World Economic Forum have just published their 18th edition of the Global Risks Report.
The 2023 version does not hold back on frightening predictions:
‘A low-growth, low-investment and low-cooperation era further undermines resilience and the ability to manage future shocks.’
Over two years
The cost-of-living crisis is ranked as the most severe global risk over the next two years, which greatly exacerbates societal vulnerabilities.
The report states that ‘the economic aftereffects of COVID-19 and the war in Ukraine have ushered in skyrocketing inflation’ but goes on to quote IMF’s most recent projections that anticipate a decline in global inflation from almost 9% in 2022 to 6.5% this year and 4.1% in 2024.[1]
The cost-of-living crisis doesn’t feature in the risks over 10 years and the ‘risk of geopolitical confrontation’ goes from being in the top three in the short-term to a much lower position in the long term – a prediction that would give hope to many.
In the meantime, however, the most vulnerable parts of society are facing rising poverty, hunger and violence. Economic pressures also erode gains made by middle-earners, spurring discontent and further political polarisation.
Over 10 years
‘Climate and environmental risks are the core focus of global risks perceptions over the next decade – and are the risks for which we are seen to be the least prepared.’
The report repeatedly states that biodiversity is undervalued in our economies, to our peril.
Biodiversity within and between ecosystems is already declining faster than at any other point during human history.[2]
Why does it matter?
Undeniably, ‘reliable and cheap access to the most basic of necessities – food, water and energy – underpins the critical functioning of societies.’
All three are dependent upon a natural world.
The number of people facing acute food insecurity has already been increasing. Global food consumption is projected to increase by 1.4% annually over the next decade (not spread equally across the world of course), versus a lower 1.1% per annum increase in production.[3]
Water faces a much greater gap between demand and supply. Even renewable energy relies on the supply of finite metals and minerals, the supply of which is riddled with problems and risks.
The report goes on to explain other long-term risks, including widespread cybercrime and large-scale involuntary migration.
‘The resulting new economic era may be one of growing divergence between rich and poor countries and the first rollback in human development in decades.’
Conclusion
Although the picture might look desperate, the Global Risk Report is not just here to scare us. It’s certainly not here to make us despondent. Its purpose is to prepare us for what might come, and perhaps if we take some of the proposed actions ,like protecting biodiversity, we might avoid the worst of it.
Read the full report here: https://www.weforum.org/reports/global-risks-report-2023/
[1] IMF, World Economic Outlook Report October 2022: Countering the cost-of-living crisis, October 2022, 2022, https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/world-economic-outlookoctober-2022.
[2] Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), The global assessment report on biodiversity and ecosystem services, 2019, https://ipbes.net/sites/default/ files/2020-02/ipbes_global_assessment_report_summary_for_policymakers_en.pdf.
[3] Organisation for Economic Co-operation and Development (OECD) and Food and Agricultural Organization of the United Nations (FAO), OECD-FAO Agricultural Outlook 2022-2031, OECD and FAO, 29 June 2022