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Mon 10 Oct 2011 06:21 PM

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Debt crisis is key threat to recovery, says WEF poll

World Economic Forum survey reveals fears that US, Euro problems could spread

Debt crisis is key threat to recovery, says WEF poll

The public debt crisis has emerged as the top trend likely to impact the global economy in the next 12 to 18 months, according to a survey of the World Economic Forum’s Global Agenda Councils released in Abu Dhabi on Monday.

The survey results, presented during the opening of the Summit of the Global Agenda in the UAE capital, also identified the uncertain economic outlook, global power shifts, digital revolution, political entrenchments, instability of financial markets, scarcity of resources, climate change, and unemployment and inequality as key issues to be tackled.

The survey revealed the increasing concern of the debt situation in the US, Japan and Europe, and the fear of this trend cascading into other regions, said Borge Brende, managing director, Government Relations and Constituents Engagement, World Economic Forum.

“It is clear that the world is in need of new models to address the challenges that were identified in this survey. The summit on the global agenda gives this group of world experts the opportunity to develop and test exactly such new ideas and models for change.”

According to the survey findings, the uncertain economic outlook is due to the continuing inability of the major industrial countries to recover growth, complemented by a jobless recovery in the US and the lag effect crisis in Europe.

Instability in the financial markets was mainly identified as being caused by a lack of a sound and globally accepted regulatory system, resulting in irresponsible fiscal policies across different nations.

A continued economic downturn and an increase in skills shortages in key sectors are leading to high unemployment and dissatisfaction of populations, especially youth, it said.

The global trends identified in the survey also showed global power shifts – a major economic gravity shift away from the mature economies towards emerging economies.

The trends were revealed by a survey of almost 500 global experts comprising the World Economic Forum’s 79 Global Agenda Councils – a network of the world’s most relevant thought leaders from academia, business, government and society.

During the two-day Summit on the Global Agenda 2011, 800 Council Members are engaging in interactive workshops and sessions to set priorities for the most compelling ideas to improve the state of the world and identify the latest trends, new models, risks and innovative solutions to address the world’s challenges.