WEF warns financial crisis may fuel 'dystopian' future for world
Source: Agencies |
January 12, 2012, Thursday
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Print Edition
Print Edition
THE World Economic Forum warned yesterday that the financial crisis that has gripped the global economy for the past few years is fueling resentment that could lay the seeds for a rising tide of protectionism, nationalism and social unrest.
In its assessment of the risks to the global economy, the WEF flagged a "dystopian future" for much of humanity that could wipe out the gains achieved so far by globalization and undermine a nascent economic recovery.
The economic crisis, which started in 2007, has already laid siege to some of the world's biggest banks and pushed the global economy into its deepest recession since World War II. It ravaged the public finances of much of the developed world, particularly in Europe, which has prompted many governments to embark on often-savage austerity measures that heighten uncertainty and do little to boost short-term economic growth.
Though finding that the failure to address excessive government debt is seen as the most "systematically important" economic risk, the report's authors warned of the impact of bulging populations of young people with few prospects, as well as growing numbers of retirees dependent on debt-saddled states.
"For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs," said Lee Howell, the WEF's managing director responsible for the report. "This new malaise is particularly acute in the industrialized countries that historically have been a source of great confidence and bold ideas."
With that grim backdrop, the report's authors warned of an expanding gap between the rich and the poor and between the skilled and the unskilled. As a result, they urged the public and private sectors to work together to prevent a vicious cycle, whereby tough times feed disillusion and jeopardize the social contract between states and citizens.
In its assessment of the risks to the global economy, the WEF flagged a "dystopian future" for much of humanity that could wipe out the gains achieved so far by globalization and undermine a nascent economic recovery.
The economic crisis, which started in 2007, has already laid siege to some of the world's biggest banks and pushed the global economy into its deepest recession since World War II. It ravaged the public finances of much of the developed world, particularly in Europe, which has prompted many governments to embark on often-savage austerity measures that heighten uncertainty and do little to boost short-term economic growth.
Though finding that the failure to address excessive government debt is seen as the most "systematically important" economic risk, the report's authors warned of the impact of bulging populations of young people with few prospects, as well as growing numbers of retirees dependent on debt-saddled states.
"For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs," said Lee Howell, the WEF's managing director responsible for the report. "This new malaise is particularly acute in the industrialized countries that historically have been a source of great confidence and bold ideas."
With that grim backdrop, the report's authors warned of an expanding gap between the rich and the poor and between the skilled and the unskilled. As a result, they urged the public and private sectors to work together to prevent a vicious cycle, whereby tough times feed disillusion and jeopardize the social contract between states and citizens.
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