The deteriorating state of public finances, the slowdown of Chinese economic growth, and the threat posed by climate change to food and health security are some of the biggest risks facing today’s world, the World Economic Forum (WEF) announced on Tuesday.
Legislators and business leaders must confront the ongoing heightened risks but must also ensure they do not worsen the situation in the long term, WEF further emphasized in its report “Global Risks 2009,” published ahead of the annual meeting in Davos, Switzerland from January 28 to February 1. “Economic forecasts for 2009 are pessimistic for most economies. Markets remain volatile, liquidity has not returned, unemployment is rising, and consumer spending and business confidence have fallen to record low levels,” the report states. “In such a climate, the impact of risks is even stronger, and the tendency towards panic and short-term reactions is more pronounced.”
The report lists 36 risks threatening the world, divided into five categories – economic, geopolitical, environmental, social, and technological. For example, WEF notes in the first category the danger that a slowdown in the U.S. could pressure the Chinese economy to a 6% annual growth rate, far below the official target level of eight percent. This could significantly harm the already severely wounded global economy due to the country’s role as a leading manufacturer and its status as a massive net creditor to other economies.
