‘Haves’ and ‘have nots’ disparity risks geopolitical instability, warns WEF
The economic and digital disparities of the ‘haves’ and the ‘have nots’ risks widening social cohesion, and could lead to geopolitical instability, the World Economic Forum (WEF) has warned.
The Covid-19 pandemic has widened long-standing health, economic and digital disparities between individuals, according to the latest WEF global risk report, which could hinder global cooperation needed to address long-term issues such as climate change.
The WEF has, perhaps unsurprisingly, ranked infectious diseases as the biggest short-term risk to the world, followed by a livelihood crisis.
In the more medium term, between three and five years, knock-on economic and technological risks as a result of the coronavirus were marked as the most prominent risks, such as asset bubbles bursting, debt crisis and price instability.
The report also highlighted that automation – sped up by the virus – may displace 85 million jobs in five years.
In five to 10 years, existential threats like weapons of mass destruction, biodiversity loss and state collapse dominated the WEF’s primary concerns.
Canada ‘not in isolation’
Despite working in the world of risk during the most tumultuous time in living memory, Zurich chief risk officer Peter Giger was optimistic about the future. He said the paper has more negative connotations that he would typically point out.
“I’m the eternal optimist. Risks are not biggest objectively when the perception is greatest. And so typically after an event people are very risk-aware, you could almost say that when risk awareness drops, risk awareness is very elevated, and the pandemic is a really good example, because there was risk awareness for pandemics 15 years ago after the first outbreak of SARs, and then there was a couple of others, and they all remained regional events, and so the risk awareness dropped, and the preparedness dropped with the risk awareness,” he said.
Giger pointed out that although Covid had accelerated the digitalisation of societies, and many jobs would be displaced, even more – some 100 million – would be created as a result.
According to the chief risk officer, the biggest risk facing Canada is the wider economy as a whole.
“For the financial services industry, and Canada especially, we only do as well as the economy does, and we must not forget that,” he continued.
“We’re not living somewhere in isolation. We will insure the exposure that exists, and if no businesses exist, then there is no exposure need. We should all be concerned about the future of the economy and the fact that we need to be competitive in Europe, because we’ll be left behind if we believe that the world is at a standstill.”