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 have been caused by older generations (see Chapter 3, Pandemials). Loss of plurality, erosion of diverse representation in positions of power, financial hardship and intergenerational frictions—which will continue worsening if profound inequalities are unaddressed—risk exacerbating societal divisiveness and severely weakening communities’ resilience. Heightened instability Domestic political challenges, growing fragmentation in many societies and geopolitical tensions left the world woefully underprepared for a crisis of the magnitude of COVID-19 and amplified its impacts (see Hindsight). Flashpoints that are likely to hamper national and international stability would deteriorate multilateral capacity to respond to future global shocks. Further polarization generated by the outcome of the US elections may create domestic obstacles for the new administration, hindering financial, political, technical and international cooperation commitments on global issues such as climate change, digital governance, free trade and international security. The formalization of Brexit, rising euro-scepticism and damage from subsequent waves of COVID-19 may weaken support among EU members for a coordinated green recovery and threaten the European Union’s consolidation as a balancing third power. Increasing tensions between China and India—with the former expanding its regional economic interests through the recently signed Regional Comprehensive Economic Partnership (RCEP)—could weaken regional and global trade and growth.52 In Africa, worsening employment and investment trends threaten the anticipated benefits of the delayed African Continental Free Trade Agreement (AfCFTA),53 which could catalyse civil unrest and aggravate humanitarian crises.54 Regional alliances are likely to form out of economic expediency and tightening Citizens now know the power political leaders can wield when the challenge demands it The Global Risks Report 2021 23 relations with superpowers, but the changing relationship between them is creating uncertainty for other nations around international rules and norms— from cybersecurity and 5G technology to climate action, natural resources and trade (see Chapter 4, Middle Power Morass). Public health is becoming a new frontier for geopolitical rivalry. Vaccine diplomacy and conflicts over other critical supplies are likely to create further tensions and require complex negotiations, impeding international coordination and the effectiveness of the multilateral system to address global concerns (see Hindsight). No vaccine for environmental degradation Without societal cohesion and stable international platforms, future transboundary crises will have greater impacts. The GRPS draws attention to blind spots in collective responses to a range of risks—such as “debt crises”, “mental health deterioration”, “tech governance failure” and “youth disillusionment” (see Appendix B, Figure B.1 Global Risk Response)—but foremost among these blind spots are “climate action failure” and “biodiversity loss”. Last year, for the first time in 15 years of the GRPS, the five most likely longterm risks were environmental— analysed in last year’s Global Risks Report chapters A Decade Left and Save the Axolotl. The World Economic Forum’s COVID-19 Risks Outlook, published in May 2020,55 analysed how the