South Africa has the ability 'to manage huge risks'

South Africa might have the systems in place to manage 50 of the world's biggest risks but its ability to recover should disaster strike is poor.

The World Economic Forum's latest Global Risk Report rates the three most likely and biggest risks that the world faces as severe wealth gaps, unsustainable government debt and the failure to adapt to climate change.

South Africa is ranked relatively high at 34th among 139 countries. But it falls short when it comes to the ability to recover from a disaster, scoring 2.77 points of a possible seven.

The report cites economic and environmental risks as the most pressing the world will face in the next decade.

"The narrative emerging from the survey is clear," the report says. "Like a superstorm, two major systems are on a collision course. The resulting interplay between stresses on the economic and environmental systems will present unprecedented challenges to global and national resilience."

The study evaluated 50 global risks in five categories: economic, environmental, geopolitical, societal and technological.

The top five risks were found to be severe income disparity, chronic fiscal imbalances, rising greenhouse gas emissions, water supply crises and mismanagement of an ageing population.

The five risks listed by the severity of their impact were major systemic financial failure, inadequate water supply, chronic fiscal imbalances, food shortages and the diffusion of weapons of mass destruction.

Economist Mike Schussler said South Africa has "very strong" financial institutions, reducing the risk of financial crisis.

The Treasury and SARS function well, and banks are properly prepared against financial problems.

"The reason that we have an inequality issue is that we don't have jobs . if we want to create jobs, we have to grow," he said.

Environmental consultant Chippy Olver said the biggest long-term concern was climate change.

"For the short-term, poaching continues to be a huge risk, and definitely water quality and scarcity. Many municipalities don't have enough water for their needs."