The World Economic Forum has just released a report outlining the worlds biggest risks, here are the top 5. Image: REUTERS/KCNA
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In a world full of risk – geopolitical upheaval, cyber attacks, climate change and natural disasters, to name just a few – global leaders have to be prepared for the worst.
Each year the World Economic Forum asks its extensive network of business, government, civil society and thought leaders to identify the biggest global risks, and those mostly likely to happen over a 10-year timeframe.
Here are the top five concerns, as outlined in the Global Risks Report 2018.
Weapons of mass destruction
President Donald Trump called him “rocket man”. North Korean leader Kim Jong-un responded by calling him a “dotard”. But this wasn’t child’s play. Their war of words in 2017 arguably brought the US and North Korea closer than ever to a nuclear confrontation.
Indeed, the escalation of geopolitical risks was one of the most pronounced trends of 2017, according to this year’s report.
Another potential flashpoint is the Middle East, where an increasing number of destabilizing forces might lead to the eruption of new military conflicts, in addition to those in Syria and Yemen.
The vast majority (93%) of respondents expect a worsening of “political or economic confrontations/frictions between major powers”.
In a year characterized by high-impact hurricanes, extreme temperatures and the first rise in CO2 emissions for four years, it comes as no surprise that environmental risks weigh heavily on the minds of respondents.
In the US, the financial fallout from extreme weather and climate events was huge in 2017. It was the most expensive year on record, with 16 weather and climate events with losses exceeding $1 billion each.
Last year also saw a string of natural disasters including flooding, earthquakes and landslides. These included a magnitude 7.1 earthquake that rocked Mexico in September, a mudslide that killed at least 200 people in Colombia in April, and floods in South Asia in August that affected 16 million people.
Failure of climate change mitigation and adaptation
The world celebrated when leaders from more than 170 countries signed the Paris Agreement on Climate Change, but the USA’s subsequent decision to withdraw threatens progress in limiting global temperature rises, especially if other countries follow suit.
A lack of clean water not only harms human health, it can also impact economic activity, spark conflict and drive people from their homes. Environmental risks have grown in prominence over the 13-year history of the Global Risks Report.
Which risks are most likely to happen?
As well as looking at the risks that will have the biggest impact on the world, the report also asks the experts to identify the ones that are most likely to happen.
Of the risks that will have the biggest impact, the respondents said extreme weather, natural disasters and failure of climate change mitigation and adaptation are mostly likely to happen.
The first week of 2018 bore out their concerns. Central and eastern China saw heavy rain and snow, a powerful storm brought strong winds and heavy rain to Europe, and parts of Australia were gripped by intense heat. A major winter storm hit the eastern coast of the United States.
The respondents also point to cyber attacks and theft of data as two of the risks most likely to happen.
The internet has transformed many aspects of our lives, mostly for the better. But it has also created new opportunities for crime, enabling anyone from a tech-savvy teenager to a nation state to carry out a cyberattack.
Attacks against businesses have almost doubled in five years, and incidents that would once have been considered extraordinary are becoming commonplace, explains the report.
The financial impact of cybersecurity breaches is rising, and some of the largest costs in 2017 related to ransomware attacks, which accounted for 64% of all malicious emails.
Notable examples included the WannaCry attack – which affected 300,000 computers across 150 countries – and NotPetya, which caused quarterly losses of US$300 million for affected businesses.
Another growing trend is the use of cyberattacks to target critical infrastructure and strategic industrial sectors, raising fears that, in a worst-case scenario, attackers could trigger a breakdown in the systems that keep societies functioning.
Economic woes recede
One of the more positive results of this year’s survey is the respondents’ belief that the worst financial crisis of the post–World War II period is finally behind us.
The global economy continues to improve, with the IMF expecting growth of 3.8% in 2018, up slightly from 3.6% in 2017 and 3.2% in 2016.
However, the report concludes with a warning. While people are enjoying the highest standards of living in human history, the interconnected global challenges we face are pushing institutions, communities and individuals to their limits.
The survey was conducted from 28 August to 1 November 2017 among 1,000 members of the World Economic Forum’s multi stakeholder communities, members of the Institute of Risk Management and the professional networks of their Advisory Board Members.
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The views expressed in this article are those of the author alone and not the World Economic Forum.
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