The COVID-19 pandemic and its economic and societal impacts will continue to be felt for years to come, warns the World Economic Forum.
In its Global Risks Report 2021, the 16th edition of the report, the WEF warned that economic fragility and societal divisions are set to increase, with underlying disparities in health care, education, financial stability and technology leading to disproportionate impacts on some economies.
COVID-19 demonstrated the "catastrophic" effects of ignoring long-term risks, such as pandemics, the report said. The WEF said it has been warning about the dangers of pandemics for the last 15 years.
As well as the more than 2 million deaths recorded around the globe, "the economic and long-term health impacts will continue to have devastating consequences," the report said. Working hours equivalent to 495 million jobs were lost in the second quarter of last year, while only 28 economies are expected to have grown last year.
The report said France, Germany, India, Japan, the U.K. and the U.S. all experienced negative GDP growth in the second and third quarters, ranging from India taking a -23.5% hit in the second quarter to the U.S. contracting by 2.9% in the third quarter. In its representative sample, only China grew in both the second and third quarters, by 3.2% and 4.9%, respectively.
COVID-19 "threatens to scale back years of progress on reducing poverty and inequality and to further weaken social cohesion and global cooperation," the report said. "Job losses, a widening digital divide, disrupted social interactions, and abrupt shifts in markets could lead to dire consequences and lost opportunities for large parts of the global population."
The WEF warned that social unrest, political fragmentation and geopolitical tensions may be experienced around the world, which will also "shape the effectiveness of our responses to the other key threats of the next decade: cyberattacks, weapons of mass destruction and, most notably, climate change."
The report is based on the WEF's annual global risks perception survey, which is completed by more than 650 members of its leadership communities.
The greatest source of risks in the next 10 years, according to respondents, include extreme weather, climate action failure and human-led environmental damage, and cybersecurity failure.
However, the greatest impact of risks for the next decade will come from infectious diseases, followed by climate action failure and other environmental risks. Weapons of mass destruction, livelihood crises, debt crises and IT infrastructure breakdowns were also cited as high-impact risks.
Over the next two years, employment and livelihood crises and economic stagnation featured highly on respondents' lists of concerns; and over the next three to five years economic risks feature prominently, including asset bubbles, price instability, commodity shocks and debt crises.
The report also warned that the lessons of 2020 must lead to developments to strengthen the overall resilience of countries, businesses and the international community. "If lessons from this crisis only inform decision-makers how to better prepare for the next pandemic — rather than enhancing risk processes, capabilities and culture — the world will be again planning for the last crisis rather than anticipating the next," the report said.
The opportunities to improve involve formulating analytical frameworks to take in an overall and systems-based view of risk impacts; investing in high-profile "risk champions" to encourage national leadership and international cooperation; improving risk communications and combating misinformation; and exploring new forms of public-private partnership on risk preparedness.
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January 19, 2021 at 10:39PM
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