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Mike Todd gets it right - on the crisis of economic disparity

Here's his post. Quotable:

From the Executive Summary of the just released Global Risks Report 2011, an initiatve of the Risk Response Network of the World Economic Forum:

The world is in no position to face major, new shocks. The financial crisis has reduced global economic resilience, while increasing geopolitical tension and heightened social concerns suggest that both governments and societies are less able than ever to cope with global challenges. Yet, as this report shows, we face ever-greater concerns regarding global risks, the prospect of rapid contagion through increasingly connected systems and the threat of disastrous impacts...

Two risks are especially significant given their high degrees of impact and interconnectedness. Economic disparity and global governance failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them.

In this way, the global risk context in 2011 is defined by a 21st century paradox: as the world grows together, it is also growing apart.

Globalization has generated sustained economic growth for a generation. It has shrunk and reshaped the world, making it far more interconnected and interdependent. But the benefits of globalization seem unevenly spread – a minority is seen to have harvested a disproportionate amount of the fruits. Although growth of the new champions is rebalancing economic power between countries, there is evidence that economic disparity within countries is growing.

Issues of economic disparity and equity at both the national and the international levels are becoming increasingly important. Politically, there are signs of resurgent nationalism and populism as well as social fragmentation. There is also a growing divergence of opinion between countries on how to promote sustainable, inclusive growth.

To meet these challenges, improved global governance is essential. But this is another 21st century paradox: the conditions that make improved global governanceso crucial – divergent interests, conficting incentives and differing norms and values – are also the ones that make its realization so difficult, complex and messy. As a result, we see failures such as the Doha Development Round of the World Trade Organization (WTO) and the lack of international agreement at the Copenhagen Conference on climate change. The G20 is seen as the most hopeful development in global governance but its efficiency in this regard has not been proven.

When an institution such as the World Economic Forum--long the showcase of self-congratulatory global plutocrats and corporate elites--admits that a minority seemed to have "harvested a disproportionate amount of the fruits" of the economic growth of the past decade, you know things are bad.

If you're interested in understanding more about the four main dimensions of our global crises, my book Everything Must Change should be of help.