The return of the World Economic Forum in Davos
Does the annual gathering of the global business elite have any relevance, when globalisation is in swift retreat?
The highlight of the last gathering of the global elite at Davos, in January 2020, “was a spat between Greta Thunberg and Donald Trump”, said Larry Elliott in The Observer. “Scant attention was being paid to reports of a new virus recently detected in China”; most of those who’d trekked to the Swiss alpine resort “were too busy virtue-signalling” about inequality and the climate emergency. A lot has happened in the past 28 months, and this week’s meeting of the World Economic Forum (delayed from January because of Omicron) had a very different feel. “Davos has always been dedicated to globalisation”, but “a combination of pandemic and Putin” has accelerated an existing trend. A big unofficial theme of this year’s shindig, therefore, was an existential question: does Davos still have any relevance in “a fragmented world where globalisation is in retreat”?
The mood among the CEO crowd was “anxious and dour”, said Andrew Ross Sorkin in The New York Times. Many comparisons were made to the 1970s (or the tech crash of 2001). There was “a sense that inflation will remain persistently high and that a recovery will take many years”. The good news is that the famous “Davos Consensus” is often wrong – a clear “contra-indicator for the future”.
Nonetheless, it was hard to laugh off the gloomy economic backdrop to this year’s meeting, said Ben Woods in The Daily Telegraph. IMF chief Kristalina Georgieva warned of a “confluence of calamities” in the world economy: from growing food protectionism to “mounting concerns that the world could split into two economic blocs”. It’s what the economist Mohamed El-Erian calls the “little fires everywhere” characterisation of the global economy.
This year, Davos was preoccupied with what Jane Fraser of Citigroup called “the three Rs”, said the FT. “Russia, recession and [interest] rates.” The star of the show, appearing via video link, was Ukraine’s president Volodymyr Zelenksyy, who earned an ovation after imploring business leaders to stop “all trade with the aggressor”. Conversation at Davos revolved around “deglobalisation and its discontents”, said Rana Foroohar in the same paper. The arguments are familiar: “unless we return to the mid-1990s status quo of neoliberalism, doom awaits”. Yet the economic and political consequences of lopsided globalisation “are the key reason that we are now in a period of deglobalisation”. As Davos types “continue to debate whether decoupling is possible”, business is “simply getting on with the new reality of a post-neoliberal world”, creating their own regional supply chains. “They should get out of the ivory tower.”