Global Risks Report 2022: WEF

Context: The Global Risks Report 2022 released by the World Economic Forum (WEF) stated that widespread youth disillusionment and digital inequality are among the top five risks for India.

• The report tracks global risk perceptions among risk experts and world leaders in business, government, and civil society.
• It examines risks across five categories: economic, environmental, geopolitical, societal, and technological.

India’s top risks

• It stated that widespread youth disillusionment, digital inequality, fracture of interstate relations, debt crisis, and failure of technology governance are the top risks.
• The report stated that youth disengagement, lack of confidence and/or loss of trust of existing economic, political and social structures at a global scale negatively impacts social stability, individual well-being and economic productivity.
• Unequal access to digital networks and technology is due to unequal investment capabilities, lack of necessary skills in the workforce, insufficient purchase power, government restrictions and/or cultural differences.
• Corporate and public finances overwhelmed by debt accumulation and/or debt servicing in large economies could result in mass bankruptcies, defaults, insolvency, liquidity crises or sovereign debt crises.
• The survey added that economic, political and/or technological rivalries between geopolitical powers could lead to a fracture in interstate relations.

Global Risks by Severity

• Climate-change related risks account for three of the top risks by severity in the next 10 years with the highest potential to severely damage societies, economies and the planet.
• The global risks horizon changes over the next two to 10 years, as the cascading impacts of the COVID-19 pandemic are felt.
• Societal risks make up a third of the global top 10, with societal cohesion erosion and livelihood crises completing the top five.
• Infectious diseases come lower down at number six.

Risks Outlook and Global Divergence

• By 2024, developing economies (except China) will have fallen 5.5% below their pre-pandemic expected GDP growth, while advanced economies will have surpassed it by 0.9%.
• Such global divergence will impact on the world's ability to tackle common challenges like climate change, digital safety, restoring livelihoods and societal cohesion and managing competition in space.
• Widening disparities within and between countries will make it difficult to control COVID-19 and its variants.

Short-Term Global Risk

• Erosion of social cohesion, deterioration of mental health, infectious diseases and livelihood crises will be equal to environmental threats in the next two years.

Medium Term Risk

• In the next five years, economic risks of debt crises and geoeconomics confrontations emerge as governments struggle to balance fiscal priorities.

Long-Term Risk

• Environmental risks dominate the world for both the short and long term in the next 10 years.
• In the longer-term horizon, geopolitical and technological risks are of concern too—including “geoeconomic confrontations”, “geopolitical resource contestation” and “cybersecurity failure”.

Additional Information
World Economic Forum (WEF)

• WEF is an international organization that brings together its membership of political and business leaders each year to discuss major issues that impact the global economy.
• Founded in: 1971
• Headquarters: Geneva, Switzerland
• The environment and related issues like biodiversity destruction and human-made disasters are the most pressing global concerns in WEF's list.
• It has no independent decision-making power but seeks to influence powerful people to make decisions that benefit the global community.
• The organization is funded through its own membership, which includes prominent business and political figures.