Risks and resilience in the new global era.
| Author | Evans, Alex |
| Position | Features - Essay |
For all that policymakers try to impose their narratives on a chaotic world, it is risks--complex, unpredictable, perhaps even unmanageable--that have defined the first decade of the twenty-first century.
Think of 11 September, 2001 and its aftermath, and how preoccupation with terrorism and fragile states has driven foreign policy ever since. Or the seismic upheavals seen in international financial markets over the last year, the first run on a British bank in living memory, the demise of some of the US's most powerful institutions, contagion across a growing number of borders, and a global stock market crash. Or the looming shadow of long-term scarcity issues--food, water, energy, land and atmospheric 'space' for emissions--which are already driving an increase in global volatility.
Tip O'Neill famously observed that 'all politics is local', but today, the drivers of political success and failure are predominantly global. In a world as complex and interdependent as ours, risks multiply. Their impact, meanwhile, is unevenly distributed. While one group of people reap the benefits of an action, others feel the pain, as conflict, economic turbulence, disease or resource shortages disrupt their lives. Failure can also cascade from one system to another, a prospect that has become increasingly likely in a 'just-in-time' world.
In response, we need to get serious about how to make global, national and local systems more resilient. This is an imposing challenge. A new politics will be needed, one that is internationalist by default, but also hard-headed about the perils of globalisation. Governance systems will have to take on arduous new functions and slough off some old ones. Renewed attention must also be paid to subsidiarity, the tricky task of determining which function should be discharged where.
But this is not primarily a technocratic challenge. Resilience relies on the energy and initiative of the society as a whole, and is ultimately a matter of culture, values and identity. Policymakers will thus need to ask some uncomfortable questions. What is it about our societies that we are trying to protect? Do our policies augment or diminish us? Have we remained ourselves during a time of disruptive change?
What makes us vulnerable
The starting point is to understand four distinct types of vulnerability.
First, there are shocks, sudden catastrophes that hit with minimal warning. These 'black swans' are not only unforeseen, but more importantly, their impact is highly unpredictable. There's nothing new about our susceptibility to shocks, of course, but our vulnerability is growing as societies become more complex and interdependent. A virulent new haemorrhagic fever in the Congo is clearly a problem for everyone in the vicinity. Stir international travel into the mix, however, and the danger becomes universal.
Risk is thus 'manufactured' by the way we have chosen to live. In the United States, for example, the economic cost of a hurricane of a given intensity is doubling roughly every decade. A $500b storm is predicted for the 2020s (Pielke et al, 2008). The 2003 European heat wave, meanwhile, caused thirty-five thousand deaths in one of Europe's worst ever disasters. The tragedy passed almost unnoticed, with the typical victim isolated from social structures and community support (Kosatsky, 2005).
Stresses have a different dynamic. These slow-burn pressures may have no discernible impact over a long period, but can then cause dramatic change once a threshold is crossed. An irrigation system can become salinised to the point where the land's productivity drops rapidly; or a fishery collapses in a sudden reaction to years of over-fishing. Often these changes will be irreversible. In the coming years, our climate may see sudden and disastrous increases in greenhouse gas concentrations as one of a number of tipping points are hit. At the same time, we can expect to see a proliferation of other stresses, as rising population, affluence and expectations imposes severe pressure on global systems. Recent intense concern about the security of the world's food supply, and pronounced spikes in the prices of other resources, are a harbinger of what is to come. Systems, at global, national and local levels, seem certain to behave in unexpected ways as they find that, along key dimensions, there is no longer any room to expand.
Then there is our vulnerability to deliberate disruption. Crime has globalised as rapidly as business and shows similar patterns of innovation. Its threat is underestimated (as is its impact on the most vulnerable). Add political motivation and the result is a 'networked actor' that systematically scans for points of weakness in its host society. In Iraq, terrorist groups have become proficient at analysing complex networks like power grids or oil distribution systems. Their attacks are designed to garner maximum return on a modest investment. Such techniques are now proliferating internationally in a 'bazaar of violence' (Robb, 2007). In the Niger Delta, for example, oil revenue has been cut substantially by insurgent activity. A substantial portion of this lost production is stolen on its way to market, in a fusion of terrorist and criminal activity. Increasingly, we will come to realise that complex systems are vulnerable to anyone with a grievance and basic understanding of some simple techniques--a problem that will intensify as technological innovation continues to accelerate (above all in the field of biotechnology).
The final vulnerability is the way we weaken our critical systems through neglect, ignorance or stupidity. Globally, we have underinvested in infrastructure and pared systems down to the point where there is no margin for error. We have also been careless in the way we have allowed risk to be exported across institutional and geographic borders. The current financial crisis is a case in point. No one--regulators, rating agencies, the investors themselves--had a clear picture of how much risk had been allowed to accumulate in the 'shadow banking system'.
Then there is the question of the resilience of our values. In the 'global war on terror', the United States, in its role as leader of the Western world, has rushed to abandon the high ground. It has picked...
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