Geopolitical risks dominate the 2019 WEF Global Risks Report

Lauren Eldershaw
By Lauren Eldershaw January 18, 2019 12:49

Geopolitical risks dominate the 2019 WEF Global Risks Report

Increasing geopolitical and geo-economic pressures are identified as the most vital risk in 2019, according to the findings of the annual World Economic Forum’s Global Risks Report 2019.The report also highlights, what it describes as “environmental squalor”, as the long-term risk that “defines our age”. Four of the top five most impactful global risks in 2019 related to climate and rapidly developing cyber, while technical threats are the most significant possible blind spots.

The Global Risks Report of 2019, which incorporates the results of the Global Risks Perception Survey, points to a worsening in economic conditions and geopolitical conditions. Trade disputes escalated very quickly in 2018 and the report expects economic development to be weighed down by continuing geopolitical tensions, with 88% of respondents expecting further loss of multilateral trading regulations and deals. A vast majority, 90% of respondents, presume that there is going to be deteriorating economic and political conflicts between the main powers this year.

If economic headwinds pose a threat to international cooperation, efforts will be further disrupted in 2019 by rising geopolitical tensions among major powers, according to the report. Eighty-five percent of respondents to this year’s survey said they expect 2019 to involve increased risks of “political confrontations between major powers”. The report discusses the risks associated a “multiconceptual” world order – one in which geopolitical instabilities reflect not only changing power balances but also the increasing salience of differences on fundamental values.

“With global trade and economic growth at risk in 2019, there is a more urgent need than ever to renew the architecture of international cooperation. We simply do not have the gunpowder to deal with the kind of slowdown that current dynamics might lead us towards. What we need now is coordinated, concerted action to sustain growth and to tackle the grave threats facing our world today,” said Børge Brende, President of the World Economic Forum.

Environmental risks as well as cyber risk continue to dominate the longer-term outlook. Both of which have a significant impact on aviation.

“Persistent underfunding of critical infrastructure worldwide is hampering economic progress, leaving businesses and communities more vulnerable both to cyberattacks and natural catastrophes, and failing to make the most of technological innovation,” said John Drzik, President of Global Risk and Digital, Marsh. “Allocating resources to infrastructure investment, in part through new incentives for public-private partnerships, is vital for building and strengthening the physical foundations and digital networks that will enable societies to grow and thrive.”

The concern over geopolitical and economic headwinds are the foremost concern for aviation leaders in the 2019 Aviation Industry Leaders Report, Tackling Headwinds, published by Airline Economics and KPMG, which are also closely tracking developments with the escalating trade wars and the departure of the UK from the EU. (The report will be published on Monday 21stJanuary, at the opening of the Airline Economics Growth Frontiers conference in Dublin.) Like the global economy, which is generally accepted to have peaked – the latest International Monetary Fund (IMF) forecasts point to a gradual slowdown over the next few years – the aviation industry cycle is also generally accepted to be on a slow downturn. The 2019 Aviation Industry Leaders Report summarises the expectations, challenges and opportunities for the next 24 months for the strongest companies. Access the report here from Monday.

Lauren Eldershaw
By Lauren Eldershaw January 18, 2019 12:49