Ahead of Davos, WEF sees world riskier than ever

World leaders gather next week in the Swiss town against a background of increasingly frequent environmental crises. (AFP)
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Updated 15 January 2020

Ahead of Davos, WEF sees world riskier than ever

  • 78 percent of survey respondents said they expect ‘economic confrontations’ and ‘domestic political polarization’ to rise in 2020

LONDON: The World Economic Forum’s Global Risk Report - traditionally the curtain raiser to the Davos annual meeting - is its most gloomy in years, highlighting economic and geopolitical strain as immediate threats and climate change as the dominant long-term challenge facing the world.

In stark terms, the report stated” “Economic and political polarization will rise this year, as collaboration between world leaders, businesses and policy-makers is needed more than ever to stop severe threats to our climate, environment, public health and technology systems.”

World leaders gather next week in the Swiss town against a background of increasingly frequent environmental crises raging from the wild fires in Australia to the floods in Indonesia, as well as a face-to-face confrontation between the US and its Middle East allies against Iran.

The US President, Donald Trump, is expected to lead a big American delegation, while it is believed the Iranians have canceled their plans to attend the 50th annual meeting in the Alpine resort. Big delegations are expected from Saudi Arabia, the UAE and other Gulf countries.

The report forecasts a year of increased domestic and international divisions and economic slowdown. “Geopolitical turbulence is propelling us towards an unsettled unilateral world of great power rivalries at a time when business and government leaders must focus urgently on working together to tackle shared risks,” the WEF said, unveiling the report in London.

Over 750 global experts and decision-makers were asked to rank their biggest concerns in terms of likelihood and impact. Some 78 percent said they expect “economic confrontations” and “domestic political polarization” to rise in 2020.

This would prove “catastrophic,” the WEF said, particularly for addressing urgent challenges like the climate crisis, biodiversity loss and record species decline. The report pointed to a need for policy-makers to match targets for protecting the Earth with ones for boosting economies – and for companies to avoid the risks of potentially disastrous future losses by adjusting to science-based targets.

While the short-term outlook is troubled by economic and political stresses, the long-term view is if anything even more pessimistic. For the first time, the top five threats on a 10-year time-scale are all related to the environment.

The polled experts highlighted extreme weather events, failure of global plans to deal with climate change, environmental damage caused by humans, major biodiversity and eco-system loss, and major natural disasters as the big threats facing humankind over the next decade.

Borge Brende, WEF president, said: “The political landscape is polarized, sea levels are rising and climate fires are burning. This is the year when world leaders must work with all sectors of society to repair and reinvigorate our systems of cooperation, not just for short-term benefit but for tackling our deep-rooted risks.”

The risk report is prepared by WEF in partnership with insurance companies Marsh & McLennan and Zurich.

Marsh chairman John Drzik said: “High profile events, like recent wildfires in Australia and California, are adding pressure on companies to take action on climate risk at a time when they also face greater geopolitical and cyber risk challenges.”

Peter Giger, chief risk officer of Zurich, warned of the urgent need to adapt faster to avoid the worst and irreversible impacts of climate change and to do more to protect the planet’s biodiversity.

“We are already seeing companies destroyed by failing to align their strategies to shifts in policy and customer preferences. Transitionary risks are real, and everyone must play their part to mitigate them. It’s not just an economic imperative, it is simply the right thing to do,” he said.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.