Top five risk drivers | North America & Caribbean

Images: Getty Images (John Lamparski; Geoff Robins; Kevin Frayer; Pedro Pardo; Christopher Rogel Blanquet)

THE GLOBAL UNRAVELLING

STRATEGIC OUTLOOK 2023

North America & Caribbean | Top five risk drivers

5

Mexico’s president has fostered a close relationship with the military, depending on it to deal with organised crime and public security more generally. The relationship is likely to come under pressure as local activists and the US demand that the president address accusations of corruption and human rights abuses by members of the security forces. There is a negligible chance that the military would intervene in politics. But in this scenario, it would probably pressure the president to grant it additional economic benefits, such as major public works contracts.

Civil-military relations in Mexico

4

The New Generation Jalisco Cartel (CJNG) is Mexico’s fastest-growing and most aggressive organised crime group. It will probably try to further expand its control of drug-trafficking routes in the coming years, particularly in central states like Michoacan, or those along the northern border, like Baja California. The forging and breakup of alliances between small gangs have driven turf wars, which have fuelled wider crime such as cargo theft and kidnapping. A split within the group’s senior leadership would also portend additional conflicts.

Gang influence
in Mexico

3

Countering China’s global influence will almost certainly remain the US’ foreign policy priority in the coming years. A potential Chinese invasion of Taiwan is likely to remain at the forefront of this, though the effects of this are unlikely to be significant within the US. But efforts by Washington to further ward off or punish Chinese commercial espionage and IP theft will be a driver for a range of strategic risks, supply chain disruption, regulatory oversight and arbitrary detention.

US-China competition

2

Whoever becomes the Republican candidate for the 2024 presidential election will probably shape US politics, geopolitical and strategic risks, over the coming years. While the type of politics Donald Trump espouses still has currency, the midterms have damaged his chances of winning the candidacy; at least one challenger is likely to emerge in 2023 to challenge him, most probably Ron DeSantis. The closer the contest between the candidates is, the more divisive and polarising it will become.

2024 Republican presidential primary

1

Political polarisation in the US is highly likely to remain at the fore in 2023, driving a sustained risk of political violence and activism. Controversies about social issues, rulings by the US Supreme Court, the process of electing candidates and legal action against Donald Trump are likely triggers for this. Sustained public mistrust in state institutions and the espousal of extremist political ideologies is likely to lead to acts of political violence, albeit mostly one-off events.

Political polarisation in the US

Indicators

Governments have to use dwindling foreign reserves to afford basic food and fuel imports.
No agreement with IMF and external debtors on future bailouts.
Significantly high inflation and currency depreciation
Governments introducing austerity measures.
Shortages of imported goods including food, medicines and fuel.