Wealth gap seen as the biggest global risk in 2014 - CNBC Africa

Wealth gap seen as the biggest global risk in 2014


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income gap. PHOTO: Getty Images

This follows after the World Economic Forum released their Global Risks 2014 report which found that the chronic income gaps between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade.

These findings are based on the contributions of 700 global experts to the report. They assessed 31 risks that have the potential to cause significant damage across entire countries and industries if they take place. Other risks that followed were unemployment, climate change and cyber-attacks.

“Each risk considered in this report holds the potential for failure on a global scale however, it is their interconnected nature that makes their negative implications so pronounced as together they can have an augmented effect,” said Jennifer Blanke, chief economist at the World Economic Forum.

The report also considers the twin challenges such as reduced employment opportunities and the rising cost of education, and how this impacts political, social and economic development. Insights are also offered on how technological and other measures can be used to mitigate some of these global risks.

David Cole, group chief risk officer of reinsurance company, Swiss Re, explained that young people today face a number of challenges in today such as fewer job opportunities and the need to support an ageing population.

“Many young people today face an uphill battle. As a result of the financial crisis and globalisation, the younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population,” he said.

While more job opportunities do exist in emerging markets, Cole added, they lack the necessary broad based skill sets needed to satisfy the demand.   

“It’s vital we sit down with young people now and begin planning solutions aimed at creating fit-for-purpose  educational systems, functional job-markets, efficient skills exchanges and the sustainable future we all depend on.”