Report Launch: Rise in Global Protectionism Could Stunt Economic Growth
A new report from the
The report, "Our World Transformed: Geopolitical Shocks and Risks," concludes that a rise in global protectionism stemming from a backlash against free trade and globalization could have significant impact on economic growth, poverty levels, and the potential for military conflict. It also warns that companies that benefit from global trade may be forced to restructure their supply chains and develop business continuity plans that anticipate disruptions to their manufacturing and retail operations.
The report also looks at the risk of conflict in the
"We are in a period of geopolitical uncertainty, which can create a volatile business environment for companies connected to global markets, whether it is as a multinational corporation with overseas manufacturing and retail facilities or a regional operation with global suppliers," said
In addition, the report examines what would happen if Mideast tensions escalated to large-scale conflict and how that could disrupt global energy markets and force businesses to seek alternative energy sources. Again, global supply chains could be affected, as rising oil prices would increase transportation costs. In the worst-case scenario, 23 million more people would be living in extreme poverty.
Regarding water and food scarcity, the report addresses scenarios in which there is too little water (drought) and too much water (flooding from extreme weather events). Extended droughts can inflict the most damage on agriculture production and, therefore, result in food shortages, which can often lead to regional conflicts. In the base-case scenario, global water withdrawals are forecast to increase by 14 percent above current levels, and many of the most affected countries lack resources and good governance to implement solutions. Even in those countries with more means to cope with water shortages, economic growth is constrained, particularly in the manufacturing and agricultural sectors. The report suggests that companies should consider implementing a water-management and conservation plan to minimize water use and develop sustainable solutions.
"There's no question that the world is facing an increasing number of interrelated global risks," said
The report is a collaboration between
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