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Global Risks 2011 report issued by World Economic Forum

The World Economic Forum which has their annual meting later this month have released their Global Risk 2011 report.  Here is he summary from the report, and the full report is a free download here.


Most likely and largest risks are those in the upper right as most likely and largest financial impact:

  • Fiscal crises
  • economic disparity
  • energy price volatility
  • global governance failure


  • climate change as most likely and largest financial impact

This extract from the report is interesting view of the world and nicely summarises the risks.

Three important risks in focus

Beyond these two cross-cutting global risks, three important clusters of risks have emerged in this year’sa nalysis:

The “macroeconomic imbalances” nexus:

A cluster of economic risks including macroeconomic imbalances and currency volatility, fiscal crises andasset price collapse arise from the tension betweenthe increasing wealth and influence of emerging economies and high levels of debt in advanced economies. Savings and trade imbalances within and between countries are increasingly unsustainable while unfunded liabilities create extreme long-term pressure on fiscal positions. One way out of these imbalances would be coordinated global action but this is challenging given the conflicting interests of differentstates.

The “illegal economy” nexus:

This nexus examinesa cluster of risks including state fragility, illicit trade,organized crime and corruption. A networked world,governance failures and economic disparity create opportunities for such illegal activities to flourish. In 2009, the value of illicit trade around the globe wasestimated at US $1.3 trillion and growing. These risks,while creating huge costs for legitimate economic activities, also weaken states, threatening development opportunities, undermining the rule of law and keeping countries trapped in cycles of poverty and instability. International cooperation – both on the supply sideand on the demand side – is urgently needed.

The “water-food-energy” nexus:

A rapidly risingglobal population and growing prosperity are puttingunsustainable pressures on resources. Demand forwater, food and energy is expected to rise by 30-50% in the next two decades, while economic disparitiesincentivize short-term responses in production andconsumption that undermine long-term sustainability. Shortages could cause social and political instability, geopolitical conflict and irreparable environmental damage.  Any strategy that focuses on one part ofthe water-food-energy nexus without considering its interconnections risks serious unintended consequences.


Written by Colin Henderson

January 12, 2011 at 10:37

Posted in economy, Uncategorized

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