TIME Foreign Policy

America’s Uneasy Path Abroad in 2015

A U.S. soldier from the 3rd Cavalry Regiment walks with his rifle, after returning from a mission at forward operating base Gamberi, in the Laghman province of Afghanistan
A U.S. soldier from the 3rd Cavalry Regiment walks with his rifle, after returning from a mission at forward operating base Gamberi, in the Laghman province of Afghanistan, Dec. 15, 2014. Lucas Jackson—Reuters

The U.S. is still the world’s leading economy, but its geopolitical clout isn’t what it used to be

America is not in decline. The U.S. will have the world’s most formidable military for the foreseeable future. Its economy remains the world’s largest, and its recovery will probably gather more steam in 2015. Its workforce is not aging nearly as quickly as that of Europe, Japan or China. No country has a greater capacity for technological innovation. Almost all the world’s biggest tech companies are based in the U.S. For next-generation cloud computing, artificial intelligence, advanced manufacturing and nanotechnology, bet on the U.S. America has an entrepreneurial culture that celebrates not simply what has been accomplished but also what’s next. There is every reason to be confident that America has a bright 21st century future.

But its foreign policy is a different story. American power is on the wane, a process that will accelerate in 2015. Power is a measure of one’s ability to force others to do things they wouldn’t otherwise do, and there are now more governments with enough resources and self-confidence to shrug off requests and demands from Washington. There was never a golden age of U.S. power when an American President could count on other governments to do as he asked. But there are several reasons the U.S. is now less able to build coalitions, forge trade agreements, win support for sanctions, broker international compromise or persuade others to follow its lead into conflict than at any other time since the end of World War II.

First, there are a growing number of emerging powers that, although they can’t change the global status quo on their own, have more than enough power to ignore what America wants—and even to block U.S. plans they don’t like. For example, Washington can still tell governments of developing countries that access to capital from Western-dominated lending institutions like the IMF and the World Bank depends on democratic or free-market reforms. But the strongest emerging markets need capital less than they used to, and some of them are creating their own lending and investment institutions.

The BRICS countries—Brazil, Russia, India, China and South Africa—in 2014 launched a $50 billion development bank, an alternative to Washington-based lenders. The BRICS bank can’t by itself end U.S. dominance of the global financial system. But add the China Development Bank, the Brazilian Development Bank (BNDES) and an expanding list of important regional lending institutions, and the world’s borrowers are no longer quite so dependent on Western lenders. The numbers tell the story. In 2013 the World Bank disbursed $52.6 billion. The same year, Brazil’s BNDES invested $85 billion, and its Chinese equivalent extended loans valued at $240 billion.

While emerging powers awaken, Washington’s relations with its traditional allies are not what they used to be. It was inevitable that as the Cold War receded further into history, Americans and Europeans would have less in common. Both are unhappy with Vladimir Putin and his assault on Ukraine, but Russia is not the Soviet Union. It’s not a global military power. European nations have far more economic exposure to Russia than America does, and Washington needs Putin’s help to get things done in other regions, most notably in the Middle East. Though the U.S. and Europe have coordinated their sanctions on Russia so far, we’re more likely in 2015 to see disagreements over how best to handle Putin.

Nor has it helped transatlantic relations that the U.S. National Security Agency was reportedly listening to German Chancellor Angela Merkel’s phone calls and collecting Internet data, raising fears across Europe that U.S. information-technology firms have given America’s spy agencies deep access to European secrets. Last February, Merkel took the extraordinary step of calling for a European Internet, one walled off from the U.S. So much for free movement through cyberspace.

Anti-American anger in many European countries—which rose sharply during the presidency of George W. Bush, then eased with the election of Barack Obama—was tested by the spy revelations. It will be tested again by the Senate’s recently released torture report, which embarrassed a number of European governments that reportedly provided “black sites”—secret U.S. prisons—for use by the CIA. This can only make it more difficult for the next U.S. President to win support from European leaders for anything that wary European voters might not like. The country’s relations with Britain will suffer in years to come as it becomes clear that the U.K. will sharply reduce the role it plays in Europe or exit the E.U. altogether. Britain has given Washington much of its influence inside the E.U., and a U.K. outside Europe would weaken the alliance.

