A more optimistic guide to 2024

Democracy must hold itself up to challenge and adapt [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. It’s tricky to find much ground for optimism into 2024. There are two major conflicts raging and many smaller ones. China is asserting itself militarily with neighbors. There are dystopian warnings about AI taking over. And there’s a pretty full electoral calendar. In Russia, there seems little doubt Vladimir Putin will secure another term, and he shows no sign of slowing his war in Ukraine. In Europe, parliamentary elections will give us a sense of voter appetite for hard-right anti-immigration groups in core member states like France and Germany. Narendra Modi looks set to romp back into power in India, where he’s taking an increasingly hardcore Hindu nationalist line. In the US, there’s [the prospect of another Donald Trump presidency]( after an extremely disruptive first term. There, though, we’d at least have the benefit of a sober assessment of Trump Mark I. That may leave other nations, US officials and lawyers a bit more prepared on how potentially to navigate Trump Mark II. And not all electoral winds are blowing toward the polarizing parties — take the shift in power in Poland in 2023. Voters will also insist the winner of a UK election expected this year tackles structural problems with the national health service and infrastructure. Elsewhere, Xi Jinping’s need to deal with a sprawling corruption scandal in China’s military will likely put the brakes on any attempt for now to forcibly unify with Taiwan. The war between Israel and Iran-backed Hamas continues in Gaza but so far Iran’s many proxies (Hezbollah, the Houthis) have not triggered a wider Middle East conflict. They have reasons not to given the risks to themselves, and they are acutely aware of that. The quality of democracy is arguably suffering, even if countries remain technically democratic because they hold elections. Still, democracy is not designed to be static. It should hold itself up to challenge and adapt. Perhaps 2024 will give it the potential to do so. — [Rosalind Mathieson]( A rally for Lai Ching-te, Taiwan’s vice president and presidential candidate for the ruling Democratic Progressive Party, in Taipei on Jan. 3. Photographer: Lam Yik Fei/Bloomberg Global Must Reads The second large-scale Russian missile barrage of the year pounded Ukraine overnight as temperatures dropped below freezing in the latest escalation of aerial attacks. After months of relatively few air strikes, Moscow [ramped up bombardments]( just before the New Year, firing hundreds of missiles at cities across Ukraine, including the capital, Kyiv. The Israel-Hamas war could “easily” turn into [a full-blown Middle East conflict](, US Secretary of State Antony Blinken said, as he travels across the region to calm tensions and urge Israel to do more to protect civilians in Gaza. Tensions between Israel and Hezbollah militants based in Lebanon are mounting, with near daily skirmishes, while Red Sea shipping attacks by the Houthis led the US and its allies to contemplate striking targets in Yemen, where the rebels are based. The struggle between US President Joe Biden and House Speaker Mike Johnson over Ukraine aid and immigration policy comes to a head this week as Congress tries to avert [a partial lapse in government funding]( on Jan. 20. Democratic and Republican leaders reached a broad deal on the contours of a spending plan yesterday, but it includes neither $61 billion in assistance to Ukraine that Biden is seeking nor stringent border protections that conservatives demand. One year after Jair Bolsonaro’s supporters stormed the Brazilian capital in a bid to overturn his election defeat, members of his inner circle are trying to refashion the right-wing movement he inspired to broaden its appeal. Yet as Daniel Carvalho and Andrew Rosati report, in seeking to move to the center-right ahead of October municipal elections, the former president’s party is [running into a major obstacle](: Bolsonaro himself. The title of the world’s longest-serving female head of government remains with Bangladesh Prime Minister Sheikh Hasina after her party swept most parliament seats in an election boycotted by her opponents and many voters. The poll, which saw the [second-lowest turnout]( since the country’s return to democracy in 1991, followed a sweeping crackdown by her government. Foreign Minister Annalena Baerbock signaled Germany is prepared to [lift a veto on selling Eurofighter aircraft]( to Saudi Arabia, a move that would reverse the ruling coalition’s policy of not supplying weapons to countries involved in the conflict in Yemen. China has detained the head of an overseas consulting firm for allegedly being employed by the UK’s [MI6 intelligence service]( to spy on the Asian nation. Prime Minister Fumio Kishida suffered another blow in Japan’s [widest-ranging political scandal]( in decades with the arrest of a ruling party lawmaker yesterday. Washington Dispatch Biden today plans to speak at a historic Black church in Charleston, South Carolina, where a White supremacist fatally shot nine people in 2015. As John Harney writes, the visit to Mother Emanuel AME Church has special significance because of the presidential campaign, with the nation’s conflicts over race again becoming an issue. Charleston Harbor was where the American Civil War began, and it’s where Biden revived his campaign in 2020 with a Democratic primary victory, thanks to overwhelming support from Black voters. His reelection cannot succeed without strong backing from African Americans in swing states, and that has been called into question by recent polls. South Carolina is the home state of Nikki Haley, a candidate for the Republican nomination and a former governor. She [drew criticism]( from both fellow Republicans and Democrats recently when she failed to say that slavery was the cause of the Civil War. The aftermath of the church massacre became an important moment in Haley’s career. As she said at a town hall last week, she consoled families of the victims, then led efforts to remove the Confederate battle flag from the State House grounds. One thing to watch today: The House and Senate will be back in session. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day Xi needs to reshape China’s economic model to drive expansion over the next decade as the property sector declines. His government’s solution — pouring money into manufacturing — risks igniting a [new wave of trade tensions]( across the globe. Part of that focus is what the nation’s leaders call the “new three” growth drivers of electric vehicles, batteries and renewable energy. And Finally US Defense Secretary Lloyd Austin went into the hospital on Jan. 1 after suffering severe pain as a result of an earlier elective procedure. But arguably [even more alarming than the absence]( of the country’s top defense official at a time of proliferating global tensions is the fact that Biden was unaware that Austin had been hospitalized. As sources tell Peter Martin and Jennifer Jacobs, the failure to notify the White House was the result of a series of errors including confusion over Austin’s wishes and his chief of staff falling ill. Austin arrives to testify at a Senate Appropriations Committee hearing on Oct. 31. Photographer: Drew Angerer/Getty Images Thanks to the 70 people who answered the Friday quiz before Christmas and congratulations to José Goenaga, who was the first to name Colorado as the US state that ruled Trump is ineligible to serve as US president because of his actions inciting the Jan. 6, 2021, attack on the US Capitol. More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. Follow Us Like getting this newsletter? 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