Industry News

WEF: There's Still Slowdown

Well, hold your horses! The economic crisis recovery may not be that soon after all, according to Global Risks 2010 report by World Economic Forum.

“The result of extensive input throughout the previous year by experts from business, academia, and the public sector, Global Risks 2010 highlights a number of slow-moving risks exacerbated by the financial crisis and global economic downturn, and stresses the continued need to further enhance global resilience to risks,” a statement in its official site said.

“Global governance gaps, an issue already to the fore in Global Risks 2009, continues to be at the nexus of global risks and the need for coordinated global action is increasingly urgent,” it noted.

The report added that fiscal crises and unemployment, underinvestment in infrastructure and chronic disease are identified as the pivotal areas of risk over the next years. At the same time, the Report warned that there are also a number of risks to keep on the radar, including the economic and social costs of transnational crime and corruption, biodiversity losses and risks to critical systems from cybervulnerability.

The report also suggested that the events of the past year have highlighted the systemic nature of global risks and the need to rethink how to manage and respond to them. Reverting to “business as usual” could have serious implications in the long term in several risk areas.

This reflected the premise at the core of the Global Risk Network’s work that global risks do not manifest themselves in isolation.

“After the shock to the global financial system and world economy in 2008, 2009 was a year of appraisal and adjustment,” the report pointed out. “The risk landscape that this report has explored over the past five editions has in fact changed remarkably little.

What has changed dramatically, it noted, is the level of recognition that global risks, like the world, are now tightly interconnected and shocks and vulnerabilities are truly global, even if impact and response can still differ at the “local” level.

“Global risks do not manifest themselves in isolation, neither geographically nor in time,” said Klaus Schwab, Founder and Executive Chairman of WEF in the opening statement in the report. “This fundamental premise of the Forum’s work on risks has become particularly pertinent since the onset of the financial crisis.

As Global Risks 2010 highlighted, he added, we are in a world with unprecedented levels of interconnectedness between all areas of risk.

“At this critical juncture, the need to redress imbalances, change incentives and improve global understanding and cooperation remains the top priority if future challenges are to be met with the right solutions and sufficient levels of preparedness,” Schwab noted.

“Global governance gaps already featured prominently in Global Risks 2009 and 2010 will be no different; they are part of a series of issues highlighted in this report, which due to their endemic and systemic nature can only be addressed by a fundamental overhaul of current values and behaviours”.

The effects of these risks will not only be felt over the coming year but will also influence decision-making well into the new decade. Inherent to these problems is the fact that they concern stakeholders from all spheres and regions across the world – the multistakeholder aspect of global risks, which renders it more difficult to manage them.

Full report can be found here http://www.weforum.org/pdf/globalrisk/globalrisks2010.pdf