Page 29 - WEF Reoprt 2020

(see 2019 Regional Risks for Doing Recent social upheaval
Business report). The world learned Concern about inequality underlies recent
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from the European sovereign debt crisis social unrest on almost every continent,
that drastic fiscal corrections and public although it may be sparked by different
austerity measures can shrink the welfare tipping points—such as corruption,
state with political and social consequences constitutional breaches, or the rise in prices
that many governments would be neither for basic goods and services. Although
willing nor able to incur. However, if the global inequality has declined over the past
combination of a prolonged economic three decades, domestic income inequality
slowdown and a public finance crisis has risen in many countries—particularly
pressures governments into spending to in advanced economies—and reached
address citizens’ immediate needs, they will historical highs in some. The OECD reports
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be left with little margin for investment to that “income inequality in OECD countries is
confront the slowdown. at its highest level for the past half century.”
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Many of those protesting have long been
excluded from their country’s wealth and
Vulnerable societies share frustration that the elite have captured
gains at the expense of others.
Compounding the economic risk factors that
are manifesting is a widespread domestic In Chile, for example, a 3% increase
discontent with current economic systems, in metro fares triggered violent
perceived to be rigged and unfair. demonstrations, forcing the government

24 The Fraying Fundamentals REUTERS/DAMIR SAGOLJ