Inequality, Inflation: Guterres says world is facing ‘the perfect storm’

UN Secretary-General Antonio Guterres on Wednesday outlined “the perfect storm” facing the world today and listed recession, inequality, supply chain disruptions, rising interest rates and inflation as the biggest economic challenges.

In his address to the World Economic Forum in Davos, Switzerland, Guterres also criticised the fossil fuel producers for peddled big lie on climate change.

He told the audience that the developing countries need access to finance, debt relief, and long-term lending to invest in sustainable development.

Climate change

“We learned last week that certain fossil fuel producers were fully aware in the 70s that their core product was baking our planet,” Guterres.

“Just like the tobacco industry, they rode rough-shod over their own science,” Guterres said and added, “Some in big oil peddled the Big Lie.”

“And like the tobacco industry, those responsibly should be held to account,” he insisted with a warning that the world is “flirting with climate disasters”, with every week bringing a new horror story.

The commitment to limit global heating to 1.5 degrees is “nearly going up in smoke”, Guterres said, in a keynote speech to the WEF Congress hall. “Without further action, we will hit 2.8 degrees of heating. For many, that will be a death sentence.”

“But this is not a surprise,” the UN chief said, citing last week’s news that Exxon had privately predicted global warming, but then spent decades publicly rubbishing such science in order to protect its core business.

He said fossil fuel producers and their enablers were still racing to expand production, knowing full well that their business model is inconsistent with human survival.

Guterres urged all corporate leaders to put forward credible and transparent transition plans on how to achieve net zero – and submit those plans by the end of this year, telling the delegates that politicians and business leaders should resist short-term thinking.

“Don’t look at what’s going to happen to you tomorrow, look at what’s going to happen to all of us in the future. And to be honest, it’s happening now.”

Great fracture

Guterres also warned that the world risks a ‘great fracture’, the possible decoupling of the two largest economies, the US and China.

“Such a rift could create two different set of trade rules, two dominant currencies, two internets and two conflicting artificial intelligence strategies, the UN secretary general fears, and hit global growth.”

About the ongoing conflict in the heart of Europe which is affecting the entire world, the UN secretary-general said he neither see the end of the Russia-Ukraine war in the immediate future nor an opportunity yet for a serious peace negotiations between the two sides.

He explained that the geopolitical divide is different than in Cold War, which was easier as there were two blocs with clear rules of engagement.

“Although they caused trouble for each other, they had mechanisms to stop that trouble if it was becoming a threat.”

“Conflicts today are more dangerous as there are fewer mechanisms to stop them getting out of control,” Guterres pointed out.

Social media

He said social media platforms should be held legally accountable if their software deliberately amplifies false information. Algorithms have been built to amplify messages, and there should be accountability, when the spread of misinformation benefits from the way the algorithm amplifies them, he noted. “That, in my opinion, creates a responsibility on the platform.”

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