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Risk is our new reality

Navigating a world of risk to chart a new course for development

July 23^rd, 2025

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Development has delivered significant progress: longer lives, more education, less poverty – and above all, hope for a better life. But the ground beneath us has shifted; our past gains are under threat and our future plans are in danger.

Why is this the case? Because our world is experiencing deep changes. And these deep changes are unleashing complex risks, amplifying uncertainty, and fuelling cascading crises. Risks have always been with us, but they have now multiplied, grown in intensity and become increasingly inter-connected. They operate at a larger scale and cause greater damage.

Political and economic models are shifting. Geopolitical tensions are escalating. Populations are surging in many places even as they are shrinking dramatically in others. Climate shocks are accelerating. Energy systems powering economies are being restructured. New technologies are transforming social and political behaviour even as they upend multiple industries, create new ones and change the dynamics of labour markets. And as crises grow and needs rise, humanitarian actors are stepping back.

No country is immune. Yet, paralysis in the face of accumulating dangers is a possibility. This would be very costly – to people, planet and peace.

We need to chart a new course.

Water resource management in the Colorado River Basin. Faced with water scarcity and competing demands, stakeholders from Mexico, U.S. states, and Indigenous Peoples have developed flexible water-sharing agreements. Photo: Lavizzara/Shutterstock.com

Disaster risk management in the Philippines. The Philippines’ Disaster Risk Reduction and Management Act promotes collaboration across government, communities, NGOs, and international partners. Photo: UNDP Philippines

This starts with recognizing the threat we face from growing risk and uncertainty. It’s systemic, it’s gaining in strength, and it could become unstoppable without urgent action.

Countries and the global community need to treat risk reduction as an important policy goal. They need to build in and invest in risk management across almost everything that they do. But they also need to see how risks could be harnessed to transform how we advance development.

UNDP’s new global report, Development at Risk: Protecting Gains and Unleashing Opportunities Amid Crisis, argues that this is possible with three concrete actions, or levers for change:

Rethink development outcomes: Move beyond GDP as a marker of progress to include prosperity, wellbeing and resilience.
Reimagine governance: Empower local institutions, harness data for early warning, and plan for uncertainty.
Reboot cooperation: Break out of short-term cycles by investing in long-term solutions with flexible finance, shared responsibility, and room for experimentation.

The report concludes that the greatest risk we face is not in taking bold action, but in failing to act when the stakes are highest.

Here are three powerful ways communities around the world are responding to cascading crises – each offering vital lessons on how to make development work better in uncertain times.

Women leading recovery in Afghanistan

In Afghanistan, development is being reimagined under extraordinary pressure. With nearly three out of four people unable to meet their basic needs, a shrinking economy, and declining access to essential services, the challenges are immense. But amid these hardships, something different is taking root: a shift toward community-driven, inclusive recovery—led by women.

Today, Afghanistan is the only country where girls are banned from secondary and higher education. Three million girls remain out of school, and restrictions on movement and work have pushed many women out of the workforce.

Female employment has dropped from 19 percent in 2021 to just six percent in 2023. Many women have been forced into insecure, informal jobs. This exclusion doesn’t just deny women their rights, it comes at a steep cost for families and for the economy. This economic exclusion is not only unjust but costly. The estimated loss could be over US$1 billion.

In context of these significant challenges, focusing on women's economic opportunity, small and micro-enterprises has been a pathway to improve services and access to energy, and to and unlock progress. With support from UNDP and its partners, more than eight million women have received access to basic services, clean energy, livelihood training, and support to start small businesses.

Recovery in Afghanistan depends on unlocking the full potential of all people, especially women. It means measuring progress not just by GDP, but by the opportunities people have, the dignity they experience, and the degree to which no one is left behind.

Facing climate change in Bosnia and Herzegovina

In Bosnia and Herzegovina, governance is being reimagined to meet the dual challenges of climate change and shifting demographics. As floods intensify and temperatures rise, local institutions are not just reacting—they’re planning ahead. By integrating migration, development, and climate risk into local governance, municipalities are building a new model: one that is more inclusive, anticipatory, and grounded in the realities of the communities it serves.

Rising temperatures and worsening floods are reshaping daily life in the country. Homes have been damaged. Jobs have been disrupted.

UNDP works with local institutions to support recovery and resilience. Across 45 municipalities, funding from the European Union has helped build flood-resistant housing for families at risk.

Women have played a key role in these efforts. Their land rights were recognized, and they were included in rebuilding activities and local decision-making.

In 2024, UNDP and the European Union launched a new initiative to expand this approach. It focuses on supporting local governments, involving communities, and promoting inclusive planning to reduce risk and strengthen recovery.

Good governance is about trust, participation and leadership that responds to real needs. Bosnia and Herzegovina is showing that inclusive, locally led governance can reduce risk and pave the way for long-term resilience.

Chile’s FOGAPE fund supports MSMEs by guaranteeing loans through public-private partnerships. Photo: Nuva Frames/Shutterstock.com

The Ethiopia Insurance and Risk Financing Facility helps communities and businesses prepare for disasters through tailored insurance solutions. Photo: UNDP Ethiopia

Charting a new course

Traditional models of international collaboration are struggling under the weight of geopolitical tensions and domestic pressures, even as global challenges intensify. What’s needed is a shift toward more flexible, inclusive, and outcome-focused partnerships—coalitions of the willing that can act quickly where space and opportunity exist.

The examples from Afghanistan and Bosnia and Herzegovina show what’s possible when people and partnerships come together to rethink what development can be.

At its core, Development at Risk is a call for political courage and practical action. The nature of risk is fundamentally changed, so our old playbook no longer works.

We must move from patchwork solutions to long-term integrated strategies that recognize risks intersect, which changes how they impact people and the planet. To measure success not only by growth, but by fairness, resilience and human dignity.

The future will be shaped by the choices we make now. If we act boldly, invest in people and systems, and listen to those most affected, we can learn to live with risk, protect hard-won gains and build something better, even in the hardest places.