。
There is concern that the citizens currently living there might flee.
Literal
Now-present citizens [subject-が] flee-out [called-という] situation [subject-が] is-feared.
News-analytical register. 危惧される is the passive of 危惧する ('to fear, be concerned about') — the passive is used as an impersonal evidential: 'X is [something] that is feared,' 'there is concern that X.' Common in news and analytical writing where the speaker doesn't want to explicitly mark themselves as the worrier. 今いる市民 ('the citizens who are now [here/there]') is a relative clause with 今 ('now') modifying いる. 逃げ出す is a compound verb: 逃げる ('flee') + 出す ('out, begin') = 'flee out,' 'break out in escape.' ~という事態 ('the situation of X,' 'the scenario that X') nominalizes the preceding verb as a noun-phrase called a '事態.'