The Themes Defining 2026, A Prelude to Great Reform or Great Conflict

By the end of 2025, the global order had moved beyond periodic crisis into sustained breakdown. Political instability, war, technological acceleration, climate stress, and financial fragility have fused into a single metacrisis in which institutional systems prove ineffective. Institutions and powers that previously addressed risk now either transmit it or are ineffective. Volatility is no longer an exception to the system, it is the system’s defining condition.

The United States sits at the centre of this shift. The administration has decisively pursued its MAGA agenda, eschewing institutional restraint, concentrating executive power, weakening regulatory frameworks, and using unilateralism in trade and security. The consequences have been immediate: market volatility, weakened alliances, and accelerating erosion of multilateral rules. Geopolitical stress has intensified. A fragile pause in Gaza has begun to reveal the risk of a stalemate without political settlement; Ukraine is being pushed toward an endgame shaped by U.S.–Russia deal-making rather than European security priorities; and pressure on Taiwan continues to rise. The U.S. National Security Strategy (N.S.S.) has moved rapidly from vision to action, beginning with regime change in Venezuela and signalling the further targets that will follow.

These pressures are compounded elsewhere. Climate governance is failing in the face of escalating physical damage. Artificial intelligence is scaling faster than energy, labour, or regulation can keep pace. Global debt is approaching sovereign breaking points, particularly in the Global South. China’s expanding reach, the assertiveness of BRICS, and the fragmentation of trade and finance point to an emerging multipolar world without agreed rules. Early signals from 2026 - from U.S. military action abroad to mass unrest in Iran - confirm that coercion and internal instability are becoming permanent features of the landscape.

This paper examines ten pivotal political, economic, technological, and social themes that will shape the year ahead, outlining the extreme ends of both the potential opportunities they present and the risks they pose.

Introduction: The Prelude to Great Change is in Motion

2025 felt less like a single year and more like a compressed decade. Key political norms previously considered central to the global order appeared to move from gradual erosion to outright fracture, long-standing geopolitical conflicts lurched into new and unpredictable phases, and technological advances accelerated at a pace once associated with generational change, amplifying economic volatility and deepening uncertainty across global markets

The past year has marked the point at which the cascading disruptions of the decade fully converged. What began in the early 2020s as a sequence of emergencies - a pandemic, a global recession, energy crisis, a major war in Europe - has hardened into a sustained stress test of the systems that underpin global order, a ‘metacrisis.’ Increasingly, those systems are no longer dampening uncertainty and volatility; they are frozen and often ineffective, risking hastening their own demise in the process.

The United States was the dominant force in 2025 bringing a multitude of change following Donald Trump’s return to the presidency. Within months, the administration issued sweeping executive orders dismantling regulatory frameworks across trade, climate, finance, and technology in one of the most far-reaching assertions of executive authority in modern US history¹. At the same time the mobilisation of the National Guard and federal forces outside customary congressional oversight, alongside open defiance of multiple state and federal court rulings, further strained constitutional norms, has raised serious questions about the durability of US institutional checks and balances². The global effects were immediate. A rapid escalation of unilateral and often unpredictable trade measures injected renewed volatility into markets, disrupted supply chains, and further weakened confidence in the rules-based trading system.

Geopolitically, the year offered only a few bright spots. In the Middle East, a tentative ceasefire in Gaza follows more than 47,000 deaths³ after years of devastation, humanitarian collapse, and heightened regional spillover risks, underscoring the fragility of the regional order and the continued absence of a durable political settlement despite a ceasefire after which 400 deaths have been recorded⁴. The war in Ukraine ground on amid repeated cycles of cancelled, delayed, and partially reinstated US defence assistance. As front lines stagnated, uncertainty deepened over long-term US commitment, with the year ending on bilateral US-Russia peace talks that excluded the EU and Ukraine. And for Europeans the year ends with the world’s largest power and its former security guarantor declaring its strategic goal of supporting nationalist political parties across Europe to effectively weaken the EU’s cohesion and political integration.⁵

