Geopolitical Risks Are Climbing: Interstate Conflict Is Highest Risk In 2015

Every year, the World Economic Forum publishes an annual report on global risks that covers the factors and underlying drivers that could most likely disrupt global economic activity. Most of the time over the last decade, the survey of 900 global experts finds the top risks to revolve between potential economic events such as collapsing asset prices and underemployment, or potential environmental challenges such as flooding or water supply crises.



However, this year geopolitical risks have made a staggering jump to the forefront, reflecting the instability in the Middle East and North Africa, the ongoing conflict in Ukraine, the rise of terrorist groups such as ISIS and Boko Haram, and even tension in the South China Sea.

 

The above graph shows the change over the course of the last year. Risks such as state collapse or crisis, interstate conflict, terrorist attacks, and weapons of mass destruction have all soared. In fact, within the overall scope of all potential risks, interstate conflict is now ranked as the #1 risk in terms of likelihood, and #4 in terms of impact.

“Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states,” said Margareta Drzeniek-Hanouz, lead economist at the World Economic Forum.

 

“However, today the means to wage such conflict, whether through cyberattack, competition for resources or sanctions and other economic tools, is broader than ever. Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015.”

 

Source: VisualCapitalist.com

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