World Economic Forum: Rich-Poor Gap is Biggest Global Risk

World | January 16, 2014, Thursday // 16:33| Views: | Comments: 0
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Bulgaria: World Economic Forum: Rich-Poor Gap is Biggest Global Risk German Klaus Schwab, founder and president of the World Economic Forum, WEF. Photo by EPA/LAURENT GILLIERON

The widening rich-poor gap represents the biggest global risk this year, the World Economic Forum declared on Thursday.

The "Global Risks 2014" report analyses 31 global risks for the next 10 years. More than 700 global experts involved in the survey identified extreme weather events as the second most likely factor to cause systemic shocks, considering the perceived increase in severe conditions.

The WEF added that the global risk that was of "highest concern" to respondents was the potential for more fiscal crises, in the wake of the eurozone debt drama.

"Economic, societal and environmental risks dominate the list of global risks that the respondents are most concerned about, with fiscal crises emerging as the top issue," the WEF reported.

Europe, in particular, is out of the immediate financial danger zone - a fact which has helped income inequality to rise up the agenda, according to David Cole, head of risk at Swiss Re, who worked on the report.

"I'm a big supporter of capitalism but there are moments in time when capitalism can go into overdrive and it is important to have measures in place - whether regulatory, government or tax measures - that ensure we avoid excesses in terms of income and wealth distribution," Cole said.

The forum warned there was a "lost generation" of young people who lack both jobs and, in some cases, adequate skills for work, fuelling cumulate frustration.

This could easily boil over into social upheaval, as seen already in a wave of protests over inequality and corruption worldwide.

The institution issued the gloomy warning in its annual Global Risks survey, published ahead of the WEF's annual meeting in Davos from 22-25 January, where the rich and powerful will ponder the planet's future.

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