Derisking From Trump Was Overlooked At Davos. It Should’ve Been Top Priority

The top risk among the top five risks listed in the 20th edition of the World Economic Forum’s (WEF’s) Global Risks Report 2025 is armed conflict. State-based armed conflict is now ranked as the number one current risk by 23% of respondents. This is an indication of how perceptions have changed for the worse. Two years ago the respondents of the same study in their two-year-long outlook had overlooked this.

Armed conflict is followed by extreme weather events, geoeconomic confrontation, misinformation and disinformation, societal polarisation and economic downturn. However, there is an umbrella emotion for lack of any other term that overrides all of this — which is that of declining optimism.

Political Miscalculations

There is limited optimism, argues the report, because the danger of miscalculation or misjudgment by political and military actors is high. And of course, we seem to be living in one of the most divided times since the Cold War. This reveals a bleak outlook across all three time horizons — current, short-term and long-term — that the report has covered.

A majority of respondents (52%) anticipate an unsettled global outlook over the short term (next two years), a similar proportion to last year. Adding everything, the three categories of responses show a combined four percentage point increase from last year, indicating a heightened pessimistic outlook for the world to 2027.

It gets worse over a 10-year timeframe. The time frame being referred to are immediate, that is 2025, short to medium term (till 2027) and long term (till 2035). The WEF said the analysis aims to support decision makers in balancing current crises and longer-term priorities.

The risks are broadly split into five domains: environmental, societal, economic, geopolitical, and technological. Now, if you were to rank the risks, as the WEF has done, five of six risks are actually entirely man made or potentially man made.

You could argue that extreme weather is also an outcome of mankind’s excesses but that is a different discussion.

Two of the top six, polarisation and misinformation, particularly the accelerated spread of it are quite closely linked to technology which also tells you something about the role of technology in not solving the world’s problems. Within technology, adverse outcomes of artificial intelligence technologies find mention in the report, a risk that climbs the most in the 10-year risk ranking.

The role of Generative AI (GenAI) in producing false or misleading content at scale and how that relates to societal polarisation is something the report references directly.

Biological terrorism, malicious misuse of gene editing technologies and brain-computer interfaces are among the other risks. See any linkages between the role of technology in spreading misinformation and brain-computer interfaces, or the people behind them?

The Man Made Problems

With California reeling under unprecedented forest fires that have claimed many lives and caused untold damage to property and livelihoods, the prospects of extreme weather and its impact, including via forest fires, should not be hard to comprehend.

There are a few larger questions that come up.

First, if so many problems are man made, indeed could the solutions also lie within ourselves, as countries or nations or those who lead them? Second, if the world could only agree upon the problem of climate change, on the fact that climate change really is a problem, could we devote more resources to solving it?

You could rightly argue that Elon Musk as a representative of capitalism and innovation is on the right side of the climate problem with electric cars. But his social platform experiment clearly caters to both misinformation and polarisation.

Elsewhere, there is scepticism and fatigue on forced climate responses, including the environment, social and governance or ESG mandates. And Trump is killing green subsidies, so the signalling is not encouraging.

Davos this year appears to be on the defensive, waiting to see what else Trump would unleash on the world at large and businesses in specific. Most business leaders and heads of states seemed to be in retreat, trying to figure out how to plan for a barrage of threats.

You can’t blame them.

A key item on the Global Risk Report agenda should have instead been, how to derisk from Trump and focus on the opportunities beyond.

That is a conversation the world, including countries like India desperately need to have.

Maybe next year.