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UPDATE 1-'Davos man' fears more storms, both real and economic

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* World Economic Forum risk report sets scene for Davos

* Income disparity and government debts top risk list

* Climate ranks third, extreme weather a growing concern

By Ben Hirschler

LONDON, Jan 8 (Reuters) - Fragile economies and extreme
weather have combined to crank up the global risk dial in the
past year, creating an increasingly dangerous mix, according to
the World Economic Forum.

Despite Europe's avoidance of a euro break-up in 2012 and
the United States stepping back from its fiscal cliff, business
leaders and academics fear politicians are failing to address
fundamental problems.

That is the conclusion of the group's Global Risks 2013
report, which surveyed more than 1,000 experts and industry
bosses and found they were slightly more pessimistic about the
outlook for the decade ahead than a year ago.

"It reflects a loss of confidence in leadership from
governments," said Lee Howell, the WEF managing director
responsible for the report.

Severe wealth gaps and unsustainable government finances
were seen as the biggest economic threats facing the world, as
they were last January. There was also a marked increase in
focus on the dangers posed by severe weather.

The 80-page analysis of 50 risks for the next 10 years comes
ahead of the World Economic Forum's (WEF) annual meeting in the
Swiss ski resort of Davos from January 23 to 27, where the rich
and powerful will ponder the planet's future.

Bringing together business leaders, politicians and central
bankers, Davos has come to symbolise the modern globalised world
dominated by successful multinational corporations.

Chief executives arriving on their private jets may still
ooze confidence but "Davos man" - and most delegates are male -
has plenty to worry about these days.

"Most of the risks have gone in the wrong direction in the
past year," Howell told reporters on Tuesday.

On the economic front, eurozone instability will continue to
shape global prospects in the coming years and the "associated
risk of systemic financial failure, although limited, cannot be
completely discarded," the report said.

SUPERSTORM SANDY

Concerns about rising greenhouse gas emissions have grown
notably in the past 12 months. The issue is ranked as the third
biggest worry overall, while failure to adapt to climate change
is viewed as the biggest single environmental hazard.

Superstorm Sandy, which wreaked havoc on the U.S. east coast
in October, was a wake-up call for many. But it was not an
isolated event in a year that also saw droughts, floods and the
Arctic sea ice melting to a record low level.

Extreme weather was on display again this week as Australia
grappled with fires and heatwave conditions, while temperatures
in China plunged to a 28-year low.

"Two storms - environmental and economic - are on a
collision course," said John Drzik, chief executive of Oliver
Wyman, a unit of insurance broker Marsh & McLennan.

"If we don't allocate the resources needed to mitigate the
rising risk from severe weather events, global prosperity for
future generations could be threatened."

This year's Davos meeting takes as its theme "resilient
dynamism", in recognition of the need for governments and
businesses to develop strategies to ensure critical systems
continue to function in the face of such threats.

Outside the interlinked areas of the environment and the
economy, the WEF identified other dangers, including increasing
resistance of bacteria to antibiotics and the danger of "digital
wildfires" created by the rapid spread of misinformation online.

More outlandish risks, dubbed "X-Factors," include the rogue
deployment of geo-engineering to counter climate change, for
example by injecting particles into the stratosphere, or the
discovery of alien life, which would challenge many assumptions
underpinning religion.

http://www.globalpost.com/dispatch/news/thomson-reuters/130108/update-1-davos-man-fears-more-storms-both-real-and-economic