Risks that Bangladesh faces in the next few years as per World Economic Forum
The he hazards that the globe faces seem both entirely fresh and uncannily familiar. Some of the most serious hazards that could affect us during the following ten years are examined in the Global Risks Report 2023. Tougher trade-offs run the risk of undermining climate action, human development, and future resilience as we teeter on the brink of a low-growth and low-cooperation age.
According to last year’s Global Risks Report, a diverging economic recovery following the COVID-19 pandemic ran the potential of escalating tensions at a time when cooperation was urgently needed to meet impending global difficulties. Few would have predicted the magnitude of instability that would soon emerge, this time fueled by a new war in Europe, despite the painful lessons about the interconnectivity of global risks that had to be learned.
A year into the conflict between Russia and Ukraine, economies and societies will find it difficult to recover from new shocks. More than four out of five respondents in this year’s Global Risks Perception Survey predicted sustained volatility over the following two years. Our current world is already changing due to these crises’ endurance, which is causing economic and technical dispersion. There will be a price to pay for maintaining national resilience in vital sectors, and only a select few economies are able to pay it. Global collaboration, which frequently serves as a safety net against these global threats, is encountering considerable obstacles as a result of geopolitical dynamics.
The Global Risks Report 2023 edition emphasises the several sectors where the world is at a crucial turning point. It is a call to action to get ready for the next disaster the world may encounter and pave the road for a more secure, resilient future. Let’s look at the key findings of the report.
As one economic period comes to an end, the next will likely bring higher dangers of turmoil, divergence, and stagnation. The COVID-19 economic aftermath and the conflict in Ukraine have ushered in a period of high inflation, quick monetary policy adjustment, low growth, and low investment. Over the next two years, governments and central banks may have to deal with persistent inflationary pressures, not least because of the possibility of a protracted conflict in Ukraine, ongoing pandemic-related constraints, and supply-chain decoupling caused by economic warfare. The likelihood of negative economic outcomes is likewise very high.
THE GLOBAL RISKS REPORT 2023 EDITION EMPHASISES THE SEVERAL SECTORS WHERE THE WORLD IS AT A CRUCIAL TURNING POINT. IT IS A CALL TO ACTION TO GET READY FOR THE NEXT DISASTER THE WORLD MAY ENCOUNTER AND PAVE THE ROAD FOR A MORE SECURE, RESILIENT FUTURE.
Geoeconomic warfare will be fueled by geopolitical fragmentation, which will also increase the likelihood of multi-domain confrontations. With rising conflicts between major world powers and state intervention in the markets during the next two years, economic warfare is starting to become the norm. Economic strategies will be employed offensively to thwart the emergence of other powers as well as defensively to increase self-sufficiency and sovereignty from rivals.
Technology will make disparities worse while cybersecurity risks will continue to be a major worry. One of the main targets of tougher industrial regulations and greater governmental intervention will be the technology sector. Over the next ten years, research and development into future technologies will proceed rapidly, fueled by governmental funding, military spending, and private investment, leading to improvements in, among other things, AI, quantum computing, and biotechnology. These technologies will offer only partial solutions to a number of future challenges for those nations with the financial wherewithal, from addressing new health concerns and a shortage of healthcare capacity to scaling up food security and climate mitigation. Inequality and divergence will rise for those who can’t. These technologies pose vulnerabilities in every economy, including the spread of false information and disinformation as well as the uncontrollably high turnover of both blue-collar and white-collar occupations.
Attempts at climate adaptation and mitigation are set up for a perilous trade-off, while nature deteriorates. Over the next ten years, perceptions of global hazards will mostly centre on climate and environmental issues, for which we are believed to be least prepared. The gap between what is scientifically required to attain net zero and what is politically doable has been made clear by the lack of significant, concerted progress on climate action targets. Over the next two years, there will be a decline in the speed and scope of mitigation efforts due to increasing demands on public and private sector resources from other crises, as well as a lack of progress toward the adaptation support needed for those communities and nations that are increasingly being impacted by the effects of climate change.
