Geopolitical uncertainties stemming from rising predictions and exit polls have already caused the gold prices to go up.
2024 is touted as the year of elections. For the first time in history, almost half of the world’s population across 70 countries, including the three largest democracies, will be voting in a year. Voters in the United States, Mexico, South Africa, India, European Union, South Korea, Pakistan, Bangladesh, Sri Lanka, and the UK, among other countries, representing more than half of the global GDP, will decide the fate of the global economy for the next decade.
The trajectory of these elections is peculiarly nuanced in this inter-connected world because the results of polls in each country will directly or indirectly cause a synergy of snowball effect into affecting issues at a universal level.
Geopolitical uncertainties stemming from rising predictions and exit polls have already caused the gold prices to go up. While some are expecting de-globalisation of economies with trade protectionism returning in countries such as Indonesia and Mexico, others are predicting increased international transactions with India turning into a lucrative investment geography.
The high tariffs on cross-border trade announced by US President-hopeful Donald Trump might cause retaliation by other countries causing stiffening of imports and exports throughout the world. Further, the potential results of the upcoming European Parliamentary elections, are expected to bring about policy changes to restrict the current free movement of war-affected immigrants into the EU countries. These measures of international isolation will cause fluctuation in currency rates across the world while the dollar and euro lift and the other currencies slip.
As countries around the world continue to stand divided due to two major ongoing wars—between Ukraine and Russia and Israel and Hamas, the defence sector expenditure is anticipated to increase. In their January 2024 national elections, Taiwanese voters have already shown solidarity with the ruling party by electing Lai-Ching Te back into power, refusing to fall into the pressures of the Chinese government. This raises the fear of geopolitical tensions and further attacks from the Chinese military in Taiwan, fuelling the expectations of increased spending on weapons.
These wars have also created uncertainties in the fuel market causing oil prices to go up as the supply risk increases. With the uncertainties growing due to upcoming elections in oil exporting countries such as Iran, Venezuela, Russia, oil prices will only soar up.
In the past decade, as countries across the world have been witnessing the re-election of the incumbent political parties, the result of the upcoming elections in countries such as Russia, India, and South Africa among others will dictate the world order to decide whether opposition parties will get to see the light of the day around the world.
With the advent of AI and technology being the backbone to growth in the developing countries awaiting elections, expenditure in science and tech related sectors is expected to radically shoot up.
Rising inflation and unemployment in the post Covid era has led the contesting political parties across the world to promise low inflation, once elected. In fact, inflation has become such a critical parameter in the election results that the 2024 elections are being called as “inflation elections”. With the world-wide emphasis on controlling inflation, one can expect the inflation trends to dip in the years to come and simultaneously the employment levels to go up.
These elections will also prove pivotal for climate change. While the Biden government has supported the cause of climate change with massive investments in clean energy, Trump remains hostile towards supporting the issue. Similarly, while the European Union has successfully tapped into renewable energy, whether the new government will go the extra mile to facilitate transition to carbon neutrality remains a big question. In Mexico, the MORENA party, if elected, is expected to pass major reforms in the clean energy sector. So, the outcomes of these polls hold the future course of global climate policies in their palm.
2024 ballot boxes are the magic lamps of the world, holding in them the fate of the next decade. Will inflation go down in the coming years? Will recession be tackled? Is AI going to replace the human workforce? Will the ongoing wars cool down or is there going to be a World War-3? With multiple countries in every continent of the world going into polls this year, the course of the global economy in the face of ongoing wars and recession is going to be an interesting site to behold.
Rajesh Mehta is a leading international consultant in the field of Market Entry, Innovation, and Public Policy. Tanya Nagpal is an independent researcher.