WEF Warns of Escalating Conflict and Geopolitical Instability

Every year, just ahead of the World Economic Forum’s annual meeting in Davos, the WEF releases its Global Risks Report (GRR), a document that typically catalogues familiar, almost predictable threats: inequality, debt, fiscal excesses.

Important, yes, but often sterile.

Not anymore.

For the second year in a row, the report signals a dramatic shift. In the 2026 edition, nearly one-third of experts surveyed identify geoeconomic confrontation (18%) and state-based armed conflict (14%) as the most likely triggers of a global crisis. In plain terms, trade is shrinking and countries are edging closer to open conflict.

These are no longer background risks. They now rank #1 and #5 among short-term global threats over the next two years.

If anything, the report began ageing the moment it was released.

Barely a week later, US President Donald Trump’s threat to take over Greenland by force triggered a sharp response from the European Union, even as European leaders privately acknowledged the asymmetry such a conflict would entail. Trump did not stop there. He also attacked the 2025 UK–Mauritius agreement returning the Chagos Islands—except Diego Garcia, which will remain under a 99-year British lease while effectively hosting a US military base.

Though the US had earlier accepted the handover plan, Trump now dismissed it as an act of “great stupidity.” The irony, of course, is that Diego Garcia itself is not being handed over at all.

The age of empires redux?

What the WEF report does not explicitly name—but now looms large—is a far more dangerous risk: the erosion of the global norm against territorial acquisition by force.

That norm emerged after World War II and is enshrined in Article 2 of the UN Charter, which prohibits the use of force against the territorial integrity of member states. If the United States were to seize Greenland by coercion or force, that prohibition would be fatally weakened.

The consequences would be profound: a return to a free-for-all world where powerful nations redraw borders at will.

Trump’s arguments—that Greenland is vital for US national security—have been dismissed by governments that still uphold territorial integrity. Denmark, which retains sovereignty over Greenland, has repeatedly said the US is welcome to establish bases or mine critical minerals there. What it rejects is ownership.

What makes the moment especially destabilising is that the United States itself once underwrote this order, even if imperfectly. Today, it appears willing to abandon it.

Why now?

One explanation is strategic anxiety.

The US increasingly fears China’s rise and lacks a convincing response. Militarily, China is now a near-peer. Economically, while the US retains an edge, China’s industrial capacity is unmatched. From electric vehicles and industrial robots to critical minerals and pharmaceutical ingredients, China can supply global demand at costs the West cannot match.

Trump’s response is blunt and regressive: a return to the idea that territory equals power.

This logic powered empires from Rome to the 20th century, when land and conquest were engines of wealth. It lost relevance with modern technologies and trade-driven growth—what economists call “increasing returns technologies,” from mobile communications to AI-enabled systems.

That this thinking is resurfacing at the peak of global technological sophistication is jarring. That it is being championed by the leader of the world’s most powerful nation is alarming.

That, more than anything else, is the world’s most pressing risk today.