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Income disparity, debt lead risk list

LONDON: Fragile economies and extreme weather have combined to crank up the global risk dial in the past year, creating an increasingly dangerous mix, according to the World Economic Forum.
Despite Europe’s avoidance of a euro breakup in 2012 and the US stepping back from its fiscal cliff, business leaders and academics fear politicians are failing to address fundamental problems. The unemployment rate across the euro zone hit a new all-time high of 11.8% in November, official figures say.
That is the conclusion of the group’s Global Risks 2013 report, which surveyed more than 1,000 experts and industry bosses and found they were slightly more pessimistic about the outlook for the decade ahead than a year ago.
“It reflects a loss of confidence in leadership from governments,” said Lee Howell, the WEF managing director responsible for the report.
The 80-page analysis of 50 risks for the next 10 years comes ahead of the WEF annual meeting in the Swiss ski resort of Davos from Jan. 23 to 27, where the rich and powerful will ponder the planet’s future.
The experts, who were asked to rate 50 global risks, suggested the risk of growing wealth gaps was the most likely to materialize, followed by unsustainable government debt and rising greenhouse gas emissions.
They deemed however that major systemic financial failure would have the biggest impact if it happened, followed by a major water supply crisis and chronic fiscal imbalances.
The list of global risks “are essentially a health warning regarding our most critical systems,” said WEF managing director Lee Howell, who edited the report.

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