The Top 10 Global Risks of 2022

A domestic focus for both the U.S. and Chinese governments lowers the odds of a big international conflict in 2022, but it leaves less potential leadership and coordination to respond to emerging 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.

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-19 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-19 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” 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-19 will continue to drive political and economic instability.

2. Technopolar world

The world’s biggest tech firms decide much of what we see and hear. They determine our economic opportunities and shape our opinions on important 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. Disinformation will further undermine public faith in democracy, particularly in the U.S. 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, U.S.-China (and, to a lesser degree, U.S.-Europe) tensions on these issues will grow.

3. U.S. midterms

In November, Republicans will almost certainly 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. Biden’s impeachment will lead the GOP agenda and 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. If he is defeated by a Democrat, a Republican House could vote to overturn state-level election results, but a Democrat-controlled Senate would limit the fallout.

But if Republicans win both the House and Senate this November, if Trump responds to possible defeat in 2024 by challenging the result, and if state-level officials submit alternative certifications that Republican congressional majorities accept, the 2024 U.S. presidential election can be broken and a constitutional crisis will result.

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. President Vladimir 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 U.S. elections. Possible U.S. sanctions that target the secondary market trading of Russian sovereign debt would end any hopes of more stable U.S.-Russian relations.

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 E.U., U.K., 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 Islamic State from drawing foreign militants into ungoverned expanses of the country. The risk of terrorism also remains acute in the thinly governed 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 make new demands on multinational corporations and the governments that regulate them. Multinationals will spend more time and money navigating environmental, cultural, social, 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. In the unlikely event of early elections in 2022, all these risks will be exacerbated.

Red herrings

The U.S. and China are each too busy with challenges at home to wage Cold War 2.0, and risks of a confrontation over Taiwan are exaggerated. The presidential faceoff between Jair Bolsonaro and Luiz Inacio Lula da Silva will test but not undermine Brazil’s democratic institutions. More migrants from the Middle East will reach E.U. territory, but there will be no repeat of the 2015-16 crisis this year.