Davos 2015 Thinking Tomorrow Today

Global Centre Stage

Kelechi Deca has more on the World Economic Forum’s week-long annual meeting in Davos on the globe’s most pressing issues and long-term challenges, including inequality, climate change and terrorism

This 45th annual meeting of the World Economic Forum ensured that participants did not leave Davos without a commitment to adequately address the world’s most pressing current affairs and long-term trends. With well over 2,500 representatives of business, government, academia and civil society, participants focussed mainly on inequality, climate change and the future of the Internet, which took most of the bytes on one of the expected long-term challenges. The event aptly themed, ‘The New Global Context’ focussed on, among other things, the profound political, economic, social and technological change that the world has entered, which has the potential to end the era of economic integration and international partnership that began in 1989.

The issue of terrorism received maximum attention from political and business leaders in the wake of the killing of journalists at Charlie Hebdo magazine. Falling prices of global crude, job losses, and events in Ukraine, Syria and Yemen, did not escape the attention of the gathering comprising some of the world’s

leading political leaders including François Hollande, Li Keqiang, Ahmet Davutoğlu and Angela Merkel, along with Matteo Renzi and Abdel Fattah Said Hussein Al-Sisi, who made their first appearance in Davos.

Complex Challenges Driven by Global Forces

Addressing participants from around the world, Klaus Schwab, founder of World Economic Forum highlighted the influence of monetary management towards financial stability. He said that with the extraordinary measures from the European Central Bank, the world was once again looking to monetary policy to provide a source of stability. “It is necessary to look back only a week to the causes of the current currency volatility and it will be clear that central bankers’ best efforts will not be enough if all the major stakeholders in this crisis do not act together. The wicked problems which direct events on a global scale can only be addressed when all stakeholders of society are able to come to common agreement through dialogue and interaction, based on mutual trust”, he said.

The gathering acknowledged the fact that the world is now beset with interconnected, complex challenges driven by unprecedented global forces. These forces are well known, if not well understood, and have been much discussed during the meetings in Davos – not only in the economic sphere, but equally in the geopolitical, technological, and social dimensions. “They include the breakdown of nation-states as citizens redefine their identities through the forces of technology and globalisation, the changing nature of work and a critical employment crisis in both developed and developing countries, long term shifts in growth levels across the developed world, a ‘mid-life crisis’ in emerging economies, a ‘burnout’ syndrome in leaders who are stretched to their limits,  and the re-emergence of strategic competition between countries and regions as the realities of resource limits take effect,” said Schwab.

Highlighting developments in the global economy, Christine Lagarde, Managing Director of the International Monetary Fund (IMF), quipped that at the start of 2015, policymakers around the world are faced with three fundamental choices: to strive for economic growth or accept stagnation; to work to improve stability or risk succumbing to fragility; and to cooperate or go it alone. The stakes could not be higher; 2015 promises to be a make-or-break year for the global community.

She was of the view that for starters; growth and jobs are needed to support prosperity and social cohesion in the wake of the Great Recession that began in 2008. “Six years after the eruption of the financial crisis, the recovery remains weak and uneven. Global growth was projected at just 3.3 percent in 2014 and 3.8 percent in 2015. Some important economies are still fighting deflation. More than 200 million people are unemployed. The global economy risks getting stuck in a ‘new mediocre’ – a prolonged period of slow growth and feeble job creation,” she maintained.

She, however, warned that there is the need for a renewed policy momentum to free the world from stagnation. Saying that the best available option to achieve this will be through the implementation of measures agreed by leaders of the G20 in November, which she said will lift world GDP by more than two percent by 2018 – the equivalent of adding $2 trillion in global income.

The issue of gender equality received more than a mention. In fact, it was on the front burner. Lagarde noted that by 2025, if the laudable – yet not overly ambitious – goal of closing the gender gap by 25 percent is achieved, 100 million women could have jobs that they didn’t have before. Global leaders have asked the International Monetary Fund to monitor the implementation of these growth strategies.

Resolving Geopolitical Crises

With conflicts continuing to destabilise Ukraine, the Middle East and other parts of the world, what can the international community do to help bring about lasting peace? This was discussed by participants including Egyptian President Abdel Fatah al-Sisi, King of Jordan, Abdullah II Ibn al-Hussein, Iraqi Prime Minister Haidar al-Abadi, President of Iraq’s Kurdistan region Masoud Barzani, and Ukrainian President Petro Poroshenko.

Climate Change

As the world prepares for another round of post-Kyoto climate negotiations, what are the chances for success at the climate meeting in Paris? How can the private sector contribute? These issues were discussed by Christiana Figueres, Executive Secretary of United Nations Framework Convention on Climate Change; Peruvian President Ollanta Moises Humala Tasso and former US Vice-President, Al Gore.

Pandemics and Health

As the outbreak of Ebola has shown, combating the spread of viruses is still a worldwide priority. At the same time, non-communicable diseases such as diabetes are becoming the world’s biggest silent killers. What can the world do to ensure global health going forward? This aspect was discussed by Kofi Annan, former Secretary-General, United Nations (1997-2006); Margaret Chan, Director-General, World Health Organisation (WHO); Alpha Condé, President of Guinea; Ibrahim Boubacar Keita, President of the Republic of Mali; and Peter Piot, Director, London School of Hygiene and Tropical Medicine.

