BREAKING NEWS

Report: Global economy could endure disaster for a week

By REUTERS

JANUARY 6, 2012 04:43

LONDON - The global economy could withstand widespread disruption from a major natural disaster or attack by militants for only a week, a report by UK-based think-tank Chatham House said on Friday.

The frequency of natural disasters, such as extreme weather events, appears to be increasing and globalisation has increased their impact, the report found.

Events such as the 2010 volcanic ash cloud, which grounded flights in Europe, Japan's earthquake and tsunami and Thailand's floods last year, showed that key sectors and businesses can be severely affected if disruption to production or transport goes on for more than a week.

"One week seems to be the maximum tolerance of the 'just-in-time' global economy," Chatham House said.

The world's economy is currently fragile, leaving it particularly vulnerable to unforeseen shocks. Up to 30 percent of developed countries' gross domestic product could be directly threatened by crises, especially in the manufacturing and tourism sectors, it said.

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