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Humorists often say that hindsight is 20/20 vision. Not so. Historians will tell you that we often don’t see things clearly even in the rear-view mirror. As ASPI begins its shutdown for the Christmas–New Year break, it’s a good time to reflect on where we are at the end of 2014.

Let’s start with the great powers. The US remains hesitant, its leader a Jeffersonian, its middle class sucked down by lack of employment opportunities and a declining share of the national cake. In his first term, President Obama used to talk about the recovery of the US middle class as the path to US leadership in the 21st century. That recovery hasn’t happened. The US remains the world’s dominant power, but there’s an uneasiness about its leadership. In Asia, allies and partners remain anxious about the US rebalance—which is happening, but not at a pace sufficient to satisfy their need for instant gratification and not to an extent that restores the US position in the region to what it was in earlier decades.

In Russia, Putin’s charted a course to the past—not to the communist past, but to the Tsarist one, where supreme leaders weren’t constrained by the dead hand of communist bureaucracy. Putin enjoys having adversaries; he thinks Russia gets more attention that way. He’s not shy of using Russian hard power. We’ve seen that in Ukraine and in the resumption of long-range naval and air patrols. Earlier this month the Russian foreign minister was claiming Russia’s right to station nuclear weapons in Crimea; a claim designed to intimidate. But the Russian economy’s struggling, and with oil at its current price it’ll struggle more in 2015. Not a good combination of factors.

Xi Jinping’s China reached a Purchasing Power Parity milestone this year—becoming the world’s largest economy. But its strategic signals remain confusing. The concept of ‘Asia for the Asians’ that Xi outlined in May at the Conference on Interaction and Confidence Building Measures in Asia didn’t play that well in Asia, not least because of Chinese pushiness in the South China Sea and East China Sea. And it’s never quite clear what Beijing wants in terms of regional order. Its own picture of order seems historic rather than contemporary. It describes the current order as hegemonic, and of course in a real sense it is—but it reflects a hegemonic power interested in liberalism, prosperity and peace. China rose under that order. Its own preferred vision, ‘Asia for the Asians’, implies a closed regional system of a sort that hasn’t existed since the Opium Wars.

In Japan, Shinzo Abe’s government attempts a difficult balancing act in trying to be both evolutionary and revolutionary at the same time. Abe has a difficult task in front of him: defining a ‘normal’ role for Japan in Asian security, when the 20th century was comparatively bereft of convincing examples. Changes of leadership in both India and Indonesia raise the prospect that both countries might also be feeling their way to more expansive regional roles, but both are works in progress. Australia would especially welcome the opportunity to work more closely with Jakarta in the field of regional security.

In Europe, NATO allies are more nervous. Not nervous enough to make a substantial lift in their defence spending—Germany remains at 1.3% of GDP—but nervous enough to make the NATO summit in Wales one of the more important in recent years. NATO has rediscovered its strategic purpose, and it turns much more upon European defence than out-of-area deployments.

The Middle East retains its status as the world’s last geopolitical shatterbelt. Syria and Iraq now form the new crush zones between the Sunni and Shia worlds. There’s little the West can do to change that. Meanwhile the negotiations continue to constrain Iran’s nuclear program. Some form of agreement now looks more likely than not—but it’ll probably be one which leaves Tehran with a degree of nuclear ‘latency’ that the neighbours will find concerning.

In Australia, the recent events in Martin Place have cast a shadow over what’s primarily been a good year. Canberra’s concluded a range of Free Trade Agreements with rich partners, struck up a new strategic relationship with Tokyo, cemented its place in the G20, and committed to a target in defence spending of 2% of GDP. But it’s hard to escape the feeling that there’s much more that needs to be done, especially if Australian strategic policy is to keep pace with the transformational changes unfolding across the Asia Pacific.

At the Carnegie Endowment, the retiring president Jessica Tuchman Matthews recently depicted the coming year, 2015, as ‘a world confused ^[2]’. Sounds like more of the same is on the way.

Rod Lyon ^[3] is a fellow at ASPI and executive editor of The Strategist. Image courtesy of Flickr user Bob B. Brown ^[4].