2016 is the middle year in the three year of change 2015,2016, 2017
Middle East
This year will be an extension of 2015.
Islamic State will not be defeated, but will be under pressure. In light of this it will try to organize more terrorist attacks to remain relevant.
Apart the Western targets, there will be a focus in trying to attack Saudi Arabia and UAE specially.
But the big space to watch is Turkey/Iran/ Russia/Iraq.
Turkey wants to reaffirm is dominance as New Ottoman empire, but the Russian intervention makes everything more complicated.
Turkey wants to establish a buffer in Syria and a de facto protectorate in Northern Iraq.
The risk of clashes with Russia will be high. Any eventual issue will be treated with extreme caution as a leaked paper from the Kremlin clearly shows that, in a confrontation with NATO, Russia will use tactical nukes on Turkey’s infrastructure.
Saudi Arabia is starting to feel the pressure of low oil prices and two wars (IS and Yemen), so in the second half will try to see how to increase oil prices.
Iran will try to keep a low profile now that is back with the good boys – but still pursuing its Iran/Iraq/Syria/Lebanon strategy.
Israel will keep a low profile in this increasing violent Middle East and is trying to appease Turkey versus a common Iran. As usual it will “kill” direct threat without obeying to orders from the US or whoever else.
Europe
No major crisis in Europe.
There will be just more nationalism and a continuous drifting apart between France and Germany (both with election in 2017).
Borders policies and immigration will be the core issues.
Italy will continue having banking issues, but with Quantitative Easing in full steam it should not end in a full blown crisis.
Greece will keep a no growth situation, but, aside revolutions, there are no pressing issues.
The big potential issue are the Balkans. A lot of illegal stopped there (specially Bosnia) and the Balkans have always been the hot spark of Europe. A Corriere della Sera (main Italian newspaper) has even identified a town where IS flags are shown (Buzim, North West of Bosnia Herzegovina). Interesting the article says that the area has been purchased with the money of one of the supposed Western allies, Qatar.
UK – the Brexit referendum is to be held end of 2016 or 2017. If it will happen in 2016 the polls say it will be a NO.
Ukraine will remain a low intensity frozen conflict
Russia will focus on economy and its pivot East
USA
For the US is a Presidential year (8 November). It will be mainly concentrated in its economy and if it really has reached the escape velocity….or if it will require Quantitative Easing 4.
China
China will continue its painful pivot to consumerism. The main risk is capital outflow and hard devaluation of the Yuan.
Still more pain to come as internal and external regions keep on diverging.
No commodities savior.
India.
PM Modi lost some elections and so the reforms will be harder to pass. India will push for investment and Made in India, but the issues of infrastructure (lack of) will make it hard for the economy to improve quickly.
Pacific
There will be more integration between the non-China nations (including Australia) to balance China in the Pacific.
South America
The best position in South America is Argentina, but Brazil and the rest will keep on struggling with low resource prices.
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So practically 2016 will be a transition year for issues started in 2015.
Unfortunately for the first time since 1983 (Able Archer 1983 exercise), there is the very rare possibility of tactical nuclear weapons being used.
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