Climate change inaction, a growing social divide and an uneven post-COVID economic
recovery have been highlighted as the top three global risks for 2022, according to a major new risk review.
The 17th edition of the Global Risks Report, sanctioned by the World Economic Forum, provides a comprehensive overview of the key risks the world is expected to face over the coming year.
The authors urge all nations to come together to work out strategies to help combat these risks and arrest them before they are beyond human control. Here’s an outline of their thoughts.
- Climate change inaction
The report highlights that over the next decade, the three most severe risks that have the potential to
damage people and the planet include: climate action failure, extreme weather and biodiversity loss. Debt crises and geo-economic confrontations round out the top five overall risks facing humankind. Technological risks like digital inequality and cybersecurity failures are also pressing concerns.
- Growing social divide
The gap between rich and poor has only been exacerbated by the pandemic, which could prompt
disastrous consequences in the future. An erosion of social cohesion has been identified as a key shortterm
threat in 31 countries, including Argentina, France, Germany, Mexico and South Africa from the G20
alone. Sadly, the report calculates an additional 51 million people are expected to live in extreme poverty
versus pre-pandemic levels this year. This has the potential to polarise communities and, in a worst case
scenario, lead to serious civil unrest.
“Technological risks like digital inequality and cybersecurity failures are also pressing concerns.”
- An uneven economic recovery
Since the pandemic’s advent in early 2020, markets and economies have been supported by unprecedented fiscal stimulus packages implemented by governments around the world. But this has elevated many nations’ debt levels to record highs, which is unsustainable in the long-term.
As the risk report notes, “the outlook remains weak: at the time of writing, the global economy was expected to be 2.3 per cent smaller by 2024 than it would have been without the pandemic. Rising commodity prices, inflation and debt are emerging risks.”
The authors explain labour market imbalances, protectionism, widening digital, education and skills gaps are exacerbating the likelihood of a disastrously uneven post-COVID economic recovery period. While
rapid vaccine rollouts, successful digital transformations and new growth opportunities are helping to support some economies such as Australia, developing nations are not benefitting from these trends to the same degree.
In these countries, low vaccination rates, severe stress on national health systems, digital divides and lacklustre job markets are hampering the economic recovery. As the authors state, “these divergences will complicate the international collaboration needed to address the worsening impacts of climate change, manage migration flows and combat dangerous cyber risks.”
The report concludes by calling for a co-ordinated global response to these threats, which it says is the only way to move towards economic equality and a world that has universally committed to net zero carbon emissions.
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