Globalisation risks spotted in Z_punkt report
Despite the high level or risk attributed to interconnected financial systems, research has found that decision makers across 35 countries still place greater weight on risks associated with people’s living conditions, such as energy and commodity shortages, water and food crises, and socio-economic disparities.
That is one of the findings of the report, The Economic Risks of Globalisation, produced by Germany’s Z_punkt as part of the Global Choices series published by the Bertelsmann Foundation.
The research identified 11 risk areas, Z_punkt said, based on an understanding of micro and macroeconomic factors, actor specific risks and socio-economic circumstances. The definition of risk extended from what is defined as individual risk through to complex risk that could impact the global economic system. The lattter raises questions of oversight and the lack of ability to measure and control it.
“In our understanding, economic risks are risks whose causes lie in social, technological, economic, ecological and/or political developments and whose effects unfold in the global economy,” Z_punkt said.
“They must be observable as an economically relevant risk and treatable as an economic decision-making problem. Conversely, this also means that future risks whose harbingers are already visible and which develop insidiously frequently remain unrecognised, as decisions are often taken on the basis of continuity expectations.”
Through its analysis, Z_punkt identified 100 individual risks, grouped into the 11 risk areas, which were used as the basis for a survey of 70 decision makers across Africa, Asia, Europe, North and South America, and Oceania. These decision makers were interviewed to assess to what existent the identified risks could damage the global economy, and to identify possible solutions to mitigate these risks.
“The results show that there is a pressing need to find international solutions to perceived conflicts and to develop hard-hitting risk management. In particular, the political players are urged to reconsider their frequently incompatible positions so as to open up avenues to possible solutions,” Z_punkt said.
“Interestingly, traditional economic risk areas such as the collapse of financial markets were ascribed a high damage potential for the world economy, whereas the priority in terms of solutions was above all assigned to risk areas which have more of an impact on people’s living conditions, such as energy and commodity shortages, water and food crises and socio-economic disparities.”
Click here to read the full report (in Germany): Die oekonomischen Risiken der Globalisierung