The World Economic Forum (WEF) has released its annual Global Risks Report before its meeting in Davos, Switzerland, next week. The report explores some of the most severe risks that the world may face over the next decade, against a backdrop of rapid technological change, economic uncertainty, a warming planet and conflict.
The report says that the global economy is experiencing a “soft landing” from the crisis triggered by the COVID-19 pandemic, as central banks and governments have implemented stimulus measures and policy interventions to avoid a severe downturn.
However, the near-term outlook remains highly uncertain, as there are multiple sources of continued supply-side price pressures looming over the next two years, from El Niño conditions to the potential escalation of live conflicts.
The report also warns that environmental risks dominate the risk landscape over all three time frames. Extreme weather events, biodiversity loss, natural disasters and water crises are among the top risks most likely to present a material crisis on a global scale in 2024.
The report says that these risks could hit the point of no return, as the warming phase of the El Niño-Southern Oscillation (ENSO) cycle is projected to intensify and persist until May this year, and as the world is still far from meeting the goals of the Paris Agreement on climate change.
The report also identifies four structural forces that will shape the materialization and management of global risks over the next decade: climate change, demographic bifurcation, technological acceleration and geostrategic shifts.
These forces represent longer-term shifts in the arrangement of and relationship between four systemic elements of the global landscape: Earth systems, populations, frontier technologies and geopolitical power.
The report says that these transitions will be characterized by uncertainty and volatility and that as societies seek to adapt to these changing forces, their capacity to prepare for and respond to global risks will be affected.
The WEF hopes that the report will serve as a call to action for leaders and stakeholders to work together to address the complex and interconnected challenges that the world is facing. The report also provides recommendations and examples of best practices for building resilience and fostering cooperation across sectors and regions.
The WEF will convene its annual meeting in Davos from January 23 to 26, under “Working Together for a More Resilient Future”. The meeting will bring together leaders from business, government, civil society and academia to discuss and shape the global agenda for 2024 and beyond.
