The world in 2023:What to expect

As the new year begins in an atmosphere of economic crisis and uncertainty,our correspondents take a look at the major issues they will be watching around the world.

Europe

Is this the year the war in Ukraine ends,and by extension the energy crisis that has driven inflation to record highs?

Russia’s Vladimir Putin never envisioned he’d still be fighting in Ukraine six months after invading in February last year,let alone a year later,but last month the presidentconceded the war would be a long one.

Ukraine will be hoping the first anniversary of the war will spur a new round of public support for arming and equipping its people to take back Crimea and oust the Russians,the only acceptable outcome according to Ukrainian President Volodymyr Zelensky.

Putin,on the other hand,can keep pounding away at Ukraine’s civilian infrastructure from Russian vantage points,making Ukraine unlivable,even as he sustains massive losses on the battlefield.

This is the conundrum:the greater the Ukrainian victories,the more spiteful Putin will be in directing his revenge toward ordinary Ukrainians.

If the war continues until this time next year,Europeans will have suffered through another 12 months of bitter economic conditions brought on by energy shortfalls,higher interest rates and scarcer food resources with Russia having supplied much of the world’s fertiliser.

The International Energy Agency estimates Europe could struggle to procure as much as 30 billion cubic metres (bcm) of gas,or 7 per cent of 2021 winter supplies.

This is also likely to factor into the next round of climate change talks held in 2023 in Dubai. If voters have been feeling the pinch on energy bills for a good 12 months already,their governments are likely to come under more pressure to guarantee power sources,even if this means turning back to fossil fuels,something we’ve already seenGermany andBritain are willing to do.–Latika Bourke,journalist,London

After enduring perhaps its most turbulent year since World War II,Britain’s challenge in 2023 is not only to convince the world of its stability but itself. The country faces a lengthy recession and has struggled more than any other G20 nation (apart from Russia) to rebound following the pandemic. Record inflation and interest rates are hitting families hard,while mass industrial action has also proved a handbrake on economic growth and is testing the patience of a weary nation.

Three prime ministers in a year have damaged what little trust in government was left and the latest resident of Number 10 Downing Street,Rishi Sunak,has just 24 months to salvage his on-the-nose ruling Conservative Party.

Energy prices have risen to record highs and it remains to be seen whether the UK can avoid rolling blackouts over the winter months. Britain has almost ground to a halt in recent months,with rail strikes as well as industrial action by nurses,teachers,postal workers,barristers and immigration staff at airports. Sunak,who has tried to restore economic stability following the catastrophic 45-day reign of Liz Truss and her disastrous mini-budget,has little room to move when it comes to improving pay and conditions.

The one feel-good occasion that Britons have to look forward to is the coronation of Charles III,the first king crowned in Britain since 1937.

Charles,and his wife Camilla,Queen Consort,have proven many critics wrong in their first 100 days,with his popularity reaching record levels since the death of his mother Queen Elizabeth II in September. Westminster Abbey will be the scene of a slimmed-down but nonetheless lavish ceremony which will have to strike the right note amid a cost-of-living crisis.

The ongoing feud between Buckingham Palace and the estranged Duke and Duchess of Sussex threatens to overshadow Charles’ early impact. Their Netflix series has created awkward headlines for the royals and Prince Harry’s autobiography,Spare,is likely to tip the bucket on more family disagreements in January. – Rob Harris,Europe correspondent

South-East Asia

Having braved the pandemic,South-East Asia is now strapping itself in to feel the weight of the worsening economic headwinds forecast for 2023.

Rising prices for regional staples like rice and cooking oil were a feature this year as were shortfalls of products like eggs in Malaysia and chicken in Singapore,and cost of living pressures are again likely to be a key issue. The return of Chinese travel,if it does indeed transpire,will at least provide a welcome boost to a tourism industry still to get back to pre-COVID levels.

Challenges to democracy loom on the horizon,with elections due in two countries that took sharp authoritarian turns in the past decade and in another where a violent military regime remains in power. A changing of the guard is on the cards inThailand,where the popularity of Prime Minister Prayut Chan-o-cha is on the wane ahead of an election due to be called by March. It may be back to the future in Bangkok,with the Pheu Thai Party,linked to exiled former leader Thaksin Shinawatra,ahead in surveys. One of its prime ministerial candidates will be Thaksin’s 36-year-old daughter Paetongtarn Shinawatra. But given the governments of both Thaksin and his sister Yingluck were overthrown by military coups,it’s difficult to know what is in store.