ACCORDING TO THE WORLD ECONOMIC FORUM, BANGLADESH FACES FIVE KEY RISKS OVER THE NEXT TWO YEARS, WITH PROLONGED INFLATION, DEBT PROBLEMS, AND SIGNIFICANT COMMODITY PRICE SHOCKS BEING THE TOP THREE THREATS TO ITS ECONOMY
As investments in human development are decreasing, food, fuel, and cost problems increase society’s vulnerability and weaken future resilience. Compounding crises have a wider social impact than previously disadvantaged communities and weak states, affecting the livelihoods of a much larger segment of the population, and undermining more economies worldwide. As economic pressures continue to erode the middle class, associated social discontent and political instability will not be restricted to emerging markets. Global political institutions are facing an existential threat as a result of rising public discontent over human development losses, falling social mobility, and a widening disparity in values and equality. Over the next two years, it’s possible that the election of less centrist leaders and the political division between the world’s two economic heavyweights will further decrease the room for group problem-solving, shatter alliances, and create a more unstable dynamic.
Now the question is, what are the risks that Bangladesh seems to be facing in the coming days?
According to the World Economic Forum, Bangladesh faces five key risks over the next two years, with prolonged inflation, debt problems, and significant commodity price shocks being the top three threats to its economy. According to the WEF’s The Global Hazards Report 2023, human-caused environmental damage and geopolitical competition for resources are the other two risks the country may encounter in the near future.
Rapid and/or sustained inflation was the most often chosen risk in Bangladesh, where the Centre for Policy Dialogue (CPD) was the WEF’s survey partner, according to the report. In response to a query about whether or not the country’s inflation rate would decline in 2023, Khandaker Golam Moazzem, research director for CPD said, “The inflation rate of the country is primarily dependent on import.” According to the Bangladesh Bureau of Statistics, consumer prices increased by 8.71% on a point-to-point basis in December after reaching a 10-year high in August.
He does not believe there is a potential for the inflation rate to decline, at least not in the first half of 2023, given the direction of the global economy. According to Golam Moazzem, several nations are only exporting goods after satisfying their internal need because of uncertainty. Due to the Russia-Ukraine war, the supply chain has not yet returned to its pre-war state. Several sizable conglomerates have been monopolising the nation’s import market at the same time. When hazards are present, imports are reduced out of concern that goods won’t be purchased. Consequently, the market is under pressure.
CPD Executive Director Fahmida Khatun stated her thoughts about this as well. The years 2023 and 2024 don’t seem promising, according to her. Bangladesh won’t be exempt from the price surge, said Fahmida Khatun, because of its reliance on imports, which she described as a major concern for the world’s inflation. There will be pressure from imported inflation. She claimed that the strain of rising living expenses will persist. Additionally, even though the ratio of external debt to GDP is still low, the ratio of internal debt to GDP is rising. But she warned that the burden of payments would grow.
According to this year’s Global Risks Report, the top three risks the globe will face over the next two years are the cost of living crises, natural disasters, extreme weather occurrences, and geoeconomic conflict. The two main worldwide threats for the near future are societal polarisation and social cohesion erosion; stated the report. According to the research, “Cost of living leads global risks in the next two years while failing to address climate change dominates the following ten years.”
The globe is starting 2023 with a mix of hazards that feel both entirely fresh and uncannily familiar. We have witnessed the resurgence of ‘older’ risks, such as inflation, cost-of-living crises, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical conflict, and the threat of nuclear war, which a few business executives and public policymakers in this generation have personally experienced. These are being exacerbated by relatively recent changes in the landscape of global risks, such as unaffordable debt levels, a new era of slow growth, low global investment, and deglobalisation, a decline in human development after decades of advancement, rapid and unrestrained development of dual-use (civilian and military) technologies, and the mounting pressure of climate change impacts. These factors will work together to create an unusual, unsettling, and turbulent decade in the future. The world is at a crossroads as new shocks are revealed. The decisions we make today will determine our future risk environment as we go into a low-growth, low-investment, and low-cooperation age. We must watch out that solving the immediate problems doesn’t distract us from the bigger picture.
