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Global elite anticipate year of heightened risk

Political and economic confrontations between major powers are expected to worsen in 2018, with the global elite preparing for another year of intensifying risks.

A survey of nearly 1,000 business leaders, politicians and academics by the World Economic Forum (WEF) also reveals there is increasing concern over the possibility of new wars breaking out this year. Cyberattacks and environmental threats are the top two risks identified in terms of likelihood, while weapons of mass destruction and extreme weather events are thought to have the greatest potential impact. The findings were published today in the WEF’s Global Risks Report 2018, less than a week before world leaders descend on the Swiss alpine resort of Davos to shape the global economic and political agenda.

The Global Risks Report is compiled by surveying a thousand experts from a variety of government and non-governmental organizations. Ninety-three percent of them expect relations between major world powers to deteriorate further in 2018, while 79 percent said there was an increased risk of military conflict between state powers, particularly on the Korean Peninsula and in the Middle East. As in 2017, the environment dominates the list of risks, with extreme weather, ecosystem collapse, man-made environmental disasters, and failure of climate-change mitigation and adaptation, all ranked highly.

Speaking at the report’s launch, Marsh president of global risk and digital, John Drzik, said: “Geopolitical friction is contributing to a surge in the scale and sophistication of cyberattacks. “While cyber risk management is improving, business and government need to invest far more in resilience to prevent the same bulging ‘protection gap’ between economic and insured losses that we see for natural catastrophes.”

The major concerns spotlighted in the report are environmentalism, including climate change, and the high degree of digital interconnectedness that leaves the world vulnerable to ransomware, denial of service attacks, Internet disinformation campaigns, and other forms of cyber mischief. The Internet is one of the most powerful tools mankind has ever developed, but it has also become a weapon of mass destruction. We have only had a few small tastes of what all-out cyberwar would be like, but it is enough to predict that global commerce would suffer incredible damage, quite possibly sufficient to trigger a doomsday cascade in the other fragile economic systems the WEF is concerned about.

A theme repeated throughout the risk report is dismay at the rise of nationalism and the corresponding decline of “multilateral rules-based approaches.” “Charismatic strongman politics is on the rise across the world,” the report warns. “In addition to the ‘America First’ platform of President Trump, variations on this theme can be seen in numerous countries from China to Japan, Russia, Turkey, Saudi Arabia, the Philippines, and elsewhere.”

Economic threats feature less prominently after the IMF raised its global GDP projections to 3.6% for this year, with WEF founder, Klaus Schwab, saying this presents an opportunity to strengthen the world’s institutions. “We must take seriously the risk of a global systems breakdown – together we have the resources and new scientific and technological knowledge to prevent this,” he said. “Above all, the challenge is to find the will and momentum to work together for a shared future.”

This ‘shared future’ concept was a reoccurring theme at the report's launch, with WEF managing board member, Richard Samans, revealing that an ‘inclusive development index’ will be proposed in Davos next week, as will discussions regarding the reformation of market capitalism.


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