It’s also inevitable that the rise of China will fray U.S. ties with allies in Asia as the governments of these countries hedge their bets on U.S. staying power in the region. An ally like Japan knows that Washington is now less likely to intervene in its security disputes because the American public won’t support a lasting U.S. commitment to solve what are perceived to be other people’s problems. A Pew Research poll conducted in late 2013 found that for the first time in the half-century that Americans have been asked this question, a majority of respondents said the U.S. “should mind its own business internationally and let other countries get along the best they can on their own.” Just 38% disagreed. More recent polls tell the same story. In a democracy, no President can sustain an expensive, ambitious foreign policy without reliable public support. In the U.S., this support is no longer there, and the world knows it. Short of another large-scale terrorist attack on U.S. soil, it’s hard to imagine anything that can restore public appetite for a more assertive foreign policy anytime soon.

For all these reasons, the U.S. will exercise less power in the coming years in nearly every region of the world, and we can expect a de-Americanization of the international system. But there are other forces at work as well. Some countries will make a more determined move away from reliance on the dollar. As the world’s primary reserve currency, the dollar has served for decades as the vital asset for central banks and commercial transactions of all kinds. Dollar dominance offers the U.S. important advantages. Its stability ensures that the country remains the safest port in any storm, attracting investment that keeps U.S. interest rates relatively low, despite the expansion of the national debt. It helps U.S. companies avoid the transaction costs that come with currency conversion and allows Washington to pay its debts by simply printing more money.

But dollar dominance is on the wane as China, Russia, Brazil and others move to denominate more of their commerce in other currencies. Five years ago, China conducted trade almost entirely in dollars. Nearly a quarter of that trade is now settled in renminbi.

At the same time, China has announced the creation of an Asian Infrastructure Investment Bank, an institution that will not require borrowing nations to uphold the environmental and labor standards that are conditions of help from Western capitals. China has also created a $40 billion Silk Road Fund that is designed to extend Chinese commercial influence across South and Central Asia and into Europe. Those initiatives will give China greater market power—and therefore political influence—with the governments of partner countries and will help Beijing escape the dominance of U.S.-mandated rules and standards. In addition, Russia and China are now talking about creating their own ratings agency to further diminish Western influence in their economies.

The emergence of new lenders and investors provides autocratic governments access to cash without having to promise democratic reforms. But diminished influence abroad is only part of the story. For many emerging states, partisan paralysis in Washington makes democracy a less than appealing path toward development.

Nor will it be as easy for the U.S. to build greater support for market-driven capitalism, particularly as China continues to demonstrate the growth potential of the state-driven variety. In 2015 congressional opponents of the U.S. Export-Import Bank, an 80-year-old institution designed to enhance the market power of U.S. companies operating abroad, will finally have a golden opportunity to kill it. At the same time, though much has been made of China’s economic-reform process, changes to China’s economy have less to do with privatization and more with making China’s enormous state-owned companies work more effectively.

American prospects in the Middle East are not, for the moment, very encouraging. The Obama Administration’s bid to make a deal with Iran to scuttle its nuclear program leaves the Saudis worried that the U.S. will lift sanctions on Riyadh’s bitterest rival, shifting the region’s balance of power in Iran’s favor. The continued erosion of U.S.-Saudi ties will persuade the Saudi royal family to run a much more independent foreign policy than it used to. For example, though technically part of a U.S.-led anti-ISIS coalition, the Saudis are not working as hard as they could to track funding and arms that militants from the Islamic State of Iraq and Greater Syria receive as they work to destabilize Iraq and Bashar Assad’s Syria. Even in places where the U.S. and Saudis have shared interests, the two countries are no longer closely coordinating policies.

The most direct challenge will come from China. Washington is still working to solidify its long-term commercial and security interests in East Asia via the Trans-Pacific Partnership, a colossal U.S.-led trade deal involving a dozen countries on either side of the Pacific. For the moment, this is not a deal that will include China and its state-dominated economy. That’s why China is working on an enormous international trade deal of its own. At a regional summit meeting in November, Chinese President Xi Jinping announced a road map for the creation of a Free Trade Area of the Asia-Pacific (FTAAP). More than 20 countries have formally signaled interest in FTAAP membership. In fact, China—not America—is now the world’s lead trading nation. According to analysis by the Associated Press, in 2012 the U.S. was the largest trade partner for 76 countries, and communist China was the lead partner for 124.

The U.S. will remain the world’s most powerful nation for years to come, but that status doesn’t carry as much weight as it used to. Advantages enjoyed for decades are fading as new powers push for new rules and standards—in international politics, the global marketplace and online. Globalization will continue to spread new ideas, speed the flow of information, lift nations out of poverty and drive global consumption. But it’s less likely than before to promote American values and an American worldview.

