Our world is increasingly plagued by war, famine and poverty. Political and other leaders will meet during the World Economic Forum (WEF) in Davos between 16 and 20 January to discuss existing predicaments and suggest solutions. However, experts doubt whether action will result.
The past year witnessed numerous adverse events, such as the Russian-Ukrainian war and the US-China trade war. As a result, Europe is concerned about its energy security, while millions of people ponder over their food security.
In light of these circumstances, the WEF identifies imminent and long-term risks. Among the former, the cost-of-living crisis, natural disasters and geo-economic confrontations are noteworthy. The failure to mitigate climate change ranks high among the latter. Several high-ranking personalities, ranging from the Managing Director of the International Monetary Fund to the Director General of the World Trade Organisation, are, therefore, expected to discuss these issues.
The IMF foresees a major economic slowdown for 2023. As such, there are several economic concerns. The cost-of-living crisis is looming, inequality gaps are widening and inflation and debt distress pose difficulties. Worse still, governments, even financial institutions, need help to address such problems. In short, the future is not looking bright.
Moreover, the flip side is no brighter. The global economic order is undergoing turbulent times. China’s rise to global influence elicits mixed feelings. Hence, protectionism is rising, and Western countries are adopting more aggressive policies. Consequently, visions of a globalised world are eroding slowly.
Hence, the WEF aspires to discuss the future of globalisation, trade, growth and investment, focusing on sustainability and resiliency. What’s more, it will set out the views of its prominent members on how to deal with the cost-of-living crisis and recession. The forum will also examine future monetary and industrial policies, including those regarding cryptocurrencies.
Climate change is real. Global temperatures are rising, and the world is already witnessing natural disasters. Pakistan has just faced severe floods; Tuvalu is threatened by the high tides and will likely become non-inhabitable soon. The WEF puts climate change at the top of its agenda, with meetings covering climate finance, decarbonisation and climate-related issues such as water supply and food security.
The forum will also explore tech-related subjects, such as artificial intelligence, data collaboration and cyberspace protection.
Not surprisingly, energy is at the top of EU concerns for 2023. Last year, Europe feared a dark and cold winter 2022/23. Germany, for example, took several energy-saving measures to keep its natural gas reserves at a sufficient level. So far, the worst-case scenario has been averted. While Europe can no longer rely on cheap Russian gas, it does not have enough natural gas storage. Brussels must contemplate radical solutions.
Given the importance of energy for security and the environment, the WEF will explore energy-related issues, such as energy resilience, affordability, sustainability, net-zero energy technologies and energy transition.
Meanwhile, the importance of businesses in addressing global crises is more apparent than ever. With the Covid-19 pandemic, and especially the manufacturing of vaccines, the business sector made a strong case for its significance. Thus, the WEF approaches business and investment-related issues from numerous vantage points: quiet quitting, diversity, start-ups, inclusiveness, investment in times of uncertainty and investing in intangible assets.
Talking about problems and suggesting solutions are both easy. The challenge is to allocate responsibilities and turn plans into action.
Last year exposed the impotence of the international community. For example, the UN Security Council could not pass a resolution on the Russian invasion of Ukraine. The highest UN agencies were paralysed until Turkiye spearheaded the grain deal to address the worsening food crisis. Meanwhile, several countries, including the US, initiated questionable trade restrictions, which contradict the rulings of the World Trade Organisation, amid general apathy.
Given the complexities associated with these portfolios, the chances of any magic bullet solutions at Davos are dim. The forum does not have the power to make decisions; it can only influence them. Nevertheless, the WEF remains significant because it sets the stage for critical discussions by reputable personalities to draw attention to important issues.
Amid all the gloom, though, there are some bright spots. The negotiations on a new WTO Agreement on Investment Facilitation for Development, for example, are expected to conclude this year. The launch of a coalition of Trade Ministers for Climate is also on this year’s agenda.
The world is going through tectonic shifts. Last year’s events already proved that. This year does not look set to be any different. Even if it carries low probabilities for prompting drastic actions, the WEF nevertheless remains an important platform to analyse the world’s present and future. It is clearly at the crossroads of a new global order.
