Top Risks 2022

Every year, Eurasia Group, our parent company, produces its list of the top 10 geopolitical risks for the coming year. The report is authored by Eurasia Group's president, Ian Bremmer, and its chairman, Cliff Kupchan.

#1 — No zero COVID

We’re done with the pandemic, but it’s not yet done with us, and the finish line depends on where you live. Critically, China’s “zero-COVID” policy will fail.

In the developed world, the end is near. The highly transmissible omicron variant is colliding with highly vaccinated populations that are bolstered by highly effective mRNA vaccines and COVID treatments. That’s why the pandemic will likely become endemic for advanced industrial economies in the first half of this year. Yet even in the developed world, the economic hangover from the pandemic will endure this year with disrupted supply chains and persistent inflation.

But China, the primary engine for global growth, will face highly transmissible COVID variants without the most effective vaccines, and with far fewer people protected by previous infection. China’s policy will fail to contain infections, lead to larger outbreaks, and require more severe lockdowns. That means greater economic disruptions, lower consumption, and a more dissatisfied population at odds with the triumphalist “China defeated COVID” narrative of the state-run media. China’s problem will continue until sometime after it has rolled out domestically developed mRNA shots and boosters for the world’s largest population — at the end of the year by the earliest.

In general, developing countries will be hit hardest, and political incumbents will bear the brunt of public anger. Demand for booster shots in wealthier countries will prevent effective vaccines from becoming more widely available. New outbreaks will slow economic growth in emerging markets, and leave poorer governments with more debt.

In all these ways, COVID will continue to drive political and economic instability.

#2 — A technopolar world

That’s a reference to the intensifying conflict between governments and the world’s largest tech companies over who will set the rules in the digital space that’s playing an ever-larger role in our lives and our politics.

Today, warn Bremmer and Kupchan, the world’s biggest tech firms decide much of what we see and hear. They play a growing role in creating our economic opportunities and shaping our opinions on important subjects. Policymakers in Europe, China, and America will tighten tech regulation this year, but Big Tech will continue to make and enforce most of the rules in the digital sphere.

The trouble, the report’s authors warn, is that tech giants can’t yet effectively govern the tools they’re creating or the space they’re expanding. Disinformation will further undermine public faith in democracy, and as tech firms and governments fail to agree on how to protect data privacy, cyber-security and the safe and ethical use of artificial intelligence, tensions on these issues among the US, Europe and China will grow.

#3 — US midterms

In November, Republicans will probably win back majority control of the House of Representatives – and maybe the Senate. If so, Democrats will view GOP control as the illegitimate result of a voter-suppression campaign, and Republicans will see victory as further evidence of 2020 election fraud. Public trust in American political institutions will take an even larger hit.

More important is what the midterms mean for the 2024 presidential election. Donald Trump is signaling he will run for president in 2024, and he might well win. The more complex scenario, according to the report, emerges if he loses. If Republicans win both the House and Senate this November, if Trump responds to a defeat in 2024 by challenging the result, and if state-level officials submit alternative certifications that Republican congressional majorities accept, the 2024 US presidential election can be broken and a constitutional crisis will result, say Bremmer and Kupchan. That’s why the 2022 midterms are so important for the future of America’s democracy.

Here are summaries of risks 4-10.

#4 — China at home

An increasingly burdensome “zero-COVID policy” (see Risk #1) and President Xi Jinping’s reform plans will unsettle markets and companies in 2022. Xi’s vision of technological self-sufficiency, economic security, and social harmony — to “make China strong” — will collide with intensifying pushback from the West, an exhausted growth model, an overleveraged and unbalanced economy, and a rapidly aging population — and at a time when COVID variants continue to circulate.

#5 — Russia

A buildup of Russian troops near Ukraine has opened a broader confrontation over Europe’s security architecture. President Putin could send in troops and annex the occupied Donbas, but his current demand is for major NATO security concessions and a promise of no further eastward expansion. But a grand bargain is unlikely, and close encounters between NATO and Russian ships and planes will become more frequent and more dangerous, increasing chances of an accident. Add ongoing concerns about Russian cyber-attacks and interference in US elections.

#6 — Iran

Iran’s nuclear program is advancing rapidly. With diplomacy stalled, the Biden administration has few options. Israel will increasingly take matters into its own hands — which once again raises the specter of Israeli strikes on Iranian nuclear facilities. These pressures will collide this year, leaving oil prices and regional states jittery, and increasing the risk of conflict.

#7 — Two steps greener, one step back

In 2022, continued upward pressure on energy costs will force governments to favor policies that lower energy costs but delay climate action. Rising energy prices will raise anxiety levels for both voters and elected officials — even as climate pressures on government increase.

#8 — Empty lands

With Washington and Beijing distracted by domestic priorities, and the EU, UK, and Japan unable to fill the resulting power vacuum, many countries and regions will be left with unmanaged crises. In Afghanistan, a disorganized and inexperienced Taliban will struggle to stop the Islamic State from drawing foreign militants into ungoverned expanses of the country. The risk of terrorism remains acute in the Sahel. Civil wars will create new risks in Yemen, Myanmar, and Ethiopia. Venezuela and Haiti risk growing refugee crises.

#9 — Corporates losing the culture wars

The world’s biggest brands look forward to record profits, but a more difficult year managing politics. Consumers and employees, empowered by “cancel culture” and enabled by social media, will force multinationals to spend more time and money navigating environmental, cultural, and political minefields.

#10 — Turkey

President Erdogan will drag Turkey’s economy and international standing to new lows in 2022 as he tries to reverse his plunging poll numbers ahead of elections in 2023. Unemployment and inflation are high, and the lira is weaker and more volatile, but Erdogan has rejected orthodox economic management. His foreign policy will grow more combative this year to distract voters from the economic crisis.