The World Economic Forum has recently published 'The Global Risks Report 2022'. This year it examines risks in five categories such as economic, environmental, geopolitical, social and technological. The report's key findings show that social and environmental risks have been the worst since the Covid-19 pandemic began, with "social cohesion erosion" and "livelihood crises" topping the list. Other risks identified as being significantly worse are "debt crisis", "cyber security failure", "digital inequality" and "backlash against science".
Among the survey respondents, only 11% thought the world would be marked by an accelerated recovery towards 2024, while 89% considered the short-term outlook to be volatile, broken or increasingly catastrophic. Absolutely 84% of the respondents expressed negative feelings about the future meaning they were “anxious” or “worried”. Extensive pessimism can create a cycle of disillusionment that makes galvanizing action even more challenging.
The main risks in the economy of Bangladesh are livelihood and employment. In addition to economic risks, socio-political and environmental risks are also mentioned in the report. Besides employment and livelihood, another major risk for Bangladesh has been identified as a geopolitical nation of the country's strategic resources. However, no details were given about the matter. Other risks identified in the report are environment, cyber vulnerabilities, digital inequality, etc.
Climate risk is a major global concern, in the long run, the report said. Short-term concerns include social divisions, livelihood crises and deteriorating mental health. These risks have increased due to corona. Many of the experts who participated in the survey believe that the recovery of the global economy will not be stable and such uneven recovery may continue for the next three years. Only one in 10 respondents think the economy will return to normal. Most of the respondents think that social and environmental risks are the main ones for the next five years.
The report identifies a total of 3 including bad weather, livelihood crisis, failure to cope with the effects of climate change, infectious disease, deterioration of social cohesion, deterioration of mental health, failure in cyber security, debt crisis, digital inequality, abnormal valuation of assets and unintentional migration.
The global economy contracted by 3.1 percent in 2020. The World Economic Forum estimates that in 2021, the global growth rate will be 5.1 percent. And in 2022 it will be reduced to 4.9 percent. According to the report, the world economy would have shrunk by 2.3 percent in 2024 compared to where the world economy would have been if the pandemic had not occurred.
The supply crisis has been a major problem since the beginning of the pandemic. Compared to 2020, commodity prices have increased by 30 percent. Conflicts between Europe, Russia and China over the energy crisis could lead to further deterioration of the situation. But the main reason for the high inflation that is being seen all over the world now is the supply crisis. That is, inflation is not demand-driven, but supply-driven. According to the report, the supply crisis will continue in 2022. Most countries have lost revenue due to the pandemic. Developed countries have given a lot of incentives. In 2020, government debt in various countries increased by 13 percent to 97 percent of GDP. This could lead to the devaluation of the currencies of developing countries against the dollar.
Most members of Sri Lanka's cabinet, including the prime minister, have resigned in the face of public outrage over the economic crisis. Political unrest has been raging in Kazakhstan for months now. Considering the risk of such instability this year, Bangladesh is also on the list of 10 emerging economies.
Maplecroft says other emerging economies are also at risk of such instability this year. The 10 countries to be monitored separately are Argentina, Brazil, Egypt, Tunisia, Lebanon, Senegal, Kenya, Pakistan, Bangladesh and the Philippines. According to the report, these countries have provided social security to their people during the pandemic. But they are struggling to make ends meet. Rising food and fuel prices could be a source of instability for Asian countries.
World food prices have risen sharply since Russia invaded Ukraine. Fuel prices are also rising. The import-dependent countries are suffering the most. Maple croft says the crisis of rising living costs will continue until 2023, as there is no solution at the moment.
According to the organization, civil unrest hinders the recovery of countries' economies. In addition, whether investors will invest in these countries in the future may also face uncertainty.
Health and economic disasters are manifesting in social divisions. This is giving rise to anxiety. This is because the issue of cooperation in the international community is very important to get out of the corona effect. To address this global challenge, world leaders must work together and find a multilateral approach. But amid all the bleak predictions, there’s still reason to hope for more positive outcomes, with the Global Risks Report 2022 including lessons in resilience from the Covid-19 pandemic, advice for cooperation in space, greater cyber resilience and a more sequenced climate transition.
Covid-19 and Russia-Ukraine war has recently led to a rise in commodity prices in our country, illegal stockpiling of edible oil and other commodities, road accidents, the deficit in imports and exports, declining remittance inflows, pressure on foreign exchange reserves, untimely flooding in Haor region, outbreaks of Dengu and other infectious diseases, unemployment, suicide, violence against women, sexual harassment, domestic violence, drugs, money laundering, trafficking in women and children, illegal immigration, bribery, corruption and social unrest have also increased. These issues can pose a serious risk to disrupt a stable political and social environment.
Thus, it can be said that if effective measures are not taken in these matters, instability in society will increase. Economic, social and political development will be hampered. Even the political system can change as we can see in different countries including our neighbouring countries. So, it needs to pay more attention to these issues right now.
The writer is a researcher and development worker