Whether the election will be free and fair at all is the question inCambodia,where ballots will also be cast nationwide for the first time since 2018. Last time,the main opposition party was dissolved and Hun Sen’s Cambodian People’s Party won all 125 seats. The landscape hasn’t improved much since,and the new opposition already faces threats and prosecution.

The generals inMyanmar have also said they will hold nationwide polls in 2023,two years after tossing out a democratically installed government in a coup. But with ousted leader Aung San Suu Kyi facing the rest of her life behind bars,and many of her political allies jailed or in hiding,it would be an election in name only.

Voters won’t go to the polls inIndonesia until February 2024 but the jostling to succeed President Joko Widodo when he finishes his second and final term will heat up this year. The contenders are expected to include Defence Minister Prabowo Subianto,a two-time loser to Widodo,Anies Baswedan,who was until recently governor of Jakarta,and Central Java Governor Ganjar Pranowo. House Speaker Puan Maharani,the daughter of former president Megawati Sukarnoputri and granddaughter of Indonesia’s first president Sukarno,could also mount a bid.

Malaysia has just got a new leader but whether a period of much-needed stability ensues is a big unknown. Prime Minister Anwar Ibrahim has had to make serious compromises to put together a government after the election in November,not least appointing a political rival facing dozens of corruption charges as his deputy. Given recent history,it’s certainly not beyond the bounds of possibility that the unlikely union comes unstuck. With a series of state elections in Malaysia in 2023,it will be worth watching whether the Islamic party PAS continues its ascent,having secured the most seats of any party in the federal poll.

East Timor,a comparative model of democracy,is the other nation in this region scheduled to choose leaders this year and a familiar face will be a central player in a parliamentary election tipped for May. Former president and PM Xanana Gusmao is angling to return his National Congress for Timorese Reconstruction party to government,a development that would only intensify the push to pipe gas from the Greater Sunrise field to Timor’s south coast and not to Darwin,as Australian project partner Woodside Energy has wanted. –Chris Barrett,South-East Asia correspondent

North Asia

China is out of the COVID cage and ready to open up after three long years of isolation. This year is make or break for the Asian giant if it is to hit its target of becoming the largest economy in the world. Battered by years of draconian zero-COVID restrictions it has unwound them at a stunning pace. It now faces an infection peak between January and March and itstravellers are facing restrictions on entry to several countries that are afraid of a resurgence in infections. If it can get through it without a spike in deaths it will be well-positioned to boom. IfChina succeeds in driving growth back up above 5 per cent,the world’s economy will be better for it,but it will also face a reckoning over how much it is willing to pay to a government that is growing increasingly ambitious and authoritarian.

Nowhere will the price of that bargain be felt more than inTaiwan, which will move into presidential election season by the end of 2024. After 12 months of unprecedented military threats from the mainland,few expect it to let up in 2023. The Democratic People’s Party,which has run on a platform of defending the island’s democracy from China,struggled in the midterm elections in November. Its rival,the Kuomintang,could pose an electoral threat for the first time in years.

Further north inJapan,the government of Prime Minister Fumio Kishida is unpopular and under strain. Kishida has persistently recorded approval ratings below 30 per cent,a number that could put him at risk of exit via the country’s revolving door for prime ministers. Tokyo is becoming increasingly prominent in the global defence and national security arenas as the government pushes a China threat narrative both for domestic political purposes and geopolitical reality. That has drawn it closer to the United States and Australia than at any time in its history.

All three will have a major role to play in India at the G20 in September,where members of the Quad alliance will have to grapple with the ongoing fallout from Russia’s war in Ukraine and China’s ambitions in the Pacific and South China Sea. –Eryk Bagshaw,North Asia correspondent

South Asia

India will hit a major milestone this year – recent United Nations projections show it will surpass China to become the world’s most populous country at 1.42 billion. Prime Minister Narendra Modi,its dominant political figure for a generation,will be in the spotlight as the nation hosts the powerful G20 summit for the first time in September. A violent clash between troops on the India-China border near the eastern Himalayan town of Tawang in December suggests the frosty relations between the two giants will be another foreign policy preoccupation for New Delhi in 2023.

