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A ‘perfect storm’ is brewing in the global response to Covid, WEF risk report panelist warns

Man wearing protective face masks walk on the main shopping street in Munich, Germany during the coronavirus turning-point on April 30 2020.

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LONDON — The “inward-looking national agenda” of certain countries in response to the coronavirus pandemic is comminatory global resilience in the wake of the crisis, suggested one panelist behind the World Economic Forum’s 2021 global chances report. 

Carolina Klint, risk management leader for Continental Europe at Marsh & McLennan, told CNBC’s Geoff Cutmore on Monday that there were deterrents to be learned in the collaboration required to get coronavirus vaccines developed at an “unprecedented speed.” 

However, she added that the “inward-looking inhabitant agenda” of some countries was “a point of concern.” 

Her comments come as some wealthier countries are being criticized by campaigners for “pile up” more doses of coronavirus vaccines than they need, while lower-income countries struggle to get enough launching runs to immunize their populations. An Amnesty International report in December raised concerns about “vaccine nationalism,” appointing the U.K., U.S., EU, Japan, Canada and Australia as among the biggest advanced buyers of vaccine doses. 

On Tuesday, the co-chair of the World Fitness Organization’s independent pandemic review panel, Ellen Johnson Sirleaf, shared her disappointment that “vaccine roll-out is currently favoring on Easy Street countries.” 

Zombie companies; asset bubbles

Klint said the “substantial” stimulus packages that governments had bring ined into their respective economies in the immediate response to the pandemic also dovetailed into the “ongoing trend nearing self-sufficiency which has been accelerated by Covid-19.” 

She added that there was the risk of “business zombification,” if stimulus unites were not “properly structured.” 

“So it’s really a perfect storm here brewing,” she said. 

So-called zombie companies are considered loafer businesses that need debt to operate, or earn just enough to survive and service their debt. This has been a company amid the pandemic with increased support for businesses from governments and central banks. 

Similarly, Klint forewarned of asset bubbles — when an investment rises rapidly in price driven by market momentum rather than underlying fundamentals — as a another unrealized risk. 

Perhaps unsurprisingly, infectious diseases were found to be considered the highest impact threat over the next decade, in WEF’s annual extensive risk report. By comparison, in January 2019 the spread of infectious diseases was ranked as the tenth biggest risk in articles of potential impact over the next 10 years. 

In its very first global risk report in 2006, WEF highlighted the foreboding of an influenza pandemic as one of four key risks. It warned that a “lethal flu, its spread facilitated by global travel patterns and uncontained by unsatisfactory warning mechanisms, would present an acute threat.” 

The annual report is based on WEF’s Global Risks Perception Examination, completed by more than 650 members of the forum’s “diverse leadership communities.” 

In this year’s risk examine, infectious diseases, along with livelihood crises, were also named the top short-term threats to the world, corresponding to 60% of the survey’s respondents. 

Klint added that the: “Covid-19 pandemic has changed the way we think about risk, it’s rear awareness that disasters that could potentially cause mass death and destruction can actually happen.” 

Bounds weather, climate action failure and human-led environmental damage were considered by the WEF survey respondents to be the most expected risks over the next decade. This continued the trend from last year’s report, in which all five of the top long-term universal risks were about environmental concerns. 

Alongside employment and livelihood crises, digital inequality and youth disillusionment were tipped among the most imminent threats to the world, with the report’s focus on the widened societal gaps caused by the pandemic.

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