The implementation of the National Security Strategy (N.S.S.) is perhaps the defining theme of the year ahead, with U.S. military action in Venezuela demonstrating that Washington’s assertion of dominance over the Western Hemisphere is not merely rhetorical but operational. President Trump’s threats, once treated as rhetorical excess, now warrant being taken both literally and seriously, a shift that carries significant implications beyond Venezuela, in particular for recently named targets such as Cuba, Colombia, and NATO partners such as Denmark via Greenland. However, the N.S.S. is far wider and the rest of the world needs to pay attention to it.⁶ At the same time, the violently suppressed uprising in Iran, described as an “Iranian Revolution 2.0”, signals that cascading global disruptions are penetrating even highly securitised autocratic states. Together, these developments suggest that both external coercion and internal instability are becoming structural features of the emerging international landscape rather than exceptional events.Unsurprisingly, against the backdrop of the above, multilateralism in 2025 continued to retreat. COP 31, sparsely attended amid geopolitical fragmentation and domestic economic pressures, delivered little substantive progress despite another year of record temperatures, extreme weather, and mounting climate-related economic losses, widening the gap between climate ambition and action. At the same time, artificial intelligence emerged as both a pillar of market optimism and a growing source of systemic threats and tension. AI-linked firms drove global equity markets to new highs, with four companies surpassing US$3 trillion in market capitalisation during the year, while spending on data centres, compute capacity, and energy infrastructure continued to surge, while their boom unfolded amid intensifying geopolitical competition, and rising unease over future potential across the board labour disruption, energy demand, and information security and integrity.

As a result of these factors, the stakes for 2026 are exceptionally high. The unresolved conflicts, political ruptures, climate failures, and technological accelerations of 2025 are not merely persisting, they are compounding, setting the stage for a decisive test of whether strained global systems can still adapt or continue to fragment further.

1. U.S. Midterms & Domestic Volatility

28 - the number of the House of Representative’s 435 seats at risk of being flipped, the majority in favour of the GOP by current state election redistricting proposals and laws⁷

Much was talked about of the presidential elections making Donald Trump a “lame duck” president and the same is expected after the US mid-term elections. However, President Trump has demonstrated the capacity to continue to drive the political, economic and social agenda at home and abroad without recourse to the house or the senate and that can be expected to continue with perhaps some enhanced attempts by his opposition at constraint. For the mid-terms, aggressive redistricting, new vote-counting and certification procedures, legal challenges, emergency measures, expanding migration clampdowns and deportations, and aggressive tactics around polling times can be expected. -The real test ahead is of how well the US functions as a democracy.

2. Middle East: De-escalation vs Regional Escalation

591 - the number of reported ceasefire violations by Israel in Gaza since Oct 10th, 2025, representing a combination of air and artillery attacks and direct shootings.⁸

The Middle East sits at a fragile inflection point, with the durability of the Gaza ceasefire central in determining humanitarian access, reconstruction governance, and longer-term political trajectories in Israel and Palestine. At the same time, persistent tensions along the Israel-Lebanon border risk drawing Hezbollah into a broader multi-front conflict, while Iran’s evolving strategic posture (across proxy activity, nuclear advances, and selective Gulf diplomacy) continues to shape regional risk calculations, as Red Sea shipping disruptions and energy security concerns drive further global volatility. Normalization efforts, including Saudi-Israel engagement and broader GCC diplomacy, remain highly contingent on conflict dynamics and external guarantees. This year can expect to also reveal what the character and dimensions of a President Trump inspired peace plan entails, with lessons for other parts of the world.

3. Ukraine Conflict Endgame

EUR378 billion - the total level of bilateral funding (across financial, military and humanitarian spending) received by Ukraine since January 2022.⁹

As the fourth anniversary of Russia’s invasion approaches, the Ukraine war is increasingly shaped by political dynamics in Washington rather than battlefield momentum. President Trump’s inability to deliver on his pledge to “end the war in a day” appears to have fuelled mounting impatience and has shifted the administration’s focus toward rapid deal-making, exemplified by high-level US envoys engaging directly with Moscow on essentially bilateral arrangements. With Russia maintaining military pressure and refusing further concessions, there is a growing risk that the conflict’s endgame will be driven by US engagement fatigue, rather than by long-term Western strategic considerations.

