Global Spotlight Discussion on Emerging Risk
Given geopolitical unpredictability in recent years, emerging risks are similarly ever-shifting. Panellists in this session focused both on a global view of risk as well as the local. For Dato’ Steven Wong of the Institute of Strategic and International Studies, he is of the opinion that global security issues in the last 3 decades have increased, with the full implications still yet to be seen. The uncertainty of developing risks is such that they are not necessarily on spreadsheets and are difficult to quantify as hard data.
His top four emerging risks:
1) A decline of democracy and democratic practices worldwide. Without the rule of law, social order will be impacted, with impacts on corporate operations.
2) The deterioration of global security and intrastate security, especially with the rise of cyber related crimes.
In recent times, there have been around 350 major cyber-attacks on government facilities, defense contractors, and the like, via Denial-of-Service attacks (DoS) and the immobilization of infrastructure.
3) The increasing frequency and complexity of gray-zone conflicts, which are not fought on the front lines or with traditional military strength, for example proxy wars instigated by Iran, the US, China, Russia, and Saudi Arabia, or manipulation of political elections, such as those suspected in the US and France.
Dr. Anthony Dass of Ambank Research concurred that we are witnessing an increasing prevalence of security risks. This is concerning for Malaysia, where, in his view, businesses run the risk of being quite complacent.
As technology reconfigures the structures of how business is conducted, there is also room for sociocultural mores to change as well. For SMEs in Malaysia, for example, there still exists the practice of having to pay ‘protection money’ to illicit third parties in order to ensure smooth operations. In this digital landscape, how will old practices fare?
The US is worried about Made in China 2025 initiative. With the push of automation and Deep Learning, China won’t need to offshore their production in the future.
In Dass’ view, it’s not all doom and gloom with emerging risks, but states and businesses need to lay down the groundwork to keep up with the pace of change. In the 70s, Malaysia used to benchmark with South Korea. Now, Malaysia is starting to compete with Myanmar, which has become a fast-developing economic hub.
In the 80s, globalization was talked about as myth, and now, it’s a fact of business. In 20 years, where will we be? Will Africa or Eastern Europe emerge as bigger players? For the panellists, most of the world has yet to recognise the extent of the emerging risks, and it’s critical to do so in order to identify the full range of vulnerabilities you face.