As India continues to have uneasy trade and political relationships with its neighbours China and Pakistan, fracture of inter-state relations—economic, political or technological rivalries between geopolitical powers resulting in a fracture of bilateral relations and growing tensions—has been identified as the biggest risk faced by India in the just-released “Global Risk Report 2022”, by the World Economic Forum (WEF). The report indicated the protectionist policies put in place by countries like India and Japan during the pandemic as an example of “geopolitical tensions spilling over to the economic sphere”.
The top five risks identified by the executive opinion survey on economic, environmental, geopolitical, societal, and technological parameters found that India is also perceived to be faced with risks associated with a debt crisis in large economies, widespread youth disillusionment, failure of technology governance and digital inequality.
By debt crisis, WEF means corporate or public finances overwhelmed by debt accumulation or debt servicing in large economies, resulting in mass bankruptcies, defaults, insolvency, liquidity crises or sovereign debt crises. Youth disillusionment highlights the possibilities of youth disengagement, lack of confidence or loss of trust of existing economic, political and social structures at a global scale, negatively impacting social stability, individual well-being and economic productivity.
The failure of technology governance—the fourth biggest risk for India—refers to the lack of globally accepted frameworks, institutions or regulations for the use of critical digital networks and technology—as a result of different states or groups of states adopting incompatible digital infrastructure, protocols or standards. Fractured or unequal access to critical digital networks and technology, between and within countries, as a result of unequal investment capabilities, lack of necessary skills in the workforce, insufficient purchase power, government restrictions and/or cultural differences was identified as the fifth biggest risk.
The Global Risk Report presents the top five risks (from a list of 35 risks) for each of the 124 economies identified by over 12,000 leaders in the WEF’s executive opinion survey conducted between May and September 2021. Overall, the respondents ranked “climate action failure” as the number one long-term threat to the world and the risk with potentially the most severe impacts over the next decade. Over 41 % of the respondents said the world is likely to remain consistently volatile with multiple surprises over the next three years.