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Our World Transformed: Geopolitical Shocks and Risks

The Atlantic Council Report, April 2017  – “No one can be complacent about geopolitical risks these days. The shocks and surprises of the past few years show how easily assumptions about liberal markets, international relations, conflict, and democracy can be shaken. Geopolitical volatility has become a key driver of uncertainty, and will remain one over the next few years. The three risks with geopolitical consequences and interconnections examined in this study—protectionism, energy crisis, and water and food scarcities—are growing. While the threat of growing protectionism is a daily feature in the news, an energy crisis resulting from the worsening Middle East situation or the spread of water scarcity could also disrupt the world. Should any of these situations become full blown, the impacts would be nothing less than earth shattering for how the world governs or does business…Scenarios are a critical device for mapping the ways risks can balloon into full-scale crises. Scenarios can show how single risks can trigger scores of others. Nobody can ignore “large impact but small likelihood” scenarios. All too frequently, those “black swans” have indelibly recast the geopolitical landscape. It is important for companies, as well as governments, to understand the triggers, trends, and scenarios for which to look out, and to prepare for the possible consequences of any of those risks…”

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