The Top 10 Global Risks of 2022

While a strong domestic focus by both the U.S. government and China reduces the likelihood of major international conflicts in 2022 it also leaves less leadership potential and coordination for responding to future crises. That’s bad news in a year that will be dominated by the COVID-19 pandemic, climate change, and a number of regional geopolitical crises.

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.

The end is coming for the developed world. Highly transmissible Omicron variants are colliding with highly vaccined populations, bolstered in part by COVID-19 treatment and highly effective mRNA shots. That’s why the pandemic will likely become endemic for advanced industrial economies in the first half of this year. Even in developed countries, there will be an economic hangover due to the pandemic.
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China is the main engine of global growth and will be confronted with highly transmissible COVID-19 strains. There are no effective vaccines available, and there are far fewer people who have been infected. 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” 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.

Overall, the most affected countries are developing nations, while political leaders will experience the greatest public outrage. Effective vaccines won’t be made available to everyone if they are not in high demand. Emerging markets will experience slower economic growth and more debt as a result.

Covid-19 will drive economic and political instability in all of these ways.

2. Technopolar world

The world’s biggest tech firms decide much of what we see and hear. These tech giants determine economic opportunity and influence our views on key subjects. E.U., U.S., and Chinese policymakers will all tighten tech regulation this year, but they won’t limit their ability to invest in the digital sphere where they, not governments, remain the primary architects, actors, and enforcers.

Tech giants can’t yet (and don’t want to) effectively govern the digital space or the tools they’re creating. Further disinformation will undermine the public’s trust in democracy, especially in the U.S.

3. U.S. midterms

In November, Republicans will almost certainly win back majority control of the House of Representatives—and maybe the Senate. Democrats may view GOP control in November as the unlegitimate outcome of a voter-suppression program, while Republicans might see their victory as proof of 2020 election fraud. Biden’s impeachment will lead the GOP agenda and public trust in American political institutions will take an even larger hit.

It is important to consider what the midterms could mean for the presidential election in 2024. Donald Trump signalled that he intends to run for President in 2024. A Republican House can vote to invalidate state election results. However, a Democrat-controlled Senate will limit his defeat.

If Republicans win the Senate and House in November and Trump challenges the outcome, or if the state-level officials present alternative certifications that Republican majorities approve, then the U.S. Presidential election of 2024 can be canceled and there will be a constitutional crisis.

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-19 variants continue to circulate.

5. Russia

A buildup of Russian troops near Ukraine has opened a broader confrontation over Europe’s security architecture. While President Vladimir Putin may send troops to annexe the Donbass, his demand for security concessions from NATO and no eastward expansion is significant. A grand deal is not possible, as close encounters between NATO ships and Russian planes are likely to increase the risk of accidents. There are ongoing worries about Russian cyberattacks and interference in U.S. election elections. U.S. sanctions against Russia’s sovereign debt secondary market trading would destroy any hope for more stable U.S.-Russian relations.

6. Iran

Iran’s nuclear program is advancing rapidly. The Biden Administration is left with few choices, as diplomacy has stalled. Israel will increasingly take matters into its own hands—which once again raises the specter of Israeli strikes on Iranian nuclear facilities. All of these factors will come together this year. This will make oil prices and other regional countries nervous and increase the chance for conflict.

7. One step forward, two steps back

In 2022, the continued rise in energy prices will push governments to support policies that lower energy cost but slow climate change. Rising energy prices will raise anxiety levels for both voters and elected officials—even as climate pressures on government increase.

8. Empty Lands

Washington and Beijing are distracted by domestic priorities. The E.U. U.K. and Japan cannot fill the power vacuum that results. This will leave many regions and countries with unmanaged crises. The Taliban in Afghanistan will be unable to prevent Islamic State’s foreign fighters from entering ungoverned areas of Afghanistan. Sahel is still vulnerable to terrorist attacks. Yemeni, Myanmar, Ethiopia and other civil wars could create new dangers. Venezuela and Haiti are at risk of becoming refugee crises.

9. Losing the Culture Wars with Corporates

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 make new demands on multinational corporations and the governments that regulate them. Multinational corporations and governments will have to spend more time and resources navigating the political, cultural and social 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. Erdogan is opposed to traditional economic management. Inflation and unemployment are both high. Erdogan’s foreign policy will be more aggressive this year in an effort to divert attention from the current economic crisis. These risks could be magnified if there are early elections 2022.

Red herrings

China and the U.S. have too many domestic issues to be able to wage Cold War 2.0. Therefore, there are no real risks that China and Taiwan will get into a conflict. The presidential faceoff between Jair Bolsonaro and Luiz Inacio Lula de Silva will test but not undermine Brazil’s democratic institutions. E.U. will see more migrants from the Middle East. However, there won’t be another 2015-16 crisis in this area.


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