The report speculates whether we are ‘sleepwalking into a crisis’, with countries focusing on taking back control from political rivals or multilateral organisations, for example the Venezuela political crisis and Brexit. It suggests that expending energy on these risks is preventing us from collectively responding to global changes. These tensions mean that if a global crisis was to occur, there may not be the necessary levels of cooperation to tackle it.
Following on from 2018’s macroeconomic crisis, the International Monetary Fund (IMF) forecasts’ point to a gradual slowdown of the economy proving a cause for concern. Global debt currently stands at 225% of GDP and the increasingly tight financial conditions will put further strain on countries who built up liabilities in periods of low interest.
Environmental risks continue to dominate business concerns, and this year they accounted for three of the five most cited risks – extreme weather, environmental policy failure and biodiversity loss. Climate change is putting people at risk of rising sea levels and increased urbanisation is worsening the problem by placing people in areas of potential danger, while simultaneously reducing natural coastal defences by destroying coastal mangroves and increasing the use of groundwater reserves. This needs to be tackled urgently.
Technology once again features, with concerns about data fraud and cyber-attacks taking centre-stage but this time joined by concerns about fake news and identity theft as cited by two-thirds of correspondents. A further three-fifths of respondents were also concerned about privacy loss as companies and governments increasingly harvest data. This builds on the 2018 report which urged countries to strengthen cross-border infrastructure.
Finally, and in some ways more worrying than changes wrought by technology, is the mental health crisis. An estimated 700 million people have experienced mental health issues in some way, with psychological stress brought on by lack of control and uncertainty cited as one of the key reasons for this. This is an issue which can in turn create further social and political problems, and urgently needs addressing.
To read the full World Economic Forum Global Risks report, click here.
These factors will pose issues for a number of organisations and to mitigate risks careful horizon scanning and crisis resilience planning will be needed. To tackle risks requires a collaborative effort and our specialist insurance and risk management, crisis resilience support and insurance cover can be part of this, whether you are a small or large, national or multinational organisation.
To find out more, please get in touch with your usual Gallagher representative.