How the global risks landscape has evolved since last year
The following risks came to the fore in the assessment for 2009, both in terms of likelihood and severity and the degree to which they are "pivotal" risks, i.e. that they are at the nexus of many risks.

Deteriorating fiscal positions
The deterioration of fiscal balances in several major G8 countries and other economies was judged as increasing in both likelihood and severity. From the interconnections map it can be seen that this risk is linked to a number of other central economic, societal and economic risks: retrenchment from globalization, a fall in the US dollar, further asset price declines, the rise of chronic diseases and underinvestment in public infrastructure.

Node size: denotes severity, Node colours: red - economics; dark green - geopolitics; light green - environmental; purple - technology; blue - society Lines: line thickness denotes the strength of the interlinkage. The direction of a thicker line segment indicates when one risk is the stronger in the relationship. Proximity: the map shows risks that are tightly interlinked to many other risks as closer to one another

China hard landing
Though the most recent World Bank forecast (November 2008) suggests China will still achieve growth of 7.5% in 2009, given the importance of China in terms of its potential to be a source of global growth and given its massive net-creditor position mainly with respect to the US, a slowdown to 6% or below in China’s growth rate would have significant impact on the already weak global economy. This risk is highly connected to a fall in the US dollar, to energy and food price risks, and to health risks.

Asset price collapse
Though the effects of sharply declining asset prices are already playing out, the assessment continues to place this risk as very high on both the likelihood and severity scale across different asset classes and regions. Many experts expect the decline in asset prices to continue over the coming months as the financial crisis unwinds further and the recession leads to bankruptcies and credit defaults.

Resource challenges
Linking several of the risks on the assessment, including climate change-related weather events and declining water quality and availability as well as energy, these longer term risks have remained almost constant since the last assessment. Nearly half of the world’s population already live in high water stressed areas and the links to food security, geopolitical and health risks are strong. In this report, the linkage between energy, water and land is discussed more fully.

Global governance gaps
Introduced for the first time in the 2009 assessment, experts and Global Risk Network members deemed the absence or lack of effective and inclusive governance on global issues such as financial stability, trade, climate change, water and security as a source of risk in and of itself. The assessment places this gap as highly likely and severe in its impact. As the interconnections map shows, weak global governance sits at a central position between geopolitical, economic and environmental risks.

A note on health-related risks
Though not discussed extensively in this report, chronic disease, infectious disease and pandemics all remain high on the assessment, particularly in terms of potential severity in economic and loss of life indices. Chronic disease, in particular, is not only prominent in the assessment but is also central on the interconnections map, linking strongly to food prices and infectious disease but also to China’s growth and fiscal crises. According to the World Health Organization (WHO), chronic diseases (including heart disease, stroke, cancer, chronic respiratory disease and diabetes) are currently the cause of 60% of deaths annually worldwide, of which 80% occur in low- and middle-income countries. Health spending already represents a significant burden on public spending, which will increase as fiscal positions deteriorate and budgets come under pressure.

Country exposure to global risks

As the Risk Interconnections Map (RIM) offers an overview of linkages, a complementary approach is to consider the ramifications of these interactions at regional and country level. The chart below is derived from a model looking at the global risk exposure of 160 countries*. The model uses 24 of the global risks that are assessed in this report. Below, country exposures to economic risks (on an increasing scale, from low to high), which can change rapidly, are depicted on the horizontal axis. Exposures to more slow-moving environmental, geopolitical, health and technological risks are displayed vertically (also on an increasing scale, low to high). Looking at different clusters, the chart underscores regional clusters and outliers. It reveals a fairly high level of cohesion with respect to economic risks among European countries. In contrast, the variation in risk exposures is far larger along the domain that includes geopolitical, environmental, health and technological risks. A closer analysis of the individual risks (not shown here) suggests that drivers for dispersion in Europe are mainly geopolitical and, to a lesser degree, environmental risks, with particularly high exposures to geopolitical risks in countries of the former Soviet Union. The picture for Asia is reversed. Asian countries are much more diverse with respect to their exposures to economic risks, but comparatively tightly clustered - however at a higher median risk level - when it comes to the geopolitical and environmental risk dimensions. African countries form, in general, a comparatively tight cluster with respect to environmental, geopolitical, health and technological risks dimensions. Note that their median exposure is lower than that for Asian countries, and also that Africa is not quite as strongly exposed to economic risks as is Asia. Though this chart should only be taken as a tool to explore possible risk exposure, it does suggest that certain regions and countries have the potential to reduce their overall risk exposure along one or the other axis.