Global leaders, when assessing risk, have a mostly negative outlook for the next two years that is expected to worsen over a decade, according to the World Economic Forum’s Global Risks Perception Survey (GRPS) that was released yesterday.
Surveyed in September 2023, the majority of respondents (54%) anticipated some instability and a moderate risk of global catastrophes, while another 30% expect even more turbulent conditions than currently.
The outlook was markedly more negative over the 10-year time horizon, with nearly two-thirds of respondents expecting a stormy or turbulent outlook, the survey, which is the WEF’s premier source of original global risks data, showed.
The GRPS carried insights from 1 490 experts across academia, business, government, the international community and civil society.
Two-thirds of respondents ranked extreme weather as the top risk most likely to present a material crisis on a global scale in 2024, with the warming phase of the El Niño-Southern Oscillation cycle projected to intensify and persist until May.
Extreme weather was also seen as the second most severe risk over a two-year time frame and nearly all environmental risks featured among the top 10 over the longer term.
However, respondents disagreed about the urgency of environmental risks, in particular biodiversity loss and ecosystem collapse, and critical change to Earth systems.
Younger respondents tended to rank these risks more highly over the two-year period compared to older groups. The private sector highlighted these risks as top concerns over the longer term, while civil society or government respondents prioritised these risks over shorter time frames.
The most severe global risk anticipated over two years was the leveraging of misinformation and disinformation to widen societal and political divides.
Close to three billion people were expected to head to elections across several economies – including Bangladesh, India, Indonesia, Mexico, Pakistan, the UK and US – over two years, and the use of misinformation and disinformation, and tools to disseminate it, might undermine the legitimacy of newly elected governments.
Beyond elections, perceptions of reality were likely to also become more polarised, infiltrating public discourse on issues ranging from public health to social justice.
Societal polarisation featured among the top three risks over the current and two-year time horizons, and ranked ninth over the longer term.
The economic risks of inflation (7) and economic downturn (9) were new entrants to the top 10 risk rankings over the two-year period.
Although a “softer landing” appeared to be the prevailing view, the near-term outlook remained “highly uncertain.”
There were many supply-side price pressures looming over the next two years, from El Niño to the potential escalation of live conflicts.
And if interest rates remained relatively high for longer, small- and medium-sized enterprises and heavily indebted countries would be exposed to debt distress.
“Economic uncertainty will weigh heavily across most markets, but capital will be the costliest for the most vulnerable countries,” the WEF survey said.
Climate-vulnerable or conflict-prone countries were likely to be “increasingly locked out” of much-needed digital and physical infrastructure, trade and green investments and related economic opportunities.
“As the adaptive capacities of these fragile states erodes further, related societal and environmental impacts are amplified,” the survey’s authors said.
“If commercial incentives and geopolitical imperatives, rather than public interest, remain the primary drivers of the development of artificial intelligence (AI) and other frontier technologies, the digital gap between high- and low-income countries will drive a stark disparity in the distribution of related benefits – and risks.
“Vulnerable countries and communities will be left further behind, digitally isolated from turbocharged AI breakthroughs impacting economic productivity, finance, climate, education and healthcare, as well as related job creation,” the report said.
Interstate armed conflict was also a new entrant into the top risk rankings over the two-year horizon.
There were already several frozen conflicts at risk of heating up in the near term, due to spillover threats or growing state fragility.
BUSINESS REPORT