Omicron, midterms, Ukraine, China: Key things to watch in US politics this year

Welcome to a new year, where there will be plenty of politics to chew over from around the world. To kick things off, here are 12 things to watch in 2022 — for now at least — when it comes to political risk.

BORDER ALERT: Tensions are high on the Ukrainian border as Russian President Vladimir Putin maintains an elevated troop presence and demands that NATO reduce its footprint in the region. As the muddy ground freezes, the prospect of a Russian invasion may rise. Three separate sets of talks start from Sunday to try and de-escalate the situation.

Key Reading

MIDTERM MOMENT: U.S. President Joe Biden faces a referendum on his performance with elections in November for the House and more than half of the seats in the Senate. His popularity has been on a downswing as he battles to get his overarching economic plans through Congress. Does this open the door for Republicans and even potentially Donald Trump in 2024?

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RISING CHINA: President Xi Jinping is seeking an unprecedented third term at a leadership meeting this year, further cementing his hold on the world’s second biggest economy. Xi has been cracking down in both China and Hong Kong, while pushing his mantra of “common prosperity,” reining in the country’s big companies and billionaires. What does this all mean for still-strained U.S. ties, and for Taiwan, an island democracy that Beijing considers its territory?

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FAIR SHOT: The pandemic is still with us, though omicron thankfully appears a milder (if much more contagious) version of Covid-19. Governments remain challenged by populations tired of restrictions but still vulnerable to the virus. Even as Israel starts to roll out a fourth inoculation, many poorer countries are still struggling to get people double vaccinated. Until the world as a whole has greater protection, variants will keep coming.

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BALLOT BOX: It’s not just the U.S. that has elections this year. Watch for votes in countries including France (where President Emmanuel Macron faces multiple challengers from the center and far-right), Brazil (where President Jair Bolsonaro is battling falling popularity), Hungary (where Viktor Orban is hoping to cement his “illiberal democracy”) and Australia (Scott Morrison is hoping that walling Australia off during the pandemic will play well at home).

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COMING DUE: Even as the pandemic continues, countries face tough decisions on when, and how, to wind down Covid-19 aid for businesses and workers. As debt piles up, governments will face pressure to start turning off the spigot and potentially raise taxes. At the same time, some of them are touting lofty green goals that will require both spending and structural economic change. Can they manage it all?

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SELF-SUFFICIENCY: 2021 saw countries push for greater self-reliance when it came to things like semiconductors. Broad supply bottlenecks may persist, accelerating plans to build domestic industry and shield national champions from overseas buyers, leading to rising protectionism. It’s not just chips that are at stake: There are renewed questions about energy dependence, for example.

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PARTIAL THAW: Things have improved between Saudi Arabia and other Middle East powers, including Israel, Qatar and the U.A.E., opening the door to more trade and investment. Will it last? Saudi Arabia’s Crown Prince Mohammed bin Salman is pushing change both at home and abroad, but that papers over many years of mistrust and conflict. Then there’s the wildcard of Iran, which is bogged down in talks to renew its 2015 nuclear accord with a harder-line administration in power.

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PRESSURE COOKER: There are specific things to watch with Turkey that could spill into the broader arena. President Recep Tayyip Erdogan is still dabbling in unorthodox monetary policies even as he takes steps to try and shore up the lira, the world’s worst-performing emerging market currency in 2021. With elections on the horizon, Erdogan needs to bolster support at home. That could make him more erratic offshore, including in the Mediterranean, with NATO and with Russia.

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NEW ERA: Olaf Scholz has taken over as chancellor in Germany after 16 years of Angela Merkel’s rule. That will raise questions not just about domestic policies and the economy but broader European stability without Merkel at the tiller. Does this open the door to Macron? To European Commission President Ursula von der Leyen? Can they manage talks around pandemic aid for Europe, tensions in Europe’s east, find a way to deal with China and keep leaders like Erdogan in check?

