Page 11 - WEF Reoprt 2020

Executive Summary

The world cannot wait for the fog of increasing the risk of economic stagnation.
geopolitical and geo-economic uncertainty Low trade barriers, fiscal prudence and
to lift. Opting to ride out the current period strong global investment—once seen as
in the hope that the global system will fundamentals for economic growth—are
“snap back” runs the risk of missing crucial fraying as leaders advance nationalist
windows to address pressing challenges. policies. The margins for monetary and
On key issues such as the economy, the fiscal stimuli are also narrower than
environment, technology and public health, before the 2008–2009 financial crisis,
stakeholders must find ways to act quickly creating uncertainty about how well
and with purpose within an unsettled global countercyclical policies will work. A
landscape. This is the context in which the challenging economic climate may
World Economic Forum publishes the 15 persist this year: according to the Global
th
edition of the Global Risks Report. Risks Perception Survey, members of the
multistakeholder community see “economic
confrontations” and “domestic political
An unsettled world polarization” as the top risks in 2020.

Powerful economic, demographic and Amid this darkening economic outlook,
technological forces are shaping a new citizens’ discontent has hardened with
balance of power. The result is an unsettled systems that have failed to promote
geopolitical landscape—one in which advancement. Disapproval of how
states are increasingly viewing opportunities governments are addressing profound
and challenges through unilateral lenses. economic and social issues has sparked
What were once givens regarding alliance protests throughout the world, potentially
structures and multilateral systems no weakening the ability of governments to
longer hold as states question the value take decisive action should a downturn
of long-standing frameworks, adopt occur. Without economic and social
more nationalist postures in pursuit stability, countries could lack the financial
of individual agendas and weigh the resources, fiscal margin, political capital
potential geopolitical consequences of or social support needed to confront key
economic decoupling. global risks.

Beyond the risk of conflict, if stakeholders
concentrate on immediate geostrategic Climate threats and
advantage and fail to reimagine or adapt accelerated biodiversity loss
mechanisms for coordination during this
unsettled period, opportunities for action Climate change is striking harder and
on key priorities may slip away. more rapidly than many expected. The
last five years are on track to be the
warmest on record, natural disasters are
Risks to economic stability becoming more intense and more frequent,
and social cohesion and last year witnessed unprecedented
extreme weather throughout the world.
Recent editions of the Global Risks Report Alarmingly, global temperatures are on
warned of downward pressure on the track to increase by at least 3°C towards
global economy from macroeconomic the end of the century—twice what climate
fragilities and financial inequality. These experts have warned is the limit to avoid
pressures continued to intensify in 2019, the most severe economic, social and

6 Executive Summary