The war in Ukraine. A rapidly slowing economy, fragmentation and deglobalization. Cost of living. Climate change. There’s plenty for the world’s great and good this week as Davos resumes after a three-year hiatus.
It’s not strictly speaking the first gathering of world leaders, businessmen, academics and civil society since the start of the pandemic, but last May’s World Economic Forum event was a smaller and less well-attended affair. The dry run was good, but the real Davos traditionally takes place in January, when the snow is thick on the ground in a Swiss village 1,500 meters up in the Alps. In the past, the mood at Davos has fluctuated between extreme optimism and unbridled gloom, depending on the state of the global economy. This year looks set to be the last. As WEF founder and executive chairman Klaus Schwab said last week, “economic, environmental, social and geopolitical crises are converging and converging.” The goal of this year’s Davos, he added, was to get rid of the “crisis mentality”.
That would be easier said than done. Before there was a “crisis mentality”, there was a “Davos mentality”, in which annual gatherings promoted an inclusive form of globalization, and participants from around the world collaborated to solve cross-border problems such as climate change.
But as threats to peace, prosperity and the future of the planet have grown, so has the willingness to cooperate — the spirit of Davos, as Schwab likes to say — diminished. Last week’s WEF Global Risks Report, an annual publication detailing what experts see as the most pressing short- and long-term risks, was stark in its warning.
“Coordinated, collective action is needed before the risks peak,” it said. “Unless the world begins to cooperate more effectively on climate mitigation and adaptation, it will lead to global warming and ecological decline in the next 10 years.”
A common perception is that the WEF is a secretive and sinister organization that looks like something out of a James Bond novel. In fact, it has no executive power and is more of a giant global chat shop where world leaders take advantage of the opportunity to interact with each other and executives make deals behind closed doors. Bond flies over Davos to the den leading to Blofeld’s mountaintop On Her Majesty’s Secret Service but it’s as close to an Ian Fleming novel as WEF gets.
Instead, IGWELs, informal gatherings of global economic leaders attended by prime ministers, presidents, central bank governors and top executives, are designed to see if there is a way to find global solutions to global problems. In a way, Davos is a prelude to the end-of-the-year summits where real decisions are made.
Some world leaders, such as Donald Trump, have used Davos to brag about how great things are going back home. Others come to Davos with the aim of mobilizing support for a global cause, which in the case of Tony Blair in 2005 meant talking about the need for debt relief and more aid to struggling developing countries.
Rishi Sunak will not be following in Blair’s footsteps on Monday, although the Prime Minister will find plenty of kindred spirits among the tech entrepreneurs and Wall Street bankers who always turn up at Davos in large numbers. WEF organizers are disappointed that the UK government is not using Davos to outline its global agenda, but the prime minister and chancellor, Jeremy Hunt, believe that being nice won’t be the most important thing. the global elite, while Britain is engulfed in a cost-of-living crisis and strikes.
Instead, the UK’s most prominent politicians in Davos will be opposition leader Keir Starmer and shadow chancellor Rachel Reeves, who are taking the opportunity to show how business-friendly the Labor party has become.
A lot has happened since Davos 2020 was dominated by a spat between Trump and climate activist Greta Thunberg. US-China relations are worse than two years ago. The pandemic and its aftermath have made countries much more wary of the impact of long, complex supply chains. The golden age of globalization in the late 1990s and early 2000s is now a fast-fading memory.
Despite Schwab’s talk of breaking the vicious cycle of short-term and self-serving policymaking, the Davos crowd must contend with a world that is deglobalizing and increasingly fragile. Somehow, a little soul-searching and humility wouldn’t be a bad thing, because for those struggling to get by, there are few things more heartbreaking than the self-proclaimed masters of the universe wringing their hands about the need to fight inequality. .
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