The World Economic Forum’s 2014 Global Risk report, has implications for investors.
The report, released ahead of next week’s meeting in Davos, highlights how global risks are not only interconnected by also have systemic impacts.
The risks were broken down into economic, environmental, geo-political and social. The seven economic risks were: fiscal crises in key economies, failure of a major financial mechanism or institution, liquidity crises, structurally high unemployment/underemployment, oil-price shock to the global economy, failure/shortfall of critical infrastructure, decline of importance of the US dollar as a major currency.
The report encourages a culture of long-term thinking, by companies, investors and governments, as a way of mitigating and managing these risks.
The global risks were identified by surveying the World Economic Forum’s multistakeholder communities.
Ten global risks of highest concern in 2014
- Fiscal crises in key economies
- Structurally high unemployment/underemployment
- Water crises
- Severe income disparity
- Failure of climate change and mitigation and adaptation
- Greater incidence of extreme weather events
- Global governance failure
- Food crises
- Failure of a major financial mechanism/institution
- Profound political and social instability