Bremmer is president of Eurasia Group, a political-risk consultancy

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TIME russia

This Isn’t A Cold War. And That’s Not Necessarily Good

Ukraine Pro-Russia
A member of a newly-formed pro-Russian armed group called the Russian Orthodox Army mans a barricade near Donetsk airport on May 29, 2014 in Donetsk, Ukraine. Maxim Zmeyev—Reuters

Four key reasons why the Ukraine crisis doesn't fit that description--and why that means the situation will deteriorate.

Since the Ukraine crisis began, many Western pundits have argued that we are headed toward a second Cold War—a worry echoed a few days ago by Russian Prime Minister Dmitry Medvedev when he declared: “We are slowly but surely moving toward a second Cold War, which no one needs.

I’ll say it definitively: This is not a cold war, nor will it become one.

A cold war involves two blocs, fighting tooth and nail over something that really matters, seeking two competing outcomes, with no space in between. There are four clear reasons why the Ukraine crisis doesn’t fit that description … nor will it.

First, the Europeans do not fully support the Americans. They would love to see Ukraine oriented toward Europe, but they don’t want to fight over it. The Germans resisted even throwing the Russians out of the G8, a largely symbolic organization. When it comes to retaliation that truly matters, Russia offers trade, banking, industry, real estate, natural gas; the Europeans will not support strong sanctions because they do not want these relationships to implode. Poland and the Baltic states might be calling for tougher NATO action, but they are in the minority. If this situation gets worse, the U.S. will struggle to drum up European support.

Second, the Chinese don’t particularly support the Russians. Yes, Putin took a triumphalist trip to Shanghai last week, signing a $400 billion gas deal. But that in no way suggests that the two countries are becoming political allies. On Ukraine, the Chinese didn’t support the Russians in the United Nations Security Council; they abstained, which was a slap in the face. The gas deal, which had been in the works for ten years, finally resolved because the Russians got desperate and sweetened the deal. The Chinese are more than happy to take money from anyone who will offer it to them. They want to work with everybody, and keep their options open. They are the prime beneficiaries of the Ukraine crisis as long as they remain on the sidelines—and that’s exactly what they intend to do.

Third, the Russians are simply not that powerful. Over the last 25 years, Russia has been steadily declining—demographically, economically, diplomatically, geographically, and militarily. Growth is slow—they will be in a recession this year—and taking over a big part of Ukraine would prove even more expensive. When you look around the world and ask who Russia’s allies are, you come up with a shabby list: neighbors like Belarus, rogue states like Venezuela, and individuals like Bashar al-Assad, and Edward Snowden. That’s not a portfolio to bet on. And that dynamic is very different from the Cold War. Russia can cause a lot of trouble in its backyard—in Ukraine and Moldova—but that is not the same as saying they’re going to invade a NATO state like Poland. Hilary Clinton and Prince Charles have drawn a comparison to Hitler and the Sudetenland—and that’s ludicrous. Putin might be a bad guy, and he might be doing things we don’t like, and he might disregard human rights. But he doesn’t have the capability to become Hitler. Economically, he can’t get it done.

Fourth, and perhaps most important, the Americans don’t care enough. Ukraine is not something we get worked up over. President Obama recently said that Afghanistan is not a perfect country, and we’re not going to make it one. You can insert Ukraine into that same sentence. We are aggravated at the Russians, and we are ready to ramp up sanctions. But how much are we really prepared to do? We said that the Ukrainian elections were pretty good from our perspective. Well, there were no elections in Crimea, and most of the polling stations in Donetsk and Luhansk were closed because of Russian militants; I personally would not call that a successful election. Of course, that’s only if you care about the territorial integrity of Ukraine. If you don’t care, and you’re just trying to ensure the Russians don’t cause too much of a mess, then calling this election a success is a smart move. Ukraine is not an ally, and we’re not prepared to go to bat for them.

So a Cold War this is not. But here’s the problem: that’s not necessarily a good thing.

When you look at the current situation, some of the same attributes that disqualify it from being a Cold War also make it likely that the situation will deteriorate. For crises like Ukraine—as well as the conflict in Syria, and others like them—there is no resolution coming. They just aren’t sufficiently vital to prompt a collaborative solution among major powers. Many players benefit from remaining on the sidelines; others just aren’t threatened enough to act. In a world without global leadership—not even conflicting global leadership from competing US-Russia camps–many conflicts will burn brighter for longer. And new ones will arise. There simply are not a lot of countries out there that are willing to push back.