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TRICKY WATERS: Countries are waking up to the fact that cryptocurrencies are here to stay. There are upsides to crypto but also murky downsides, especially when it comes to money laundering, trafficking and terrorism funding. As everyone from El Salvador to major football clubs gets in on the action, governments will find themselves grappling with the question of how, or whether, to regulate.

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TIME BOMB: With the focus in 2021 on countries like China and Russia, things were oddly quiet in North Korea. Kim Jong Un restrained himself to short-range missile tests and some propaganda bursts against America. He’s busy dealing with food shortages at home, but how long will he stay out of the limelight he seemingly adores? Is this the year Pyongyang muscles its way back onto the global stage for attention?

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Global Headlines

Covid surge | A record 10 million people were diagnosed with Covid-19 in the seven days through yesterday, almost double the previous high. At the same time, as omicron swamps many parts of the globe, weekly deaths continued to drop, falling to the lowest level in more than a year.

• U.S. Secretary of Defense Lloyd Austin said he tested positive and plans to quarantine at home for five days.
• China reported 101 new cases, of which 90 were in Xi’an, where some residents complained on social media about a lack of access to food and censorship on the matter.

Closing doors | A third Hong Kong news outlet announced it would shut as the city installed a legislature vetted for loyalty to the Communist Party, a stark illustration of Beijing’s success in silencing the local opposition. Citizen News briefed reporters on its decision to close at midnight at the same time as dozens of pro-establishment lawmakers were sworn-in one by one in front of the red and gold Chinese national flag.

China’s property developers have rising bills to pay in January and shrinking options to raise funds. The industry will need to find at least $197 billion to cover maturing bonds, coupons, trust products and deferred wages to millions of migrant workers, according to Bloomberg calculations and analyst estimates. Beijing has urged builders to meet payrolls to avoid the risk of social unrest.

Deepening crisis | Sudanese Prime Minister Abdalla Hamdok resigned yesterday, saying the failure of power sharing between the military and civilians has put the North African country in jeopardy of sliding into chaos. His decision leaves the transitional government almost entirely in the hands of the armed forces amid deadly protests against October’s coup.

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Another push | U.S. Democrats begin the year needing to re-imagine their $2 trillion tax, climate and spending package if they are to revive Biden’s economic agenda. West Virginia Senator Joe Manchin remains a major roadblock, and the bill will need to be slimmed down to have any chance of passing before midterm election campaigns begin.

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News to Note

• Bolsonaro was admitted to a hospital in Sao Paulo after spending his holidays at a beach.
• Biden reaffirmed U.S. support for Ukraine’s sovereignty yesterday in a call with President Volodymyr Zelenskiy.
• South Korea’s Moon Jae-in vowed to make another push for peace with North Korea in his final months as president, despite signs Kim has little interest in reciprocating.
• Twitter has permanently banned the personal account of Republican Representative Marjorie Taylor Greene for repeated violations of its prohibition against spreading misinformation about Covid-19.
• Talks to restart the nuclear deal between Iran and world powers resume today with diplomats contemplating outcomes that fall short of fully reviving the accord.
• Richard Leakey, a Kenyan conservationist and paleontologist whose discoveries of fossils including “Turkana Boy” helped transform views on human evolution and its roots in Africa, has died. He was 77.

Thanks to the 33 readers who answered our quiz on Dec. 17 and congratulations to Rebecca Rich, who was the first to name South Africa as the nation whose leader tested positive for Covid-19 that week.

And finally … The pre-Christmas extradition of a Russian tech tycoon has delivered the highest-level Kremlin insider into U.S. custody in recent memory. Vladislav Klyushin, a medal of honor recipient who had access to sensitive intelligence documents, could potentially provide American law enforcement officials with their closest view yet of Russia’s efforts to manipulate the 2016 U.S. election.

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— With assistance by Alan Crawford, and Michael Winfrey

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