Food shortages to cause nations to hoard stocks: Global Risks report

09-Jan-2013 - Last updated on 09-Jan-2013 at 12:48 GMT

Scarce liquid assets: water and food security are likely to become increasingly significant threats over the next 10 years

Food and water security will become an increasingly significant threat over the coming decade as global environmental and economic pressures impact on supply chains, according to a new report published yesterday (January 8) in London by the World Economic Forum (WEF).

“Food security intersects with extreme weather events and the potential for them to cause floods and droughts, therefore creating disruption in the food supply,” said one of the report editors, John Drzik, ceo of Oliver Wyman Group, a part of Marsh & McLennan Companies, at the launch.

“You could have rising commodity prices as a result of these floods or droughts, which then cause nations to hoard their own food supplies in some cases and create even more acute conditions amongst those who require food imports to basically survive.”

Drzik added: “So we see food security as not only independently a critical risk but also intersecting very significantly with some of the other big risks in the system around commodity price volatility, extreme weather events, water security and then all tied in with the general economic exposure that governments have and their inability to respond to some of these because of the debt position they are in.”

1,000 industry leaders

The Global Risks 2013 report offers a snapshot of how more than 1,000 industry leaders and experts perceive the evolving, interconnected risks that cut across society, the economy, the environment, geopolitics and technology. The eighth edition of the report analyses risks over the coming decade, highlighting the most significant threats to humanity.

The report, which identifies 50 global risks in five different areas, has helped shape the agenda of the WEF annual meeting, which takes place in Davos-Klosters, Switzerland on January 23–27

According to the report, the world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges. The report also highlights wealth gaps followed by unsustainable government debt as the top two most prevalent risks, which reflects a slightly more pessimistic outlook overall for the coming 10 years. It concludes that national resilience is now crucial to tackle unpredictable global threats.

Adrian Monck, WEF md and head of communications, called on more action from governments across the world to mitigate the risks presented. This included infrastructural change to accommodate climate change. “Risk is interconnected, but you can prepare,” he said.

Two storms

Drzik, added: “Two storms – environmental and economic – are on a collision course. If we don't allocate the resources needed to mitigate the rising risk from severe weather events, global prosperity for future generations could be threatened. Political leaders, business leaders and scientists need to come together to manage these complex risks.”

The report also highlights so-called ‘x factors’ – emerging concerns which warrant more research. These include the rogue deployment of geo-engineering where, for example, attempts to influence local weather patterns have detrimental impacts elsewhere in the world. Another x-factor is the use of drugs designed to improve cognitive function which could have other unidentified negative impacts on human behaviour.

Lee Howell, md of the WEF’s Risk Response Network, said: “What’s interesting comparing this year’s results with last year’s results is that it is still very much centred around the economic cluster of risk … the number one risk for the next 10 years is still income disparity and chronic fiscal imbalances.

“We are not seeing greater confidence in governments tackling these two things.”