The risks that trouble the world’s leaders

The World Economic Forum’s (WEF) latest report, Global Risks 2008, predicts the highest levels of political and economic uncertainty in a decade.

The report focuses on four emerging issues which will impact the world in the decade ahead: systemic financial risk, food security, supply chain vulnerability and energy.

The authors call for new thinking on systemic financial risk. Deregulation and innovation have increased the financial system’s capacity to assume and distribute risk, but the current turmoil has shown that they are only effective in normal market conditions.

David Nadler, vice chairman, office of the chief executive, Marsh, and a partner in the project, called systemic financial risk the most ‘immediate’ and ‘severe’ risk facing the global economy.

“Food security will also become an increasingly complex political and economic problem over the next few years.

Food security will also become an increasingly complex political and economic problem over the next few years, said the report. Greater cooperation on managing vulnerabilities may also be needed.

With the price of oil at record highs, the report recommends an improved approach to securing energy supplies in the years ahead – and doing so in line with global commitments to reduce greenhouse gas emissions.

Global Risks 2008 was published by the WEF’s Global Risk Network in cooperation with Citigroup, Marsh & McLennan Companies, Swiss Re, the Wharton School Risk Center and Zurich Financial Services. It highlights key areas of risk that were the focus of discussions by world leaders at the annual meeting of the WEF in Davos, Switzerland.