World Economic Forum warns of growing array of global risks

LONDON -- The global economy faces a worrying array of risks, from natural disasters related to climate change to the rise of the Islamic State group and hacking, according to experts polled by the World Economic Forum, which organizes the gathering of political and business leaders in the Swiss resort of Davos.

See Full Article

In a bleak assessment published Thursday ahead of next week's discussions in Davos, the WEF said its survey found that a failure to deal with and prepare for climate change is potentially the most costly risk over the next ten years.

That's the first time that an environmental concern has topped the list of global risks in the 11 years the organization has carried out the survey.

"Climate change is exacerbating more risks than ever before in terms of water crises, food shortages, constrained economic growth, weaker social cohesion and increased security risks," said Cecilia Reyes, chief risk officer at Zurich Insurance, which helped develop the annual Global Risks Report.

The survey of almost 750 experts and decision-makers from a variety of fields, locations and ages was conducted in the autumn of 2015 before the global warming targets agreed on in Paris in December.

John Drzik, president of global risk at insurance broker Marsh, which also helped develop the report, conceded that climate change might have been lower down the list -- but still high given 2015 was the hottest year on record -- if the poll had been conducted after the Paris Agreement. The deal saw nearly 200 countries agree to keep global temperatures from rising another degree Celsius (1.8 Fahrenheit) between now and 2100.

Drzik said the 2016 report has the "broadest array" of risks facing the global economy in the survey's 11-year history. However, he said the aftermath of the 2008 financial crisis, which saw the collapse of numerous banks around the world and the deepest global recession since World War II, may have seen leaders more concerned about the future.

"Events such as Europe's refugee crisis and terrorist attacks have raised global political instability to its highest level since the Cold War," Drzik said.

In its survey, the WEF found that large-scale involuntary migration -- not just in Europe but within regions, including the Middle East -- was the most likely risk, as opposed to potential impact, to the stability of the global economy.

With 60 million involuntary migrants last year -- almost 50 per cent more than in 1940, when World War II really took hold -- there is significant potential for social unrest, Drzik said. He noted that the refugee crisis that gathered pace last year is already leading to calls for changes to the freedom of movement of labour within the 28-country European Union and that could hurt trade and employment.

Purely economic factors were high on the list of concerns, too, including the scale of the slowdown in China, the world's number 2 economy, mass unemployment in many countries, and the impact of low oil prices on the budgets of oil exporters.

Drzik said the confluence of worrying economic signals, which has seen markets suffer sharp losses so far in 2016 is "creating a very difficult environment to navigate for business."

A major concern identified by all involved in the report is the interconnectedness of all the risks.

"We know climate change is exacerbating other risks such as migration and security, but these are by no means the only interconnections that are rapidly evolving to impact societies, often in unpredictable ways," said Margareta Drzeniek-Hanouz, the WEF's head of global competitiveness and risks.



Advertisements

Latest Economic News

  • Takata Corp. files for bankruptcy in Japan and U.S. following air bag recalls

    Economic Toronto Sun
    Japanese air bag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators. The company announced the expected action Monday morning Tokyo time. Source
  • From condoms to caskets: merchandise marks Canada's 150th birthday

    Economic CBC News
    It's been said that Canadians are not brash about their patriotism, but you wouldn't know it from the variety of merchandise, big and small, being snapped up in advance of Canada's 150th birthday July 1. From T-shirts to hats, flags to flasks, condoms to caskets, goods adorned with celebratory logos are popping up faster than you can say sesquicentennial. Source
  • Canadian lumber producers brace for second round of softwood lumber duties

    Economic CTV News
    MONTREAL -- Canada's softwood lumber industry is bracing for a second wave of U.S. duties expected to come Monday that could put further pressure on producers, particularly smaller ones, to cut jobs. The U.S. Source
  • Warning labels might be coming to cheese: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Here's the consumer news you need to know from CBC-TV's Marketplace. Get this in your inbox every Friday. Sign up here. Fake drugs American prosecutors accuse CanadaDrugs.com and its CEO Kris Thorkelson of selling unapproved and counterfeit cancer drugs to U.S. Source
  • Debt, protectionism could drag down improving global economy

    Economic CTV News
    FRANKFURT -- The global economy has picked up and prospects for the next few months are the best in a long time. But the recovery is maturing and faces risks from populist rejection of free trade and from high debt that could burden consumers and companies as interest rates rise. Source
  • Air bag maker Takata bankruptcy expected Monday

    Economic CTV News
    DETROIT -- Drowning in a sea of lawsuits and recall costs, Japanese air bag maker Takata Corp. is expected to seek bankruptcy protection in Tokyo and the United States early Monday. Takata was done in by defective air bag inflators that can explode with too much force, spewing out shrapnel. Source
  • Air bag maker Takata files for bankruptcy in Japan, U.S.

    Economic CTV News
    Japanese air bag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators. The company announced the expected action Monday morning Tokyo time. Source
  • How Sears' troubles could hasten radical change in Canada's malls

    Economic CBC News
    Sears' plan to shut down 59 of its locations is grim news for the chain's landlords across Canada. Could it also spell doom for the nation's neighbourhood malls? Anchor tenants — typically big department stores — have always been a critical component of mall design. Source
  • Proposed rules for CRA amnesty program could expose more tax-cheat advisers

    Economic CBC News
    The Canada Revenue Agency is tightening its amnesty program for tax cheats, including a proposed rule that could expose more of the shady advisers who set up dodgy tax schemes to help clients hide their money. Source
  • Italian PM 'guarantees' savers' accounts in 2 troubled banks

    Economic CTV News
    ROME -- Italy's premier says holders of accounts in two troubled Italian banks will have their savings guaranteed despite insolvency proceedings. Premier Paolo Gentiloni was referring to Veneto Banca and Banca Popolare di Vicenza, each struggling with unpaid loans. Source