Every December here at Stratfor, we sit down and do the critical work of self-assessment, taking the forecast we made the previous December and seeing how it stacked up against actual world events. The endeavor can prove challenging at times, but it is always wholly rewarding. We write our annual forecasts with you, our readers, in mind. We want to inform you of the big issues of the year that you are thinking about already, and also to highlight issues that might not be on your radar but that we think should be. 

To put it mildly, this year has proved something of a doozy. It was mid-January when we first alerted our readers to a "disease akin to the SARS virus" that was hitting the Chinese city of Wuhan particularly hard. Since that day, our team of analysts has done an incredible job covering the pandemic, looking at its effect on tourism, manufacturing and economic performance around the world. Naturally, we have also extensively covered the issue in our subsequent quarterly forecasts. Did we predict COVID-19 in our 2020 Annual Forecast? No. We are not psychics, soothsayers or prophets. We are forecasters, looking at trends around the world, considering constraints and compulsions to determine how circumstances might change over time in a designated area. Even with the pandemic throwing the world a little askew, we still had a strong 2020 forecast with quite a few hits and just a handful of misses. Without further ado, here's the Stratfor 2020 Annual Forecast Scorecard.

Global Trends 

A Push for Final Trade Deals Before U.S. Elections

The U.S. elections were a big theme in our 2020 forecast, and a big theme in the events of 2020. As a part of that, we forecast that U.S. President Donald Trump would push "to finalize as many [trade] deals as possible" this year. And while the United States continued to hold negotiations with the United Kingdom, India, Kenya and others, the pandemic derailed any effort to finalize those deals. In addition, we said the president's position on Iran and North Korea would not soften over the course of the year, which held true.

A Slow Economic Recovery Takes Shape

Last December, we wrote that "aggressive U.S. actions will continue to be a chief driver of economic weakness throughout the year." We also said that other risks "could easily be triggered in 2020" and suppress "global economic growth." One could certainly say the COVID-19 pandemic fits under "other risks." But the pandemic, not U.S. action, was definitely the chief driver of economic weakness this year. We did specifically call out Argentina, India, Brazil and Turkey as facing particular economic challenges, and those challenges became all the more acute this year as the pandemic put additional strain on already-fragile systems.

Despite a China Deal, Trade Offensives Continue

The U.S.-China trade war has been a major source of global economic disruption since it began in 2018. We forecast that a thaw was on the horizon, but not an end. Specifically, we expected (and got) a phase one trade deal, but not a comprehensive trade agreement. We also expected that agreement to remain fragile throughout the year but not break. And we were right. We also said that the United States would continue to undermine World Trade Organization legitimacy, and it did just that when it blocked the appointment of a new director-general in November. As we also forecast, the United States and Europe expanded tariffs on one another related to long-running trade disputes over Boeing and Airbus subsidies.

The Competition for Tech Supremacy Rages on

Last year we highlighted the growing competition between Europe, the United States and China, saying "more tech sectors will be classified as national and economic security priorities," and that the U.S. would "sharpen export controls" on Huawei. In spite of the distractions of the pandemic response, we saw quite a bit of movement on this particular issue this year. The United States expanded export control on Huawei in the spring, and more broadly targeting China's technology sector with the August launch of the "Clean Network" plan against China. But while we expected only limited U.S. success in influencing its allies to similarly restrict the Chinese behemoth, France, the United Kingdom and a few other European countries actually aggressively announced phaseouts of Huawei equipment from their 5G networks, albeit more due to technical issues arising from U.S. export controls than due to U.S. political pressure. In addition to the intense competition between the West and China, the United States and Europe continued to square off over digital service taxes following the U.S. withdrawal from international negotiations and subsequent Section 301 investigations against global digital service taxes in June.

OPEC+ Cuts Will Have Little Practical Effect

In our 2020 Annual Forecast, we said that the OPEC+ coalition would "fight an uphill battle to manage the market in 2020," but would maintain production cuts through the end of 2020 without a "dramatic further cut" in production. Like most of Stratfor's other forecasts on economic issues, however, this forecast was blown significantly off course by COVID-19. The pandemic reduced oil demand by as much as 20 million barrels per day — roughly one-fifth of normal demand — during the height of lockdowns in April, and sent the futures contract for West Texas Intermediate into negative price territory for the first time. The significant collapse in the market spurred a dramatic cut in production. 

Asia-Pacific

U.S.-China Trade

This time last year, we were carefully tracking negotiations on a potential "phase one trade deal" between the United States and China. That deal was signed in mid-January. As we forecast, that deal held throughout the year even though China failed to uphold many of its commitments. We were also right on the money (pun very much intended) when we said that the "narrow deal will end the cycle of tariff hikes" between the two countries. We were also correct that the two would be unable to reach a comprehensive trade agreement. 

Hong Kong 

Our forecast on Hong Kong is another one hit with a pandemic caveat. All of the trends we identified as being most important this year proved correct, and 2020 ushered in a "new normal" in the relationship between Hong Kong and China. We were also correct that China would increase "its investments in Hong Kong's economy and financial system." What we did not foresee was the full extent of the government crackdown via the National Security Law or the political crisis that ultimately led the pro-democracy opposition to resign from the Legislative Council. 

