Water Crisis & War Top Global Risks 2015 Report

April 12th, 2015 - by admin

World Economic Forum – 2015-04-12 23:18:03


International Conflict Tops List of Global Risks in 2015
Oliver Cann / World Economic Forum Global Risks 2015 Report

Top 5 Global Risks in Terms of Likelihood

1. Interstate conflict with regional consequences (geopolitical risk)

2. Extreme weather events (environmental risk)

3. Failure of national governance (geopolitical risk)

4. State collapse or crisis (geopolitical risk)

5. High structural unemployment or underemployment (economic risk)

Top 5 Global Risks in Terms of Impact

1. Water crises (societal risk)

2. Rapid and massive spread of infectious diseases (societal risk)

3. Weapons of mass destruction (geopolitical risk)

4. Interstate conflict with regional consequences (geopolitical risk)

5. Failure of climate-change adaptation (environmental risk)

The report can be read in full here

LONDON (January 15, 2015) — The biggest threat to the stability of the world in the next 10 years comes from the risk of international conflict, according to the 10th edition of the Global Risks report, which is published today.

The report, which every year features an assessment by experts on the top global risks in terms of likelihood and potential impact over the coming 10 years, finds interstate conflict with regional consequences as the number one global risk in terms of likelihood, and the fourth most serious risk in terms of impact.

In terms of likelihood, as a risk it exceeds extreme weather events (2), failure of national governance systems (3), state collapse or crisis (4) and high structural unemployment or underemployment (5).

In looking at global risks in terms of their potential impact, the nearly 900 experts that took part in the Global Risk Perception Survey rated water crises as the greatest risk facing the world. Other top risks alongside that and interstate conflict in terms of impact are: rapid and massive spread of infectious diseases (2), weapons of mass destruction (3) and failure of climate change adaptation (5).

With the 28 global risks that were assessed in 2015 grouped into five categories — economic, environmental, geopolitical, societal and technological — 2015 stands out as a year when geopolitical risks, having been largely absent from the landscape of leading risks for the past half-decade, returns to the fore.

With geopolitics increasingly influencing the global economy, these risks account for three of the five most likely, and two of the most potentially impactful, risks in 2015. Also in this category, three risks stand out as having intensified the most since 2014 in terms of likelihood and impact. These are interstate conflict with regional consequences, weapons of mass destruction and terrorist attacks.

The risk landscape in 2015 also shows that there remains concern over the world’s ability to solve its most pressing societal issues, as societies are under threat from economic, environmental and geopolitical risks. Indeed, the societal risk accounts for the top two potentially impactful risks.

Also noteworthy is the presence of more environmental risks among the top risks than economic ones. This comes as a result of a marked increase in experts’ negative assessment of existing preparations to cope with challenges such as extreme weather and climate change, rather than owing to a diminution of fears over chronic economic risks such as unemployment and underemployment or fiscal crises, which have remained relatively stable from 2014.

“Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states,” said Margareta Drzeniek-Hanouz, Lead Economist, World Economic Forum. “However, today the means to wage such conflict, whether through cyberattack, competition for resources or sanctions and other economic tools, is broader than ever. Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015.”

In addition to assessing the likelihood and potential impact of these 28 global risks, Global Risks 2015 examines the interconnections between risks, as well as how they interplay with trends shaping the short- to medium-term risk landscape.

It also offers analysis of three specific cases which emerge from the interconnections maps: the interplay between geopolitics and economics, the risks related to rapid and unplanned urbanization in developing countries and one on emerging technologies.

On urbanization, the report considers how best to build sufficient resilience to mitigate the challenges associated with managing the world’s rapid and historical transition from predominantly rural to urban living.

“Without doubt, urbanization has increased social well-being. But when cities develop too rapidly, their vulnerability increases: pandemics; breakdowns of or attacks on power, water or transport systems; and the effects of climate change are all major threats,” said Axel P. Lehmann, Chief Risk Officer at Zurich Insurance Group.

The rapid pace of innovation in emerging technologies, from synthetic biology to artificial intelligence, also has far-reaching societal, economic and ethical implications. Developing regulatory environments that are adaptive enough to safeguard their rapid development and allow their benefits to be reaped, while preventing their misuse and any unforeseen negative consequences is a critical challenge for leaders.

John Drzik, President of Global Risk and Specialties at Marsh, said: “Innovation is critical to global prosperity, but also creates new risks. We must anticipate the issues that will arise from emerging technologies, and develop the safeguards and governance to prevent avoidable disasters.”

The report also provides analysis related to global risks for which respondents feel their own region is least prepared, as well as on the global risks on which they feel most progress has been made over the last 10 years.

It also presents for the first time country-level data on how businesses perceive global risks in their countries, which can be accessed here. Moreover, the report features three examples of risk management and resilience practices related to extreme weather events.

The Global Risks 2015 report has been developed with the support of Strategic Partners Marsh & McLennan Companies and Zurich Insurance Group. The report also benefited from the collaboration of its academic advisers: the Oxford Martin School (University of Oxford), the National University of Singapore, the Wharton Risk Management and Decision Processes Center (University of Pennsylvania), and the Advisory Board of the Global Risks 2015 report.

