Thursday, January 16, 2014

World Economic Forum: gap between rich and poor...biggest risk to global stability

See also Oxfam Report on wealth disptribution, January 21, 2014,
Davos 2014: Widening wealth gap 'biggest risk' in 2014

From BBC website, January 16, 2014
The increasing gap between rich and poor is seen as the biggest risk to global stability, according to a survey by the World Economic Forum (WEF).

In its annual report it warned that income disparity is seen as the risk "most likely to to cause serious damage globally in the coming decade".

The increased risk of a cyber attack was also highlighted.

Firms were told they needed to do more to deal with that risk as well as regain public trust in the internet.
'Lost generation'
The report warned that worsening levels of income disparity could lead to more social unrest - such as that seen in the Arab Spring.

"Disgruntlement can lead to the dissolution of the fabric of society, especially if young people feel they don't have a future," said Jennifer Blanke, WEF chief economist.

"This is something that affects everybody."

David Cole, group chief risk officer at Swiss Re and contributor to the report, said: "I'm a big supporter of capitalism but there are moments in time when capitalism can go into overdrive and it is important to have measures in place - whether regulatory, government or tax measures - that ensure we avoid excesses in terms of income and wealth distribution."

The WEF also warned about the "lost generation" - young people coming of age in the 2010s who face either unemployment or underemployment.

"The younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population", said Mr Cole.

"While in the emerging markets there are more jobs to be had, the workforce does not yet possess the broad based skill-sets necessary to satisfy demand," he added.

As a result, he said it was important to think in the long term, and that countries should not simply support jobs at home but that they also facilitated migration and invested in skills.

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