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Gap between rich and poor the biggest threat to global economy – World Economic Forum

Published time: January 17, 2014 13:23
Fashionistas pose for photographs in front of a homeless man outside Moynihan Station following a showing of the Rag & Bone Spring/Summer 2013 collection during New York Fashion Week (Reuters/Lucas Jackson)

Fashionistas pose for photographs in front of a homeless man outside Moynihan Station following a showing of the Rag & Bone Spring/Summer 2013 collection during New York Fashion Week (Reuters/Lucas Jackson)

Growing income inequality is the biggest risk the world may face within the next 10 years. It has already squeezed the middle class in both developed and emerging economies, the World Economic Forum (WEF) warns.

The World Economic Forum’s Global Risks 2014 report

The report, compiled with the help of over 700 global experts, warns against the chronic gap between the incomes of the richest and poorest people. It’ll become the risk that is “most likely to cause serious damage globally in the coming decade,” the report said.

Extreme weather events such as floods and drought is the second biggest threat to the global economy according to WEF. “This is hardly surprising, given the devastating impacts of having too little water, or too much. While water’s immediate impacts are often local, water security is now recognized as a systemic global risk”, says the report.

Unemployment is another high risk the globe may face, especially among the young, which the report calls the “lost generation”. The competition to find opportunities will increase on a par with rising education costs.

As a result of the financial crisis and globalization, the younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population,” said David Cole, the Group Chief Risk Officer of Swiss Re, in the report. “While in the emerging markets there are more jobs to be had, the workforce does not yet possess the broad based skill-sets necessary to satisfy demand.

In a number of countries, particularly in Europe, youth unemployment has risen to extremes. Greece and Spain have nearly 60 percent of their under-25s out of work.

A separate report by Credit Swiss classified Russia in October 2013 as a nation with the highest level of wealth inequality in the world.

All the world billionaires hold about 1 to 2 percent of total household wealth; while in Russia 110 billionaires own 35 percent of national household wealth.

Comments (26)

 

Glitch Girl 02.04.2014 05:35

The ultra rich will continue to get richer. Once a critical mass is reached that represents control of nations' currencies, their banking sectors corporate voting stock in the corporations that extract these nations' resources from the earth and from under the sea bed - once the wealthy controls these nations learning institutions, think tanks and military industrial complex (which is a worldwide interconnected complex) they control everything.

 

Grandpa 05.02.2014 16:29

The only answer, hang the ones who profit from misery, and their puppets .

 

Damanjit Ghosh 25.01.2014 16:21

Economic disparity all over the world will continue to rise unless there is a global mechanism in place, but that is a distant cry.The greatest irony is, these filthy riches are held in esteem socially.Awareness of their criminality in the society could be the first step to force them to fake social responsibility

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