4. China-Taiwan Tensions & Indo-Pacific Realignments

362 - the number of Chinese army aircraft that violated Taiwan’s self-declared Air Defense Identification Zone (ADIZ) in the space of one month (February) in 2025¹⁰

While it has received only little international attention in the past year, strategic uncertainty in the Indo-Pacific continues to intensify amid a clear uptick in Chinese air, naval, and grey-zone pressure on Taiwan.¹¹ The island state faces mounting economic coercion and supply-chain vulnerabilities ahead of key political milestones, reinforcing global concerns over semiconductor dependencies and contingency planning among allies and multinationals. Beyond Taiwan, defence integration among the United States, Japan, and the Philippines has deepened, strengthening deterrence but also increasing escalation risks across contested theatres. Similarly, South China Sea disputes have expanded into a broader multi-party strategic contest, while India has stepped up naval operations and “Quad” cooperation, signalling a widening regional alignment aimed at balancing Chinese influence.

5. China’s Global Repositioning & Overcapacity Shock

20% - the year on year drop in Chinese exports to the United States in 2025¹²

China is accelerating its global repositioning in the second half of the decade by presenting itself as an alternative development and trade partner amid perceived U.S. retrenchment, not only undercutting prices but also out-innovating European and American competitors across products including electric vehicles, solar panels, batteries, and other strategic technologies, whose exports have surged. At the same time this scaling has intensified overcapacity pressures, straining global industries and trade systems. Beijing has deepened engagement with the Global South through infrastructure investment, lending, and commodities partnerships, even as the United States and European Union expand defensive trade measures to shield domestic manufacturers from import surges.

6. Climate Pivot: Adaptation, Finance & COP31 Outcomes

2.3°C to 2.5°C - the estimated average global warming by 2100 under current policies and pledges, against a target of 1.5°C¹³

As the 2030 deadline for interim carbon reduction targets approaches, global climate policy has shifted from ambition-setting toward uneven implementation, with COP30 including discussions and initiatives around methane reduction, carbon pricing and border-adjustment mechanisms but failing to secure a roadmap for phasing out fossil fuels or other high-ambition outcomes. As extreme heat, water stress, and resilience gaps widen, adaptation finance has moved higher up the policy and investment agenda, while repeated insurance-market failures are driving rapid repricing of property and infrastructure risk in climate-vulnerable regions. Clean-energy investment is increasingly flowing into enabling systems, grids, storage, nuclear small modular reactors, and hydrogen, as political urgency and private capital are shaped less by long-term targets than by immediate weather-driven disruptions. China is a clear leader in clean tech and alternative energy with grand innovations ranging from building a 4,500km Great Green Wall to halt desertification¹⁴ to a 1MW floating air turbine for clean energy.¹⁵ India, in particular, has accelerated investment in solar, hydrogen, and grid modernisation as water scarcity, heat extremes, and air pollution intensify domestic adaptation pressures.

7. EU-UK Strategic Re-engagement

51.7 % - the EU’s share of the UK goods trade, making it the country’s largest trading partner¹⁶

The UK and EU appear to be moving toward a pragmatic phase of strategic re-engagement, centred on achieving the best possible cooperation framework within the constraints of a post-Brexit reality. Shared security pressures from Russia and China have driven closer defence collaboration, while joint efforts on supply-chain resilience, critical minerals, and energy security have accelerated amid rising geopolitical risk. After years of regulatory divergence, alignment has improved in science, technology, and AI governance, reflecting mutual interest in competitiveness and innovation. Trade frictions have begun to soften through sector-by-sector accommodation, while coordination on migration, borders, and policing has quietly deepened beneath often sharper political rhetoric.