Ian Bremmer is the president of Eurasia Group and a global research professor at New York University. You may follow him on Twitter @ianbremmer.

TIME China

China’s Hard Landing Is Coming, But It’s Not The One You Expect

The future of the world's second largest economy hinges on how the country's political elite responds to Xi Jinping's reforms

For years, people have worried whether China is headed for a hard landing. Those concerns are overstated—just like fears that the U.S. was going to default, or that the Eurozone was going to fall apart. But there is trouble coming in the long term: either many leaders and elites will have a hard landing, or far more troublingly, the country itself will.

Here’s why there is good reason to be confident that China will do well over the next year or so: The leadership under Xi Jinping has actually engaged in transformational economic reform without the specter of urgent crisis. Leaders rarely undertake difficult projects when circumstances don’t absolutely force their hand (and even then, those responses begin to recede along with the threat itself). That’s what we saw with the Eurozone sovereign debt crisis, and with financial reform in the U.S.

By contrast, even in the absence of crisis, China’s leadership has been able to make methodical, significant change, dictating their own pace and priorities for economic reform. The most significant reforms have been around the environment, particularly air quality; Xi Jinping understands that these issues will take a long time to fix. There has been financial reform as well, which struck him as urgent because many of the leaders most committed to it will retire by 2018. And Xi is reforming state-owned enterprises, while loosening the rules for foreign direct investment.

Even as Xi slowly opens up the economy, he is clamping down politically to mitigate risk. Xi is surrounding himself with strong leaders, consolidating support at the top echelons of government. He’s taking firm control of the military, something he worked out with the former president and which typically takes longer to happen. He has managed to build institutions within the party that are focused on internal control, such as a national security council that focuses resources on internal stability. He has also waged a strong anti-corruption campaign to keep political leaders in lockstep with his economic reforms.

And it has all gone pretty smoothly thus far. China’s growth has actually remained quite strong; it’s tapered off slowly in recent years, but that’s part of the process of building a more sustainable economic model. And there has been very little political backlash. (The only example has been former President Jiang Zemin’s warning that “the footprint of this anti-corruption campaign cannot get too big”). When it comes to popular dissent, it hasn’t materialized in any acute way. (Yes, there are demonstrations in the country, but we’ve been reading Tom Friedman columns for decades claiming China is going to implode. He hasn’t written any of those lately.) In short, Xi has a well-considered plan, and he has sufficient internal support to pull it off. It’s hard to imagine a scenario where this falls of the rails in the near future.

But there is a hard landing coming down the road. And it’s not economic, it’s political.

Xi’s reforms are not just cosmetic. Real changes to the economy will threaten the vested interests of all the Chinese leaders who have been making significant money for themselves and their allies through inefficient investment of state capital, protection for their preferred companies, and inappropriate promotion of growth over sustainability. If the reforms are going to work, then an entire class of Chinese leaders, who have enriched themselves for over 30 years, will suddenly be on the losing end. And that’s a problem.

The fact that Xi has gone as far as he has with no pushback—no civil disobedience, no willful obstruction by leaders—is extraordinary, but we can guarantee it won’t continue forever. When pushback comes, it’s going to be as strong as the powerful people that his reforms threaten. And that will be the moment of truth for China. When that moment comes, one of two things could happen. An entire cadre of Chinese leaders suffers a hard landing; this would be for the greater good of China, as Xi’s economic fixes continue and things improve. Or these powerful elites win, and Xi’s reform process stalls out. At that point, the country could experience a much more devastating hard landing, because the legitimacy that Xi has built up will collapse, and critical environmental and economic problems in China will go unfixed. That will all lead to public disenchantment. That’s when you’ll see the real instability on the streets.

Reforms are a tremendous undertaking and a great opportunity for China; Xi has performed as well as anyone could have hoped for thus far. If he can push on with reforms despite the political pushback, we could see a much more vibrant Chinese economy. But if powerful Chinese leaders can avoid a hard landing, it will come at the expense of China itself.

Ian Bremmer is president of Eurasia Group and author of “Every Nation for Itself: Winners and Losers in a G-Zero World.” You can follow him on Twitter @ianbremmer.

TIME Ukraine

What You Should Know About Ukraine

Violence Escalates As Kiev Protests Continue
Anti-government protesters clash with police on Independence Square in Kiev on Feb. 19, 2014. Alexander Koerner—Getty Images

Ukraine is caught between Russia and Europe — its past and its future — and Putin is in the catbird seat

Ukraine is a divided country caught in an increasingly violent tug of war between its past and future.

