In 2016, the world will face a migration crisis, experts from the World Economic Forum in Davos predict. Russia and its neighbors will be threatened by budget deficits, hyperinflation and unemployment

The report, based on a survey of 750 World Economic Forum members, was published a week before the official opening of the site in Davos on January 20. During its preparation, survey participants named the five most serious positions from the list, grouped into several categories: economy, environment, world politics, society and technology. The potential degree of impact on the situation on a global scale and the relationship with other risks, including those from various categories, were assessed.

Migration is the first challenge

The risks described by experts include both long-term natural challenges and unforeseen political and economic disasters. Thus, in the medium term (one and a half years), Davos experts consider the most likely (52%) to be an unforeseen migration crisis. The next most likely ones are the collapse or serious crisis of statehood in individual countries, armed interstate conflict, crises associated with surges in unemployment, as well as the risks of collapse of the public administration system. Their probability ranges from 25–27%.

Over the past year, the severe migration crisis in Davos has come to be perceived as both a more likely risk and a risk with the most serious consequences. Based on an analysis of existing data, the report’s authors provide several explanations for why migration challenges must be taken increasingly seriously. Firstly, migrants stay in a foreign land for a longer period of time: if in the 1980s, forced migrants left their home country for an average of nine years, then in the mid-2000s - already twenty. Conflicts tend to become increasingly protracted, the researchers also note: over the past three years, only one out of 40 conflicts around the world was resolved, and more than 80% of them dragged on for more than ten years. Secondly, migration exacerbates social problems: migrants are usually endowed with reduced socio-economic rights, which “limit their ability to lead a decent life.” This in turn leads to the emergence of ghettos and “isolated communities on the margins of societies, which creates fertile ground for frustration, disillusionment and even radicalization.”

In Europe, the influx of migrants in 2015 challenged both the financial capabilities of receiving countries and their social adaptation policies, which set a trend of polarization both in European societies and in their political systems. This, in turn, called into question the effectiveness of European public administration structures, the authors of the report also point out.

Weak states

In their forecast, Davos experts point to such a risk factor as the existence of “frail states” ( frail states , by analogy with failed states), which cannot cope with “well-organized, armed non-state actors” who pose an asymmetric threat for through the use of an extensive infrastructure, including information. The existence of such players poses a challenge to the modern world order no less than the traditional threat of military confrontation between two sovereign countries.

The Islamic State, banned in Russia, is the best example of the inability of governments to respond to security challenges, Davos experts say. Despite the fact that the group controls only part of the territory of Syria and Iraq, its emissaries managed to recruit volunteers from more than 100 countries, in part thanks to successful marketing on popular social networks. ISIS is exploiting feelings of resentment and frustration that are growing among young people, including in Western countries, and the spread of attacks from Ankara to Paris shows that this terrorist movement has acquired global proportions.

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The war in Syria will continue as long as “the countries that can put an end to it remain divided over what its endgame should be,” the study’s authors believe. ISIS draws its strength from the failure of leading regional and global players to put their own interests aside and develop a diplomatic solution to the crisis that they would prefer to maintain the current status quo. Until now, all diplomatic efforts have been ineffective, Davos experts conclude, confident that it will be impossible to defeat ISIS only by military means. “Aerial bombing without a coherent strategy aimed at achieving long-term stability is likely to widen the [power] vacuum in which terrorist groups thrive,” experts warn. If ISIS is defeated, some other terrorist structure may take its place if governments do not figure out how to reach those youth around the world who are prone to radicalism.

Russia is threatened by its economy

As an energy power and possessing the second largest nuclear arsenal in the world, Russia will continue to play an active role in the geopolitical world order, Davos experts say. “After the annexation of Crimea, there is no clear political solution to the current conflict in Eastern Ukraine on the horizon. European-American sanctions, combined with low oil prices, have damaged the Russian economy, but have not yet led to the expected turn in policy,” they write. The desire of major powers to contain Russia conflicts with the desire to cooperate in combating the threat of ISIS. Russia's future depends on a balance between modernization and reliance on raw material exports, and the fact that its current leadership is increasingly looking to the East in hopes of strengthening political-economic ties. Western countries that have cut back on defense investment and are preoccupied with domestic issues may find themselves strapped for resources and the desire to pursue their long-term strategic goals.

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However, Russia faces challenges that are not of a geopolitical nature. Moscow and its partners in Central Asia (in the study they are combined into one region) are 100 percent likely to face a budget deficit in 2016 due to falling oil prices and domestic demand. Even a comparative reduction in the price of goods from this region on the world market will not help replenish the state treasury. “With only average economic growth prospects, the region is likely to experience a surge in unemployment, which was ranked among the top five risks,” the study said.

Inflation, which governments will not be able to cope with, awaits Russia and its neighbors with an 86% probability, analysts predict. The depreciation of national currencies against the dollar, the reduction of state reserves, the already existing experience of hyperinflation in the 1990s, as well as the likely inability of the authorities to carry out deep structural and budgetary reforms necessary to maintain economic growth, are at work in this regard, Davos is confident.

Global risks in numbers

742 World Economic Forum members took part in the Global Risk Assessment survey

1°C was the global temperature increase by 2016 compared to the pre-industrial era (since the 1910s–1920s)

More than 60 million people will become internally displaced in 2016

$450 billion in losses will be caused by cyber crimes in 2016

At least 2.6 billion people already have difficulty accessing drinking water for at least a month out of the year.

Source: World Economic Forum report

Climate is a long-term challenge

In the next ten years, experts do not see any serious geopolitical threats; natural disasters, food shortages and general social instability will pose a much greater danger to humanity. Already this year, the global temperature increase compared to the pre-industrial era will reach 1 degree, the number of internally displaced persons will exceed 60 million people, which is equivalent to the 24th largest country in terms of population, and cyber crimes will bring losses of $450 billion, which is more than GDP than 170 countries, such as Austria.

Leading the list of threats is the shortage of drinking water, which is closely related to the second most popular crisis scenario—the failure of efforts both to combat climate change and to adapt to already changed conditions. Both of these crises will occur with a probability of more than 35%, according to those interviewed by the forum organizers. Already, at least 2.6 billion people experience difficulties with access to drinking water for at least a month during the year.

Thus, the Intergovernmental Panel on Climate Change is already predicting that the inadequacy of international efforts to curb warming will cause a future crisis in access to water and food resources, which will trigger the migration of millions of people from regions affected by drought and crop failure. About 70% of all water is spent on agriculture, in developing countries - up to 90%, Davos experts explain the connection between water shortages and food. Greenhouse gas emissions are also increasing the acidity of the world's oceans, making it difficult for small shellfish to grow, and the decline in these organisms will in turn create a hole in the food chain, which could threaten fisheries resources.

The deterioration of the situation with access to primary resources will be facilitated not only by objective natural changes, but also, for example, by managerial inefficiency. The report's authors cite Brazil as an example: the Amazon provides up to 12% of all drinking water in the world, while one of the largest cities in this country, Sao Paulo, suffers from its shortage. Rapid industrial development in several African and Asian countries will also require more and more water resources for energy. By 2030, the demand for water in Asian countries will increase by 70%, experts cite existing forecasts.

Davos experts warned Russia about the threat of hyperinflation