Global Risks Report 2010 – the state of the world

According to the report – which will be officially presented in Davos, Switzerland, later this month – the world’s economic crisis will continue to be felt for a long time to come. The volatility of the dollar is one of the highest risk factors for 2010 – aggravating the crisis in one of the world’s key economies, and creating global repercussions.

The scenario envisages serious consequences everywhere – with unemployment rising, as well as other associated risk factors: the failure of social security systems, increasing insecurity (on all levels) and uncontrolled migration.

The report shows how current health, education and unemployment protection systems have been put under huge pressure by the financial crisis. Also, the ageing of the population and increase in life expectancy, has upped expenditure on public health - already in a difficult situation due to the shrinking of world economies. The risk of natural disasters has also risen due to the weakening of ecological systems and natural habitats – and the consequences translate into an increase in endemic diseases and difficulties in supplying populations with sanitary water and food. The poorer countries are those that will suffer the most from natural disasters triggered by climate change – due to their lack of basic infrastructures and institutional organisation (witness Haiti…)

The report also forecasts that hunger will affect more people in 2010 – either as a result of environmental factors, but most likely as a result of volatility in food prices.

A rise in crime is also predicted, on a worldwide level – particularly on a transnational level. Crimes of corruption, crimes against the environment and terrorism are those that most concern risks specialists.

The increase risk of terrorist attacks heralds extra reliance on security measures and their associated costs by sectors that have already been weakened by the volatility in fuel prices – the aviation industry, for example.

There’s also the rising likelihood of risks associated with cyber-vulnerability – which could originate in the failure of banks’ and financial markets’ security systems.

Although Portugal gets small mention in the report, the country “isn’t spared from any of the risks mentioned”, says José Pirra Alves, CEO at «Marsh, Lda», the Portuguese office of the world’s leading Insurance Broker and Risk Advisor, Marsh Inc.

“Indeed, Portugal is already suffering the consequences of many of these risks. You only have to look at the current reality: unemployment has hit its highest levels, desertification is increasing, the cost of energy and fuel has irredeemably affected Portuguese businesses – and the Social Security system cannot be looking into the future with any optimism”.