5 greatest risks to global stability looming ahead in 2016

By Anya Degtyarenko 

NEW YORK, Oct. 12 — With the end of the Cold War, the world entered the new era: multiple regional economic and political powers are about to reshape the world order. The startling trends had been much in evidence during 2015: complete breakdown in relations between the US and Russia with Putin’s aggressiveness; an escalating international crisis in the Middle East, a shattering economic and social state of the European Union, and the fearful economic effect of Chinese slowdown. While the world doesn’t seem close to “stable” today, the global stability implies the existing political status quo, allowing moderate and predictable international economic and social progress. Geopolitical factors that threaten the predictable order are, therefore, the risks causing global instability. Five of these top risks will be prominent in 2016. 

1. European Instability

European integrity and reputation of stability will continue to be challenged in 2016.  Eurozone economic weakness, coupled with the migration crisis and following political repercussions will be hitting European Union in its weak spots. The inflation rate has fallen again in 3rd quarter of 2015, to just 0.3 percent, and the unemployment rate is stuck at 11.5 percent — and prospects for 2016 might be worse. Economic weakness makes the EU reluctant to hurt Moscow; cutting it off from the global financial system would strike the EU too. Following the economic fragility, “Brexit”, the possibility of Britain quitting the EU, is the next risk sign of  European fragmenting. Economic stagnation and lack of political cooperation produced infirm responses to the Ukraine, Iraqi and Syrian crises. The bottom line of  the list is a migration crisis with no obvious solution. Migrant inflow from the African continent, dictated by demography and economic gaps, is going to increase and the EU must develop a common approach or risk further political and social challenges to its unity. 

2. China

While the world is focused on the situation in Middle East, ISIS and Putin, the problem with China will approach shortly. The growth targets for 2016 keep lowering, and it will affect China’s trade partners at first place. Commodities dependent countries booming on exports to China, like Japan, Brazil, Australia, Indonesia, Thailand, will continue to suffer, raising the risk of political unrest in the most unstable of them. GDP in the US and already the struggling and the Eurozone will decline. While the world is anticipating China’s economic slowdown, the Chinese Communist Party seeks to demonstrate its political and military power. It is building up its influence in the South Sea and closed the air space in Eastern China, which the US does not recognize. Its actions in Syria pose a major threat to the US-allies in the Middle East. Chinese hackers are believed to pose threat to the US cyber security. On top of the economic interdependence between the US and China, the political tension between powers will highly increase. 


3. The Middle East 

The expansion of the Islamic State, as well as Saudi Arabia and Iran, will continue to complicate the situation in the Middle East. ISIS ideology will continue to spread out, setting up new units and disrupting the status quo power of the Sunni countries like Saudi Arabia or the United Arab Emirates. Meanwhile, the conflict between Israel and the Palestinians is unresolved, Hamas in Gaza and Hezbollah in Lebanon will promote violent  clashes with Israel. With the US-Iran nuclear deal and impending lifting of sanctions, the struggle for dominance between Iran and Saudis will feed violent proxy wars in the region like those underway in Syria and Yemen. The threat of the Assad regime collapse and his successor will be on the agenda of 2016. With the US scheduled to withdraw from Afghanistan in 2016, there is a risk of the collapse of Afghanistan and possibly Pakistan into semi-failed states. Some of these conflicts may yield an actual oil supply disruption, as in 1973, 1979, and 1990, with the results reflected in risking prices. Weakened economies and civil wars in Lebanon, Jordan, Syria and Turkey, will turn millions of people into refugees and continue to destabilize Europe economically and socially. Furthermore, lasting hopelessness and growing unemployment will produce more anti-western jihadists among Arab Youth who will find their way to stage terrorist attacks in the US, Europe or Russia. 



4. Saudi Arabia

Saudi Arabia will contribute to global instability and already existing turmoil in the Middle East. Its importance as an oil exporting nation has made economic interdependence with the West inevitable, That, in turn, set up strong political and military relationships that at times have been a source of tension for both sides that will be tested in 2016. Saudi Arabia is facing multiple risks for its economy, succession and regional stability. With the trend favoring continued low oil prices, the Saudi budget deficit will increase, which was already $100 billion in 2015. This will produce risks for the Kingdom’s credit rating, capital outflows and negative responses on international markets. As the country will be close to running out of its financial and oil reserves, the region will be more destabilized. Besides this tight economic situation, the US-Iran nuclear deal shuttered the 70 year history of the American and Saudi relationships of the status quo powers. Russia’s dramatic intervention to the balance of power  in the Middle East will signal that the US is not responsible for defending its friends and allies anymore. With ongoing succession conspiracy inside the House of Saud, that  will leave the Saudis more vulnerable than ever, and cause more friction in the relations with Iran.  


5. Russia 

Russia is a tricky factor when calculating global destabilization factors in 2016. Against the backdrop of the weak Eurozone, the economic sanctions imposed after Crimea were not enough to mortally weaken Russia. Arguably, they made Putin even more aggressive and revisionist. As the Russian economy tumbles, Putin will increase its anti-Western economic policy, targeting the companies and investors inside of Russia. Its nuclear capability and intend on territorial and political expansion, especially in the region of the US-allies, continues to pose threat to the security of Western world and overall, global stability. With the Ukraine left in the “frozen conflict” state, Putin moved his attention to Syria. Putin’s intervention in Syria intends to insert Russia as a rival to the US-superpower role in the regional conflict. That clearly had implications for further extension beyond the region. Russia will continue its provocative behavior against NATO states (e.g. violating Turkey air space).  Further, China uniting with Russia against ISIS and US-backed allies will pose great risk of expelling NATO as a power organization and eventually shifting the US influence in the region. Failure to defend the NATO ally from Russia-China coalition will disrupt the whole balance of power and the attempt of the US to return to its primary power in the region will trigger the World War III.