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.
Fearing a repeat: A hard-hitting report has warned the world could be dragged back into the dark days of the 1930s and the Great Depression due to the global financial crisis
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.
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Meeting: The World Economic Fund will hold its yearly conference in Davos, Switzerland, later this month
The growing number of young people who cannot find a job and the increasing number of the elderly depending on debt-ridden states are ‘fuelling resentment worldwide’, it said in the Global Risks 2012 report.
‘Both young and old could face an income gap as well as a skills gap so wide as to threaten social and political stability,’ said the WEF.
‘This could precipitate a downward spiral of the global economy fuelled by protectionism, nationalism and populism.’
Ruinous consequences: Sir Mervyn King warned of the impact on the global economy if policies used by 1930s Governments were repeated
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.
Read more: http://www.dailymail.co.uk/news/article-2085346/Global-financial-crisis-threatens-drag-world-1930s.html#ixzz1jKkkdSrt
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