Surging inflation,caused by elevated food and energy prices,caused hardship in communities across the subcontinent in 2022. InSri Lanka a state of emergency was declared after then president Gotabaya Rajapaksa fled the country in July,following months of mass protests over skyrocketing prices and shortages of fuel,food and medicines.

Further economic difficulties are likely across the South Asia region,including slower growth in India,amid higher global interest rates and the ongoing effects of COVID-19.Pakistan is still reeling from devastating floods in August and September which left about a third of the country underwater. It has also been plagued by political instability since prime minister and former cricket star Imran Khan was deposed following an April no-confidence vote in parliament. Khan and his followers responded with a series of protest marches on the capital of Islamabad seeking to oust his successor,Prime Minister Shehbaz Sharif. Khan was wounded in a failed assassination attempt in November. A general election in Pakistan is due by October.Bangladesh,the world’s eighth most populous nation,will also hold elections this year.– Matt Wade,senior journalist,former South Asia correspondent

North America

Fresh from a polarising midterm election year,theUnited States will enter 2023 facing even greater political and economic uncertainty. Much of the first two years of Joe Biden’s presidency was spent trying to reach consensus in a Congress that his party narrowly controlled,but the next two years will involve navigating a newly divided government.

While the Democrats held on to the majority in the Senate at the midterms in November,Republicans won back the House of Representatives,giving them the power to thwart Biden’s agenda as he heads towards the next election in 2024. Expect to see plenty of acrimony as the new House works to undo some of the president’s legislative gains – such as higher taxes on corporations or big-spending climate change initiatives – while launching a flurry of probes on everything from the financial dealings of Biden’s son,Hunter,to the crisis at the US-Mexico border.

On that front,immigration will be a hot-button issue,as Americans brace for an explosion of migrants illegally crossing into the country seeking asylum.

Inflation will also remain a problem,with economists and financial experts predicting that higher prices will last well into the year,if not longer. The Federal Reserve’s latest interest rate rise in December also renewed the vexed question not even chairman Jeremy Powell can answer:will there be a recession in 2023?

Biden said he would decide early in the new year about whether to run for a second term – a move that seems increasingly likely amid reports that his wife and closest confidante,Jill Biden,has come around to the idea and is now “all in”.

Donald Trump,on the other hand,has been somewhat diminished after his coterie of extremist candidates ended up tanking at the midterms,and he still faces a string of legal woes,including the Justice Department’s probe into the January 6 Capitol attack and his alleged mishandling of classified documents. Nonetheless,history suggests it would be unwise to count “Teflon Don” out just yet. Expect a crowded field of primary candidates jockeying for the 2024 presidential nomination to emerge.

Meanwhile,in foreign affairs,the growing strategic competition between the US and China will inevitably challenge America’s alliance with Australia. The partnership was strengthened at the latest round of AUSMIN diplomatic talks in Washington in December,where the US announced it would integrate Japan into Australia’s military activities so that all three countries could push back on Beijing’s coercion in the Indo-Pacific. But the significant pledge came with very few details,so the proof,according to analysts,will be in the pudding. It’s going to be another fascinating 12 months.– Farrah Tomazin,North America correspondent

South and Central America

The return of Luiz Inacio Lula da Silva to the helm inBrazil will likely mean a greater role for the country on the world stage,especially on climate change and protection of the Amazon. But first Lula will have to get past his inauguration on January 1 andfears of unrest by supporters of outgoing President Jair Bolsonaro,who has not yet accepted his election loss. Then Lula will need to govern around a Congress full of Bolsonaro-backed members and a divided population,half of which is still in denial over his victory.

Fresh from a FIFA World Cup victory,people inArgentinacould beforgiven for temporarily forgetting the deep economic crisis the country is in,but the problems will persist at least until a planned October election,when current President Alberto Fernandez will likely be replaced by a leader from further to the right,if not the far-right,given the disenchantment with his administration.

Peru enters the new year in crisis after its peasant teacher-turned-president attempted a coup,was removed and arrested last month,and his supporters unleashed protests which culminated in the current state of emergency. New President Dina Boluarte has proposed elections in 2023,but the current climate gives her little room for policies to turn the economy around.

Venezuela’s economic crisis continues despite it having faded from the headlines. Strongman Nicolas Maduro survived Washington-backed efforts to remove him,but now the US appears to have gotten used to the idea he will be staying,certainly long enough to celebrate 10 years at the top this year.

