Job crisis, climate change, infectious diseases biggest global risks in next decade: WEF
BusinessToday.In January 20, 2021
The World Economic Forum (WEF) has warned that infectious diseases, environmental risks, and economic troubles including livelihood and debt crises stand as the highest risks for the next ten years. In its 'The Global Risks Report 2021', the foundation states that the existing trends, like nationally focused agendas to stem economic losses, have been given fresh momentum by the COVID-19 crisis, and this could lead to risks including stagnation in advanced economies and lost potential in emerging and developing markets, among others.
The WEF, in its report, states that risks of job losses, a widening digital divide, disrupted social interactions, and abrupt shifts in markets could lead to dire consequences and lost opportunities for large parts of the global population. These consequences, which could manifest in the form of social unrest, political fragmentation, and geopolitical tensions, will shape the effectiveness of responses to other key threats of the next decade, climate change being paramount among them, along with cyberattacks and weapons of mass destruction, it points out.
"Among the highest likelihood risks of the next ten years are extreme weather, climate action failure, and human-led environmental damage; as well as digital power concentration, digital inequality and cybersecurity failure," the WEF report notes.
"Among the highest impact risks of the next decade, infectious diseases are in the top spot, followed by climate action failure and other environmental risks; as well as weapons of mass destruction, livelihood crises, debt crises, and IT infrastructure breakdown," it adds.
Out of these, employment and livelihood crises, widespread youth disillusionment, digital inequality, economic stagnation, human-made environmental damage, erosion of societal cohesion, and terrorist attacks are the most imminent threats to the world that could become critical in the next two years, the foundation says.
Terming the climate crisis as one of the most impactful risks, the WEF report cautions that although lockdowns worldwide caused global emissions to fall in the first half of 2020, evidence from the 2008-2009 financial crisis warns that emissions could bounce back.
"In the 5-10-year horizon, environmental risks such as biodiversity loss, natural resource crises, and climate action failure dominate; alongside weapons of mass destruction, adverse effects of technology and collapse of states or multilateral institutions," the WEF risk assessment says.
Talking about the economic impact of COVID-19, WEF notes in the report that the pandemic led to working hours equivalent to 495 million jobs being lost in the second quarter of 2020 alone, which in turn will immediately increase inequality. An uneven recovery poses a similar threat, it adds.
Economic risks can take 3-5 years before they fester into becoming global threats, the WEF says, listing asset bubbles, price instability, commodity shocks, and debt crises among such risks. This will be followed by geopolitical risks, including interstate relations and conflict, as well as resource geopolitisation, it further adds.
"Only 28 economies are expected to have grown in 2020. Nearly 60 per cent of respondents to the GRPS identified "infectious diseases" and "livelihood crises" as the top short-term threats to the world. Loss of lives and livelihoods will increase the risk of "social cohesion erosion", also a critical short-term threat identified in the GRPS," WEF says.
With COVID-19 driving digitisation in all walks of life, the Global Risk Report emphasises that digital inequality could become a critical short-term threat.
"A widening digital gap can worsen societal fractures and undermine prospects for an inclusive recovery. Progress towards digital inclusivity is threatened by growing digital dependency, rapidly accelerating automation, information suppression and manipulation, gaps in technology regulation, and gaps in technology skills and capabilities," WEF says.
Amid the economic, environmental, and employment challenges, the global community has largely neglected the risk of youth disillusionment which, WEF states, can become a critical threat to the world in the short-term. Hard-fought societal wins could be negated if the current generation lacks adequate pathways to future opportunities, and loses faith in today's economic and political institutions, the report warns.
"Existing trends have been given fresh momentum by the crisis... The business risks emanating from these trends have been amplified by the crisis and include stagnation in advanced economies and lost potential in emerging and developing markets, the collapse of small businesses, widening the gaps between major and minor companies and reducing market dynamism, and exacerbation of inequality; making it harder to achieve long-term sustainable development," the report notes.
"The response to COVID-19 offers four governance opportunities to strengthen the overall resilience of countries, businesses and the international community: (1) formulating analytical frameworks that take a holistic and systems-based view of risk impacts; (2) investing in high-profile "risk champions" to encourage national leadership and international co-operation; (3) improving risk communications and combating misinformation; and (4) exploring new forms of public-private partnership on risk preparedness," it further adds.