Global Risks 2015: Executive Summary
The 2015 edition of the Global Risks report completes a decade of highlighting the most significant long-term risks worldwide, drawing on the perspectives of experts and global decision-makers.

Over that time, analysis has moved from risk identification to thinking through risk interconnections and the potentially cascading effects that result. Taking this effort one step further, this year’s report underscores potential causes as well as solutions to global risks.

Not only do we set out a view on 28 global risks in the report’s traditional categories (economic, environmental, societal, geopolitical and technological) but also we consider the drivers of those risks in the form of 13 trends. In addition, we have selected initiatives for addressing significant challenges, which we hope will inspire collaboration among business, government and civil society communities.

A global risk is an uncertain event or condition that, if it occurs, can cause significant negative impact for several countries or industries within the next 10 years.

A trend is defined as a long-term pattern that is currently taking place and that could amplify global risks and/or alter the relationship between them.

Mapping Global Risks in 2015
The Global Risks Landscape, a map of the most likely and impactful global risks, puts forward that, 25 years after the fall of the Berlin Wall, “interstate conflict” is once again a foremost concern. However, 2015 differs markedly from the past, with rising technological risks, notably cyber attacks, and new economic realities, which remind us that geopolitical tensions present themselves in a very different world from before.

Information flows instantly around the globe and emerging technologies have boosted the influence of new players and new types of warfare. At the same time, past warnings of potential environmental catastrophes have begun to be borne out, yet insufficient progress has been made — as reflected in the high concerns about failure of climate-change adaptation and looming water crises in this year’s report.

These multiple cross-cutting challenges can threaten social stability, perceived to be the issue most interconnected with other risks in 2015,andadditionally aggravated by the legacy of the global economic crisis in the form of strained public finances and persistent unemployment.

The central theme of profound social instability highlights an important paradox that has been smoldering since the crisis but surfaces prominently in this year’s report. Global risks transcend borders and spheres of influence and require stakeholders to work together, yet these risks also threaten to undermine the trust and collaboration needed to adapt to the challenges of the new global context.

The world is, however, insufficiently prepared for an increasingly complex risk environment. For the first time, the report provides insights on this at the regional level: social instability features among the three global risks that Europe, Latin America and the Caribbean, and the Middle East and North Africa are least prepared for.

Other societal risks, ranging from the failure of urban planning in South Asia to water crises in the Middle East and North Africa, are also prominent. And capacity to tackle persistent unemployment — an important risk connected with social instability — is a major concern in Europe and sub-Saharan Africa.

The Global Risks Perception Survey 2014 gathered the perceptions of almost 900 members of the World Economic Forum’s multi-stakeholder community between July and September 2014.

As in previous years, Part 2 explores three risk constellations that bear on the survey findings. In 2015, these are: Interplay between geopolitics and economics: The interconnections between geopolitics and economics are intensifying because states are making greater use of economic tools, from regional integration and trade treaties to protectionist policies and cross-border investments, to establish relative geopolitical power.

This threatens to undermine the logic of global economic cooperation and potentially the entire international rule-based system. Urbanization in developing countries: The world is in the middle of a major transition from predominantly rural to urban living, with cities growing most rapidly in Asia and Africa.

If managed well, this will help to incubate innovation and drive economic growth. However, our ability to address a range of global risks — including climate change, pandemics, social unrest, cyber threats and infrastructure development — will largely be determined by how well cities are governed.

Governance of emerging technologies: The pace of technological change is faster than ever. Disciplines such as synthetic biology and artificial intelligence are creating new fundamental capabilities, which offer tremendous potential for solving the world’s most pressing problems.

At the same time, they present hard-to-foresee risks. Oversight mechanisms need to more effectively balance likely benefits and commercial demands with a deeper consideration of ethical questions and medium to long-term risks — ranging from economics to environmental and societal.

Mitigating, preparing for and building resilience against global risks is long and complex, something often recognized in theory but difficult in practice.

Against this backdrop, Part 3 features three proven or promising initiatives that were instituted in response to extreme weather events and climate-change adaptation. The modeling of the Murray-Darling Basin river system in Australia has pioneered innovative methods of water management that are now being adapted for use elsewhere in the world.

The Resilient America Roundtable is currently helping selected local communities across the United States to understand how they might be affected by different risks and then design resilience strategies.

ZÃœRS Public, part of an extensive flood management programme in Germany, is a public-private collaboration that for several years now has been a tool for communicating with homeowners and businesses about their exposure to flood risk.

Over the past 10 years, the Global Risks report has raised awareness of the dangers from the interconnected nature of global risks and has persistently called for multi-stakeholder collaboration to address them.

By offering a broad-ranging overview from risk identification and evaluation to practices — from the “what” to the “how” — this year’s report aims to provide the most comprehensive set of insights yet for decision-makers in its decade-long history.

For more information on Global Risks 2015:
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