Understanding Global Risks to Middle East Is Key to Effective Regional Leadership

Geneva, Switzerland, 18 May 2007 – The Middle East@Risk report, released today by the Global Risk Network of the World Economic Forum in collaboration with the Gulf Research Center, builds on the global view of Global Risks 2007 to provide an assessment of the Middle East's vulnerability to selected global risks.

The Middle East is often seen as a focal point of risk, particularly geopolitical risk. This is also true of two of the great intersecting risks of the early 21st century – energy security and climate change – and for risks relating to global economic imbalances (e.g. Middle Eastern external surpluses far exceed those of China). Global risks, drawn from Global Risks 2007, will not play out identically across a varied region with such different specific strengths and vulnerabilities.

However, the region shares a number of global risks and a number of solutions to those risks. The region is interconnected by webs of investment and religious affiliation, as well as the physical infrastructure of pipelines and sources of water. "Many of the mitigation measures to deal with the consequences of these global risks stem from the region; indeed, mitigation measures can only be managed and controlled by acting in frameworks of regional cooperation," said Charles Emmerson of the World Economic Forum. "Building the capacity to manage and control global risks begins with understanding what they are, how they interrelate and how they are making the world a more complex place." (Watch the full 3-minute interview)

The report looks at the potential consequences of several major global risks on the Middle East, and takes a "deep dive" into four: a global asset price collapse, a Chinese economic hard landing, a retrenchment from globalization and geostrategic instability. None of these are predictions, but plausible scenarios for the future.

The first of these "deep dives" looks at how the Middle East could be affected by a major correction in global financial markets. Global markets are currently buoyed by unprecedented external surpluses in certain Middle Eastern countries – but were the markets to fall seriously, this could import inflation, reduce savings for the future and raise questions about the role of the US dollar. The second looks at the relationship between China and the Middle East in the context of a possible slowdown in the Chinese economy. The third raises the possibility of an erosion of the structures of globalization, and asks how the Middle East region is responding. The final "deep dive" looks at the prospects of geostrategic instability, expressing the hope that the increased leadership role shown by some Middle Eastern countries will allow a wide-ranging dialogue to defuse tensions over Iran's alleged nuclear weapons programme.

The Middle East@Risk report is published ahead of the World Economic Forum on the Middle East, which will take place from 18-20 May 2007 at the Dead Sea in Jordan.

Notes to Editors:

· The report can be downloaded here: www.weforum.org/globalrisks

· Print-quality, high resolution photographs of the cover and the authors can be downloaded here: www.pbase.com/forumweb/risks

· For more information about the World Economic Forum on the Middle East, please visit our website at http://www.weforum.org/middleeast

· Print-quality, high resolution photographs of the World Economic Forum on the Middle East will be made available here: www.pbase.com/forumweb/mideast2007

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests (www.weforum.org).