In time for its annual meeting last month, the World Economic Forum released the fifth edition of its Global Risks Report (full report here). Each year, the report outlines some of the current issues dominating the global risks landscape and the appropriate measures required to address these risks.
If the 2010 report is distinguished from past reports, it’s in its demonstration of the unprecedented levels of interconnectedness between all areas of risk. No longer are environmental, geopolitical, economic, technological and social risks manifesting themselves in isolation. In fact, this report shows that global risks are getting increasingly tighter in relation. Economic and environmental risks are the areas where there has been a marked increase in the perception of interdependencies.
The WEF identifies fiscal crises, underinvestment in infrastructure and chronic diseases as the riskiest of risks. Runners up are transnational crime, biodiversity loss and cyber-vulnerability. These combine with 30 other threats, measured and ranked according to their impact on economic loss.
Take a look at the links that spread from biodiversity loss:
When global biodiversity is eroded, 17 related threats emerge, which in turn, negatively impact economic growth. This ripple effect adds greater complexity to foreign policy decision making and understanding it is vital in developing effective strategies, both domestically and with other nations.
When economic risks, shocks and vulnerabilities are truly global, what does the U.S. do? The WEF suggests that governments must address risk management by taking major strides to coordinate their own agencies and prioritize a national risk landscape.
“Cooperate” seems like an obvious and overly simplistic solution but this report goes one step further by making the case for the implementation of a “Country Risk Officer,” a single point of contact and coordination for the responses to risky events. The appointed individual or committee would complement macro supervision that countries are currently discussing, in an effort to lessen the fragmentation of risk ownership.
In all, the Global Risks Report is a brisk 52 pages. If you’re strapped for time, the accompanying infographics are concise summaries and very revealing.
Even better, head to the WEF’s online, interactive risk map. Pick your very own global risk and watch related threats take shape, according to severity and probability. Start here. (This would be a great tool for professors teaching international relations. I would have appreciated this kind of visual interaction during my undergraduate days)!
