World Economic Forum Launches Risk Network To Address Financial, Food Security Risks

The World Economic Forum launched the Risk Response Network (RRN) at its meeting, which opened Wednesday in Davos, Switzerland, the Economic Times reports.  

The network aims to “address various risks related to financial governance and resource scarcity … the WEF said the platform will help member nations to better understand, manage and respond to complex and intertwined risks worldwide,” the publication writes (1/27). It could also be used to help governments address food security risks, according to Reuters.

Kevin Steinberg, chief operating officer for the WEF in the U.S., told Reuters: “If you look at the number of crises that have hit from financial to social to economic ones, almost everybody has felt they’ve been trying to avoid falling off the cliff. One of the moods we’re starting to see here in Davos is the sense we need to be more proactive. We need to think about risk not only in terms of responding to events after the fact but structuring our thinking before, being prepared,” he said (1/25). “WEF will employ permanent staff for the RRN, which will use a proprietary online platform to enable virtual collaboration between global leaders,” according to the the Economic Times (1/27).

At the forum on Tuesday, Agence France-Presse reports, Indonesian President Susilo Bambang Yudhoyono said: “Indonesia fully supports the prioritisation of food security in the G20 agenda. … High food prices impact on inflation but also poverty and hunger which could lead to social and political unrest.” Yudhoyono cited U.N. data showing that food prices have risen significantly, AFP reports, adding: “Noting that the world population is already approaching seven billion this year and expected to reach nine billion by twenty-forty-five, he warned that a failure to manage resources including food could spark the next conflict. ‘The next economic war or conflict can be over the scarce resources if we do not manage it together,’ Yudhoyono said” (Neo, 1/27).

Also at the WEF on Thursday, French President Nicolas Sarkozy, who holds the chair of both the G20 global economic forum and the Group of Eight major industrialised economies, called for regulation to reduce excess speculation in key commodities, according to Reuters. The news service reports that he said “that speculation and poverty fed off each other. Noting recent extreme swings in oil, grain and other commodity prices, Sarkozy said regulators needed to step in. ‘Regulation. Not an excess … but regulation,’ he said. ‘We should put in that transparency. Let those who buy big quantities of commodities commit to putting on deposit part of the financing for those commodities'” (Stott, 1/27).

Meanwhile WEF delegates say that record food prices and other factors could cause outbursts of social unrest around the world, Bloomberg reports.

“This protest won’t end in North Africa; it will spread in many countries because of high unemployment and increasing food prices,” Hamza Alkholi, chairman and CEO of the Saudi Alkholi Group, said at the WEF. On a panel at the forum, New York University economist Nouriel Roubinim said commodity price rises are “leading to riots, demonstrations and political instability.” The article looks at the situation in Egypt and highlights other areas of concern around the world (Saitto/Connan, 1/27).

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