Cyberattacks were ranked as the second most important risk — after an “energy shock” — in the three Gulf states, according to the WEF’s flagship Global Risks Report 2019.
The report was released ahead of the WEF’s annual forum in Davos, Switzerland, which starts on Tuesday.
In an interview with Arab News, John Drzik, president of global risk and digital at professional services firm Marsh & McLennan said:
“The risk of cyberattacks on critical infrastructure such as power centers and water plants is moving up the agenda in the Middle East, and in the Gulf in particular.”
Drzik was speaking on the sidelines of a London summit where WEF unveiled the report, which was compiled in partnership with Marsh and Zurich Insurance.
“Cyberattacks are a growing concern as the regional economy becomes more sophisticated,” he said.
“Critical infrastructure means centers where disablement could affect an entire society — for instance an attack on an electric grid.”
Countries needed to “upgrade to reflect the change in the cyber risk environment,” he added.
The WEF report incorporated the results of a survey taken from about 1,000 experts and decision makers.
The top three risks for the Middle East and Africa as a whole were found to be an energy price shock, unemployment or underemployment, and terrorist attacks.
Worries about an oil price shock were said to be particularly pronounced in countries where government spending was rising, said WEF. This group includes Saudi Arabia, which the IMF estimated in May 2018 had seen its fiscal breakeven price for oil — that is, the price required to balance the national budget — rise to $88 a barrel, 26 percent above the IMF’s
October 2017 estimate, and also higher than the country’s medium-term oil-price target of $70–$80.
But that disclosure needed to be balanced with the fact that risk of “fiscal crises” dropped sharply in the WEF survey rankings, from first position last year to fifth in 2018.
The report said: “Oil prices increased substantially between our 2017 and 2018 surveys, from around $50 to $75. This represents a significant fillip for the fiscal position of the region’s oil producers, with the IMF estimating that each $10 increase in oil prices should feed through to an improvement on the fiscal balance of 3 percentage points of GDP.”
At national level, this risk of “unemployment and underemployment” ranked highly in Bahrain, Egypt, Morocco, Oman and Tunisia.
“Unemployment is a pressing issue in the region, particularly for the rapidly expanding young population: Youth unemployment averages around 25 percent and is close to 50 percent in Oman,” said the report.
Other countries attaching high prominence to domestic and regional fractures in the survey were Tunisia, with “profound social instability” ranked first, and Algeria, where respondents ranked “failure of regional and global governance” first.
Looking at the global picture, WEF warned that weakened international co-operation was damaging the collective will to confront key issues such as climate change and environmental degradation.