LONDON (AP) – Cybersecurity and space are emerging risks to the global economy, adding to existing challenges posed by climate change and the coronavirus pandemic, the World Economic Forum (WEF) said in a report yesterday.

The Global Risks Report is usually released ahead of the annual elite winter gathering of chief executive officers and world leaders in the Swiss ski resort of Davos, but the event has been postponed for a second year in a row because of COVID-19.

Here’s a rundown of the report, which is based on a survey of about 1,000 experts and leaders:

WORLD OUTLOOK

As 2022 begins, the pandemic and its economic and societal impact still pose a “critical threat” to the world, the report said. Big differences between rich and poor nations’ access to vaccines mean their economies are recovering at uneven rates, which could widen social divisions and heighten geopolitical tensions.

By 2024, the global economy is forecast to be 2.3 per cent smaller than it would have been without the pandemic. But that masks the different rates of growth between developing nations, whose economies are forecast to be 5.5 per cent smaller than before the pandemic, and rich countries, which are expected to expand 0.9 per cent.

DIGITAL DANGERS

The pandemic forced a huge shift – requiring many people to work or attend class from home and giving rise to an exploding number of online platforms and devices to aid a transformation that has dramatically increased security risks, the report said.

“We’re at the point now where cyberthreats are growing faster than our ability to effectively prevent and manage them,” said risk management leader Carolina Klint at Marsh, whose parent company Marsh McLennan co-authored the report with Zurich Insurance Group.

Cyberattacks are becoming more aggressive and widespread, as criminals use tougher tactics to go after more vulnerable targets, the report said. Malware and ransomware attacks have boomed, while the rise of cryptocurrencies makes it easy for online criminals to hide payments they have collected.

While those responding to the survey cited cybersecurity threats as a short- and medium-term risk, Klint said the report’s authors were concerned that the issue wasn’t ranked higher, suggesting it’s a “blind spot” for companies and governments.

SPACE RACE

Space is the final frontier — for risk.

Falling costs for launch technology has led to a new space race between companies and governments. Last year, Amazon founder Jeff Bezos’ space tourism venture Blue Origin and Virgin Galactic’s Richard Branson took off, while Elon Musk’s Space X business made big gains in launching astronauts and satellites.

Meanwhile, a host of countries are beefing up their space programmes as they chase geopolitical and military power or scientific and commercial gains, the report said.

But all these programmes raise the risk of frictions in orbit.

“Increased exploitation of these orbits carries the risk of congestion, an increase in debris and the possibility of collisions in a realm with few governance structures to mitigate new threats,” the report said.

Space exploitation is one of the areas that respondents thought had among the least amount of international collaboration to deal with the challenges.

CLIMATE CRISIS

The environment remains the biggest long-term worry.

The planet’s health over the next decade is the dominant concern, according to survey respondents, who cited failure to act on climate change, extreme weather, and loss of biodiversity as the top three risks.

The report noted that different countries are taking different approaches, with some moving faster to adopt a zero-carbon model than others. Both approaches come with downsides.

While moving slowly could radicalise more people who think the government isn’t acting urgently, a faster shift away from carbon intense industries could spark economic turmoil and throw millions out of work.

“Adopting hasty environmental policies could also have unintended consequences for nature,” the report added. “There are still many unknown risks from deploying untested biotechnical and geoengineering technologies.”

TOKYO (AP) – European benchmarks rose yesterday but Asian shares mostly declined following a retreat on Wall Street.

France’s CAC 40 added 0.6 per cent in early trading to 7,160.56, while Germany’s DAX added 0.7 per cent to 15,882.28. Britain’s FTSE 100 rose 0.4 per cent to 7,474.60. United States (US) shares were set to drift higher with Dow futures inching up less than 0.1 per cent to 35,965.00. S&P 500 futures rose nearly 0.1 per cent to 4,664.50.

Investors are keeping an eye on rising numbers of coronavirus cases, especially in China, where a third city has locked down its residents because of a COVID-19 outbreak, raising the number confined to their homes to about 20 million people.

“In China, upward momentum quickly faded and reversed as COVID-19 restrictions were tightened once again in some Chinese cities,” said senior market analyst at Oanda Jeffrey Halley.

Such disruptions can have regionwide implications for trade and other activity. Major companies, including automakers such as Toyota, had been counting on a recovery in the supply of semiconductor chips and other products from China and the rest of Asia, as vaccinations and other coronavirus prevention efforts has advanced. The recent surge in infections by the Omicron variant of coronavirus has shaken such hopes.

Japan is also seeing a dramatic surge in reported COVID cases, which experts said are mostly Omicron. Japan decided to keep strict border controls through next month, which ban the entry of travellers except for returning residents and citizens. Prime Minister Fumio Kishida said the large-scale facilities run by the Japanese military to give vaccinations, which had closed last year, will re-open to speed up booster shots. So far, fewer than one per cent of the population have received boosters.

Japan’s benchmark Nikkei 225 fell 0.9 per cent to finish at 28,222.48, coming back from a national holiday on Monday. South Korea’s Kospi picked up less than one point to 2,927.38.

Australia’s S&P/ASX 200 dipped 0.8 per cent to 7,390.10. Hong Kong’s Hang Seng inched down less than 0.1 per cent to 23,739.06, while the Shanghai Composite index sank 0.7 per cent to 3,567.44.

High inflation is taking a toll on American families, Federal Reserve Chair Jerome Powell acknowledged in remarks delivered at yesterday’s congressional hearing on Powell’s nomination to a second four-year term.

Higher interest rates make stocks of expensive tech companies and other pricey growth companies less attractive to investors, and the sector has been slipping as bond yields rise.

The tech sector has been the biggest weight on the market through January and is coming off of its worst week since October 2020.