The New Energy Context

As energy prices drop to five-year lows, Saudi Aramco President and CEO Khalid al-Falih, General Motors CEO Mary Barra, OPEC Secretary-General Abdalla Salem el-Badri, Petroleos Mexicanos CEO Emilio Lozoya, and Total President and CEO Patrick Pouyanné discussed the short and long-term effects on the world and implications for growth in emerging economies and the impact on climate change.

Benchmarking Inclusive Growth and Development

Participants agreed that rising income inequality was often the cause of social and political unrest and damaged our future economic well-being. Yet, while it is clear that economic growth must also deliver improvements in living standards, little in the way of concrete policy guidance has yet emerged. Benchmarking Inclusive Growth and Development, a discussion paper aimed to contribute to the emerging debate on policy incentives and institutional mechanisms available to policymakers seeks to expand social inclusion without dampening incentives to work, save and invest.

Jim Yong Kim, President, World Bank, warned, “We have to increase the impact that global growth has on the poorest.” Kim said that improving healthcare and the quality of education have proven to reduce inequality and foster sustainable growth. “We need to ensure a relatively high employment rate, especially sufficient employment for young people. And we need to optimise income distribution and raise people’s welfare,” Chinese Premier Li Keqiang said, outlining the ‘new normal’ growth in China.

Katherine Garrett-Cox, Chief Executive Officer, Alliance Trust, United Kingdom noted that this year was going to be the ultimate test ‘to see if public-private partnerships really work’. “What I am taking from this meeting is a huge sense of urgency, especially from the business community”, she maintained. Winnie Byanyima, Executive Director, Oxfam International, United Kingdom said that “growth must touch everybody and lift everybody if it is to be sustainable.” She said that she had met many business leaders ready to commit to reducing inequality and mitigating the impact of climate change, but that political leaders were falling behind.

Chatham House Director, Robin Niblett, was of the view that ‘governments are being delegitimised in many parts of the world. They are struggling to keep up.’ However, he also sees promising signs for 2015, including the European Central Bank’s adoption of quantitative easing and the boom in alternative energies, which low oil prices will not stop.

Italian Prime Minister Matteo

Renzi talked about ways to reignite Europe’s growth engine. “The European direction must stress the importance of growth and public and private investment, not only austerity,” he said. German Chancellor, Angela Merkel, insisted that the ‘so-called austerity is often pitted against so-called growth’ and that ‘we need a growth-oriented, sound fiscal policy, we need investments by the state, and we need an environment which encourages private investors to take out investments.’

The Scourge of Terrorism

Speaking on the security challenges facing countries today, French President François Hollande warned that ‘there cannot be prosperity without security’. He urged the private sector to play a pivotal role in a global international response. “It needs to be international and it needs to be shared, also by business, particularly the largest corporations.” US Secretary of State John Kerry believed that ‘the elimination of terrorists that confront us today actually only solves part of the problem. We have to do more to avoid an endless cycle of violent extremism. We have to transform the very environment from which these forces emerge.’

The Future of the Internet

Technology stakeholders discussed the future of the Internet. Satya Nadella, Chief Executive Officer, Microsoft, focussed on Internet security and transparency. “We’ve got to get this balance between privacy and legitimate public safety. The Internet is one of the greatest global goods. If we destroy it, we destroy a lot of our economic future.” Sheryl Sandberg, Chief Operating Officer, Facebook, said that increasing access should be the key. “If we can extend the Internet to more people, we increase economic opportunities and equality,” she said.

International Institution for Public-Private Cooperation

The Forum gained formal status under the Swiss Host State Act, confirming its role as an international institution for public-private cooperation. “Through this recognition, Switzerland has shown not only its full support for the World Economic Forum’s mission, but also its commitment to further enhance Geneva’s role as a centre for international cooperation,” said Klaus Schwab. Simonetta Sommaruga, president of the Swiss Confederation, and her entire cabinet were in Davos for the meeting. The meeting created momentum for the Forum’s regional agendas, thanks to strong representation from governments and business leaders from emerging markets, including Mexico, Indonesia, Nigeria, Turkey and South Africa, in addition to those from Brazil, Russia, India and China.

A number of key stakeholders from Libya, Syria and Ukraine gathered for informal talks on mitigation of the impact of the Syrian conflict on its population and the reversal of the emergency situation in Libya. This was part of the Forum’s long-standing commitment to improve the state of the world, which also includes on-going engagement on Palestinian-Israeli relations. Against the background of on-going conflict, the Forum also convened an expanded meeting of business leaders from Ukraine, the Russian Federation, Europe and the United States as part of the Geneva-Ukraine Initiative. At the meeting, all participants reaffirmed their commitment to a common approach, despite tense circumstances, to help resolve the conflict between Ukraine and Russia.

The Shaping Davos initiative brought together Global Shapers from around the world. Over the course of 16 live sessions, 40 cities connected to the meeting in Davos. These included Gaza, Juba, Erbil, Paramaribo and San Salvador. The spirit of Davos was present in all these cities as Global Shapers hosted local conversations on the meeting’s topics. The Forum launched a new Global Challenge Initiative on Food Security and Agriculture, with support from the Government of Canada and a broad network of stakeholders. The initiative will work to achieve sustainable and inclusive food systems through investment, innovation and collaboration. The Forum also presented its Transformation Maps, and urged participants to travel around Davos on foot, with its Walk for Education project, resulting in a donation of 2,500 bicycles to children in rural South Africa.

The World Economic Forum Annual Meeting ended with a Co-Chairs debate on the Global Agenda 2015. The session closed a week-long meeting on the world’s most pressing issues and long-term challenges, including inequality, climate change and terrorism.

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