The World Economic Forum (WEF) has identified infectious diseases, livelihood crises and extreme weather events as the risks that are most likely to become critical threats to the world in the coming two years,
These are likely to be followed by knock-on economic and technological risks over the next three to five years — including asset bubbles, IT infrastructure breakdowns and debt crisis — according to its 2021 Global Risks Report, which was released on Tuesday.
The publication comes as the globe remains in the grip of the Covid-19 pandemic that has forced many countries to reinstitute harder lockdowns in the face of resurgent waves of the disease.
Though it has warned of the threat of a global pandemic in its risks report for the past 15 years, the world is now dealing with the effects of failing to prepare for those risks. This highlights the need for countries to wake up to long-term threats, the WEF said.
“In 2020, the risk of a global pandemic became reality, something this report has been highlighting since 2006. We know how difficult it is for governments, business and other stakeholders to address such long-term risks, but the lesson here is for all of us to recognise that ignoring them doesn’t make them less likely to happen,” Saadia Zahidi, the MD of the WEF, said in a statement.
“As governments, businesses and societies begin to emerge from the pandemic, they must now urgently shape new economic and social systems that improve our collective resilience and capacity to respond to shocks while reducing inequality, improving health and protecting the planet,” Zahidi said.
The report was released ahead of a series of digitally convened dialogues — under the rubric of the Davos Agenda — which take place next week. The WEF’s annual meeting traditionally held in Davos, Switzerland at this time of year, has been rescheduled to take place in Singapore, in May.
Though the effects of Covid-19 are profound, threats associated with climate change dominated the survey, making up four of the top seven risks deemed most likely to materialise. Climate led concerns such as human environmental damage and biodiversity loss also made up four of the top seven risks deemed to have the largest effect.
“The biggest long-term risk remains a failure to act on climate change. There is no vaccine against climate risks, so post-pandemic recovery plans must focus on growth aligning with sustainability agendas to build back better,” Zurich Insurance group chief risk officer Peter Giger said. The company is a partner in the production of the report.
But the consequences of the pandemic, which threaten to scale back years of progress in reducing poverty and inequality and to weaken social cohesion and global co-operation, will shape the effectiveness of the world’s responses to these environmental dangers, as well as other notable threats, such as cyberattacks and weapons of mass destruction.
“The pandemic was a stress-test that shook the foundations of economies and societies worldwide. Rebuilding resilience to systemic shocks will require significant funding, international co-operation and greater social cohesion,” said Lee Hyung-hee, president of the social Value Committee, at SK Group, which also contributed to the report.
The WEF warned that if lessons from the current crisis just inform decision-makers on how to prepare for the next pandemic, instead of improve risk “capabilities and culture”, the globe will end up “planning for the last crisis rather than anticipating the next”.
But the Covid-19 crisis offered opportunities to strengthen the resilience of countries, businesses and international communities, including through formulating analytical frameworks that take a holistic and systems-based view of risk affects, and exploring new forms of public-private partnership on risk preparedness.
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