As growth slows, we must be ready for the next economic crisis
Governments need to tackle excessive debt while growth is good, or they will find themselves unable to provide stimulus when the party is over.
The World Economic Forum has been publishing The Global Risks Report since 2006, highlighting each year the vulnerability of our increasingly networked and interconnected world to volatility and disruption. The relevance of the risk perspective has only increased with time. Globally, we have been living through a period of unprecedented improvements in living standards, but this period is also unsettled and unsettling. We can see signs of how vulnerable many of the complex systems that make up our world are: from the environmental to the financial and the societal to the geopolitical, the signs of strain are evident.
In The Global Risks Report 2018 we noted that this is now a multipolar and multiconceptual world – not only has global power shifted, but differences in norms and values among the world’s powers have become more important. Predictions – particularly in the West – that global systems would converge have not stood the test of time and we are moving into uncharted international waters. One consequence of the geopolitical shifts that are under way is the increasing likelihood that regional developments will impact the broader international system.