People wearing protective masks walk on the main shopping street in Munich, Germany, during the coronavirus crisis on April 30, 2020.
Alexander Hassenstein / Getty Images
LONDON – Certain countries’ “inward-looking national agenda” in response to the coronavirus pandemic is threatening global resilience in the wake of the crisis, suggested one of the speakers behind the World Economic Forum’s 2021 global risk report.
Carolina Klint, risk management leader for Continental Europe at Marsh & McLennan, told CNBC’s Geoff Cutmore on Monday that there were lessons to be learned from the collaboration needed to develop coronavirus vaccines at “unprecedented speed”.
However, she added that some countries’ “inward-looking national agenda” was “a point of concern”.
His comments were made while some wealthier countries are being criticized by activists for “accumulating” more doses of coronavirus vaccines than they need to, while low-income countries struggle to get enough vaccines to immunize their populations. An Amnesty International report in December raised concerns about “vaccine nationalism”, citing the United Kingdom, the United States, the EU, Japan, Canada and Australia among the largest advanced buyers of vaccine doses.
On Tuesday, the co-chair of the World Health Organization’s independent pandemic review panel, Ellen Johnson Sirleaf, shared her disappointment that “vaccine launches are currently favoring rich countries”.
Zombie companies; asset bubbles
Klint said that the “substantial” stimulus packages that governments have injected into their respective economies in the immediate response to the pandemic have also fitted into the “continuing trend of self-reliance that has been accelerated by Covid-19”.
She added that there was a risk of “business mockery” if the stimulus packages were not “properly structured”.
“So it really is a perfect storm brewing here,” she said.
The so-called zombie companies are considered laggard companies that need debt to operate or earn just enough to survive and pay off debt service. This has been a concern in the midst of the pandemic, with greater support for companies from governments and central banks.
Likewise, Klint warned of asset bubbles – when an investment skyrockets in price driven by market momentum rather than the underlying fundamentals – as another potential risk.
Perhaps unsurprisingly, infectious diseases were considered to be the threat of greatest impact in the next decade, in the WEF’s annual global risk report. In comparison, in January 2019, the spread of infectious diseases was ranked as the tenth highest risk in terms of potential impact in the next 10 years.
In its first global risk report in 2006, WEF highlighted the threat of an influenza pandemic as one of the four main risks. He warned that “a lethal flu, with its spread facilitated by global travel patterns and not contained by insufficient alert mechanisms, would pose an acute threat.”
The annual report is based on the WEF’s Global Risk Perception Survey, conducted by more than 650 members of the forum’s “diverse leadership communities”.
In this year’s risk report, infectious diseases, along with subsistence crises, were also identified as the main short-term threats to the world, according to 60% of survey respondents.
Klint added that: “The Covid-19 pandemic changed the way we think about risk, raised awareness that disasters that could cause mass death and destruction can really happen.”
Extreme weather conditions, failure of climate action and environmental damage caused by humans were considered by respondents to the WEF survey as the most likely risks in the next decade. This continued the trend of last year’s report, in which all five major long-term global risks concerned environmental issues.
Along with job and livelihood crises, digital inequality and disillusionment among young people were listed among the most imminent threats to the world, with the report’s focus on the broad social gaps caused by the pandemic.