One of the year's turning points is the emergence of Japan as a major geopolitical player. And for the first time since the overthrow of the Shah in Iran in 1979, the future of the Islamic Republic is seriously called into question, writes Clyde Kull.
As the Danish proverb says: "It is difficult to make predictions, especially about the future". Nonetheless, below are ten predictions for the year ahead.
First, the dominant theme of the year, the war in Ukraine, will continue, albeit at a less intense level. Neither Russia nor Ukraine will be able to achieve total military victory, if by victory one means the subjugation of the other side and the dictated terms of a post-war territorial or political settlement.
Nor will diplomacy succeed if it is interpreted as reaching an agreement that both sides are prepared to sign and abide by. Peace – or, more likely, a truce – implies compromises and the necessary terms of settlement. Both sides conspicuously lack these elements (although for very different reasons).
Second, there is the possibility of a war over Taiwan, but in 2023 this seems highly unlikely. Chinese leader Xi Jinping has his hands full dealing with an explosion in Covid cases that are straining the country's healthcare system, raising questions about the Communist Party's competence and further weakening the slowing economy.
China is far from abandoning its goal of gaining control of Taiwan, by force if necessary, and will certainly continue to exert pressure on Taiwan, but direct aggressive action is likely to be postponed for at least a few years.
Third, the surprise of the year is Japan, which is emerging as a major geopolitical player. Growth in the world's third largest economy has been revised upwards to 1.5 percent and defense spending is set to double to 2 percent of GDP. Japan, which has one of the most capable militaries in the region, is further intensifying military cooperation with the U.S. to repel China or, if necessary, to defend against Chinese aggression against Taiwan. Even more so than for Germany, 2023 will be a year in which Japan enters a new post-World War II era.
Fourth, North Korea will almost certainly conduct its seventh nuclear test, in addition to its frequent missile tests. Neither South Korea nor the United States will be able to prevent such actions, while China, the only country that has the capacity to do so, will refrain from using its considerable influence to avoid weakening its neighbor and setting in motion processes that could cause instability on its periphery.
Fifth, transatlantic relations, which are currently stronger thanks to a shared willingness to resist Russian aggression and help Ukraine, are suffering from increasing friction. Europeans are unhappy with U.S. economic protectionism and the Americans with Europe's continued economic dependence on China. Relations could also be damaged by emerging disagreements over the extent of military, economic and diplomatic support for Ukraine and the level of defense spending.
Sixth, the global economy is likely to grow more slowly than most observers currently forecast. The International Monetary Fund is forecasting 2.7 percent overall economic growth, but in reality it may be lower, due to China's mismanaged fight against the koruna and the U.S. Federal Reserve's decision to continue raising interest rates to reduce inflation. Political instability in parts of Africa and Latin America, extreme weather events and disruptions in the supply chain will also affect global economic performance.
Seventh, the annual UN climate change conference (COP28, to be held in Dubai) continues to disappoint. With short-term economic concerns outweighing medium- and long-term climate concerns, the impact of global warming is likely to get worse, before it gets even worse still.
Eighth, Israeli-Palestinian relations will become more violent as Israeli settlement activity expands, and the prospects for negotiating a Palestinian state on terms that both Israelis and Palestinians can accept are slim. By contrast, a "one-state" solution that leads to deadlock is becoming increasingly realistic.
Ninth, India continues to disappoint those who predict a great future for it. India will continue to buy arms and oil from Russia and cling to a non-aligned position even as it seeks greater help from the West against China. And domestically, there is a danger that India will become less liberal and less secular.
Lastly, Iran is likely to be the second dominant issue in 2023, alongside Ukraine. Anti-regime protests will escalate and their impact will grow as the economic situation deteriorates and the leadership disagrees over whether to compromise with the protesters or to arrest and kill them.
In view of Iran's military aid to Russia and the U.S. desire to avoid throwing an economic lifeline to the troubled regime, the 2015 nuclear deal will not be renewed. However, the regime, hanging on by a thread, may get a reprieve from rising oil revenues, as the U.S., for whom it is more important to keep inflation under control at home, is in no hurry to apply sanctions in full.
Iran's leaders may decide to continue advancing their nuclear weapons program in the hope of either a breakthrough or triggering an Israeli attack that would allow them to consolidate national unity. Alternatively, a tightening of the country's security forces could lead to the brink of civil war. For the first time since the overthrow of the Shah in 1979, the future of the Islamic Republic is seriously in doubt.
All of which predicts a year of tense foreign policy.
Editor: Marcus Turovski