|WEF: INCOME GAP BIGGEST THREAT TO GLOBAL COMMUNITY|
Aruba, January 20, 2014 - World Economic Forum survey identifies inequality as biggest flashpoint as well as extreme weather and unemployment
The large and growing income gap between rich and poor is the biggest risk to the global community in the next decade, the World Economic Forum said on Thursday as politicians, business leaders and academics prepared to gather in Davos.
Reflecting mounting concern about the risk to societies from inequality, the WEF said the need to tackle disparities in income and wealth had to be addressed at WEF's annual gathering in the Swiss ski resort of Davos next week.
The WEF said its annual survey of 700 opinion formers had identified the income gap, extreme weather events and unemployment or underemployment as the three threats most likely to cause major cross-border damage in the next 10 years.
It added that a fresh fiscal crisis, climate change and water shortages were the three risks that would have the biggest impact on the global community, although these were seen as less likely.
Jennifer Blanke, the WEF's chief economist, said that although incomes gap between countries had been narrowing, the gulf between rich and poor had widened within countries. "The message from the Arab spring, and from countries such as Brazil and South Africa is that people are not going to stand for it any more."
The Davos meeting has often been targeted by anti-globalisation campaigners for being an exclusive club for a small, powerful elite but Adrian Monck, the WEF's head of communications, said inequality and the wealth gap was on the agenda. "We need to mobilise people around these issues and make people aware of them", he said.
Philip Jennings, general secretary of UNI Global Union, said: "The report should act as a wake-up call to the influencers and leaders at Davos next week. These are global issues we can do something about: we can twist the global economy back into shape – this includes a new commitment to create jobs, address income inequality and falling living standards. Since the global financial crisis it's been a race to the bottom in jobs, wages and living standards."
The report also highlighted the problems of "generation lost" and said the world's increasing reliance on the internet had resulted in a threat of "cybergeddon".
The study, Global Risks 2014, said the generation coming of age in the 2010s faced high unemployment and job insecurity, hindering their efforts to build a future and raising the risk of social unrest.
Noting that many young people faced an uphill battle, David Cole, group chief risk officer of Swiss Re, one of the companies behind the report, said: "The members of generation lost are not lost because they have tuned out. They are highly tuned in. They are lost because they are being left out or they are deciding to leave."
He added: "As a result of the financial crisis and globalisation, the younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population. While in the emerging markets there are more jobs to be had, the workforce does not yet possess the broad-based skill sets necessary to satisfy demand."
The WEF said the huge expansion of the internet made the risk of systemic failure greater than ever, but revelations about government surveillance had reduced countries' willingness to work together to address potential weaknesses. It added that the effect could be a Balkanisation of the internet, or so-called cybergeddon, where hackers enjoy overwhelming superiority and massive disruption is commonplace.
Axel Lehmann, chief risk officer at Zurich Insurance Group, said: "Trust in the internet was decreasing as a result of data misuse, hacking and privacy intrusion. A fragmentation of the internet is the wrong way to solve this issue, as it would destroy the benefits the web provides to all of us. Rather than building walled gardens, it is time to act by setting up security standards and regaining trust."