The world is more at risk as persistent economic weakness saps the ability to tackle environmental challenges, according to the World Economic Forum’s (WEF)
‘Global Risks 2013’
The report highlights wealth gaps (severe income disparity) followed by unsustainable government debt (chronic fiscal imbalances) as the top two most prevalent risks, in a survey of over 1,000 experts and industry leaders, which reflects a slightly more pessimistic outlook overall for the coming 10 years.
Following a year scarred by extreme weather, from hurricane Sandy to flooding in China, respondents rated rising greenhouse gas emissions as the third most likely global risk overall, while the failure of climate change adaptation is seen as the environmental risk with the most knock-on effects for the next decade.
“These global risks are essentially a health warning regarding our most critical systems,” warned Lee Howell, editor of the report and WEF managing director. “National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance.”
Axel Lehmann, chief risk officer (CRO) for Zurich Insurance Group, added: “With the growing cost of events like superstorm Sandy, huge threats to island nations and coastal communities, and no resolution to greenhouse gas emissions, the writing is on the wall. It is time to act.”
The report analyses three major risk cases of concern globally:
Health and Hubris:
Huge strides forward in health have left the world dangerously complacent. Rising resistance to antibiotics could push overburdened health systems to the brink, while a hyper-connected world allows pandemics to spread. This risk case draws on the connections between antibiotic resistance, chronic disease and the failure of the international intellectual property regime, recommending more international collaboration and different funding models.
Economy and Environment under Stress:
Urgent socioeconomic risks are derailing efforts to tackle climate change challenges. Inherent cognitive biases make the international community reluctant to deal with such a long-term threat, despite recent extreme weather events. At a time when structural changes are happening in the economy and environment, this case focuses on new approaches to make the strategic investments needed to fend off worst-case scenarios for both systems.
From the printing press to the Internet, it has always been hard to predict how new technologies might shape society. While in many ways a force for good, the democratisation of information can also have volatile and unpredictable consequences, as reflected in the riots provoked by an anti-Islam film on YouTube. As the media’s traditional role as gatekeeper is eroded, the report considers how connectivity enables ‘digital wildfires’ to spread, and asks what can be done to put them out.
The report also highlights ‘X Factors’, or emerging concerns which warrant more research. These include the rogue deployment of geo-engineering and brain-altering technologies. The three risk cases and X Factors will be the focus of special sessions at the WEF annual meeting 2013 in Davos-Klosters, Switzerland, taking place on 23-27 January under the theme ‘Resilient Dynamism’.
Forecasts for 2016-2020 place Africa as the second fastest growing region in the world (at a compound annual growth rate (CAGR) of 4.3%), just below Emerging Asia.
Sentiment in the financial services sector deteriorated in the three months to September, as firms digested the challenges of lower interest rates and the uncertainty caused by the vote to leave the European Union (EU), according to the latest CBI/PwC Financial Services Survey.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
The proposals of both US presidential candidates could shake up operating conditions in several sectors, reports the credit ratings agency.