Focus on rebuilding 'more sustainable, resilient and inclusive' economies: WEF

RISK MANAGERS expect a prolonged global recession as a result of the coronavirus pandemic, a report by the World Economic Forum said on Tuesday (19).

Recessions on a scale not seen since the 1930s Great Depression demand more action from governments to ensure a timely recovery and to put growth on a healthier path, it noted.

Two-thirds of the 347 respondents to the survey -- carried out in response to the outbreak -- put a lengthy contraction in the global economy top of their list of concerns for the next 18 months.

Half of risk managers expected bankruptcies and industry consolidation, the failure of industries to recover and high levels of unemployment, particularly among the young.

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past," said Saadia Zahidi, managing director of the World Economic Forum.

Environmental goals risk being discarded as a result of the pandemic, the report said, but governments should try to carve out a "green recovery".

"We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive," Zahidi said.

Ahead of this year's WEF conclave in January, when the Covid-19 outbreak was still largely confined to China, the forum's annual risk report had shown climate change as the biggest concern for companies over the next 10 years.

It also flagged up anxiety that health systems around the world were ill-prepared for another pandemic.

Notably, a second wave of Covid-19 was another concern identified in Tuesday's report, along with the dangers of cyberattacks and data fraud as much corporate activity shifts online.

The report was compiled by the WEF’s Global Risks Advisory Board together with Marsh & McLennan Companies Inc and Zurich Insurance Group.

Risk managers were surveyed between April 1 and 13.