SONGEZO ZIBI: World Economic Forum’s global risks report gave rise to gloom at meetings
The world’s biggest and most likely risks need the steady hand of leadership and broad consensus, yet both are receding
As the last of the delegates attending the 2019 annual meetings of the World Economic Forum (WEF) in Davos, Switzerland, headed home on Friday, the skies began to clear, shining bright sunlight on the snow-capped mountains around the small town. It was a sight so glorious one could easily forget the decidedly gloomy mood at this year's event.
While global CEOs and policymakers made it clear that the outlook for the year ahead is a reversal from 2018's optimism, it was the WEF’s global risks report 2019 that gave detailed insights into the reasons. Even more frightening is the realisation that the antidotes to those risks are also in recession, putting long-term prospects for political stability and global peace — and therefore inclusive economic growth — in the “worry” basket.
The risks demonstrate how political leaders and policymakers globally find it difficult to fashion policy responses that address these risks. Instead, we continue to see outmoded, isolationist responses to the symptoms of those risks, partly because they do not make for exciting political messaging but also due to continuing ignorance about which risks are more crucial.
Extreme weather events, resultant natural disasters, cyberattacks, data fraud or theft, and failure of climate change mitigation and adaptation occupy the top five, ahead of terrorist attacks at number eight and, at nine and 10 respectively, illicit trade and asset bubbles in major economies. Of course, this priority list is difficult to sell in a country such as Kenya, where terrorist attacks are a real and immediate concern.
Even so, the top 10 risks by impact demonstrate a similar pattern, save for weapons of mass destruction, the undisputed champion of potentially catastrophic risks to humanity. Extreme weather events, natural disasters, failure of climate change mitigation and adaption and water crises occupy positions two to five respectively. Cyber attacks, food crises and biodiversity loss come in ahead of large-scale, involuntary migration, the one phenomenon that appears to come close to US President Donald Trump’s number one policy priority — immigration.
For South Africans who have time to care about the goings-on at the WEF, the gathering seems reduced to an opportunity for convincing foreign investors to increase their investments here so we can create jobs. This also makes sense given that unemployment is the most important concern for millions of South Africans because they feel the exclusion and poverty daily.
Yet we will have more emergencies if the government does not prioritise spending on new infrastructure such as dams, and cultivating a culture of efficient use of natural resources. In turn, those emergencies may have grave political and social consequences, such as protests, societal divisions and policymaking informed by sentiment rather than facts.
The contrast between increasing global risks and their potential impact, and matters that politicians in different countries prioritise, explains the continuing impasse and why political and business leaders need to rethink their societal roles if further disintegration is to be averted. It is from clear-headed, fact-based political priorities that policymakers get the cover they need to allocate resources to the most important priorities.
Not only do they already understand these risks better, they also have the opportunity to cast a long-term, integrated view on the different variables that conspire to create what on the surface looks like the same old problems: unemployment, hunger and poor access to basic services.
It is also due to faulty framing of political and policy messaging about the symptoms of these that the much-needed transformation in societal attitudes and thinking will not take place soon. The water shortages that threatened to plunge Cape Town into crisis were hardly ever linked to climate change, one of the world’s top five risks. The fact that none of the three spheres of the government (national, provincial and municipal) was ready to deal with the crisis when it arose also demonstrates why the failure of climate change adaptation and mitigation remain a risk.
In the SA context, the topics that get people animated often have little relation or insight into these risks. The nationalisation of the Reserve Bank appears to receive significant political attention but water shortages do not, and this is unlikely to change. Extreme weather events such as floods and droughts are beginning to occur more regularly, but this is unlikely to be a regular topic of discussion, nor will it be reflected in policy-making and budget planning.
People want immediate solutions or those that assuage their moral and emotional sentiments, whether or not facts support the case.
The pattern of contradiction between real risks and political priorities is not unique to SA. In the US, Trump denies climate change, with resultant destructive policy positions. He also appears to believe that immigration, by no means an increasing risk to that country, should be a priority. Because the efforts of policy-makers have to reflect his priorities, the US is incurring an increasing opportunity cost that will be difficult to mitigate in years to come.
These risks and the widespread societal ignorance thereof introduce a new role many politicians are still unaccustomed to — learning to popularise a more rational, fact-based political discourse. In a world of fake news and conspiracy theories this will be understandably difficult, but it is a task from which they can no longer continue to shirk.
It is national election season in SA. Parliament and provincial legislatures are likely only to discuss and process matters that will keep the wheels of government turning while their occupants hit the campaign trail. The electorate is not waiting to hear long expositions about the local symptoms of very serious global risks. People want immediate solutions or those that assuage their moral and emotional sentiments, whether or not facts support the case.
There are two powerful antidotes everyone should nurture. The first is to choose leaders with considered views and a steady hand. The risks we face are complex and interconnected. They will not be mitigated with binary views and knee-jerk, populist actions. They require long-term planning, decisive execution and efficient use of increasingly scarce resources.
The second is always to work hard to secure broad consensus on the biggest risks so that national, regional and international resources and talents may be directed towards the highest-impact areas. In a polarised world in which regional blocs are breaking up and politics is becoming nationalistic, this is very difficult, yet the task of leadership is to use popular support to do the necessary rather than the popular.
Perhaps the reason delegates were so gloomy in Davos was that they knew both antidotes are receding, and those who hold separatist views are gaining political popularity across the globe. This leaves civil society, including business, with the responsibility to locate like-minded partners to pursue an agenda of long-term sustainability.
Rather than the glamorous stage on which bodies such as the IMF get to pronounce on the global economic growth outlook,which is weakening, the WEF is the opportunity to circumvent obstacles and pursue collaborations within countries and across borders. This is in the hope that collective informal power will eventually move the needle towards the right outcomes.
• Zibi, a former Business Day editor, is an author and head of communications at Absa.