The Global Risks Report 2019

The Global Risks Report 2019 is published against a backdrop of worrying geopolitical and geo-economic tensions. If unresolved, these tensions will hinder the world’s ability to deal with a growing range of collective challenges, from the mounting evidence of environmental degradation to the increasing disruptions of the Fourth Industrial Revolution.

Global Risks Report and its significance:

Based on the work of the Global Risk Network, the report describes changes occurring in the global risks landscape from year to year and identifies global catastrophic risks.

The report explores the interconnectedness of risks and is intended to raise awareness about the need for a multi-stakeholder approach to the mitigation of global risk

Top 10 risks by likelihood as per the latest report:

  • Extreme weather events.
  • Failure of climate change mitigation and adaption.
  • Major natural disasters.
  • A massive incident of data fraud/theft.
  • Large scale cyber attacks.
  • Man-made environmental damage and disasters.
  • Large-scale involuntary migration.
  • Major biodiversity loss and ecosystem collapse.
  • Water crises.
  • Asset bubbles in a major economy.

Analysis of the report and key takeaways:

Environmental risks dominate the global risks landscape in terms of impact and likelihood for the third year in a row. This includes extreme weather events and the failure of climate mitigation and adaptation. Only 12 years left to stay beneath 1.5C. However, there is a lack of political will to set more stretching targets to cut emissions. The report finds that business leaders are more concerned about the climate in the long term. This disconnect will need to be tackled.

Global risks are intensifying, but our capacity to respond to them is declining. Power is moving towards more nationalist, authoritarian states and they are becoming more inward-looking. With greater geopolitical friction, our ability to cooperate to solve challenges such as cyber risks and climate change has become more challenging.

Geopolitics and geo-economic factors, such as uncertainty and nationalism are fuelling risks. Innovation is also outpacing our ability to manage it and there are growing concerns around technology misuse.

Shorter-term fears are around geopolitical and cyber threats. For top business leaders, cyber risk concern is rising globally and is the highest ranked threat. Other concerns also exist including fiscal crises, unemployment, energy price shocks, national governance failure, interstate conflict, and natural disasters.

There is a significant financing gap (US$18 trillion) in infrastructure capital – with only US$79 trillion currently planned between now and 2040. This means 20% more financing is needed than we are putting in today. Furthermore, the infrastructure needs to be resilient to extreme weather events. Business, with its reliance on public sector infrastructure, will be impacted and need to work with the government on solutions.

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US named the world’s most competitive economy

The United States was named the world’s most competitive economy by the World Economic Forum (WEF) on Wednesday.

In its Global Competitiveness Index, WEF — known for its annual economic forum in Davos, Switzerland — ranked the U.S. as the most competitive of 140 economies, the first time the nation has reached the top spot in a decade.

Performance of India:

India was ranked as the 58th most competitive economy with a score of 62.0 on the Global Competitiveness Index 2018.

India jumped five spots from 2017, the largest gain among G20 economies.

India ranked highest among South Asian countries. Sri Lanka was ranked 86th, Bangladesh 103rd, Pakistan 107th, and Nepal 109th.

As per the report, India leads the region in all other areas of competitiveness except for health, education, and skills.

As per the report, India’s greatest competitive advantages include its market size and innovation.

Global performance:

On the list of 140 economies, the United States topped the list with a score of 85.6, followed by Singapore and Germany at the second and the third positions respectively.

Other countries in the top 10 include Switzerland (4th), Japan (5th), Netherlands (6th), Hong Kong (7th), United Kingdom (8th), Sweden (9th) and Denmark (10th).

In Europe, Sweden is ranked the highest among the Nordic economies at 9th position, while France (17th) is among the top 20. Countries such as Germany and Switzerland set global standards for innovation.

Competitiveness performance in the Middle East and North Africa remains diverse, with Israel (20th) and the United Arab Emirates (27th), leading the way in their respective regions.

17of the 34 sub-Saharan African economies are among the bottom 20. Mauritius (49th) leads the region, ahead of South Africa and nearly 91 places ahead of Chad (140th).

Among the BRICS economies, China topped the list at 28th place with a score of 72.6, followed by Russia, India, South Africa, and Brazil respectively.

The Global Competitiveness Index (GCI) is prepared on the basis of country-level data covering 12 categories or pillars of competitiveness.

Institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation are the 12 pillars.

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In work & politics, India gender inequality extremely high, suggests report

Gender inequality in India is extremely high at the workplace and in terms of legal protection and political voice, according to a recent report by the McKinsey Global Institute (MGI) for the Asia-Pacific region.

The report assessed inequality on the basis of a Gender Parity Score (GPS) that uses 15 indicators of gender equality in work and society. With 1.0 signifying parity, India’s score was 0.30 in gender equality at work and 0.78 in legal protection and political voice.

Advancing women’s equality in the countries of Asia Pacific, the report suggests, could add $4.5 trillion to their collective GDP annually in 2025, a 12% increase over a business-as-usual GDP trajectory. This presumes a best-in-region scenario in which each country matches the rate of progress of the fastest-improving country in its region — China in the case of the Asia-Pacific. If this were achieved, India would add $770 billion in 2025 over and above its business-as-usual GDP, it says.

Comparing the 15 indicators under four broad categories, the report finds India behind the Asia-Pacific average in all four, but ahead of Bangladesh and Pakistan. It notes, however, that India has progressed faster than any other country in the Asia-Pacific region in the last 10 years, primarily due to advances in education and a reduction in maternal mortality.

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