Taiwan 

In Taiwan, we expected an increase in the already-fraught tensions between Taiwan and China. As we forecast, after President Tsai Ing-wen's victory in January, the island nation expanded "the scope of Taiwan's economic and military engagement with the United States." Between high-level visits and arms sales, relations between Washington and Taipei warmed throughout the year. In response, we also saw the increase in aggressive behavior expected from Beijing. 

Middle East and North Africa

Iran

As in the last few years, Iran was the major focus of our Middle East and North Africa forecast in 2020. With the United States officially out of the Joint Comprehensive Plan of Action and the other members of the agreement unable to offer much in the way of incentives, Iran spent this year ramping up its nuclear program, just as we anticipated. We expected Iran to be more aggressive in blocking International Atomic Energy Agency access to nuclear sites, but in all the other details of this forecast, we were correct. We were also correct that Israel would be more aggressive in response to Iranian provocation, something we saw throughout the year. While we did expect Iran to be more aggressive in attacking regional oil and gas infrastructure than it was, however, its Houthi proxies in Yemen picked up the mantle for it.

Saudi Arabia

When we wrote our forecast last winter, we said that low oil prices would "drag down Saudi Arabia's economic growth." And that was true. But the pandemic did, too, by dragging down oil prices. We expected Riyadh would be able to maintain its social and defense spending programs throughout the year, and for the most part that held true, but the COVID-19 reality forced the kingdom to engage in unprecedented budget cuts as well as unusually high tax hikes. We also forecast that Saudi Arabia would "maintain its risk-averse foreign policy" this year. And it did for the most part. While the kingdom remains deeply entangled in the conflict in Yemen and somewhat tangled in the ongoing dispute with Qatar, Saudi did not intervene in the many other conflicts around the region, nor did Riyadh provoke Iran, its main regional adversary.

Turkey

For Turkey, 2020 was a year of aggressive foreign policy, and an economic crisis at home its aggression tried to mask. We correctly forecast that Turkey would take a more "independent" path for its foreign policy this year. In Libya, the Eastern Mediterranean, Nagorno-Karabakh and elsewhere, Turkey showed time and again it was unwilling to bend to U.S. or European pressure. And while we didn't have high hopes for the Turkish economy, the pandemic obviously made things much worse than expected, with inflation rising and the currency depreciating at record levels.

Israel

One important omission from our annual forecast was the normalization of the relationship between Israel and its regional neighbors and historic foes. While we tracked some warming ties over the last few years, the pace and success of that outreach this year is noteworthy. 

Europe

Brexit

When the British voters in June 2016 opted to leave the European Union, they kicked off a long (very long) period of negotiations. That phase ended in January 2020, when the United Kingdom officially left the European Union. In reality, they are still a part of the single market, and 2020 has been a transition year when the two parties worked to negotiate a free trade agreement. When we wrote our forecast last year, the British Parliament had not yet approved the Withdrawal Agreement that would officially mark "Brexit." We were correct in our forecast that they would do so. We also forecast that the trade agreement talks would be complex, specifically because "Brussels will push to have British products follow the norms and regulations of the single market, an idea London will resist." And that has indeed been a massive hang-up in the negotiations. As I write this column, the two parties are still negotiating. We will know what happens before the New Year's ball drops, but for now, we wait and see how the rest of our forecast plays out.

Germany

Germany was another country that we forecast would face strong economic headwinds in 2020. As with other economic forecasts mentioned throughout, we were correct in the result, but not in the cause. We did say that the German government would be split on how to respond to the downturn, as the Christian Democratic Union would be very reluctant to increase spending, and even with the pandemic, this held true. We also forecast that a deep recession could get Germany "to abandon its fiscal neutrality and embrace large stimulus measures." And that it did, passing a recovery package early in the pandemic to address the quickly mounting crisis.

European Union

In 2020, we saw the European Union get more active in defending the bloc's economic interests. As a part of this, we forecast that the European Commission would "become more energetic in cracking down on monopolistic behavior." Throughout the year Brussels launched antitrust investigations against large tech companies, and even charged Amazon with unfair competition. We also expect the commission to unveil its Digital Services Act by the end of the year, which (among other things) will seek to establish a fairer competition between digital giants and their smaller competitors. We also correctly forecast that the European Commission would become more flexible when it comes to enforcing EU fiscal rules so that countries can spend more. In fact, the European Union suspended the application of debt and deficit limit rules so that governments could take on more debt and increase public spending. And while our forecast for the European Central Bank in 2020 does not mention COVID-19, it still proved surprisingly accurate. As we expected, the ECB expanded its stimulus programs (most notably, its asset-buying programs) to boost economic growth in the eurozone and pushed member states to increase their public spending.

Italy

As we forecast, Italy's government was indeed fragile, but the political and economic complications of addressing the COVID-19 pandemic contributed to its survival as the health emergency forced the country's political forces to temporarily put their differences aside. And while the opposition remained popular, it was unable to make political gains in such an unusual year. As we expected, Italy failed to introduce any structural reforms in its economy, but again this mostly was because of the pandemic.

