‘Perfect global storm’ developing warns World Economic Forum

Make text smaller Make text larger

  • Top five global risks by liklihood and impact, according to the WEF’s Global Risks 2013 report

    Top five global risks by liklihood and impact, according to the WEF’s Global Risks 2013 report

  • Economic and ecological risk: Fagile economies and extreme weather have cranked up the global risk dial, says the WEF Global Risks 2013 report.

    Economic and ecological risk: Fagile economies and extreme weather have cranked up the global risk dial, says the WEF Global Risks 2013 report.


A major systemic financial failure. Extreme weather patterns. A water supply crisis. Food shortages. Weapons of mass destruction. Stark income disparity. Cyber attacks. Those are just a few of the major risks to the global economy this year, according to a report released this week by the World Economic Forum.

With nations already coping with rising economic strains while staring in face of increasing environmental concerns, the WEF report says the world could soon find itself in the eye of “the perfect global storm”.

“Like a super storm, two major systems are on a collision course,” the report said. The interplay “between the stresses on the economic and environmental systems will present unprecedented challenges to global and national resilience.”

“The world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges,” warned the WEF, which each year hosts a massive get-together of world leaders, decision makers and activists at the Swiss mountain resort in Davos.

The foundation’s Global Risks 2013 report, based on a survey of more than 1,000 experts from industry government, academia and civil society, is of particular interest to the insurance industry and will be the subject of special sessions at that annual meeting scheduled for January 23-27.

The experts, who were asked to rate the top 50 global risks, suggested the risks most likely to materialise were growing wealth gaps, followed by unsustainable government debt and rising greenhouse gas emissions.

The risks they believed would have the greatest impact if they were to happen were major systematic financial failure, followed by a major water supply crisis and chronic fiscal imbalances.

The list of global risks “are essentially a health warning regarding our most critical systems,” said WEF managing director Lee Howell, who edited the report.

“National resilience to global risks needs to be a priority so that critical systems continue to function despite a major disturbance,” he added.

The report concluded that crises and austerity measures are severely testing the global economic system. At the same time, it stressed the world is facing rising global temperatures and more extreme weather like catastrophic fires in Australia, flooding in China and Hurricane Sandy, which slammed into the East Coast of the US in late October.

Following the extreme weather of 2012, respondents to the survey said rising greenhouse gases were the third most acute global risk, while failure of climate change adaptation was seen as the environmental risk with the most knock-on effects for the next decade.

“With the growing cost of events like Superstorm Sandy, huge threats to island nations and coastal communities, and no resolution to greenhouse gas emissions, the writing is on the wall,” said Axel Lehmann, chief risk officer at Zurich Insurance Group. “It is time to act.”

But the acute social and economic difficulties, the report says, are making countries around the world more reluctant to address more long-term threats like climate change, while natural disasters wreak serious havoc on many economies.

The top 50 global risks the WEF lists, several that are of most immediate concern to the insurance industry, in addition to catastrophes, include ageing populations, emerging health risks and so-called ‘digital wildfires’.

“While in many ways a force for good, the democratisation of information can also have volatile and unpredictable consequences,” the report cautioned.

One example sited was the September riots provoked by the crudely made anti-Islam film “The Innocence of Muslims”.

“As the media’s traditional role as gatekeeper is eroded,” the world needs to find ways to put out such blazes, the WEF said.

You must be registered or signed-in to post comment or to vote.

Published Jan 10, 2013 at 8:00 am (Updated Jan 9, 2013 at 7:32 pm)

‘Perfect global storm’ developing warns World Economic Forum

What you
Need to
Know
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon

Take Our Poll

  • Should public transport be listed as an essential service?
  • Yes
  • 80%
  • No
  • 18%
  • Don't know
  • 2%
  • Total Votes: 9750
  • Poll Archive

Today's Obituaries

View all Obituaries Place an obituary

Facebook Activity