complex. … With the uncertainty surrounding the U.S. elections, it is unlikely that a decision will come before November 3.”
Three weeks after the American elections, Israeli Prime Minister Benyamin Netanyahu held secret talks with Saudi Crown Prince Mohammed bin Salman in yet another unprecedented step toward normalization of Arab-Israeli relations.
Inflation on the way in Europe
In a recent press conference, European Central Bank President Christine Lagarde said that inflation in Europe could be expected both this year and in the medium term.
GIS founder and chairman Prince Michael of Liechtenstein predicted this state of affairs when Ms. Lagarde was nominated for ECB head in July 2019, saying that the move “will ultimately debauch the currency.”
He pointed out that Ms. Lagarde is not a banker but “a full-blooded politician,” adding: “With the ECB’s new management, it is likely that European governments have installed a willing enabler of excessive spending.”
North Macedonia’s EU accession blocked again
In late 2020, Bulgaria prevented the launch of European Union accession talks with North Macedonia, citing disagreements over language and interpretations of history. It was a severe blow to the latter country, which conducted painful negotiations with Greece that ended in a formal change of its name.
GIS expert Blerim Reka foresaw this outcome, writing, “Bulgaria is holding firm, insisting that if the issues are not resolved, it will block the accession negotiations.” He added that the prospects the two countries could come to an agreement looked dim, and noted that their leaders were striking “pessimistic” tones.
In November 2020, 15 countries signed onto the Regional Comprehensive Economic Partnership (RCEP), a huge trade agreement that will include nearly a third of the global population and 29 percent of global gross domestic product.
In 2019, GIS expert Walter Lohman predicted the deal would be signed before the end of 2020, pointing out that, “[t]he economies in the region … have an interest in completing the RCEP, not only for the economic benefits … but also to constructively engage China.”
He added that this could mean “China will continue to gain market share and the region will continue to engage it constructively, seeking Chinese trade and investment.” But the signing of the agreement does not by itself reduce U.S. influence in the region. That will depend on Washington’s willingness to re-engage with its partners there, he argued.
Chile on the path to a new constitution
On October 25, 2020, Chileans voted to scrap their country’s constitution, instituted during the dictatorship of Augusto Pinochet, and draft a new one. A month earlier, GIS expert Prof. Joseph Tulchin predicted that outcome, writing that it would “almost certainly” come to pass.
However, he also warned that drawing up a new constitution could turn into a Pandora’s box. “Uncertainty and institutional instability would loom over the entire process, particularly for investors who would rightly wonder if Chile can be counted on as a bastion of stability and free-market priorities,” he said.
Turkey enters the fray in Libya
In September 2019, GIS expert Dr. Federica Saini Fasanotti correctly predicted that “a regional actor [would] intervene in support of one faction to end the conflict as rapidly as possible.”
She wrote that “the most involved regional actor is Turkey, which sees Libya as a fundamental strategic chessboard within the Mediterranean Basin. Because of its extraordinary energy resources and market potential, Libya is worth a fight, economically speaking.
Turkey could enter the fray more substantially.” In June 2020, Turkey played a decisive role in ending the Libyan National Army’s siege of Tripoli, making it unlikely that insurgent Field Marshal Khalifa Haftar will ever regain his advantage.
Germany’s ECB ruling
In early May, Germany’s Federal Constitutional Court ruled that the European Central Bank’s bond buying did not respect the “principle of proportionality,” and could have acted outside its remit by purchasing government debt. With the decision, the German Bundesbank’s participation in the ECB program was suspended.
In August 2019, GIS founder Prince Michael of Liechtenstein discussed this issue before the German court, and pointed out that the ECB’s policy has enabled governments in various EU member countries to continue excessive spending. A rule in favor of the ECB, he wrote, would have been more political than legally based.
While it might have stabilized the situation in the short term, it would have come at the “steep price of bending the principle of the rule of law,” wrote Prince Michael. In the long term, it would have led to a collapse of financial stability in the EU. Fortunately, the court decided differently this time.
Shoring up oil prices
Earlier this year, U.S. President Donald Trump brokered a deal with Saudi Arabia and Russia to prop up oil prices, after they had spiraled to historic lows.
More than a year ago, GIS expert Professor Enrico Colombatto saw the potential for such a trilateral deal, especially if oil prices started to fall sharply. “[A] trilateral cartel could solidify and shape a new framework for the world oil market,” he wrote, emphasizing that the U.S. would play the crucial role, due to its lower dependence on oil revenue.
“The ball is now in the Americans’ court, and much depends on what the U.S. producers do. The Russians and Saudis can accomplish little unless their moves harmonize with the Americans’ strategy.”
China’s trade concessions
In a November 2018 report, GIS expert Dr. Thitinan Pongsudhirak pointed out that the U.S.’s trade deficit to China actually gave Washington leverage in the countries’ conflict over tariffs – it had more goods on which to levy such fees.
He confidently predicted that Chinese President Xi Jinping could find a way to make concessions to the U.S. politically palatable, saying such a scenario had a 50-60 percent chance of coming to fruition.
Less than a year later, China passed a key law on intellectual-property protection, agreed to give greater access to its financial market and promised to buy more American agricultural products.
PM Netanyahu’s electoral lead
In January 2020, GIS expert Ambassador Zvi Mazel wrote that “there are signs that [Israeli] voters on the left and on the right may decide to desert smaller parties to reinforce the two main formations and end the stalemate.”
He predicted that such a development might “work in favor of Likud,” Israel’s long-ruling, center-right party. Elections on March 3, 2020 yielded precisely those results. The small parties lost voters to Likud, allowing Prime Minister Benjamin Netanyahu and his coalition to gain four more seats in the Knesset than after the September 2019 elections.