The Covid-19 pandemic is not just a health crisis. It has devastated the economy and set the world back in its fight against inequality and climate crisis, exacerbated poverty, and taken resources away from other critical health challenges.
As countries continue to battle the pandemic, the World Economic Forum (WEF) warns that infectious disease, digital inequality, a livelihood crisis, and extreme weather are some of the biggest risks the world will face in the next year or two. It also mentions the risk of “youth disillusionment” that is being largely ignored by the global community.
In its Global Risks Report 2021, released on Tuesday, the WEF raised concerns over the growing digital divide, especially at a time that reliance on the Internet has increased manifold. People are not just working from home, but children are using computers and smartphones to attend classes as a large number of schools and colleges around the world remain shut.
The digital divide and lack of access to the Internet has been the hardest on the already vulnerable and underserved children, many of whom have been forced to drop out of school. According to UNESCO, a little more than half the global population, or about 55%, have access to the Internet. Additionally, the WEF warns of a lost generation post the pandemic, and says that investing in education, upskilling, social protection schemes, and addressing mental health are critical for vulnerable youth.
“Lack of opportunities for future economic, societal, and political participation could have long-lasting global consequences,” says the report. Youth from low-income households and young women are particularly vulnerable as they face the risk of being sent to work rather than finish their education.
The economic distress and job losses from the pandemic will also impact young people who are just entering the workforce, as well as older millennials who are facing a second major global crisis after the financial meltdown of 2008-09.
“Already exposed to environmental degradation, the consequences of the financial crisis, rising inequality, and disruption from industrial transformation, this generation faces serious challenges to their education, economic prospects, and mental health,” says the WEF.
Rising inequality and economic distress
The pandemic has scaled back efforts on reducing inequality; it will raise the number of people with lack of access to quality and affordable healthcare and education. The WEF also sees asset bubbles, price instability, commodity shocks, and debt crises as some of the key economic risks in the next three-five years.
The pandemic has so far caused more than two million deaths and infected more than 95 million people globally, according to the Center for Systems Science and Engineering, Johns Hopkins University. In the second quarter of 2020 alone, the pandemic caused work hours equivalent to 495 million jobs being lost, says the WEF.
As countries around the world start vaccination drives, the world will eventually control the pandemic, but its impact will linger. According to the World Bank, Covid-19 is expected to push some 100 million people into extreme poverty in 2020 alone.
The economic fallout of the pandemic will also impact already disadvantaged minorities, unskilled workers, and working parents, especially mothers. The WEF notes that as much as 70% of working women in nine of the world’s largest economies see their career slowing down because of the pandemic.
Climate crisis
Logically, an unprecedented pandemic should force the world to take the climate crisis more seriously. However, it may make climate a secondary issue as countries will focus more on economic growth and job creation as they recover.
“The ramifications—in the form of social unrest, political fragmentation and geopolitical tensions—will shape the effectiveness of our responses to the other key threats of the next decade: cyberattacks, weapons of mass destruction and, most notably, climate change,” the WEF says.
A recent UN report predicted that despite a dip in emissions from the economic slowdown following the pandemic, temperatures will still rise above 3° C this century—more than the Paris Agreement goals of limiting global warming to below 2° C.
The WEF calls climate change a “catastrophic risk”. It sees extreme weather and human environmental damage as the key climate risks in the short term, whereas biodiversity loss, natural resource crisis, and climate action failure are important long-term risks.
“There is no vaccine against climate risks, so post-pandemic recovery plans must focus on growth aligning with sustainability agendas to build back better,” says Peter Giger, group chief risk officer, Zurich Insurance Group.
The WEF recommends learning from the pandemic, combating misinformation, forming new public-private partnerships, and analytical frameworks to review risk impact. “As governments, businesses and societies begin to emerge from the pandemic, they must now urgently shape new economic and social systems that improve our collective resilience and capacity to respond to shocks while reducing inequality, improving health and protecting the planet,” said Saadia Zahidi, managing director, WEF.
