Global Risks Report
The Global Risks Report is an annual study published by the World Economic Forum ahead of the Forum’s Annual Meeting in Davos, Switzerland. Based on the work of the Global Risk Network, the report describes changes occurring in the global risks landscape from year to year and identifies the global risks that could play a critical role in the upcoming year. The report also explores the interconnectedness of risks, and considers how the strategies for the mitigation of global risks might be structured.
Sources for the report include an assessment by several major insurance and reinsurance companies and focus workshops, interviews and a survey of internationally recognised experts. The report is intended to raise awareness about the need for a multi-stakeholder approach to the mitigation of global risk.
Global Risks Report 2009
The Global Risks report 2009 identifies deteriorating fiscal positions, a hard landing in China, a collapse in asset prices, gaps in global governance and issues relating to natural resources and climate as the pivotal risks facing the world this year. While Global Risks 2008 highlighted food security, systemic financial risk and supply chain risk as areas of focus for the short term, Global Risks 2009 focuses on the impact of the financial crisis on levels of economic risk and its implications for other risk areas. The 2009 report stresses the importance of considering the long-term implications of many of the decisions taken today in response to immediate financial and economic challenges. The report also explores how the lack of effective global governance was a factor in the financial crisis and could potentially exacerbate a number of other global risks if not properly addressed.[1][2][3][4][5][6]
Global Risk
The particularity of this Global Risks report is that it considers risks that are global in their nature and impact, such that they would have a widespread impact should they play out. The criteria for what constitutes a global risk have been set as follows:
Global Scope: To be considered global, a risk should have the potential to affect (including both primary and secondary impact) at least three world regions in at least two different continents. While these risks may have regional or even local origin, their impact can potentially be felt globally.
Cross-Industry Relevance: The risk has to affect three or more industries (including both primary and secondary impact).
Uncertainty: There is uncertainty about how the risk manifests itself within ten years combined with uncertainty about the magnitude of its impact (assessed in terms of likelihood and severity).
Economic Impact: The risk has the potential to cause economic damage of at 10 billion US$ or more; and/or Public Impact: The risk has the potential to cause major human suffering and to trigger considerable public pressure and global policy responses.
Multi-Stakeholder Approach: The risk’s complexity both in terms of its effects and its drivers as well as its inter-linkages with other risks require a multi-stakeholder approach for its mitigation.
The Global Risk Network
The Global Risk Network was established in 2004 and tracks the evolution of a set of risks in five areas over a ten year time frame. The five areas are: Economics, Geopolitics, Environment, Society, Technology. In 2009 the set of risks totalled 36, up from 31 in the 2008 taxonomy. Each year the risk set is assessed using quantitative and qualitative means in terms of likelihood and severity to come up with a 'Risk Landscape' of risks to watch in the short to medium term. These include high likelihood and high severity risks, but also low likelihood and high severity risks that constitute 'outliers' whose impact would be significant in the unlikely event they would occur. The Global Risk Network also publishes a selection of regional and topical reports each year. Its latest publications include: India@Risk 2008, Europe@Risk 2008, Global Growth@Risk 2008, and Africa@Risk 2008.
References
- ↑ China slowdown 'big global risk' , BBC News, 13 January 2009, retrieved on 13 January 2009
- ↑ World faces risks from climate change to China slump, Reuters, 13 January 2009, retrieved on 13 January 2009
- ↑ World WEF warns govt bailouts could backfire, Agence France Presse in Mail & Guardian, 13 January 2009, retrieved on 13 January 2009
- ↑ Study sees risk of $1 trillion asset collapse, Associated Press in Salon.com, 13 January 2009, retrieved on 14 January 2009
- ↑ World Economic Forum highlights Chinese slump as biggest risk to global economy, The Daily Telegraph, 13 January 2009, retrieved on 13 January 2009
- ↑ China Growth Slump Poses Global Risk, Report Says, Wall Street Journal, 13 January 2009, retrieved on 13 January 2009