By Emma Ujah
Prolonged global recession, high unemployment, another outbreak of infectious diseases and protectionism now top the list of worries of corporate organizations across the world, according to the World Economic Forum (WEF) in a report, COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications, released yesterday.
According to the report, the global economy was not ready for the effects of the pandemic but that the situation could be salvaged if world leaders acted together.
The WEF report said, “Economic distress and social discontent will rise over the next 18 months unless world leaders, businesses and policy-makers work together to manage the fallout of the pandemic.
“As economies restart, there is an opportunity to embed greater societal equality and sustainability into the recovery, which would unleash a new era of prosperity.”
The report, produced in partnership with Marsh & McLennan and Zurich Insurance Group, tapped into the views of nearly 350 senior risk professionals who were asked to look at the next 18 months and rank their biggest concerns in terms of likelihood and impact for the world and for business.
“The immediate economic fallout from COVID-19 dominates companies’ risks perceptions. These range from a prolonged recession to the weakening fiscal position of major economies, tighter restrictions on the cross-border movement of goods and people, and the collapse of a major emerging market.
“In examining the interconnections between risks, the report also calls on leaders to act now against an avalanche of future systemic shocks such as the climate crisis, geopolitical turbulence, rising inequality, strains on people’s mental health, gaps in technology governance and health systems under continued pressure.
“These longer-term risks will have serious and far-reaching implications for societies, the environment and the governance of breakthrough technologies. It reinforces the calls made in the Global Risks Report 2020, where multistakeholder community-rated environmental risks as being among the top five risks for the next decade and warned of the extraordinary stress on health systems,” it said.
According to the report, “two-thirds of respondents identified a “prolonged global recession” as a top concern for business. One-half identified bankruptcies and industry consolidation, failure of industries to recover and disruption of supply chains as crucial worries.
“With the accelerated digitization of the economy in the midst of the pandemic, cyberattacks and data fraud are also major threats – according to one-half of respondents – while the breakdown of IT infrastructure and networks is also a top concern. Geopolitical disruptions and tighter restrictions on the movement of people and goods are high on the worry list.”