A new report by the World Economic Forum (WEF), in partnership with Marsh & McLennan (MMC) and Zurich Insurance Group, has argued that world leaders, businesses and policy makers have a unique opportunity to build better economies as they begin to recover from the COVID-19 pandemic.
As part of the report, analysts warned that economic distress and social discontent will rise over the next 18 months unless greater societal equality and sustainability is embedded into the recovery.
The WEF, together with MMC and Zurich, questioned nearly 350 senior risk professionals on what their biggest worries were over the next 18 months, and found that the immediate economic fallout from COVID-19 dominated concerns.
Risks ranged from a prolonged recession to the weakening fiscal position of major economies, tighter restrictions on the cross-border movement of goods and people, and the collapse of a major emerging market.
In examining the interconnections between risks, the report called on leaders to act now against future systemic shocks such as the climate crisis, geopolitical turbulence, rising inequality, strains on mental health, gaps in technology governance and health systems under continued pressure.
“The crisis has devastated lives and livelihoods,” said Saadia Zahidi, Managing Director, World Economic Forum. “It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past.”
“As well as managing the immediate impact of the pandemic, leaders must work with each other and with all sectors of society to tackle emerging known risks and build resilience against the unknown,” he continued. “We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive.”
Peter Giger, Group Chief Risk Officer of Zurich Insurance Group, also commented: “COVID-19 has shown it is crucial to keep existential risks in focus, and climate change is one of these. As we reboot our economies, changes in working practices and in attitudes towards travelling, commuting and consumption all point to new ways to achieve a lower-carbon and more sustainable future.”
“The pandemic will have long-lasting effects, as high unemployment affects consumer confidence, inequality and well-being, and challenges the efficacy of social protection systems,” Giger added.
“With significant pressures on employment and education – over 1.6 billion students have missed out on schooling during the pandemic – we are facing the risk of another lost generation. Decisions taken now will determine how these risks or opportunities play out.”
John Doyle, President and CEO of Marsh, further stated: “Even before the COVID-19 crisis, organizations were faced with a highly complex and interconnected global risk landscape. From cyber threats to supply chains, as well as the well-being of their colleagues, businesses will now rethink many of the structures they formerly relied on.”
“To create the conditions for a speedier recovery and a more resilient future, governments and the private sector need to work together more effectively. Along with major investments to improve health systems, infrastructure, and technology, one of the outcomes of this crisis has to be that societies become more resilient and capable of withstanding future pandemics and other major shocks.”