Americas

Argentina

We said "Argentina will default on much of its debt in 2020." And it did: In May, Argentina officially entered default. We continued to track the 'will they or won't they' negotiations between the bondholders, the International Monetary Fund and the government of President Alberto Fernandez. As the pandemic set in and economic realities became clear, Argentina's private creditors relented and a deal was reached to restructure the country's debt. Defaults are not static situations, and Argentina is not currently in default. But the deal requires Argentina to rigorously address the underlying structural issues that got it in trouble in the first place. Few experts seem confident in its ability to succeed. So this forecast is a hit, miss, and wait and see, because the country soon could find itself in default again. 

Venezuela

On the other hand, we forecast that 2020 would not bring any real change to the precarious situation in Venezuela, and that proved spot on. As it has for years, the United States continued to try to pressure the regime of President Nicolas Maduro through legal and financial means. As expected, Maduro was able to "fend off opposition leaders" in December's legislative elections, further sidelining National Assembly President Juan Guaido. 

Mexico and the United States

After hitting a high-water mark in 2019, we predicted that under intense pressure from U.S. President Donald Trump, Mexico would find a way to "curb ... the northward flow of Central American migrants." In an effort to avoid tariffs threatened over the issue, Mexican President Andres Manuel Lopez Obrador worked closely with the United States on security measures. These efforts were so successful that border crossings fell from a high of 24 million in December 2019 to just under 8 million six months later. 

Eurasia

Russia and China

For years Stratfor has been tracking the somewhat-warming ties between Russia and China. The two great powers are clearly set for competition in many arenas, but are prioritizing areas of cooperation where possible; recently, this focus has specifically been on increasing bilateral trade. While we stand by our forecast that this will happen, the COVID-19 pandemic has delayed the timeline. 

Ukraine and Russia

For years now Stratfor has been correct in our forecasts of the situation in eastern Ukraine. Moscow and Kiev have once again failed "to achieve meaningful progress in negotiations over the status of Donbas." In March, the government of Ukrainian President Volodymyr Zelenskiy made a renewed push to end the conflict, but nothing more than a prisoner exchange came from the effort. While talks between the Normandy Four (Ukraine, Germany, France and Russia) continued, no breakthroughs have emerged. We therefore enter 2021 much the same way we entered in 2020. 

Russian Foreign Policy

As a part of the deepening great power competition, we have expected Russia to increase its outreach to myriad countries around the world. We saw this outreach increase throughout 2020 in spite of the pandemic. Russia could be found involving itself in the war in Libya, striking military agreements with Sudan, negotiating a cease-fire between Armenia and Azerbaijan, and more. 

South Asia

Afghanistan

As we forecast, 2020 brought a U.S.-Taliban peace deal and the continued withdrawal of U.S. troops from Afghanistan. Also as expected, the war did not end with that peace deal, as we have now entered what we called in our forecast "a more complex phase of the peace process involving dialogue between the Taliban and the Afghan government." After months of talks about the talks, the sides finally agreed to sit down in November, but continued violence delayed negotiations once again. 

India's Economy

As with all our economic forecasts in 2020, a pandemic caveat must be included here. We knew that Prime Minister Narendra Modi's primary domestic challenge this year would be to boost growth in the nation's economy, which we expected would happen through a mix of monetary and fiscal stimulus. But with economic woes mounting even before the pandemic, once the resulting lockdowns set in, Modi had to focus more on fiscal stimulus and less on the larger reform efforts we had expected. 

Indian Foreign Policy

In 2020, we forecast that India would continue to try to fight Chinese influence in the Indian Ocean through increased outreach with its neighbors. This certainly came to pass, as India signed agreements on security cooperation and defense assistance. We also saw India reach out to its allies in Canberra, Tokyo and Washington to strengthen those partnerships in an effort to "counterbalance Beijing." What we missed was another round of kinetic military action between China and India along their shared border in the Himalayas. 

Sub-Saharan Africa 

South Africa

For years, we have been tracking South Africa's economic decline that has resulted in political deadlock. We expected these issues to continue throughout 2020, and they did, with the additional complication of a global pandemic and resulting economic slowdown. We were certainly correct when we forecast that "intraparty divisions will also impede the government's ability to tackle the economy's continued low growth with a comprehensive economic plan." And this has made any attempt to come up with a comprehensive policy to recover from the pandemic almost impossible.

Ethiopia

This time last year, we were looking forward to Ethiopia's general election. As with so many other elections around the world, those were postponed; they are now scheduled for some time in 2021. We did forecast "spiraling interethnic violence" and warned our readers to monitor the Tigray region for a potential bid for independence. That bid for greater independence led Tigray to hold an election condemned by the federal government, eventually culminating in military action against the restive region.

Mozambique

As for omissions, we underestimated the growth of the insurgency in northern Mozambique. Throughout the year, as the capability of the movement grew, we saw greater concern from the country's vital oil and gas sector as well as growing unease from Mozambique's neighbors and Western security partners.