These Are the Geopolitical Risks You Won’t Have to Fear in 2015

Sometimes, the future can be easy to predict. The Islamic State of Iraq and Greater Syria (ISIS) will continue to terrorize the Middle East and North Africa. Vladimir Putin’s Russia won’t back down in Ukraine or quit lashing out against the West. And of course, there will also be plenty of geopolitical risks that will come out of nowhere, like the sudden volatility in global oil markets.

Yet sometimes the biggest surprises are the false alarms—the overrated risks that end up nowhere near as disastrous as everyone assumed. They’re what I call a ‘red herrings’: risks that are largely expected to materialize, but that I predict it won’t pan out in 2015.

In a world where we get whipsawed by headlines and hyperbole, risks both real and overblown, it’s important to make bold predictions for some of the so-called major threats that won’t disrupt the world—at least not the way we think. I’ve outlined the biggest four.

1. The Islamic State

In 2015, the influence of ISIS will continue to grow. It has become the most powerful terrorist group in the world, eclipsing al-Qaeda, with funds and fresh recruits flowing in rapidly. As a brand, as a terrorist organization and as a regional menace, ISIS is on the rise.

But as a sovereign state, ISIS will not achieve similar success in 2015. The group will fail to expand the territory under its direct control, and it’s even likely to cede ground in Iraq and Syria. The U.S., potent Shia militias, Kurdish peshmerga forces, the Iraqi army and Sunni tribal forces will combine to contain the Islamic State’s power over the next year. Even though its influence will prove long-lasting, ISIS will not replicate the stunning military successes it demonstrated in the summer of 2014, nor create a caliphate that can be sustained over the long term.

2. Asia Nationalism

In Asia, strong, nationalistic leaders can seem like a geopolitical disaster waiting to happen. Take Japan and China, with their conflicting claims to the Senkaku/Diaoyu islands in the East China Sea. The animosities run deep: in a recent Pew Research poll, only 7% of Japanese held a favorable view of China, while just 8% of Chinese viewed Japan positively.

At least for 2015, however, pragmatic restraint should prevail. Stronger, more popular leaders in four of Asia’s key economies—China’s Xi Jinping, India’s Narendra Modi, Japan’s Shinzo Abe and even Indonesia’s new President Joko Widodo—all have their hands full with long-overdue economic reforms. With their focus turned to home, they have good reason to avoid foreign distractions, improve their regional economic ties, keep security relations in balance and contain any inevitable flare-ups. There will be scuffles, but don’t expect soaring tensions between the economic powerhouses of Asia.

3. Petrostates

There’s no way to ignore the relentless slide in oil prices, which have fallen by more than half since June. For consumers enjoying cheaper gasoline, it’s a welcome relif. For countries like Saudi Arabia, Russia, and Iran—authoritarian petrostates that rely on oil exports as an economic lifeline—there’s a growing expectation that both their geopolitical weight and even their internal stability could be severely compromised in 2015.

It’s unlikely to happen. We’ll probably see a modest recovery in oil prices, but even if we don’t, massive cash reserves give many of these countries a lot of room for maneuver in the short-term. After all, Saudi Arabia has contributed to the oil price collapse by opting against a production cut. Nor will their foreign policies budge much: cheaper oil won’t make Russia pull out of Ukraine or Iran accept worse terms in nuclear negotiations. The notable exception is Venezuela, which may very well default if oil prices remain low. Yet in 2015, don’t expect petrostates to die out.

4. Mexico

Mexican President Enrique Pena Nieto has his hands full. He’s fighting off accusations of financial impropriety involving his wife and his finance minister. Economic growth has been anemic. Many Mexicans, outraged by the murder of 43 college students who were handed over to drug lords by a local mayor, feel that the government hasn’t lived up to its commitments to improve security.

Despite the storm clouds, though, it should be a reasonably positive year for Mexico. Pena Nieto still has the popularity and the determination to push forward with economic reforms in the telecom and energy sectors. The President’s weakness has mainly benefited the right-of-center National Action Party (PAN), which generally supports his agenda. If he can make progress on his reforms, it will have a huge impact on Mexico’s productivity and competitiveness, which will help attract large-scale investment from abroad. Combine that with an economic rebound in the U.S. as well as improving cross-border trade, inbound investment and tourism numbers, and Mexico could be a bright spot for 2015.

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Of course, for every false alarm, there are plenty of real and underappreciated threats. If pessimism suits you better, my last column focuses on the ten biggest risks of 2015.