Permacrisis, Polycrisis – The words of our times

Permacrisis, Polycrisis – The words of our times

As we find ourselves further ensnared in a multifaceted crisis situation, it’s worth reflecting on the significance of these terms and the realities they represent

Image: Top 10 Global Risks; Source: World Economic Forum

In the ever-evolving lexicon of our age, words often emerge as markers of the zeitgeist. They capture the spirit, anxieties, and challenges of their times. In 2022, amidst the tumult of a global economic upheaval, the Collins dictionary introduced us to a term that would become emblematic of our era: ‘permacrisis’. Yet, while linguists were quick to embrace this neologism, economists around the world clung to the more conventional ‘polycrisis’. A year on, as we find ourselves further ensnared in this multifaceted crisis, it’s worth reflecting on the significance of these terms and the realities they represent.

For many of us, the wriggly red lines of Microsoft Word’s spellcheck became a daily reminder of the evolving narrative. With each right-click, we added new words to our personal dictionaries, adapting to the changing discourse. But beyond the digital realm, these words held a mirror to a world grappling with unprecedented challenges.

‘Permacrisis’ suggests a state of perpetual crisis, a never-ending cycle of challenges without respite. It paints a picture of a world where stability is elusive, and where the ground beneath our feet is constantly shifting. On the other hand, ‘polycrisis’ denotes a crisis with multiple facets, each intertwined and feeding off the other. It’s a term that acknowledges the complexity of our global predicament, where economic, environmental, social, and political issues are inextricably linked.

Today the world grapples with a convergence of crises the term we seem to be a continuous state of uncertainty that is becoming even more intense every day. The term “polycrisis” became a buzzword at the World Economic Forum’s Annual Meeting. Peter Giger, Group Chief Risk Officer at Zurich Insurance Group, and Carolina Klint, Managing Director at Marsh McLennan, recently reflected on the evolving nature of these challenges.

Adapting to the New Normal

Despite the ongoing geopolitical tensions, inflation, and wars, Giger believes that humans have a remarkable ability to adapt. “Humans get used to circumstances very quickly. What they really don’t like is change,” he remarked. This adaptability, however, doesn’t mean the crises have subsided.

Economic Uncertainties

Earlier this year, many developed nations grappled with a cost-of-living crisis due to market instability and soaring inflation. While interventions have staved off immediate financial turmoil, the slowdown of China’s economy, which hasn’t rebounded as strongly post-pandemic, adds to global uncertainties.

Klint warns of further economic shocks, especially with the intensification of the war in Ukraine and potential extreme weather events. “Inflation could remain high and even rise if further shocks occur,” she said.

Middle East Crisis and Oil Prices

The recent Hamas attack and the escalating war in Israel have added another layer of complexity. With the Middle East being a pivotal region for oil, these tensions threaten to drive oil prices even higher, exacerbating global inflation concerns.

Supply Chain Fragility

The fragility of global supply chains, already tested by events like the US-China trade war, the pandemic, and the Ever Given (the huge container ship that blocked the Suez Canal in March – disrupting global trade) incident in the Suez Canal, is further strained by rising geopolitical tensions and sanctions. Klint emphasized the need for companies to pivot their strategies, focusing on resilience over efficiency.

Climate Crisis Remains Paramount

The climate crisis, a recurring top concern in the Global Risks Report, remains a significant threat. Giger highlighted the increasing inhabitability of certain regions due to regular natural disasters, making them uninsurable. Biodiversity loss, driven by habitat destruction and aggressive agricultural policies, is also a rising concern.

However, Klint sees a silver lining. The energy crisis, exacerbated by the war in Ukraine, has accelerated the push for green energy solutions.

Emerging Risks

While artificial intelligence has garnered significant attention recently, Giger believes its immediate impact is overestimated. However, he acknowledges the long-term implications of AI integration into daily life.

Klint also pointed to aggressive data collection and the potential for generating fake content as areas of concern. Moreover, the lessons from COVID-19 emphasize the need to monitor potential sources of future pandemics closely.

As the world navigates this polycrisis, which is really a continuation of the 2022 permacrisis, the challenges are multifaceted and interconnected. The recent developments in the Middle East, coupled with economic uncertainties, underscore the need for global cooperation and strategic foresight.

Are we in a perpetual crisis?

As we stand at this crossroads, the question arises: Are we in a state of perpetual crisis, or are we facing a series of interconnected challenges that demand a holistic approach? The global economy’s current state is a testament to the latter. We are not merely facing a singular, prolonged crisis but a web of crises that intersect and amplify each other. From supply chain disruptions to inflationary pressures, from environmental degradation to social unrest, the world today is a complex puzzle that defies simplistic solutions.

Silver lining

Yet, there’s a silver lining. Recognizing the multifaceted nature of our challenges is the first step towards addressing them. By understanding that we are in a ‘polycrisis’, we can begin to devise strategies that tackle issues at their intersections, rather than in isolation.

In the end, whether we label our times as a ‘permacrisis’ or a ‘polycrisis’, the imperative remains the same: to confront our challenges head-on, with a spirit of collaboration and innovation. As we continue to adapt our language to describe our world, let’s also adapt our mindset to find solutions that are as multifaceted as the problems they aim to solve.

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