8. Global Debt Cycle → Sovereign Stress

99.6% - the global public debt to GDP ratio estimated for 2030, the highest share of GDP since World War Two¹⁷

As 2026 approaches, the global debt cycle is increasingly tilting toward sovereign stress as higher refinancing costs, weaker growth, and persistent inflation strain public finances. Vulnerable emerging markets across Africa, South Asia, and the Middle East face elevated default and liquidity risks, while advanced economies – including the U.S. struggle to balance high debt burdens against slowing growth and tighter fiscal space. China is contending with hidden local-government debt and pressure on regional lenders, limiting its capacity for traditional stimulus even as it remains a critical creditor abroad. Developing countries paid more in debt interest than inflows.¹⁸ As restructuring needs grow, the IMF and World Bank face mounting pressure to deliver faster and more flexible solutions, while parallel financing ecosystems, led by China, Gulf states, and BRICS-linked institutions, gain influence. South-South lending is increasingly prominent, with India and China emerging as key players in shaping alternative financial lifelines.

9. Tech Cycle Reset and March Forward: AI Consolidation, Regulation & Hardware Constraints

US$3 trillion - projected investments in data centres over the next five years¹⁹

The global technology cycle appears poised for a decisive reset as the AI ecosystem consolidates around a smaller number of capital-rich platforms capable of sustaining the scale of compute, energy and data-centre investment required. GPU shortages, power constraints and rising data-centre costs continue to limit scaling and raise barriers to entry, even as antitrust scrutiny forces big tech firms to reassess business models and gatekeeping roles. Despite these constraints, enterprise AI adoption is accelerating, with increasingly measurable productivity gains across operations and services. Sector rotation is directing capital toward semiconductors, energy infrastructure and applied AI systems, while renewed enthusiasm around agentic AI has lifted sentiment and reinforced expectations of a multi-year capex supercycle.

10. BRICS Expansion Cooperation → First Concrete Trade, Finance & Security Agreements

54.6% - the share of the Global population covered by the 19 BRICS countries²⁰

BRICS cooperation is increasingly moving beyond symbolism towards concrete trade, finance, and security arrangements. Early operational pilots for cross-BRICS payment and settlement systems are underway, while a growing share of commodities trade is being settled in local currencies, modestly reducing dollar concentration at the margins but indicating the direction. The New Development Bank has expanded lending under alternative terms to those offered by Western institutions, reinforcing BRICS’ appeal to emerging markets seeking flexibility. BRICS+ has also begun exploring security coordination through joint exercises and strategic dialogues, even as India plays an influential but cautious role, backing selective Global South initiatives while avoiding commitments that could constrain its broader strategic autonomy.

Conclusion: The Meta-Crisis in Action… and the Possibility of Renewal

2026 promises to be as tumultuous a year as 2025 was, and its first few days have indicated the direction of travel, seeing US military action in Venezuela and what has been termed the Iranian Revolution 2.0 unfolding in the Gulf.

The former serves as a stark piece of evidence that the recently published US National Security Strategy (NSS),²¹ which has declared US dominance over the Western hemisphere, is being put into action, and further that President Trump, who has repeatedly threatened Venezuela and its president, needs to be taken at his word. During his first term, critics tended to take him literally but not seriously, while supporters often took him seriously but not literally. The NSS and its implementation indicate that planning scenarios should consider taking the president literally and seriously. That shift carries real implications for countries now in his sights, including Cuba and Colombia, and even for Greenland and Denmark, despite their status as NATO allies. Wider implications for Europe, India and the rest of the world require serious consideration.

The uprising in Iran, now being brutally suppressed, points to a deeper phenomenon: the world’s cascading disruptions are not just destabilising only the global order, but are spreading to even highly securitised states that operate largely outside its governance frameworks. This reinforces the sense that domestic instability is becoming a systemic feature of the international landscape rather than an exception.

Each of these events have significant impacts across the ten themes for 2026 identified above, highlighting the integrated nature of the unfolding meta-crisis. The strike on Venezuela has raised both domestic political tensions over its lack of congressional approval, as well as international tension with Russia, a traditional supporter of Venezuela, with the resulting rise in geopolitical tensions tightening risk premia and increasing pressure on sovereigns, while U.S. efforts to rehabilitate the country’s oil production capacity intersect with broader global commodity pressures and strategic competition with China in minerals, energy, and influence. The uprising in Iran, on the other hand, impacts BRICS expansion, given the country’s status as a member, Middle East security, and international relations with allied countries like China and Russia.

