Global risks for 2013 outlined by World Economic Forum
The World Economic Forum (WEF) has identified the top two risks to the global economy for the second year running are severe income disparity and chronic fiscal imbalances.
A major systemic financial failure was highlighted as the top risk in terms of impact, followed by water supply crises and continuing fiscal imbalances.
The third most likely global risk was a rise in greenhouse gas emissions, following a year of extreme weather, with Hurricane Sandy to flooding in China.
These top three risks have not moved from their positions in the WEF’s global risk report for 2012. This is not something to be concerned about, says David Cole, group chief risk officer of Swiss Re.
“The fact that some of the issues are similar to last year is not a negative,” says Cole. “A lot of these issues are structural in nature so they’re not going to go away as a result of one year’s efforts.”
However, Cole acknowledges that a new approach to how they are dealt with may be needed.
“It may well be that we need to think about the ways in which we can improve our effectiveness and facilitate better co-operation, particularly on those issues that really go beyond national borders.”
The report analysed three risk cases of concern globally: economic and environmental stress; problems associated with misinformation and social media; and epidemic disease, particularly involving antibiotic-resistant pathogens.
Economic weakness is affecting the world’s ability to tackle environmental challenges, according to the findings. Efforts to deal with the long-term effects of climate change are being affected by the limited public resources available.
Digital misinformation, meanwhile, was found to be at the centre of technological and geopolitical risks, which ranged from terrorism to cyberattacks and the failure of global governance. False information can be transferred around the globe rapidly, posing potential dangers. During Hurricane Sandy, for instance, a Twitter user falsely tweeted that the New York Stock Exchange was flooded by three feet of water, a statement subsequently reported by several TV news channels as fact. Operational Risk & Regulation highlighted reputational damage as one of the top 10 operational risks for 2013.
The report also warned against the dangers of complacency stemming from recent developments in human health. Risks associated with the rising resistance to antibiotics, increasing rates of chronic disease and the failure of the international Intellectual Property (IP) regime were highlighted in the report. Operational Risk & Regulation found epidemic disease to be one of the top 10 operational risks for the year ahead.
This article was first published on Risk