Risks within the societal category have dominated research into the top 10 threats the world believes itwill face in the next two years, according to the 2025 World Economic Forum (WEF) “Global Risks Perception Survey”. These risks include societal polarisation (fourth), inequality and involuntary migration (seventh and eighth) and in 10th position, erosion of human rights.
Many may argue that WEF predictions appear to have caught up with humanity faster than what the world could prepare for, amid debates over diversity, equality and inclusion which peaked in the week since US President Donald Trump announced some constitutional and policy changes.
The survey provides a risk radar of eminent threats facing humanity and is released every year before the WEF gathering in Davos. Social risks were certainly fewer on the 2020 radar.
The rise in social risks could be indirectly attributed to Covid-19, which threw the world into recession.
The Covid-19 crisis highlighted the vulnerabilities that come with country co-dependencies, which can lead to a period of deglobalisation that can force states to find ways to provide internally or regionally for needs previously met by imports from afar. The Russian-Ukraine conflict only worsened these issues, creating desperation over essential energy and oil supplies, among other supply chain issues.
Such dynamics can move us into states of self-preservation, where we take on a “me-first” approach. And we also can’t deny the power of a domino effect when such a stance is taken by a country which inevitably influences how communities and tribes relate and then, finally, translating into how we relate in our households. Leading to social tensions and eventually to instability.
Social instability can be detrimental to the economy as well as to society. Economies can be immobilised when trade paths are blocked, and violence overwhelms state capacity, from health to safety and security. The aftermath of the Mozambican elections is evidence. Such implications could be crippling when experienced continentally and, worse, globally.
The recent executive orders announced by Trump have been somewhat polarising as we’ve seen civil rights activists raise concerns that the pronouncements could be seen as an endorsement of inequality and involuntary migration, which could lead to an erosion of human rights, not only in the US but globally.
Improvements may not have been reached without BEE and affirmative action. Thus I would argue that it is in the interest of world leaders to mitigate societal risk
The view from Trump is that deporting foreigners is likely to create jobs, and ignoring certain sexual identities will surely provide much administrative simplicity and even cost efficiency. Unfortunately, we live in a complex world and the cost of the short-term gains that may come from such decisions might be higher than what is now being considered.
Today, an estimated 40% of the global workforce is female, a significant contribution to economic productivity, innovation and intellectual capacity. In South Africa, improved racial representation in every field and industry has unlocked opportunities that reduce the state welfare burden while responding to the limited provision of goods and services in previously disadvantaged groups. These improvements may not have been reached without BEE and affirmative action. Thus I would argue that it is in the interest of world leaders to mitigate societal risk.
Davos presents a unique opportunity to see both political and business leaders united in a collective discussion around the societal problems we see in the world. In fact, there appears to be a growing expectation for corporates and business leaders to actively take on responsibilities that would have otherwise belonged to the state. In South Africa this has inspired the CEO pledge and Operation Vulindlela in which the public and private sectors work hand in hand to avoid a socioeconomic downward spiral.
It has often been argued that the South African constitution is too ambitious for the economic power it holds. How often has this country found itself facing great challenges because of a lauded constitution that compels us to protect human rights, sometimes beyond the state's capacity to do so? But we are reminded that this constitution represents an ideal that many died for and sets a high standard for the country and its future.
• Makhoba is an economist and lead specialist of research and analytics at Liberty, the insurance and asset management arm of Standard Bank
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