Begin inside the country. About two thirds of Ukraine’s citizens are ethnic Ukrainians whose first language is Ukrainian. About one-sixth are ethnic Ukrainians who speak Russian. Another one-sixth are ethnic Russians, who live primarily in the east and south near the Russian border. This division creates a fault-line beneath the country that potentially pits one group against the other. Following the Soviet Union’s collapse, Ukrainians of both ethnic groups feared open conflict, and the new country’s stability rested on the promise that no politician could afford to try to win the presidency by playing with these divisions.

(MORE: Ukraine Revolution Erupts in Fresh Violence)

When Vladimir Putin became Russia’s president in 2000, and then a surge in global energy prices helped boost Russia’s economy, Moscow began more actively to try to slow Ukraine’s move toward a future in Europe. Ukrainians eager to break from their past as part of the Russian empire and Soviet Union confronted Russian involvement in Ukrainian politics, culminating in the 2004 Orange Revolution, an uprising in which popular pressure reversed an election result that many ethnic Ukrainians believe was stolen by pro-Russian political figures, led by current President Viktor Yanukovych. Ukrainians celebrated what appeared a decisive break from manipulation by Moscow, and Putin accused the U.S. and Europe of interfering in Ukraine’s domestic politics.

Yet, though the Orange Revolution demonstrated that Ukrainians could reverse a stolen election by taking to the streets, a crucial precedent in a post-Soviet country, the victory did nothing to resolve Ukraine’s larger economic problems, and in 2010, Yanukovych won a legitimate victory as voters rushed toward a candidate who promised a more stable path forward.

(MORE: Ukraine Protesters See Russian Hand in Kiev Crackdown | TIME.com)

Today, the country’s increasingly fragile economy continues to depend on cheap supplies of Russian energy, a dependence Moscow is eager to maintain. For its part, Europe also needs Russian energy supplies, and its political leaders and institutions are far too busy with efforts to stabilize and redesign the Eurozone to want a confrontation with Russia over a country that will not be strong enough to join the European Union for the foreseeable future.

Why the violence now? On November 21, Yanukovych startled his country with a last-minute decision to abandon a crucial trade deal with Europe in favor of closer economic ties with Russia. Angry protesters, already suspicious of Yanukovych’s ties with Putin, flooded the center of Kiev. Within three days, protests swelled to their highest levels since the Orange Revolution ousted Yanukovych in 2004. Police responded aggressively, and the fight was on. Putin moved to stabilize the situation and consolidate his gains with emergency financial help for Yanukovych’s government and the promise of more to come.

Over the past three months, the conflict has ebbed and flowed between negotiations and violence. In recent days, both the demonstrators and Yanukovych have become more aggressive, killing both protesters and police. More nationalist elements have joined the demonstrations, provoking more violence. All sides are digging in, and serious negotiations appear well out of reach.

For lack of better options, the EU has threatened sanctions on Yanukovych’s government, and Obama administration officials are expressing the expected diplomatic concerns. But Americans and Europeans are no more anxious to fight over Ukraine than over Syria — and Putin knows it.

For now, the bloodshed will continue. With Putin’s help, can Yanukovych withstand pressure to surrender? His direct political support depends on powerful Ukrainian businessmen. If these oligarchs renounce their support for him, his resignation might stabilize the situation quickly. In addition, watch the flow of new protesters attempting to enter Kiev from the country’s ethnic Ukrainian-dominated western provinces. But the Russian-dominated eastern territories are most crucial. If ethnic Russians living in Ukraine begin to turn on Yanukovych’s government to end the violence, he’s in imminent danger. That’s a real possibility, because many conflict-weary Ukrainians of both ethnic groups want good relations with both Europe and Russia.

Sadly, Yanukovych’s ouster won’t solve Ukraine’s larger problem: Its Russian-dominated past exerts a powerful pull and Europe is nowhere near ready to help the country build a more peaceful and prosperous future.

Ian Bremmer is president of Eurasia Group and author of Every Nation for Itself: Winners and Losers in a G-Zero World. You can follow him on Twitter @ianbremmer.