These two events in the early days of 2026 are not unique in the way they intersect with multiple themes, but are early signals of how the themes outlined here will increasingly collide. While the resulting meta-crisis may appear unprecedented in its intensity, periods of deep systemic transition have punctuated global history before. The years following the end of the First World War in the 1920s and 30s or the end of the Soviet Union in the 1990s were each characterised by overlapping political shocks, economic dislocation, and institutional breakdown (albeit experienced much more intensely in formerly communist countries in the latter instance). In each case, prevailing systems appeared exhausted, legitimacy eroded, and uncertainty pervasive.

The events raise the risk of global conflict, in what is now often referred to as an unfolding World War III. However, t such periods also became incubators of renewal, not because disruption receded, but because it forced adaptation. The structural transitions of the 1930s and 1990s produced new institutions and fundamentally new economic models. The Great Depression gave rise to Keynesian macroeconomics and the construction of welfare states across advanced economies, forming the basis of post-war mixed capitalism, while the disruption of the early 1990s drove globalization with liberalised capital flows, privatisation, global supply chains and financialization. In both cases, crisis discredited the old model and created space for a new one to emerge. The pressures now building across geopolitics, technology, climate and debt suggest a similar paradigm shift may once again be underway.

Many of these pressures, climate stress, technological acceleration, fiscal strain, geopolitical realignment, are severe, but they are also opportunities for necessary reform and renewal: Energy systems and supply chains are being rebuilt around resilience and sustainability rather than cost and efficiency alone. At the same time, new multilateral arrangements and governance frameworks are becoming necessary in a world where demographic, political, and economic power has shifted significantly from the conditions under which the prevailing frameworks were originally formulated.

The ten themes for 2026 highlighted above can therefore be seen as a set of arenas in which the global order will be contested, reshaped, and ultimately redefined. Whether 2026 marks the beginning of an era of great reforms or the prelude to great war remains uncertain, but it does appear to be a year of great importance.

The Leader: Endnotes

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2. Associated Press. (2025, March 28). Legal clash over Trump’s use of National Guard raises separation-of-powers questions. AP News. https://apnews.com/article/trump-national-guard-legal-clash-presidential-power-1ed22e89bcdebc8d3e5bd9238373dc45

3. United Nations. (2025, January). Action by UN system and intergovernmental organizations relevant to the question of Palestine: January 2025 monthly bulletin. United Nations Information System on the Question of Palestine. https://www.un.org/unispal/document/action-by-un-system-and-intergovernmental-organizations-relevant-to-the-question-of-palestine-january-2025-monthly-bulletin/

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9. Christoph Trebesch, Arianna Antezza, Yana Balanchuk, Pietro Bomprezzi, Katelyn Bushnell, Daniel Cherepinskiy, Jakob Drews, Yelmurat Dyussimbinov, Catarina Chambino, Celina Ferrari, Gabriele Ferretti, Andre Frank, Pascal Frank, Lukas Franz, Max Funke, Caspar Gerland, Giuseppe Irto, Leon Haziraj, Felicia Jäckel, Kateryna Kuzmuk, Ivan Kharitonov, Bharath Kumar, Federico Mellace, Taro Nishikawa, Javier Ospital, Ekaterina Rebinskaya, Christopher Schade, Stefan Schramm, Jonas Schweigard, Jannis Stagge, Annalena Tetzner & Leon Weiser (2025). "The Ukraine Support Tracker: Which countries help Ukraine and how?" Kiel Working Paper, No. 2218, 1-75.

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15. Bathgate, R. (2025, August 15). China builds record-breaking floating wind turbine — it could change the face of renewable energy. Live Science https://www.livescience.com/technology/engineering/china-builds-record-breaking-floating-wind-turbine-it-could-change-the-face-of-renewable-energy

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21. America the Merchant Power, The National Security Strategy 2025 (Research Paper, December 2025). (2025). Retrieved from https://isii-pdf-img.s3.eu-north-1.amazonaws.com/pdfs/1767775687872-1f64aea7-e81d-4a5d-a821-8f87b8b170b7.pdf