Efforts to tackle the global economic crisis have created new economic risks and have drawn resources away from efforts to counter long-term risks such as energy security and climate change, according to the World Economic Forum's latest report on global risks.

The WEF's “Global Risks 2010” report, released last week, also highlights an increase in interdependencies among risks, as well as the need to fundamentally change risk management thinking. Governments should establish “country risk officers,” and risk management frameworks should better reflect the interrelatedness of risks rather than follow a silo approach, the report states.

The report does not identify any new risks, but it shows greater interdependency among risks, said Robert Greenhill, managing director and chief business officer at the Geneva-based think-tank, in launching the report in London on Thursday. The annual report is supported by several insurance industry companies.

The interconnectedness of risk is one of the most important themes of the report, said John J. Merkovsky, New York-based managing director and global practice leader for Marsh Risk Consulting, which contributed to the report. “The headline theme of interconnectivity of risk shows risk managers that they cannot manage risk in silos. The concept of interconnectivity of risk is far more important than any of the risks (identified in the report) themselves.”

“Global Risks 2010” does not rank risks, but those with the greatest likelihood and highest severity are certain economic risks, underinvestment in infrastructure and the impact of chronic diseases.

One of the economic risks of most concern is the formation of new asset bubbles, in part due to the fiscal stimulus aimed at dealing with the financial crisis, said Daniel M. Hofmann, Zurich-based chief economist at Zurich Financial Services Group Inc., one of the report partners. There also is a high risk of a fiscal crisis in major economies such as the United States and the United Kingdom, where levels of government borrowing are not sustainable, he said.

There also is a high risk of “hard landing” for the Chinese economy, where growth is “unbalanced,” he said.

Other risks that must be addressed include transnational crime and corruption, loss of biodiversity and critical information systems and cyber liability, said Mr. Greenhill.

According to Raj Singh, chief risk officer at Zurich-based Swiss Reinsurance Co., another partner in the report, long-term risks such as energy, climate change and food and water security are not getting the attention they deserve.

“Long-term risks like these have huge implications for infrastructure spending, but governments do not perceive the need for such investment,” he said.

The risks associated with underinvestment in infrastructure have moved up in importance and have been exacerbated by the financial crisis, Mr. Hofmann said. “Governments are under so much pressure to fight the recession that they risk focusing on long-term issues,” he said.

Efforts to promote the creation of country risk managers, who would serve as national chief risk officers, may be gaining traction, Mr. Singh said.

The concept of a country risk manager was first discussed in 2007, but the financial crisis derailed discussions that were being held with international banking organizations, said Mr. Singh. Efforts have since resumed, and a meeting was held with the Organization for Economic Cooperation and Development to discuss the matter in the summer, he said.

There has been some progress in promoting the concept with individual countries, he said, noting that the main political parties in Germany have commissioned a feasibility study for creating the post of country risk officers at a central and local government level.

In the five years that the WEF has published its global risks reports, there has been more international cooperation on risk issues, Marsh's Mr. Merkovsky said.

The report is intended to bring government, nongovernmental organizations and business together and align their interests, he said. Risk managers are increasingly being asked to participate in wider-risk dialogue, and they should consider the potential implications of the risks identified in the WEF report for their own companies, Mr. Merkovsky said.

“Global Risks 2010” is available for download at www.weforum.org/en/initiatives/globalrisk/Reports/index.htm.