TIME olympics

What NBC Won’t Tell You About the Opening Ceremonies

Visitors walk inside the Olympic Park prior to the Sochi 2014 Winter Olympics on February 6, 2014.
Visitors walk inside the Olympic Park prior to the Sochi 2014 Winter Olympics on February 6, 2014. Pascal Le Segretain—Getty Images

A geopolitical guide to the Parade of Nations at the Sochi Winter Games

For more on the geopolitics of the Olympics, follow the author on Twitter @ianbremmer and @eurasiagroup where he will be live-tweeting the Opening Ceremonies.

Here in the United States, the Parade of Nations at the Sochi Olympic Opening Ceremonies will be shown by NBC broadcasters who will narrate the long march of more than 80 countries with innocuous facts. Did you know the last name of Icelanders is derived from their father’s first name?How about that Mexico’s only competing athlete is…a 55-year-old of royal German descent who moonlights as a pop singer?

What if the flag-waving event, which was watched by an estimated 1 billion people when the Olympics last convened in London, was treated not as “an entertainment spectacle,” as NBC has publicly promised, but as something that showed the actual relationships between these nations as they parade before the world?

Here’s how the procession might look if the countries were grouped by the most geopolitically important—and scandalous—issues that face the world today. Just keep these political realities in mind as the flag bearers wave, Putin smiles, and Bob Costas sticks to the script (for the most part…).

The pariahs

After years of tightening sanctions that have suffocated its economy, perhaps Iran won’t be an outcast of the international community for much longer. The world’s biggest make-or-break geopolitical moment on the horizon is the outcome of Iranian nuclear negotiations. The nuclear program’s progress, sanctions’ success, and the election of President Hassan Rouhani have dramatically upped the probability of a deal (I would definitely peg it at better than even odds). But bear in mind, there will be risks along the way, and if the deal falls apart, the risk of military action will rise. While some might be more inclined towards an Iranian Olympic victory in this auspicious political climate, that won’t be true of Israel, who will be going head-to-head with Iran in alpine skiing.

Venezuela will also make an alpine skiing appearance: it is sending one competitor to Sochi this year. Violence in Venezuela is at appalling levels, with nearly 25,000 homicides in 2013 (although the government denies this figure). To put that in perspective, when Venezuela’s sole Olympian returns home, he is more than 150x more likely to be murdered than he would be in the United States (a nation with one of the highest homicide rates among developed countries).

Argentina is fast becoming an economic pariah as global investors brace for the worst. The country’s reserves of hard currencies fell 30% last year, and the currency has been in a tailspin of late. As the Argentine Peso has weakened, the government continues to tighten restrictions on transactions using foreign currency. Items purchased online from websites like Amazon need to be picked up at the local customs office, where waits often run 3 or 4 hours—and they are taxed 50%. Should an Argentine win a medal, good luck getting it past customs…

The locals

As I wrote in a recent piece for Time, the situation in Ukraine is deteriorating—with serious potential impact for Russia and the Winter Games. Part of the issue derives from Ukraine’s split personality between Europe and Russia. About one-sixth of citizens are ethnic Ukrainians who speak Russian as their first language rather than Ukrainian. Another one-sixth are ethnic Russians who speak Russian. So how will Ukraine’s Olympic delegation proceed? Will there be any signs of support for the Ukrainian opposition? Will Russia try and muzzle them from interviews? It’s an important space to watch.

As Russia tries to pull Ukraine deeper into its orbit, there are other countries in its cross-hairs. Belarus and Kazakhstan are already members of the Russia-led Customs Union. If Putin could realize his dream of building out the Eurasian Union to include more of the former Soviet UnionArmenia, Tajikistan and Kyrgyzstan would be early candidates for this formalized security-economic integration framework—just imagine what it could do for Russia’s Olympic medal count.

The rising powers

The international sporting spotlight will soon shift to Brazil as it hosts the World Cup this summer (and the 2016 Olympics soon after). Brazil is sending 13 athletes to Sochi—that’s a record-high for the snowless country. Indeed, Brazil’s ambitions on the international stage are growing along with the prosperity of its populace: more than half of Brazil’s population is now middle class. But rising fortunes come with rising expectations, and as last year’s massive-scale protests showed, public frustration can quickly send people into the streets. The original spark? A 9-cent bus fare hike in Sao Paolo.

