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education and technology— long-proven channels for economic advancement—have grown higher; especially for youth (see Chapter 3, Pandemials). Education systems worldwide are set to undergo a challenging structural transformation underpinned by widespread adoption of online learning. This shift can potentially reduce costs and expand access,42 but students and workers who lack the digital tools, online access and knowledge to participate are at risk of being excluded (see Chapter 2, Error 404).43 “Digital inequality”—ranked as the fifth most concerning short-term threat to the world—is increasing within and between countries. The growing gap between the technological “haves” and “havenots”—amid pressures on public and private finances that could limit critical investments in digital education—will impede individual economic mobility. Physical mobility—another channel for economic advancement—is at risk too. Domestically, the digital leap forward can allow businesses to reduce costs by relocating them away from city centres, but workers in hands-on industries or without the means or flexibility to move to new production centres could be stranded. Internationally, restrictions on movement brought in during the pandemic may be slow to ease given geopolitical tensions, jeopardizing opportunities for the world’s 250 million migrant workers and their dependents.44 Global remittances are expected to decrease by more than 14% by 2021.45 Societal fragmentation As public health gaps, digital inequality, educational disparities and unemployment—risks that result from a complex combination of existing inequalities and the impact of the pandemic—affect vulnerable groups the most, they may further fray social cohesion. Unsurprisingly, “social cohesion erosion” and “livelihood crises” are among the highest-likelihood and highest-impact long-term risks in the GRPS (see Figure II, Global Risks Landscape). Too many people have little left to lose. The global recession is now expected to force as many as 150 million more people into extreme poverty, increasing the total to 9.4% of the world’s population—it was expected to fall to 8% by the end of 2020.46 This setback in the global development agenda will heighten vulnerability to future shocks and threaten Public health gaps, digital inequality, educational disparities and unemployment may fray social cohesion The Global Risks Report 2021 21 FIGURE 1.2 Fiscal Response to COVID-19 and Expected Growth in 2020 Mexico Expected growth in 2020 (annual) Saudi Arabia Russia China Argentina Indonesia Germany India Brazil Turkey Australia Canada United States France Italy Japan Fiscal response as of 12 January 2021 (% of GDP) -Source: Data for the fiscal response from IMF, Policy Tracker, “Policy Responses to COVID-19”, https://www.imf.org/en/Topics/imf-and-covid19/PolicyResponses-to-COVID19#:~: January 2021; expected annual growth data from IMF, 2020, World Economic Outlook, October 2020: A Long and Difficult Ascent. October 2020, 020. Note: Data are as of 12 January 2021. This figure considers direct and indirect fiscal stimulus measures in select economies for which data is reported as a percent of GDP by the IMF. These include cash transfers, credits and loans, debt facilities, funding for healthcare and unemployment aid, among others. the erosion or collapse of states: more than half of the respondents to the GRPS believe “state collapse” is a critical long-term threat (see Figure I, Global Risks Horizon). Increasing levels of public and private debt may reduce scope for further stimulus— which was a powerful tool in advanced economies—requiring trade-offs between investments in stronger social protection, The Global Risks Report 2021 22 reskilling and upskilling of disadvantaged workers, preparing youth for a drastically changed labour market, and economic transformation towards greener energy and infrastructure (see Chapter 5, Imperfect Markets). Respondents to the GRPS believe mismanaging these trade-offs will compound the risks of “debt crises”, “social security collapse”, “digital inequality” and “youth disillusionment”; triggering “livelihood crises” globally (see Figure III, Global Risk Network). Developed and developing countries with weak public finances face a harder road to recovery: according to the International Monetary Fund (IMF), seven low-income countries are in debt distress, with another 28 at high risk.47 Even where fiscal stimulus has been substantial (see Figure 1.2), it is not clear whether it will lead to a more equitable recovery. Divisiveness had been increasing before the pandemic in many countries—as analysed in the Fraying Fundamentals chapter of last year’s Global Risks Report48—with growing perceptions of economic and political systems being rigged and unrepresentative. While social distancing measures temporarily interrupted popular protests in 2020, they have resumed in countries ranging from Belarus to France, Germany, Russia, Sudan and the United States.49 Systemic issues that sparked protests in 2020 include corruption, racial inequality and police brutality.50 In some countries, perceptions that COVID-19 responses were inadequate or too stringent have aggravated public discontent.51 Young people have increasingly voiced discontent over climate, economic, political and social injustices they believe