Absa at WEF
The world’s highest risks need the steady hand of leadership and broad consensus
Politicians around the globe need to popularise a more rational, fact-based political discourse.
As the last of the delegates to the 2019 Annual Meetings of the World Economic Forum (WEF) in Davos, Switzerland, headed back home last Friday, the skies began to clear and shone bright sunlight on the snow-peaked mountains around the small town. It was a sight so glorious one could easily forget the decidedly gloomy mood this year.
While global CEOs and policy makers made clear that the outlook for this year was a reversal from last year’s optimism, it was the WEF’s Global Risks Report 2018 that gave detailed insights into the reasons. Even more frightening is the realization that the antidotes to those risks are also in recession, putting the long-term prospects for political stability, global peace and therefore inclusive economic growth in the “worry” basked.
The risks also demonstrate how political leaders and policy makers around the world find it difficult to fashion policy responses that address these risks. Instead, we continue to see outmoded, isolationist responses to the symptoms of those risks partly because these risks do not make for exciting political messaging but also due to continuing ignorance about which risks are more crucial.
Extreme weather events, resultant natural disasters, cyber-attacks, data fraud or theft and failure of climate change mitigation and adaptation occupy the top five ahead of terrorist attacks at number 8 and, at number 9 and 10 respectively, illicit trade and asset bubbles in major economies. Of course, this priority list is difficult to sell in a country like Kenya where terrorist attacks are a real and immediate concern.
Even so, the top ten risks by impact demonstrate a similar pattern, save for weapons of mass destruction, the undisputed champion of potentially catastrophic risks to humanity. Extreme weather events, natural disasters, failure of climate change mitigation and adaption and water crises occupy positions 2 to 5 respectively. Cyberattacks, food crises and biodiversity loss come in ahead of large-scale, involuntary migration - the one phenomenon that appears to come close to US President Donald Trump’s number one policy priority - immigration.
For South Africans who have time to care about the goings-on at the WEF, the gathering seems reduced to an opportunity to convince foreign investors to increase their investments here so we can create jobs. This also makes sense given that unemployment is the most important concern millions of South Africans have because they feel the exclusion and poverty every day.
Yet we will have more emergencies if the government does not prioritize infrastructure spending towards new infrastructure such as dams, and cultivating a culture of efficient use of natural resources. In turn those emergencies may have grave political and social consequences - such as protests, societal divisions and policymaking that informed by sentiment, rather than facts.
The contrast between increasing global risks and their potential impact, on the one hand - and matters that politicians in different countries prioritize explains both the continuing impasse and why political and business leaders need to rethink their societal roles if further disintegration is to be averted. It is from clear headed, fact-based political priorities that policymakers get the cover they need to allocate resources to the most important priorities.
Not only do they already understand these risks better, they also have the opportunity to cast a long-term, integrated view on the different variables that conspire to give us what on the surface looks like the same old problems. These are unemployment, hunger and poor access to basic services.
It is also due to faulty framing of political and policy messaging around the symptoms of these that the much-needed transformation in societal attitudes and thinking will not take place anytime soon. The water shortages that threatened to plunge Cape Town into crisis were hardly ever linked to climate change that is one of the world’s top five risks. The fact that none of the three spheres of government (national, provincial and municipal) were ready to deal with the crisis when it arose also demonstrates why failure of climate change adaptation and mitigation remain a risk.
In the South African context the topics that get people animated often have little relation or insight into these risks. The nationalization of the SA Reserve Bank appears to have significant political attention but water shortages do not, and this is unlikely to change. Extreme weather events, such as heavy rains and droughts are beginning to occur more regularly but this is unlikely to be a regular topic of discussion, nor will it be reflected in policymaking and budget planning.
The pattern of contradiction between real risks and political priorities is not unique to South Africa. In the US, President Donald Trump denies climate change with resultant, destructive policy positions. He also appears to believe that immigration, by no means an increasing risk to that country, should be a priority. Because the efforts of policymakers have to reflect his priorities, the US is incurring an increasing opportunity cost that will be difficult to mitigate in years to come.
These risks and the widespread societal ignorance thereof introduces a new role many politicians are still unaccustomed to, and that is to learn to popularize a more rational, fact-based political discourse. In a world of fake news and conspiracy theories, this will be understandably difficult but it is a task from which they can no longer continue to shirk.
It is national election season in South Africa. Parliament and provincial legislatures are likely to only discuss and process matters that will keep the wheels of government turning while their occupants hit the campaign trail. What we also know is that the electorate is not waiting to hear long expositions about the local symptoms of very serious global risks. People want immediate solutions or those that assuage their moral and emotional sentiments whether or not facts support the case.
There are two powerful antidotes we all need to nurture. The first is to choose leaders with considered views and a steady hand. The risks we face are complex, interconnected and they will not be mitigated with binary views and kneejerk, populist actions. They require long-term planning, decisive execution and efficient use of increasingly scarce resources.
The second is to always work hard to secure broad consensus on the biggest risks so that national, regional and international resources and talents may be directed towards the highest impact areas. In a polarized world where regional blocs are breaking up, and politics is becoming nationalistic this is very difficult, yet the task of leadership is to use popular support to do the necessary rather than the popular.
Perhaps the reason delegates were so gloomy in Davos was that they knew that both antidotes are receding, and those who hold separatist views are gaining political popularity across the globe. This leaves civil society, including business, with the responsibility to locate like-minded partners to pursue an agenda of long-term sustainability.
Rather than the glamorous stage on which bodies like the International Monetary Fund (IMF) get to pronounce on the global economic growth outlook (which is weakening), the WEF is the opportunity to circumvent obstacles and pursue collaborations within countries and across borders. This is in the hopes that collective informal power will eventually move the needle towards the right outcomes.