Freeland heads to Davos as WEF says cost of living ‘most severe global risk’ of 2023

Deputy Prime Minister and Finance Minister Chrystia Freeland is set to go to Davos, Switzerland, next week to attend the World Economic Forum’s Annual Meeting as the organization has released a damning report on the largest risks to humanity.

The annual meeting will begin Jan. 16 and will run until Jan. 20. Freeland, who is a member of the organization’s board of trustees, will speak in two events, titled Restoring Security and Peace and Women’s Leadership: Towards Parity in Power.

The town in the Swiss Alps will host 52 heads of state and government, as well as nearly 600 CEOs, according to the organization.

“There is no doubt that our 53rd annual meeting in Davos will happen against the most complex geopolitical and economic backdrop in decades,” Forum President Borge Brende told the Associated Press.

The meeting is preceded by a bleak report that warns of “polycrises” interplaying in the future, including climate change and natural resource shortages. The report surveyed 1,200 experts, policy-makers and industry leaders to determine what they think are the biggest risks to the world. The survey found cost of living to be the “most severe global risk” for the next two years, followed by “failure to mitigate climate change” for the next 10 years.

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The report warns that governments and central banks could face “stubborn inflationary pressures” over the next two years, along with the risk of mishandled economic policies that could cause a prolonged economic downturn on a global scale.

“Governments will continue to face a dangerous balancing act between protecting a broad swathe of their citizens from an elongated cost-of-living crisis without embedding inflation,” the WEF said in a statement.

The report says that economic effects will be felt most by already vulnerable parts of society and fragile states, potentially leading to more poverty, hunger, violent protests, political instability and state collapse.

2:42 Outlook for global economy has ‘darkened’ amid inflation, tighter financial conditions: IMF

Meanwhile, the report highlights the growing risks of climate change in the long term, saying that there has been a divergence between what is “scientifically necessary to achieve net zero (carbon emissions) and what is politically feasible.”

According to the report, risks from climate change can intermingle with other crises, such as resource shortages and geopolitical tensions, to create a worse situation than if each crisis were faced individually. It calls this situation “polycrises,” and gives the example of the risk of resource shortage, including food, water, metals and minerals, which could spark ecological harm from overexploitation of resources, along with a humanitarian crisis from potential “water wars” and famines, as well as a slowdown in climate mitigation.

“As volatility in multiple domains grows in parallel, the risk of polycrises accelerates,” the WEF said.