Claims 'chronic' state of government finances is partly to blame
Warns failure to tackle youth unemployment and ageing population will make world 'a place where life is full of hardship
By Hugo Duncan
The financial crisis threatens to drag the world back to the dark days of the 1930s and wipe out the gains of globalisation, a hard-hitting report said tonight.
In its annual assessment of the global economy, the World Economic Forum warned of a rising tide of protectionism, nationalism and protests as seen during the Great Depression.
It blamed the ‘chronic’ state of government finances and the widening gap between the rich and poor as the world lurches from one crisis to another.
The WEF, which holds its yearly meeting for leading politicians, economists, businessmen and academics in the Swiss ski resort of Davos later this month, said the ‘seeds of dystopia’ have been sown.
It warned that without action to tackle youth unemployment and support an ageing population the world would become ‘a place where life is full of hardship and devoid of hope’.
The survey of 469 global experts warned the world was ‘vulnerable’ to fresh economic shocks, major social unrest, and food and water crises.
Lee Howell, managing director of the WEF, said: ‘For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs.
‘This new malaise is particularly acute in the industrialised countries that historically have been a source of great confidence and bold ideas.’
The Great Depression of the Thirties was exacerbated by a wave of protectionism that saw governments impose tariffs of imports in a desperate effort to protect their own manufacturers.
Bank of England Governor Sir Mervyn King has warned that a rerun of those policies would have ‘ruinous consequences’ for the global economy.
The WEF issued a call to arms as it warned that debt-ridden governments could no longer ensure higher living standards for future generations.
‘Individuals are increasingly being asked to bear risks previously assumed by governments and companies to obtain a secure retirement and access to quality healthcare,’ said John Drzik, chief executive of management consultants Oliver Wyman.
‘This report is a wake-up call to both the public and the private sectors to come up with constructive ways to realign the expectations of an increasingly anxious global community.’
The report welcomed advances in communications and technology but warned that there is a ‘dark side to connectivity’ which left society vulnerable to ‘malicious’ and ‘devastating’ cyber-attacks.
‘The Arab Spring demonstrated the power of interconnected communications services to drive personal freedom, yet the same technology facilitated the riots in London,’ said Steve Wilson, chief risk officer for general insurance at insurance giant Zurich...
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