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World Economic Forum warns of 'perfect storm' of policy failure

World Economic Forum warns of 'perfect storm' of policy failure

Persistent policy failures threaten a ‘perfect storm’ of systemic global financial, economic and ecological collapse, the World Economic Forum has warned, ahead of its annual meeting in Davos.

The organisation’s regular Global Risks report, released ahead of its conference in the Swiss resort, said growing income inequality, over-leveraged governments and climate change were in danger of becoming disastrously intertwined by a failure to effectively deal with any of the issues separately.

Every year the organisation canvasses 1,000 sector experts on their global outlook. The report was unusual in idenitifying a common and self-reinforcing thread connecting the dots, however.

‘Continued stress on the global economic system is positioned to absorb the attention of leaders for the foreseeable future,’ wrote Lee Howell, editor of the report.

‘Meanwhile, the Earth’s environmental system is simultaneously coming under increasing stress. Future simultaneous shocks to both systems could trigger the “perfect global storm”, with potentially insurmountable consequences.      

‘A sudden and massive collapse on one front is certain to doom the other’s chance of developing an effective, long-term solution.’

Drawing an analogy with the radio broadcast of HG Well’s War of the World’s, which spread fear across the US in 1938 among listeners who mistook it for a news report, the authors also warned of the risks of a global panic based on the rapid spread of social media.

The spread of misinformation, and the potential to cause real-world damage, was an unexplored consequence of the revolution in online media, they said.

‘While the benefits of our hyper-connected communication systems are undisputed, they could potentially enable the viral spread of information that is either intentionally or unintentionally misleading or provocative,’ wrote Howell.  

‘Imagine a real-world example of shouting “fire!” in a crowded theatre. In a virtual equivalent, damage can be done by rapid spread of misinformation even when correct information follows quickly.’

Among the known unknowns of global risks, the report also warned that rapid advances in immunisation and antibiotics had led to complacency about the risks of a global pandemic.

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