People wearing protective face masks walk through the main shopping street of Munich, Germany, during the coronavirus crisis on April 30, 2020.
Alexander Hassenstein / Getty Images
LONDON – Certain countries’ “inward-looking national agenda” in response to the coronavirus pandemic threatens global resilience in the wake of the crisis, suggested a panelist behind the World Economic Forum’s 2021 report on global risks.
Carolina Klint, risk management leader for Continental Europe at Marsh & McLennan, told CNBC’s Geoff Cutmore on Monday that lessons can be learned from the collaboration needed to develop coronavirus vaccines at an “unprecedented rate.”
However, she added that the “inward-looking national agenda” of some countries was “a concern”.
Her comments come because some wealthier countries are being criticized by campaigners for ‘hoarding’ more doses of coronavirus vaccines than they need, while lower-income countries struggle to get enough injections to immunize their populations. A December report by Amnesty International raised concerns about “vaccine nationalism”, citing the UK, US, EU, Japan, Canada and Australia as one of the largest advanced purchasers of vaccine doses.
On Tuesday, the co-chair of the World Health Organization’s independent pandemic review panel, Ellen Johnson Sirleaf, shared her disappointment that “vaccine roll-out is currently in favor of wealthy countries.”
Zombie companies; asset bubbles
Klint said the “substantial” stimulus packages injected by governments in their respective economies in the immediate response to the pandemic also fit the “ongoing trend towards self-sufficiency accelerated by Covid-19.”
She added that there was a risk of ‘corporate zombification’ if stimulus packages were not ‘well structured’.
“So it really is a perfect storm here,” she said.
So-called zombie companies are seen as lagging companies that need debt to operate, or earn just enough to survive and pay off their debts. This has been a concern amid the pandemic with increased support for government and central bank businesses.
Likewise, Klint warned of asset bubbles – when an investment is rapidly rising in price driven by market momentum rather than underlying fundamentals – as another potential risk.
Perhaps unsurprisingly, infectious diseases were identified in the WEF’s annual global risk report as the greatest threat to the impact of the next decade. In comparison, in January 2019, the spread of infectious diseases was ranked as the tenth greatest risk in terms of potential impact over the next 10 years.
In its first-ever global risk report in 2006, WEF highlighted the threat of an influenza pandemic as one of the top four risks. It warned that a “deadly flu, the spread of which is facilitated by global travel patterns and not controlled by inadequate alert mechanisms, would pose an acute threat”.
The annual report is based on WEF’s Global Risks Perception Survey, completed by more than 650 members of the forum’s “diverse leadership communities”.
In this year’s risk report, infectious diseases, along with livelihood crises, were also identified as the top short-term threats to the world, according to 60% of respondents.
Klint added, “The Covid-19 pandemic has changed the way we think about risk, it has raised awareness that disasters that could potentially cause mass death and destruction can actually happen.”
Extreme weather, the failure of climate action and man-made environmental damage were considered by the WEF survey respondents to be the most likely risks for the next decade. This continued the trend of last year’s report, in which all five of the largest long-term global risks related to environmental issues.
In addition to employment and livelihood crises, digital inequality and youth disenchantment have been cited as one of the most immediate threats to the world, with the report highlighting the wider societal rifts caused by the pandemic.