2022 Risk Atlas - Geopolitics, debt and inflation, climate and demographics: Credendo’s review of the state of the world
This year end, Credendo is releasing its “Risk Atlas” (together with Trends & Trends-Tendances), a genuine decision-making tool for internationally focused companies. Geopolitical risks, debt and inflation risks, climate risks and demographic shifts: with the help of a group of experts, Credendo has reviewed how the world changed in 2022, providing a specialised, expert analysis that also makes it possible to identify areas where the situation is already improving and those where there are positive outlooks for the future.
The year 2022 will be remembered as an eventful one: a resurgence of conflicts, an energy crisis and high inflation in a context of worrying debt, not to mention long-standing climate problems and their impact on populations and demographics.
From a geopolitical standpoint, the news is punctuated daily by multiple conflicts or threats of conflicts, and Europe is now directly affected with the Russian-Ukrainian conflict on its very doorstep. To complete the picture, there are tensions around Taiwan, the growing rivalry between China and the United States, and threats of nuclear developments in North Korea and Iran, all of which threaten armed conflict with potentially significant repercussions on the global economy.
Another worrying phenomenon that has spread across the globe is inflation. According to Nabil Jijakli, Credendo’s Group Deputy CEO: “While the upward movement in prices had already started before 2022 due to the rapid post-Covid recovery, it became more pronounced with the outbreak of the Russian-Ukrainian conflict. This has resulted in raw material shortages, supply chain disruptions and the scarcity of many products.”
This is not really a surprise, but East and South-East Asia are partly unaffected by this phenomenon. “This area, traditionally the most dynamic in the world, is experiencing lower inflation due to the Chinese slowdown and lower energy costs and also benefits from its proximity to supply chains.”
The inflationary context is linked to the significant debt situation affecting several countries. Some have already defaulted, such as Sri Lanka and Zambia, and others may follow. In contrast, oil and gas-exporting countries are doing better despite a rise in public debt due to the impact of Covid.
Finally, although this is a major – and in fact existential – issue for the future of humanity, there has been no major progress on the climate front, even though the effects have been felt throughout the world through the extreme heat and flooding of recent summers. As Nabil Jijakli points out, “our ability to respond to this challenge should be a major concern. Europe has a great opportunity to reposition itself at the centre of the world map, because we have world leaders in energy transition.”
Although high-income countries are relatively less vulnerable than the emerging and developing world, all countries are in the same boat: the impact of climate change will be severe socially, politically and economically. And, in general, there will be greater instability in these three spheres. If everyone remains focused on what is happening within their own borders, we will not be able to meet the climate challenges facing us, which are global.
As a result of these tensions, the demography of countries, regions and continents is likely to be reshaped around these issues, in both rich and poor countries, causing an increase in demographic pressure and migration flows.
Content & Press Relations Manager
rue Montoyer 3
M +32 476 45 01 33
Group Deputy CEO
rue Montoyerstraat 3
M +32 478 25 11 33