Recently, Turkey has been no stranger to protests either. But here the outlook is sufficiently bleak that any aspirations as a rising power will have to be put on hold. Turkey has to contend with Syria’s civil war just across the border, and heightened political uncertainty at home: Prime Minister Erdogan’s bellicose behavior toward any opposition isn’t doing the country any favors. He will be in attendance at Sochi. Turkish journalists may want to keep any dissenting views to themselves: in 2013, more imprisoned journalists were identified in Turkey than in any other country in the world

The key economies

The United States’ soft power (and star power) will be on full display in Sochi, with a huge roster of participating athletes and the quintessential American corporations sponsoring the Games. But one of the biggest political risks in the world today is driven by the United States’ international presence (or lack thereof). An increasingly risk-averse and poorly defined US role in the world has allies wondering whether Washington is disengaging abroad. Secretary of State John Kerry recently declared, “I can’t think of a single place in the world where we’re retreating, not one.” Perhaps he should have brainstormed with President Obama, who billed withdrawal from Iraq and Afghanistan as one of his principal foreign policy achievements in his State of the Union address last month.

In the Eurozone, three ‘core’ countries have cracked the top 10 in all-time gold medals: Germany (4th), Austria (5th), and Finland (9th). No periphery state has accomplished this feat. (Of course, their climates may be less accommodating, and Italy is knocking at the door at #11th…but it’s still one notch below East Germany, which ceased to be a country over 20 years ago). Unfortunately, when it comes to the health of their economies and employment rates, we see a similar imbalance. Germany’s 2013 current account surplus of $260 billion was the largest in the world, breaking its own record high. Meanwhile, periphery countries have struggled with painful austerity measures to try and strengthen their budgets and restore competitiveness. The result? Youth unemployment in Germany (8%) is a fraction of the levels seen in Italy (38%), Portugal (40%), Spain (55%) and Greece (58%). In a recent Pew poll, 75% of Germans had an optimistic economic outlook. Compare that with 1% in Greece.

While China recently surged past Japan to become the world’s second largest economy, its Winter Olympic delegation doesn’t yet reflect that reality. Japan’s delegation is 113 strong—almost 60% of them women, which is uncharacteristic for a country ranked 105th out of 136 in a recent Global Gender Gap Report—whereas China has 65 athletes. On the global stage, China’s rise is alarming the neighbors. When you add in the historic bad blood between Beijing and Tokyo as well as recent escalations, the product is the world’s most dangerous bilateral geopolitical conflict. There has even been a Harry Potter component to the tensions, with each country accusing the other of being the region’s ‘Voldemort.’ Both countries’ leaders will be present in Sochi; suffice it to say they will avoid each other…even as they both meet with Putin.

The noticeably absent

While it may come as no surprise given its historical tensions with Russia, Georgia is not sending a delegation in protest (although they will have four athletes in attendance). But even as a no-show, Georgia can’t escape events in Sochi—after all, the Games are taking place on their front porch—and that’s not all they’re protesting. For the duration of the Olympics, Russia has extended its security perimeter into territory it contests with Georgia. In fact, Russia invaded its tiny neighbor over similar territorial disputes during the 2008 Olympics.

North Korea has failed to qualify for the Winter Games for the first time in 12 years. But surely Pyongyang will be represented in the Summer Olympics, given Dennis Rodman’s help with their basketball program…

India will not join the Parade of Nations because it has been suspended after it refused to prohibit corruption-tainted officials from running for elections. But the IOA (Independent Olympic Athletes) is filled with Indian athletes. Maybe it’s fitting that in a country of 1.2 billion people with 18 official languages and a messy democracy, the formal delegation fell through—but the athletes made it to Sochi nonetheless.
And last but not least, many Western world leaders are snubbing the games as well. It seems French President Francois Hollande has a more pressing affair to attend.

Ian Bremmer is president of Eurasia Group and author of Every Nation for Itself: Winners and Losers in a G-Zero World. For more on the geopolitics of the Olympics, follow him on Twitter @ianbremmer and @eurasiagroup where he will be live-tweeting the Opening Ceremonies.

TIME europe

Putin’s Explosive Olympics

Vladimir Putin Visits Sochi Ahead Of Winter Olympics 2014
Russian President Vladimir Putin attends a meeting with Sochi Winter Olympics 2014 volunteers in Sochi, Russia, January,17,2014. Sasha Mordovets / Getty Images

Terrorist threats, a sky-high price tag, geopolitical turmoil, and controversial anti-gay laws are making for a combustible Winter Games

If you’re a sponsor, a spectator, or Vladimir Putin himself, you better brace yourself for the Sochi Olympic Games. Between the security risks, violence in neighboring Ukraine, protests from the international community and the staggering price tag, Sochi has earned its status as the most geopolitically interesting Olympics since 1980 (incidentally, the last time the Games were held in Russia). But that’s not an honor anyone would want. To top it all off, given the erratic behavior from Putin and the Kremlin of late, expect the unexpected at the 2014 Olympics.

