Global risks 2013

The World Economic Forum produces an Insight Report "Global Risks 2013" which offers a comprehensive overview of global risks in various categories.


Download WEF Global Risks Report 2013

The top five most likely global risks are –
 
1. Severe income disparity
2. Chronic fiscal imbalances
3. Rising greenhouse gas emissions
4. Water supply crises
5. Mismanagement of population aging

A detailed Risk Landscape of 50 Global Risks is presented as follows –
 
Economic Risks

1. Chronic fiscal imbalances
2. Chronic labour market imbalances
3. Extreme volatility in energy and agricultural prices
4. Hard landing of an emerging economy
5. Major systemic fincial failure
6. Prolonged infrastructure neglect
7. Recurring liquidity crises
8. Severe income disparity
9. Unforeseen negative consequences of regulation
10. Unmanageable inflation or deflation

Environmental Risks

1. Anti-biotic resistant bacteria
2. Failure of climate change adaptation
3. Irredeemable pollution
4. Land and waterway use mismanagement
5. Mismanaged urbanization
6. Persistent extreme weather
7. Rising greenhouse gas emissions
8. Species over-exploitation
9. Unprecedented geophysical destruction
10. Vulnerability to geomagnetic storms

Geopolitical Risks

1. Critical fragile states
2. Diffusion of weapons of mass destruction
3. Entrenched organized crime
4. Failure of diplomatic conflicdt resolution
5. Global governance failure
6. Militarization of space
7. Pervasive entrenched corruption
8. Terrorism
9. Unlilateral resource nationalization
10. Widespread illicit trade

Societal Risks

1. Backlash against globalization
2. Food shortage crises
3. Ineffective illicit drug policies
4. Mismanagement of population aging
5. Rising rates of chronic diseases
6. Rising religious fanaticism
7. Unmanaged migration
8. Unsustainable population growth
9. Vulnerability to pandemics
10. Water supply crises

Technological Risks

1. Critical systems failure
2. Cyber attacks
3. Failure of intellectual property regime
4. Massive digital misinformation
5. Massive incident of data fraud/theft
6. Mineral resource supply vulnerability
7. Poliferation of orbital debris
8. Unforeseen consequences of climate change mitigation
9. Unforeseen consequences of nanotechnology
10. Unforeseen consequences of new life science technologies

A similar, and perhaps more precise, global risks assessment is provided in the Chartered Institute of Insurance (CII)'s Centenary Future Risk Series Report 6 – Insuring for a stronger world (2012) – Future Risks mind map (p.7).

Download CII Centenary Future Risk Series – Report 6 – Insuring for a stronger world

Economic Risks

1. US economic decline
2. Asian threat to Western competitiveness
3. Currency War
4. Eurozone collapse
5. Fall of Bretton Woods – return to protectionism
6. Chinese financial crisis
7. Rising economic uncertainty
8. Stagnation

Political Risks

1. Political unrests across emerging markets
2. Rising geopolitical uncertainty
3. Chinese social unrest
4. US political paralysis
5. National/international terrorism
6. Breakdown in public trust of state institutions

Investment in technology

1. Slowdown of investment in new tech
2. Reduced use of technology in business
3. Reduced understanding of technology

Technological "Black Swans"

1. Cyber crime
2. Failure of largescale IT systems
3. Widespread data loss or corruption
4. Global spread of disease through international travel

Technology and Risk management

1. Out-of-date computational models
2. Failure to understand model limitations
3. Failure to horizon scan

Adaptation to climate risks

1. Poor local infrastructures
2. Town planning in hazardous areas

Global warming

1. Extreme weather events
2. Crossing tipping points
3. Rising sea levela
4. Water shortages

Energy risks

1. Geopolitical tension over scarce resources
2. Exploation for new energy sources

Aging population

1. Cost of age-related spending to public purse
2. Intergenerational fairness
3. Falling economic productivity
4. Rising liabilities of pension funds
5. Adequacy of pension income
6. Increased chronic disease

Poverty trap: high fertility and low life expectancy

1. Violent internal conflict and social unrest
2. Increased antagonism towards developed countries

Global population growth

1. Fears of overcrowding
2. Concerns about immigration
3. Increased risk of pandemic

By means of a fictional "Special Report – The Remarkable Rebound 6 February 2030", in which the world looks back on how some of the major risks have been contained or overcome, the CII proposes the following preventive measures against a disastrous outcome –

1.  Reform to the international economy – global economic imbalances; EU fiscal and political union; sustainable international trading system
2. A vibrant private sector – effective financial services including insurers and banks
3  Private sector-led growth through partnership between research centres, entrepreneurs and business leaders
4. Climate Change mitigation and adaptation, involving insurers and risk managers
5. Improving healthcare and pensioner security – extended working lives and cost-effective use of telecare
6. Greater private savings
7. Dynamic technological change improves lives; avoidance of "black swans" through enhanced risk management

Apart from a whiff of self-interest in some of the recomendations, few would doubt their validity, but not too many are likely to be convinced that they will be sufficient or will all be delivered. However, the test of the pudding is in the eating. There is still some time for the Remarkable Rebound of 6 February 2030 to become a reality. 

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