Amidst anxiety over the US-China trade war, Brexit and a slowdown in global growth, a record number of private jets are arriving at Davos, Switzerland, bringing together some 3,000 business and political leaders to attend the annual meeting of the World Economic Forum.
Reports of gloom set the stage
Around 1,500 individual private flights flew in and out of airfields in the Swiss Alps, drawing criticism from observers around the world given the summit’s agenda to talk business with climate concerns in sight.
Two reports calling for an overhaul of the current economic structure, Oxfam International’s “Public Good or Private Wealth?” and Edelman’s “Trust at Work” set a tone for the proceedings to take off at Davos.
The International Monetary Fund also released its economic outlook highlighting the impact of worsening trade relations on the global economy, further revising growth rates for 2019 downward by 0.2%.
“After two years of solid expansion, the world economy is growing more slowly than expected, and risks are rising,” IMF Managing Director Christine Lagarde said on Monday, adding that the “risk of a sharper decline in global growth has certainly increased”.
Challenges ahead
The unresolved trade war between the US and and the possibility of a no-deal Brexit could be catastrophic for the global economy. Furthermore, China’s slowing economy recorded its slowest pace since 1990 last year. This has spooked several top companies and investors as businesses around the world rely on the Chinese market for growth.
Ken Hu, Huawei’s deputy chairman, told an audience at Davos earlier on Tuesday that the trade war was having a “damaging effect on many of the companies” in the tech industry. “As the technology industry, we heavily rely on the global supply chain and the global innovation ecosystem, so we are probably suffering the most right now,” he was reported as saying.
A letter from billionaire investor Seth Klarman, circulated on the eve of the meeting, has also emerged as the talking point. It flags growing geopolitical tensions, rising debt levels and receding American leadership as contributors to mass panic and eventual economic calamity.
“It cant be business as usual amid constant protests, riots, shutdowns and escalating social tensions, he wrote, US president Donald Trump for pulling out of the Davos conference because of the government shutdown. This is expected to leave German chancellor Angela Merkel and Prime Minister Shinzo Abe of Japan with an opportunity to fill the leadership void.
Technology companies attending the conference in Davos including Facebook, Google and Amazon may also want to take note of Klarmans anxiety that more and more people are choosing to only seek out information from those who share their views and his blame that technology and social media have made it increasingly easy to do so.
Speakers of the day
Former Indian central bank governor Raghuram Rajan, Alphabet CFO Ruth Porat, Blackstone chairman CEO Stephen Schwarzman, and Bank of America CEO Brian Moynihan discussed the of new market architecture on Tuesday. Bill Gates and Tedros Adhanom Ghebreyesus, head of WHO, discussed the future of financing global health.
Microsoft CEO Satya Nadella addressed the pressing issue of protecting through tech and AI. Bank of America CEO Brian Moynihan predicted a shake-up in the American banking sector with a fresh round of mergers. He also spoke about the challenge of doing business across international borders at a time when restrictions on foreign direct investment are increasing.
The itinerary also included representatives of the media, from Reuters and the Washington Post, who deliberated on press freedom in crisis. Marty Baron of the Post condemned the Trump administration and other governments for failing to hold Saudi Arabia accountable for the premeditated murder of columnist Jamal Khashoggi.
Britains Prince William interviewed legendary conservation advocate David Attenborough, who was felicitated with the WEF Crystal Award on Monday. Meanwhile, Brazil’s newly elected far-right president Jair Bolsonaro failed to impress the crowd with a short campaign speech that missed its mark.
In other news, one of the world’s most powerful oilmen, Saudi Arabias Energy Minister Khalid Al-Falih also dropped out of this week’s event, although acquired foreign investment worth a billion from its biggest global investor on the first day at Davos.
Will it go downhill from here?
The rise of populism and nationalism threatens the “Davos dream” of open markets, global connectivity and cooperation, that the week-long conference aims to resolve.
With anti-elite yellow vest protests in France to the consolidation of power by populist leaders in Brazil, Mexico and Italy, the Davos conference will have to navigate a common ground with authoritative powers in Turkey and Hungary, while dealing with the US’s continued absence from international talks.
In a move away from the possibility of a tripolar world, led by the US, Europe and China, in a move that several pundits are referring to as deglobalisation, the notion of each country for its own has emerged. Additionally, the economic opportunities of the Fourth Industrial Revolution are coinciding with a growing roster of societal concerns that include data privacy, environmental degradation, market concentration endemic corruption, leaving more people behind, defranchised.
How these economic leaders will this unchartered uncertain economic territory over the next few days remains to be seen.
Prarthana Mitra is a staff writer at Qrius