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Elnur Enveroglu

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The World Economic Forum’s Global Risks Report 2026, based on insights from more than 11,000 experts across 116 economies, paints a stark picture of an international system entering a period of heightened fragmentation. For the next two years, respondents identify geoeconomic confrontation as the most severe global risk, followed closely by misinformation and disinformation, and the deepening polarisation of societies. Together, these trends reflect a world in which economic policy, information flows, and domestic politics are increasingly weaponised.

Rather than operating in isolation, these risks are mutually reinforcing. Trade restrictions, sanctions and economic decoupling exacerbate domestic economic stress; misinformation amplifies social divisions; and polarisation, in turn, weakens institutional resilience. For regions already shaped by geopolitical tension, such as the South Caucasus, this convergence of risks has particularly profound implications.

In the 2026 report, Azerbaijan’s risk profile is dominated by cybersecurity, environmental degradation and inflationary pressures. The emphasis on cybersecurity reflects the growing exposure of state institutions, financial systems and critical infrastructure to digital threats. As public services, energy systems and transport networks become more technologically integrated, the potential impact of cyber incidents increases exponentially.

Environmental risks also feature prominently. Air, water and soil pollution are identified not merely as ecological concerns but as long-term socio-economic stressors. Environmental degradation can undermine public health, constrain agricultural productivity and generate rising fiscal costs. In a region where climate adaptation is uneven, these pressures may accumulate gradually but prove structurally significant over time.

Inflation remains another key concern. Global volatility in energy, food and transport markets continues to affect price stability, with direct consequences for household purchasing power and social cohesion. While Azerbaijan has demonstrated a degree of macroeconomic resilience, persistent inflationary pressure risks eroding real incomes and amplifying social vulnerability.

Notably, the report also highlights non-weather-related natural disasters, drawing attention to industrial and technological risks. This points to the importance of regulatory oversight, infrastructure safety and emergency preparedness in a rapidly modernising economy.

Take Armenia, the country’s risk landscape, assessed in partnership with the CIVITTA Institution Research Centre, is marked by political fragility and socio-economic vulnerability. One of the most acute risks identified is the insufficiency of public services and social protection mechanisms, including education, infrastructure and pension provision. Weak service delivery directly affects public trust and intensifies social dissatisfaction.

The risk of state-based armed conflict is also ranked highly. This includes not only interstate conflict, but also proxy wars, internal unrest and politically motivated violence. Such risks are closely linked to Armenia’s internal political dynamics, where narratives of military defeat continue to shape public discourse.

The report underscores a deep legitimacy crisis between government and opposition forces. Periodic street protests, at times escalating into radical confrontation, reflect unresolved tensions within the political system. Misinformation and disinformation further compound these divisions, blurring accountability and distorting public debate.

Economic risks are equally pronounced. Limited employment opportunities, persistent unemployment and the threat of economic stagnation or recession constrain long-term development prospects. Of particular concern is the ongoing brain drain, as young and skilled citizens leave the country in search of stability and opportunity abroad. This trend not only weakens Armenia’s labour market but also undermines its future growth potential.

As regards Georgia’s risk profile, it highlights a different but equally complex set of challenges. Cybersecurity weaknesses and the risk of cyber warfare feature prominently, reflecting the country’s exposure to regional and global information security threats. As Georgia continues its digital transformation, the gap between technological adoption and cyber resilience remains a critical concern.

Economic opportunity and employment also rank among the top risks. Limited job creation and structural constraints in the economy increase vulnerability to external shocks and contribute to social dissatisfaction. These economic pressures intersect with environmental risks, particularly the loss of biodiversity and the potential collapse of ecosystems.

Such ecological degradation carries economic implications, especially for sectors such as agriculture and tourism, which are central to Georgia’s development model. The report also flags the negative consequences of artificial intelligence technologies, suggesting that unregulated or uneven technological adoption could exacerbate inequality and social disruption.

Taken together, the Global Risks Report 2026 underscores that the principal threats facing the South Caucasus are no longer confined to traditional security concerns. Instead, the region confronts a dense web of interconnected risks, where cyber threats, misinformation, environmental stress and socio-economic pressures reinforce one another.

Geoeconomic confrontation at the global level amplifies these regional vulnerabilities. Sanctions regimes, disrupted trade flows, and strategic competition among major powers constrain policy space for smaller states, while information warfare erodes trust both domestically and internationally.

The decision to circulate the report at the Davos Economic Forum signals that these risks are not peripheral to the global agenda. On the contrary, they illustrate how regional instability, digital insecurity and social fragmentation can spill over into broader international challenges.

For the South Caucasus, the message is clear: managing risk in the coming decade will require more than reactive crisis management. It will demand institutional resilience, credible governance, regional dialogue and long-term investment in human capital and environmental sustainability. In an increasingly fragmented world, the ability of states to navigate these intersecting pressures may prove as decisive as their traditional measures of power.