Chileexperienced one of the world’s fastest recoveries from the pandemic last year,growing 11.7 per cent,but an OECD report released in September and quoted by Reuters,expects this growth to slow to 1.9 per cent in 2023 due to growth in consumption,high inflation and the effects of the war in Ukraine.

El Salvador,Guatemala andNicaraguaare all battling high crime and unemployment and are likely to continue to lose citizens to the promise of a better life in neighbouring nations and in the United States,presenting an enduring challenge for transit countryMexico and the Biden administration.- Lia Timson,deputy world editor

Middle East

Russia’s invasion of Ukraine has proved a coin with two starkly different sides for the Middle East.

For oil and gas-producing nations,the energy crisis created by the conflict has resulted in a windfall as the world turns to them for fuel. US President Joe Biden,who had vowed to makeSaudi Arabia a pariah for its human rights abuses,instead travelled cap-in-hand to Jeddah to urge increased oil production,only to be rebuffed. Even as the European Parliament is rocked by abribery scandal involving Qatar,many European leaders have been anxious to avoid sanctions that might result in Doha withholding gas supplies to the continent.

But for those nations that import most of their food and fuel,the interruption in supplies of cereals and edible oils from Ukraine and Russia has put fresh strain on economies already struggling with severe youth unemployment,the COVID-19 pandemic and inflated food prices. Economic problems triggered the wave of uprisings in the Arab world in 2011,and the current mass protests inIran,while aggravated byabuses of women’s rights,also had their origins infalling living standards for a population that is mostly under 30.

After one of the deadliest years since 2005 for Palestinians under occupation,Israel enters 2023with a new government,led once again byBenjamin Netanyahu,built around an assortment of far-right figures with long histories of incitement to violence and opposition to a two-state solution.

Yemen andLibya remain torn apart by war andLebanon’s economy has collapsed completely. With the West’s attention turned elsewhere,a power vacuum has grown,and with it the prospect of renewed turmoil.- Maher Mughrabi,features editor,The Age

Oceania and the Pacific

Across the Tasman,things will heat up for Jacinda Ardern as she gears up for an election year (a ballot must be called no later than January 13,2024). Despite theJacindamania that propelled her toNew Zealand’s prime ministership in October 2017,the leader is facing a barrage of negative polls,worrying crime statistics and a fresher opposition. Having gotten through terror attacks,a pandemic and myriad problems in her first two terms,expect Ardern’s focus this time to be on economic resilience:tax cuts,childcare and support targeted to the working poor,writes the AAP’s Ben McKay.

Elsewhere in the Pacific,expect more jostling for political influence between China,the United States and Australia,especially inFiji,theSolomon Islands andVanuatu.

Africa

The outlook for the African continent is grim,with the Economist Intelligence Unit warning that “heightened geopolitical tensions,the lingering effects of the COVID-19 pandemic,ongoing supply chain disruption,business and consumer price pressures,the rising cost of international and domestic finance,disruptive national elections,social grievances and adverse weather events are all present and will create an unsettled backdrop throughout 2023″.

Some 17 countries will hold state or parliamentary elections this year,includingSouth Africa,theDemocratic Republic of Congo andZimbabwe. Ongoing conflicts inMali andBurkina Faso,aggravated by the presence of al-Qaeda and Islamic State-affiliated terrorist groups,and food insecurity will pose grave threats.

A fragile ray of hope comes fromEthiopia,where a truce was struck in November to end a two-year war with Tigrayans in the north of the country,which also drew inEritrea on the Ethiopian government’s side. The conflict killed tens of thousands,displaced millions and left millions more hungry and in need of aid. Last week,mediators were locked in negotiations in Tigray’s capital Mekelle,trying to advance the terms of the truce.

Morocco may be buoyed somewhat by the country’s unexpected brilliant performance at the FIFA World Cup,which has given the population reason to be cheerful despite it being knocked out in the late stage.

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It’s not all doom and gloom:Reasons for optimism in 2023

Meanwhile,China and Russia’s forays into the continent will continue –China via its mining and Belt and Road Infrastructure projects and Russia via thenotorious mercenaries of the Wagner Group who have,among other things,seized diamond mines and reinforced military government crackdowns. –Lia Timson

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