Several crises in one: what effects will COVID-19 have on the global risk landscape?
A new Forum report based on the views of 350 senior risk professionals analyses the pandemic's implications for the world.
The challenge is to reconcile people's fears with the acceptance of uncertainties.
Here are areas for policy-makers and businesses to consider as we move forward into the 'new normal'.
We are in a healthcare crisis that is also an economic crisis combined with an energy crisis. Add to that a looming humanitarian crisis in some emerging economies and you have a multitude of challenges, all of which are exacerbating geopolitical risks. How will these crises play out over the next 18 months - and what does it mean for the actions we take today?
The World Economic Forum's COVID-19 Risks Outlook report, A Preliminary Mapping and its Implications, published on 19 May and informed by the views of nearly 350 senior risk professionals, identifies the main emerging concerns and fallouts, and analyses the pandemic's implications and effects. This goes beyond the immediate crisis response, providing insights on the current and future global risk landscape.
Balancing fear and optimism
The length and depth of the current economic crisis will depend on solving the healthcare crisis with an exit strategy involving a combination of an effective, widely available vaccine and therapeutic drugs. Meanwhile, governments around the world are trying to manage the delicate balance between controlling transmission and returning some people to economic activity. The stakes are high, not only in the obvious health and economic consequences of mis-steps but also in managing public perceptions of risk.
Sir John Templeton, the British investor, banker, fund manager, and founder of the Templeton Growth Fund, once said “the biggest mistake in investment is to think that this time it’s different” - but this time, it really is different. The difference is that this economic crisis is combined with a healthcare crisis - and people are scared. The challenge is to return to the “new normal”; to reconcile the natural fears we feel with acceptance of the uncertainties, aided by a risk management architecture that helps manage the trade-offs.
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