Geoeconomic confrontation world’s top threat, global leaders say

“Geoeconomic confrontation” looms as the most pressing global threat facing the world in the short term, according to decision-makers surveyed in a World Economic Forum (WEF) report.

The organisation’s annual Global Risks Report, released on Wednesday, polled more than 1,300 experts worldwide about the greatest risks to global stability.

Eighteen percent of those surveyed identified “geoeconomic confrontation” – involving the use of trade, investment, sanctions and industrial policy as strategic weapons to constrain geopolitical rivals and consolidate spheres of influence – as the most likely trigger of a global crisis within the next two years.

Saadia Zahidi – managing director of the WEF annual gathering in Davos, Switzerland, which is ‍due to start next week – cited rising tariffs, checks on foreign investment and tighter supply controls on resources like critical minerals as examples of “geoeconomic confrontation”.

“[It ⁠is] when economic policy tools become essentially weaponry rather than a basis of cooperation,” she said at an online news conference.

While the report did not name specific countries, the category’s rise from ninth in last year’s report to the top spot reflects a year marked by renewed trade wars between rival powers sparked as the administration of President Donald Trump in the United States imposed aggressive tariffs on trading partners.

The report said the risk of geoeconomic confrontation is rising as the world enters a new “age of competition” with economic tools increasingly weaponised as extensions of geopolitical strategy amid a broader retreat from multilateralism.

“Protectionism, strategic industrial policy and active influence by governments over critical supply chains all signal a world growing more intensely competitive,” the report said.

Economic rivalries are coming to the fore, it said, as concerns grow over “an economic downturn, rising inflation and potential asset bubbles as countries face high debt burdens and volatile markets”.

The report ranked misinformation and disinformation, and societal polarisation as the second and third most pressing threats in the short term.

Environment-related concerns were ranked the greatest threat over a 10-year period with extreme weather, biodiversity loss and ecosystem collapse, and critical change to earth systems considered the gravest long-term risks.

In a statement accompanying the release of the report, Peter Giger, group chief risk officer at Zurich Insurance Group and a member of the report’s advisory board, said that with such “a complex mix of interacting risks” demanding attention, serious threats such as the risk to critical infrastructure appeared “underplayed”.

The survey rated disruptions to critical infrastructure – such as energy, water and digital systems – as the 22nd biggest risk over the next two years and 23rd over the next 10, he noted.

“That’s strikingly low for something so fundamental to modern life,” he said, calling it “a dangerous oversight”.