Risk advisory firm unveils top threats of 2023

Some of this year’s top global risks are inflation, higher energy prices and water stress, according to a top political risk consulting firm. 

However, “rogue Russia” is the No. 1 risk facing nations, industries and institutions in 2023, according to the Eurasia Group’s annual risk report released on Tuesday.

“A humiliated Russia will turn from global player into the world’s most dangerous rogue state,” wrote co-authors of the report, Eurasia Group President Ian Bremmer and Chairman Cliff Kupchan.  

Moscow has been careful to keep its war confined to Ukraine since launching an invasion in February 2022. But Bremmer and Kupchan predict that will change this year.  

“In 2023, Putin can’t afford to be that cautious,” the report states. “Nuclear saber-rattling by Moscow will intensify. Putin’s threats will become more explicit; he’s likely to move tactical nuclear weapons closer to Ukraine—and publicize it—and we could see an increase in the alert status of Russia’s nuclear arsenal.”

Direct use of nuclear weapons remains unlikely, the report adds, but the potential for destruction due to accidents or miscalculations will be greater this year “than at any time since the Cuban missile crisis.”  

The No. 2 risk for this year is “Maximum Xi,” according to the report, referring to Chinese President Xi Jinping.

China’s leader has control over the country’s political system that has not been seen since the reign of Mao Zedong. Bremmer and Kupchan describe Xi as being “virtually unfettered” in his ability to pursue his nationalist policy agenda in a system with few checks and balances to work against him.  

Xi’s ability to make long-term mistakes is also unmatched. “That’s a massive and underappreciated global challenge, given the unprecedented reality of a state capitalist dictatorship having such an outsized role in the global economy,” Bremmer and Kupchan wrote.

Number three on the list are “weapons of mass disruption” as technological advances in artificial intelligence garner new potential for manipulating the masses and creating political chaos.  

“Political actors will use AI breakthroughs to create low-cost armies of human-like bots tasked with elevating fringe candidates, peddling conspiracy theories and ‘fake news,’ stoking polarization and exacerbating extremism and even violence — all of it amplified by social media’s echo chambers,” the report states.  

The powerful ripple effect of rising global inflation is the next-biggest threat, according to the report.  

Inflation experienced across the globe in 2022 had multiple causes, including the COVID-19 pandemic, Russia’s invasion of Ukraine and China doubling down on its “zero COVID” policy. And the historically high inflation will most likely cause a global recession and as result prompt social instability in some emerging economies, per the report.

Number five on the report’s list of biggest global risks this year are the possible confrontations between Iran and the West as protests against the government in Tehran continue. Amid the protests, Iran has also escalated its nuclear program and become a key backer of Russia in the Ukraine war.  

“Facing convulsions at home while lashing out abroad, this year will feature new confrontations between the Islamic Republic and the West,” the report states.  

Other risks mentioned in the report are higher oil prices, rollbacks to gender equality, the risk of political violence in the United States, Generation Z further changing work culture and increased water scarcity.