The immediate human and economic cost of COVID-19 is severe, but this is just the beginning of more serious global risks as stated in the recently released 16th edition of Global Risks Report (GRR) by the World Economic Forum (WEF).
In the WEF statement October last year, COVID-19 was expected to add as many as 150 million individuals to extreme poverty by 2021. The global recession caused by the pandemic is foreseen to bring to waste long “years of progress on reducing poverty and inequality and to further weaken social cohesion and global cooperation. Job losses, a widening digital divide, disrupted social interactions, and abrupt shifts in markets could lead to dire consequences and lost opportunities for large parts of the global population.
In the Global Risks Report 2021, WEF shares the results of the latest Global Risks Perception Survey (GRPS), followed by analysis of growing social, economic and industrial divisions, their interconnections, and their implications on our ability to resolve major global risks requiring societal cohesion and global cooperation. The GRR also contains proposals for enhancing resilience, drawing from the lessons of the pandemic as well as historical risk analysis.
Thousands of respondents were asked about what they perceive as global risks, classified as short term (0-2 years), medium term (3 to 5 years) and long term (5 to 10 years) across economic, environment, geopolitical, societal and technological horizons. The succeeding discussion are direct excerpts from the GRR.
The risks of the next ten years are extreme weather, climate action failure and human-led environmental damage; as well as digital power concentration, digital inequality and cybersecurity failure. Among the highest impact risks of the next decade, infectious diseases are in the top spot, followed by climate action failure and other environmental risks; as well as weapons of mass destruction, livelihood crises, debt crises and information technology (IT) infrastructure breakdown.
Short term of current critical or imminent threat to the world, or those that are most likely in the next two years include widespread employment and livelihood crises, youth disillusionment, digital inequality, economic stagnation, human-made environmental damage, erosion of societal cohesion, and terrorist attacks.
Economic risks falling under the medium term are asset bubbles, price instability, commodity shocks and debt crises; followed by geopolitical risks, including interstate relations and conflict, and resource geo-politization.
In the long-term horizon, the perceived environmental risks include biodiversity loss, natural resource crises and climate action failure, emergence of weapons of mass destruction, adverse effects of technology and collapse of states or multilateral institutions.
The GPR states that global economy will continue to be fragile and societal divisions are set to increase, as underlying disparities in healthcare, education, financial stability, and technology led the crisis to disproportionately impact certain groups and countries. Not only has COVID-19 caused more than two million deaths, but the economic and long-term health impacts will continue to have devastating consequences. Because of the pandemic, working hours equivalent to 495 million jobs were lost in the second quarter of 2020 alone and increasing. Loss of lives and livelihoods will increase the risk of “social cohesion erosion”.
Countries are urged to deploy nationally focused agendas to stem economic losses, technological transformation and changes in societal structure, including consumer behaviors, the nature of work and the role of technology both at work and at home. With governments still deliberating how to pivot away from emergency to recovery, and with companies anticipating a changed business landscape, there are opportunities to invest in smart, clean and inclusive growth that will improve productivity and delivery of sustainable agendas.
The GRR calls for global preparedness by looking at four key areas of the response to COVID-19: institutional authority, risk financing, information collection and sharing, and equipment and vaccines. It also calls for national level responses depending on varied starting points for individual countries, and finally it draws lessons from five domains: government decision-making, public communication, health system capabilities, lockdown management and financial assistance to the vulnerable.
However, WEF warns that if lessons from this pandemic only drive decision-makers to better prepare for the next pandemic instead of enhancing risk processes, capabilities and culture, the world will be again planning for the last crisis rather than anticipating the next. The response to COVID-19 offers four governance opportunities to strengthen the overall resilience of countries, businesses and the international community: first, formulating analytical frameworks that take a holistic and systems-based view of risk impacts; second, investing in high-profile “risk champions” to encourage national leadership and international co-operation; third, improving risk communications and combating misinformation; and fourth, exploring new forms of public-private partnership on risk preparedness.