Joel Kurtzman, Senior Fellow, Milken Institute; Executive Director, SAVE
When it comes to assessing global risks, "the old ways are not the new ways," said Jami Miscik, suggesting something has fundamentally changed across the world.
Miscik, of Kissinger Associates, identified three hazards: the risk of the unknown — not knowing how long the downturn will last or how bad it will get; the risk of opportunism — people taking advantage of the downturn to achieve malicious objectives; and the risk of unintended consequences — that solutions may create problems of their own.
Asked why experts did not see the crisis coming, Miscik criticized those who relied too much on quantitative tools. These tools created confidence because they were based on models that predicted good results. Scandella went even further, calling these models "exceedingly bad" because they were based on value at risk, a calculation he said "has no meaning."
Karen Monaghan of the National Intelligence Council spoke to the second-order risks caused by the economic downturn, the risks of political and social instability in countries across the globe.
The panelists discussed whether the swine flu, the latest global threat to make headlines, is risk or hype. When determining the true threat of the flu or other events, experts must make decisions while facing uncertainty, and Miscik applauded the Mexican government for its quick action and communication with other countries.
The panelists discussed various hot spots that pose risks to the global market, including China, Russia and Pakistan. Russia, which Monaghan called a "wounded bear," is of particular concern to the global market because of the recent devaluation of the ruble. If oil prices remain low and Russia's downturn continues, panelists warned, the government may pursue aggressive strategies to avoid the appearance of weakness.
Despite an apparent de-escalation of the downturn, several vulnerabilities remain for the United States and its global partners. Miscik pointed to consumer credit card debt and commercial real estate, and food scarcity remains a primary concern across the globe.
Scandella predicted a change of global leadership toward China that will leave the United States and Europe behind. Yet, the Milken Institute′s Joel Kurtzman cautioned, "Perhaps the riskiest bet of all is to bet against the United States."
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
