Bangladesh faces five major risks in next two years

Bangladesh faces five major risks in the next two years with sustained inflation, debt crises and severe commodity price shocks being the top three challenges for its economy, said a report released by the World Economic Forum (WEF).

Besides, human-made environmental damage and geopolitical contestation of resources are the rest two risks the nation might face in the short term, according to WEF’s The Global Risks Report 2023, reports news agency BSS.

The report presents the results of the latest Global Risks Perception Survey (GRPS) based on insights on the evolving global risks landscape from over 1,200 experts across academia, business, government, the international community and civil society.

Responses for the GRPS 2022-2023 were collected from 7 September to 5 October, 2022, said the report.

The survey participants were asked: “Which five risks are the most likely to pose the biggest threat to your country in the next two years?” and thus were asked to select these from a list of 35 risks.

In Bangladesh, the Centre for Policy Dialogue (CPD) was the partner of the WEF for the survey and rapid and or sustained inflation was selected as the most frequently selected risk here, according to the report.

Responding to a question on whether the inflation rate would come down in 2023 or not, CPD’s research director Khandaker Golam Moazzem told Prothom Alo, “The inflation rate of the country is mostly dependent on import.”

Viewing the trend of global economy, he does not think there is a chance of decrease of inflation rate, at least in the first half of 2023.

Golam Moazzem said, “Due to the uncertainties, different countries are exporting products only after meeting their domestic demands. Alongside the supply chain is yet to return to its previous normal condition due to the Russia-Ukraine war. At the same time, several large conglomerates have been dominating the import sector in the country. Whenever they see risks, they decrease import fearing products would not be sold. This also puts pressure on the market.”

This year’s Global Risks Report finds that cost-of-living crisis, natural disasters, extreme weather events and geoeconomic confrontation are the top three risks the world would be facing in the next two years.

Failure to mitigate climate change Erosion of social cohesion and societal polarisation are the two major global risks for the short-term.

“Cost of living dominates global risks in the next two years while climate action failure dominates the next decade,” said the report.

The report highlighted that food, fuel and cost crises exacerbate societal vulnerabilities while declining investments in human development erode future resilience.

Side by side as volatility in multiple domains grows in parallel, the risk of polycrises accelerates.

The report further said technology will exacerbate inequalities while risks from cybersecurity will remain a constant concern.

It also noted that climate mitigation and climate adaptation efforts are set up for a risky trade-off, while nature collapses.

The report said the return to a “new normal” following the Covid-19 pandemic was quickly disrupted by the outbreak of war in Ukraine, ushering in a fresh series of crises in food and energy - triggering problems that decades of progress had sought to solve.

The report said as 2023 begins, the world faces a set of risks that feel both wholly new and eerily familiar.

It said there is a return of “older” risks - inflation, cost-of-living crises, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical confrontation and the spectre of nuclear warfare - which few of this generation’s business leaders and public policy-makers have experienced.

These are being amplified by comparatively new developments in the global risks landscape, including unsustainable levels of debt, a new era of low growth, low global investment and de-globalisation.

The report also said geopolitical fragmentation will drive geoeconomic warfare and heighten the risk of multi-domain conflicts.