Report sees debt crisis as top risk facing Pakistan
ISLAMABAD: “Global Risks Report 2022” listed five risks facing Pakistan, with highest risk of debt crisis, followed by extreme weather events, failure to stabilize price trajectories , failure of cybersecurity measures and man-made environmental damage.
The report, released by the World Economic Forum (WEF) on Tuesday, outlines the top five risks for each of the 124 economies surveyed by the forum’s Leaders’ Opinion Survey between May and September 2021.
According to the report, “Risk 1” indicates the most frequently selected risk in each country. Rising commodity prices, inflation and debt are the emerging risks. Moreover, with a new spike in Covid-19 cases towards the end of 2021, the pandemic continues to stifle countries’ ability to facilitate a sustainable recovery, the report says.
Economic challenges stemming from the Covid-19 pandemic persist and the outlook remains weak, as the global economy is expected to be 2.3% smaller by 2024 than it would have been without the pandemic.
Climate risks dominate global concerns as the world enters the third year of the pandemic. According to the report, while the main long-term risks are climate-related, the main short-term global concerns include societal fractures, livelihood crises and deteriorating mental health.
Furthermore, most experts believe that a global economic recovery will be volatile and uneven over the next three years.
The economic fallout from the pandemic comes on top of labor market imbalances, protectionism and widening digital, education and skills gaps that risk dividing the world into divergent trajectories.
In some countries, the rapid deployment of vaccines, successful digital transformations and new growth opportunities could mean a return to pre-pandemic trends in the short term and the possibility of a more resilient outlook in the longer term.
Short-term domestic pressures will make it harder for governments to focus on long-term priorities and limit the political capital allocated to global concerns.
Growing insecurity resulting from economic hardship, intensifying effects of climate change and political instability are already forcing millions of people to leave their homes in search of a better future abroad. ‘Involuntary migration’ is a major long-term concern for respondents to the Global Risk Perceptions survey, while 60% of them see ‘migration and refugees’ as an area where international efforts to mitigation have ‘not started’ or are in ‘early development’. In 2020, there were more than 34 million internationally displaced people worldwide due to the conflict alone – an all-time high.
Growing reliance on digital systems – intensified by Covid-19 – has altered societies. Over the past 18 months, industries have experienced rapid digitization, workers have shifted to remote work where possible, and platforms and devices facilitating this shift have proliferated.
At the same time, cybersecurity threats are on the rise – in 2020, malware and ransomware attacks increased by 358% and 435%, respectively – and outpace the ability of companies to prevent or respond to them effectively.
Lower barriers to entry for cyber threats, more aggressive methods of attack, a shortage of cybersecurity professionals, and disparate governance mechanisms all compound the risk.
“Health and economic disruptions are deepening social divides. This creates tension at a time when collaboration within societies and within the international community will be fundamental to ensuring a smoother and faster global recovery. World leaders must come together and adopt a coordinated multi-stakeholder approach to address relentless global challenges and build resilience ahead of the next crisis,” said Saadia Zahidi, Chief Executive Officer of WEF.
Posted in Dawn, January 12, 2022