New Report Warns Current Global Governance Systems Lack Capacity to Deal with Global Risks

Today we release Global Risks 2011, Sixth Edition, a report which reveals insights stemming from an unparalleled effort on the part of the World Economic Forum to analyse the global risk landscape in the coming decade.

The financial crisis has drained the world’s capacity for dealing with shocks. The frequency and severity of risks to global stability have amplified, while the ability of global governance systems to deal with them has not.

As a result, economic disparity and global governance failures are two central risks identified by the report. These two risks are shaping the evolution of many other global risks – the complexity of these issues can lead to unintended consequences and traditional risk response mechanisms often simply shift risk to other parts of society.

Three risk clusters of particular concern are also highlighted in the report:

• the relationship between illicit trade, crime, corruption and state fragility
• a set of interconnected risks tied to water, food and energy
• risks related to global macroeconomic imbalances.

In addition to these three clusters of risk, Global Risks 2011 identifies five emerging risks to watch:

• Cybersecurity: the new frontier for controlling information, from hackers and massive service failures to the little-understood possibility of cyberwarfare between nation states
• High population growth: in fragile, resource-constrained countries, population growth may result in “population cluster bombs”, increased violence and state collapse
• Resource scarcity: limits on commodities, water and energy put stringent limits on growth and create conflict hotspots
• Retrenchment from globalization: as economic inequality grows, a populist backlash against globalization could fracture economic and political integration
• Nuclear and biological weapons threats are of renewed concern in a fragile world

Published in cooperation with Marsh & McLennan Companies, Swiss Reinsurance Company, the Wharton Center for Risk Management and Zurich Financial Services, Global Risks 2011 draws on the insights of 580 expert respondents to the Forum’s Global Risks Survey 2010 across stakeholder groups and regions, measuring perceptions of risk likelihood, impact and interconnections for 37 global risks over a 10-year time horizon. The results of this survey are included in the report. Global Risks 2011 also provides insights on a number of emerging risks and outliers to this year’s global risk landscape that could surprise us in the future.

Read an interactive version of the Risks Report.

Find out more about the Forum’s work on Risk on our website.

Read the Global Risks Report on Scribd below: