WEF: Global Risks 2012

Economic imbalances and social inequality risk reversing the gains of globalization, warns the World Economic Forum (WEF) in its just-released report Global Risks 2012.

Respondents to the survey worry that further economic shocks and social upheaval could roll back the progress globalization has brought, and that the world’s institutions are ill-equipped to cope with today’s interconnected, rapidly evolving risks.

Chronic fiscal imbalances and severe income disparity are the risks seen as most prevalent over the next 10 years, the WEF reports.

These risks in tandem threaten global growth as they are drivers of nationalism, populism and protectionism at a time when the world remains vulnerable to systemic financial shocks, as well as possible food and water crises.

Published in cooperation with Marsh & McLennan Cos, Swiss Re, the Wharton Center for Risk Management and Zurich, Global Risks 2012 draws on the insights of 469 experts and industry leaders around the world.

This year’s findings indicate a shift of concern from environmental risks to socioeconomic risks compared to a year ago.

Lee Howell, the WEF managing director responsible for the report says:

For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs. This new malaise is particularly acute in the industrialized countries that historically have been a source of great confidence and bold ideas.†

The report analyzes three major risk cases: Seeds of Dystopia; Unsafe Safeguards and the Dark Side of Connectivity.

A special chapter also highlights key crisis management lessons from Japan’s earthquake, tsunami and nuclear disasters.

The report analyzes the top 10 risks in five categories – economic, environmental, geopolitical, societal and technological.

It also highlights “X Factor† risks, the wild card threats which warrant more research, including a volcanic winter, cyber neotribalism and epigenetics (the risk that the way we live could have harmful inheritable effects on our genes.

The three risk cases, Japan and X Factors are the focus of special sessions at the World Economic Forum Annual Meeting 2012 in Davos-Klosters, Switzerland, which begins January 25.

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