This week global business and policy leaders will convene the Annual Meeting of the World Economic Forum in Davos-Klosters, also known simply as Davos. The theme for Davos this year is Shared Norms for the New Reality. And we can expect a lot of discussion off of the recent World Economic Forum Global Risks report. Global Risks 2011 features 37 risks for economies and business, but calls two risks "especially significant": Economic disparity and global governance failures. These two risks, the report's authors argue:
...both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them.
In this way, the global risk context in 2011 is defined by a 21st century paradox: as the world grows together, it is also growing apart.
Globalization has generated sustained economic growth for a generation. It has shrunk and reshaped the world, making it far more interconnected and interdependent. But the benefits of globalization seem unevenly spread – a minority is seen to have harvested a disproportionate amount of the fruits. Although growth of the new champions is rebalancing economic power between countries, there is evidence that economic disparity within countries is growing.
Issues of economic disparity and equity at both the national and the international levels are becoming increasingly important. Politically, there are signs of resurgent nationalism and populism as well as social fragmentation. There is also a growing divergence of opinion between countries on how to promote sustainable, inclusive growth.
To meet these challenges, improved global governance is essential. But this is another 21st century paradox: the conditions that make improved global governance so crucial – divergent interests, conflicting incentives and differing norms and values – are also the ones that make its realization so difficult, complex and messy. As a result, we see failures such as the Doha Development Round of the World Trade Organization (WTO) and the lack of international agreement at the Copenhagen Conference on climate change. The G20 is seen as the most hopeful development in global governance but its efficiency in this regard has not been proven.
Read the full report online, here. And watch Robert Greenhil--the World Economic Forum's managing director and chief business officer--discuss Global Risks 2011: