How good it is to be back in New York, and I am very much looking forward to the weather over the weekend. It proves to be a very exciting time of the year to be in the United States.

I acknowledge the presence here this morning of my colleague, the former Finance Minister in the Australian government, and now the Consul General to New York, Nick Minchin. It appears that I am the only one who brought a few blokes along today. The others are sitting at that table over there, yes they are from my department as well.

I’m particularly delighted to be addressing this impressive group of talented women. On all of my visits overseas, whatever country I’m currently in, I ask that, included in that program there be a meeting with the business women of that particular country.

So whether it is here in New York or whether it’s in Manilla in the Philippines or in Pakistan, I like to meet with a group of women. You get a very different perspective on the politics, economic and social issues of that country.

I love the title of this group. “100 Women in Hedge Funds”. I want to thank Anita and Citi for sponsoring this event. Just the title itself really challenges the stereotype and certainly highlights the significant contribution that women do and have made to this industry for some time, and perhaps the industry has been considered as male-dominated for such a long time. It is a high-risk, high-pressure, challenging, complex industry and to have so many women a part of it is a great thing. So all power to you.

I’m Australia’s first and only female Foreign Minister, so my club is a little smaller. I recently discovered that of the 193 nations around the world, 29 have female Foreign Ministers, so I am thinking of setting up a G29. I have to pay tribute to the United States however because you have had three very impressive female Secretaries of State in Madeleine Albright, Condoleeza Rice and Hillary Clinton. In fact on the first occasion I met Secretary John Kerry he said to me that the State Department were a bit discombobulated: how were they ever going to work for a male Secretary of State? How times have changed.

I have been asked this morning to speak about the top geopolitical risks for 2016 and how they will impact on the markets. Well, given what has happened to the market between the end of December and now, the first few weeks of January, I don’t know that anyone should be in the business of predicting anything. It’s particularly perilous for politicians to forecast future events, given the consequences of the almost inevitable failure, and it is particularly difficult for a Foreign Minister given the complexities of the global challenges that we see around the world.

The British wartime leader Winston Churchill advised against prophesising beforehand. He said it was much better to predict after the events had occurred. Apparently economists have no such difficulty. According to the Council on Foreign Relations, economists (they say rather dryly) have predicted eleven of the past seven financial crises.

I think that governments and analysts and security agencies and academics and others do a pretty good job of scouring the landscape to identify the likely trends and how events might shape the globe. I will perhaps talk about the probabilities, and identify some hotspots that I believe will impact on the markets and the globe more generally.

The first is an issue that is occupying the minds of many governments around the world, and that is the continuing conflict in Iraq and Syria. It really is the epicentre of a destabilised Middle East and 2016 may see it conflate. It may even see a new front in the conflict.

There are about 60 nations around the world who are part of a coalition to fight against the terrorism that is based in Iraq and Syria - but the political instability in those two countries is a source of great concern.

The next risk I would identify stems from the first and that is a likelihood of a high-profile and even more devastating terrorist attack. It could be anywhere in the world, but this would have a pretty significant impact on global markets as we have seen in the past. I am talking about something even more devastating than that we have seen in Paris, Jakarta and elsewhere in recent months.

The third is a weakened Europe. Europe is currently facing some of the most significant challenges since World War II because it is facing a refugee crisis, the likes we have not seen since the Second World War, and the different responses of the European nations will lead to that continuing disunity that we are starting to see within Europe.

Of course we have a Russian President who is determined to drive disunity between European nations, and NATO, and determined to undertake, how shall I put it, military adventures to distract from the economic and demographic challenges that he faces at home.

Another risk is the economic divergence of nations across the globe. The United States Federal Reserve tightening monetary policy; the monetary policy of Europe and Japan; then of course the big focus now on what is happening in China. China is transitioning to a more sustainable economic model and that is having a significant impact.

There are other hotspots. The tensions in the South China Sea where the interests of not only the significant big powers like the US, Japan and China intersect, but also the interests of a number of particularly significant South East Asian nations. Those interests all intersect around the South China Sea.

We are also challenged by random acts of instability; for example, North Korea’s recent nuclear tests. That obviously impacts on markets and if we see more of that kind of behaviour we’re in for a very challenging year.

Then coming back to China I think the impact of China’s slowing growth on other economies. About 120 countries around the world identified China as their largest two-way trading partner. So the transition in China, and how that impacts on other economies is obviously a matter of great focus for us this year.

This list is not exhaustive by any means, but standing here today in mid-January, I think we can assume that all those matters may come to a head in one way or another in 2016.

Of course I can’t say how these events will impact on markets, but to extent that’s your job. You provide a kind of insurance, if you like, a guarantee against disruptive events and even transformative long-term trends. That’s a pretty heavy responsibility for the hedge-fund industry, quite frankly. Some of the disruptive changes that you hedge against include natural disasters – and I anticipate that again we will have our fair share of natural disasters in 2016.

The fact is though, however volatile the market are, however they react to disruptive change – markets are also highly resilient. Markets that are transparent and well run and therefore trustworthy can really underpin stability.

The United States is a case in point.

The US economy has faced some extraordinary challenges over time and yet the ability of this country to reinvent itself and for its economy to keep powering through, is an inspiration for us all. Indeed, the US economy remains the most important, the most significant, in the world today, and I believe that will remain the case for some time.

In Australia we have embraced a policy of putting innovation at the heart of our economic policies. This is a natural embrace for Australia because we have always been a very inventive, creative country. Being so far from everything else you kind of have to do it on your own.

We believe that countries that are innovative, are nimble, are agile, flexible, able to embrace technological change – these are the countries, these are the economies that will not only survive but thrive. The United States and Australia are two such economies. So I hope that gives a basis for us to have a discussion today.

Thank you for having me here. Let’s talk!

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