In a risk report, backed by the World Economic Forum, 1,200 experts lay out their fears about the uncertainty that dominates our times.
By Beatrice Parrino
© FABRICE COFFRINI / AFP
Published on
NOTour decision-makers are worried. Inflation, cost-of-living crises, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical clashes and the specter of nuclear war, the issues of uncertainty hanging over the planet are indeed numerous in this early 2023.
This is what emerges from the latest report on global risks published this Wednesday, January 11 – work supported by the World Economic Forum (Davos) – and carried out in collaboration with the companies Marsh McLennan, SK Group and Zurich Insurance Group, as well as Oxford Martin School, National University of Singapore and Wharton Risk Management and Decision Processes Center. As the report points out, “few business leaders and public policymakers of this generation have ever experienced” these kinds of risks.
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At the top of the major short-term concerns of the 1,200 experts surveyed is the cost of living. The fault, of course, with the effects of Covid-19 and the war in Ukraine. This situation has led to runaway inflation, an adjustment of monetary policies, a slowdown in investment and weak growth. The downside risks to this outlook are not neutral. Respondents fear that the prolonged war in Ukraine will create additional strains on supply chains. In addition, the choices of central banks are very scrutinized: their decisions could result in liquidity shocks, causing an economic slowdown and over-indebtedness at the global level. This framework could result in increasing poverty and social and political repercussions.
Polycrises
“Respondents are generally more optimistic in the long term. Just over half of respondents predict a negative outlook and almost one in five predict limited instability with relative (and potentially renewed) stability over the next ten years,” the report’s authors point out.
In the longer term, decision-makers say in this report that they are concerned about the failure of climate measures, fearing the multiplication of environmental and social crises, aggravated by underlying geopolitical and economic trends. “Biodiversity loss and ecosystem collapse” is seen as one of the most deteriorating global risks in the next decade.
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“As instability increases in several sectors, the risk of polycrises is accelerating”, underlines the report. Understand: one crisis can cause many others. A suggested example? The erosion of geopolitical cooperation would have domino effects on the entire medium-term global risk landscape, including contributing to environmental, geopolitical and socio-economic risks related to the supply and demand of natural resources.
These themes will be at the rendezvous of the Davos summit, organized by the World Economic Forum, which is being held from September 16 to 20.