It’s impossible to put a percentage on the risk of terrorism at this year’s Games. But suffice it to say, those with brand and sponsorship exposure in Sochi are vastly more concerned than they have been for any other Olympics in recent memory. There are known threats from known terrorist groups. Back in July, the leader of a Chechen separatist organization pledged “maximum force” to undermine the Sochi Games. On January 19th, two men with explosives released a video warning Putin to expect a “present” at the Olympics. These warnings come amidst a spree of recent bombings in nearby Volgograd. While Putin has guaranteed strict security in Sochi, it would come as no surprise if there are terrorist incidents elsewhere in Russia during the Olympics—and a strike in Sochi itself cannot be ruled out.

Exacerbating this issue is a severe lack of trust between Russia and the U.S. U.S. involvement in the security preparation for the 2004 Athens Olympics began after the events of 9/11. The Americans gave $35 million in security assistance—and many multiples of that figure via in kind expertise, equipment, and physical support—with input from about 20 different entities and offices across various U.S. agencies (let alone the assistance from European powers). For Sochi, Putin’s pride and bravado leave him unwilling to accept any substantial outside help. Russia has asked for terrorist-tracking surveillance technology that the U.S. has refused to share with a country it doesn’t trust. The main security agreement between the U.S. and Russia? They’ve agreed to try and maintain a dialogue throughout the Games; American Rear Admiral John Kirby said he “would describe it more as a check-in call.” In many ways the American relationship with Russia was warmer and more trusting under Gorbachev after 1988 with perestroika and glasnost than it is today.

This bravado from Putin has been on display in spades over the past year. In his dealings with the West on Syria and its chemical weapons (including his notorious New York Times op-ed, published on September 11th, no less) and in his decisions to welcome Edward Snowden, free rival Mikhail Khodorkovsky and Pussy Riot, and bail out Ukraine, we’ve seen Putin excel at doing what’s best for Putin. His actions are increasingly unpredictable.

The costs and corruption in Sochi have been staggering. Remember the scandalously expensive 2002 Salt Lake City Winter games? They cost $1.3 billion. Russian organizers originally estimated that the Sochi Winter Olympics would cost about $12 billion. As accusations of corruption mount, the total cost of the Sochi Games, now estimated at about $51 billion, will exceed the cost of all previous Winter Olympic Games combined. Much of that money has enriched a handful of Russia’s elites, with no prospect for return on investment for the average Russian citizen.

Ukraine is a potential geopolitical flashpoint. The country is in its current state partly because of Russia’s historical tendency to shut off natural gas to its neighbor whenever Kiev tacked too far from Russia toward integration with the European Union. Frustration with the previous futile leadership helped get Viktor Yanukovych elected president. When protests flared up in November, it was Putin’s $15 billion bailout that gave Ukraine an economic lifeline—with the quid pro quo of being increasingly shackled to Russia. Who else but Putin could unilaterally take $15 billion his own country’s pension system to bail out a neighbor with no pushback? Who else would want to? Today, protests are building once more in Ukraine; we are not so far from civil war. There are reports of plainclothes special forces from Russia arriving in Kiev to support a very embattled President Yanukovych—a man who has already used violence against his people. What happens if Ukraine explodes during the Olympics? It has the potential to get really ugly for Putin. Remember the ’08 Beijing Olympics, during which Russia invaded Georgia? Putin will certainly not do anything of the sort while hosting his own Olympics, but the Ukraine issue could really steal the spotlight.

There are other areas where a rift between Russia and the West adds a political dimension to the Games. Russia’s recent anti-gay laws have triggered international outcry that will cast a pall over the games. The Mayor of Sochi’s absurd comment that there are no gays in his city underscores how out of touch Russian officials can be on the issue. Many top-level country delegations are refusing to attend in defiance. Throw Snowden into the equation—yet one more distraction, as he is free to move about the country and thus make headlines during the Games—and this is shaping up to be a very contentious Olympics indeed.

Add up the scandals, the corruption, and the violence on Sochi’s doorstep and what do you get? More geopolitical intrigue than we have seen at the Olympics in over 30 years. Be prepared for quite a spectacle.

Ian Bremmer (@ianbremmer) is president of Eurasia Group and author of Every Nation for Itself: Winners and Losers in a G-Zero World.

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