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Environment Dominates the Risk Outlook of Younger Stakeholders

Economic, environmental and domestic political risks all dominate the short-term concerns of respondents to the Global Risks Perception Survey. Its results are presented in the 2020 Global Risks Report from the World Economic Forum, produced with support from Marsh McLennan and other partners. 

The first column shows risks that are expected to increase by the WEF’s multistakeholder community, while the second column shows the concerns of WEF’s younger constituents. 

It illustrates the different priorities of each group, with the latter being much more focused on climate change and its impacts. 

Economic confrontations and their effects on trade — complicated by protectionism and the lack of a resolution to 2019’s trade war — mostly concern the group of WEF multistakeholders, along with the potential for a recession in a major economy.  

Economic inequality and social issues are another focal point: The domestic political fractures and protests seen in 2019 are expected to continue as people demand more from and remain critical of their governments. Without social stability, countries will find it more difficult to address key global issues, the report says. 

The interrelated nature of global risks complicates their potential solutions, for example, “a growth in nationalist policies risk[s] preventing meaningful action,” against climate change, the report notes. 

One Year After Taliban Take Power, Afghanistan’s GDP Plummets

Source: Financial Times

One year after the Taliban took power in Afghanistan following the withdrawal of U.S.-led troops, Afghanistan’s gross domestic product has sharply declined and food insecurity has risen. The UN Development Program estimated that Afghanistan’s GDP fell 20% in 2021 and will shrink another 5% this year. The World Bank and International Monetary Fund estimate that the country’s GDP could fall by up to 30%.

Afghanistan’s economic decline has been exacerbated by mismanagement under the government, rising inflation, and the collapse of the country’s banks. Even before the Taliban took over, 75% of Afghanistan’s economy was dependent on foreign aid — much of this aid has now been cut off by Western sanctions that have also frozen billions in foreign reserves. 

As a result, 37% of Afghan households say that they don’t have enough money for food. More than four out of five households say they have significantly lost income since the change in regime. However, the World Bank reports that employment has increased at the national level, driven largely by an expansion of employment in rural areas.

Taiwan and China’s Economies Are Inextricably Linked

Tensions between the U.S. and China remain high following last week’s visit by U.S. Speaker of the House Nancy Pelosi to Taiwan, the first in 25 years by a top U.S. official. Despite Taiwan’s fraught diplomatic relationship with China, the two countries’ economies are  inextricably linked, reports Investment Monitor.

China is Taiwan’s biggest export partner, with a value of more than $515 billion of goods between 2017-2022, more than double that of the United States. Taiwan’s main export to China is semiconductors — in 2020, China spent more on chips than on oil. 

Taiwan’s electronic exports dwarf any other industry and were valued at more than $844 billion between 2017-2022. Electronics also attract the most foreign direct investment, bringing in more than 16% of all greenfield FDI projects between 2019-2020. While strained trade relations between the U.S. and China have prompted some U.S. companies to relocate from mainland China to Taiwan, the recent rise in tensions may make Taiwan a riskier prospect for foreign investors.

Employees Don’t Want to Be in the Office on Friday

Fridays are the emptiest days in the office in the United States as the majority of hybrid workers choose to work from home on the last day of the week, new data shows. Security service provider Kastle Systems found that only 30% of U.S. workers swipe into the office on Fridays. In comparison, 50% of workers came into work on Tuesday, the highest turnout of the week.

Employers worldwide are experimenting with flexible work arrangements as the pandemic continues and workers make clear their preference for working from home. A U.K. survey shows that 80% of workers say that working from home at least once a week has a positive impact on their lives. Seventy-five percent say that they believe the world is never going back to a traditional five-day work week.

Some companies are experimenting with giving employees Fridays off. In the U.K., more than 70 companies are part of the largest trial of a four-day work week ever. In the U.S., tech companies like Kickstarter, Thred Up, and Bolt are moving to a Monday to Thursday work week for good.

China’s Economic Recovery Wobbles in July

China’s manufacturing fell in July after bouncing back in June, as the country’s economic recovery remains fragile. China’s manufacturing purchasing managers’ index (PMI) fell from 50.2 to 49, according to China’s National Bureau of Statistics. Non-manufacturing PMI, including the construction and service sectors, also slowed to 53.8 from 54.7.

The contraction follows weak demand and continued COVID-19 outbreaks, which are controlled under China’s restrictive “zero-COVID” policy. COVID-19 cases have locked down the city of Xi’an and closed some buildings in the country’s tech hub Shenzhen and the port city of Tianjin, home to major factories.

China’s economy shrank in the second quarter of this year, contracting by 2.6% between April and June following widespread lockdowns earlier in the year. Supply chain disruptions and high commodity prices from the crisis in Ukraine have also contributed to the economic slowdown. China is preparing to miss its previously-stated GDP goal of 5.5%, Chinese state media reported after a meeting of the Communist Party last week.

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