Closing post
That is probably all from us from Davos today, unless there are some late developments.
Here’s our news story on today’s action:
Goodnight. GW
Scholz optimistic of avoiding German recession and US trade war
German Chancellor Olaf Scholz has declared he is convinced that Europe’s largest economy would not fall into a recession.
Scholz, who gives a special address to the World Economic Forum tomorrow, added he was optimistic Berlin could reach an agreement with Washington to avoid a trade war over new U.S. green subsidies (within the Inflation Reduction Act).
Scholz told Bloomberg TV:
“We are now discussing with the government and with all the political people in the United States that it should not happen that local content regulations are against European partners.
“And I’m quite optimistic that we will reach an agreement in this field.”
Kissinger: Ukraine Nato membership would be appropriate once peace talks concuded
On the Ukraine war, Henry Kissinger argued that the US should continue to “support and if necessary” intensify its military support for Ukraine until a ceasefire line is reached, or accepted, at some preliminary discussions with Moscow.
Kissinger tells Davos via videolink that peace talks should begin once Ukrainian forces had reclaimed the territories occupied by Russia since the invasion.
He argues that this would prevent the war from becoming a war against Russia itself, and would give Russia an opportunity to rejoin an international system.
“This may seem very hollow to nations that have been under Russian pressure, for much of the post-war period”, Kissinger concedes.
He favous dialogue with Russia while the war continues, pointing out that there are over 15,000 nuclear weapons on its territory.
Kissinger argues that sanctions and other measures would continue to put pressure on Russia during peace talks.
And he expresses his admiration for the president of Ukraine and the “heroic conduct” of the Ukrainian people.
Kissinger says that before the war began, he was opposed to Ukraine joining NATO, fearing it would start the sort of conflict we have seen in the last year.
In the current situation, “the idea of a neutral Ukraine is no longer meaningful”, he explains.
At the end of the process of peace talk process that Kissinger invisinges, Ukraine should be given guarantees by Nato.
Kissinger says:
I believe Ukrainian membership in Nato would be an appropriate outcome.
Henry Kissinger, 99, @wef: Russia not able to win war in a conventional way, but keep the war from becoming a war against Russia itself. Ukraine can’t be neutral anymore afterwards. #wef23 #Kissinger
— Carsten Knop (@carstenknop) January 17, 2023
Updated
There was quite the queue to listen to Henry Kissinger ‘in person’ (on a video-link screen).
Thank you to #wef2023 for live-streaming 99 year-old Henry Kissinger to us in Davos. The demand to listen to his views on Ukraine and Taiwan was twice the availability of seats!#avisonyoung https://t.co/ZwufXDwizO
— Mark Rose (@markerose) January 17, 2023
Updated
Kissinger, 99, who opposed Ukraine entering NATO and has urged ceasefire with Russia, tells Davos that NATO membership now appropriate. "The idea of a neutral Ukraine under these conditions is no longer meaningful."
— Shaun Tandon (@shauntandon) January 17, 2023
Henry Kissinger, former US Secretary of State and National Security Advisor, is now speaking at Davos via videolink.
He’s asked about China – the country he normalised US relations with while working with President Nixon.
Kissinger explains that when Nixon and chairman Mao began to move to make progress in relations, there had been 152 negotiations about Taiwan. Each time those negotations closed down quickly, as each sides’ position was unacceptable to the other.
The Taiwan issue was placed under arrangements where Taiwan could develop economically without the affirmation of the US of a separate China, he
Process has been under pressure recently, Kissinger points out. But, the presidents of China and US have recently met (in November) to arrest the move towards conflict, and created a basis for dialogue.
Kissinger says:
I am delighted to see that my friend of two decades, Liu He, has expressed a vision at this meeting which outlined ways by which this process can be implemented.
[as covered earlier, China’s Vice-Premier Liu He told Davos that China welcomed foreign investment and was open to the world]
There needs to be a deep conviction on both sides to resolve the issue of Taiwan’s status, Kissinger explains, citing the potential dangers of two countries with expertise in artificial intelligence and nuclear weapons capabilities being in conflict.
Biggest lineup at #WEF? For Henry Kissinger, of course. #Davos pic.twitter.com/kwiBYuSAUE
— john stackhouse (@StackhouseJohn) January 17, 2023
Sweden says no reason for Turkey not to begin ratifying NATO bid
Sanna Marin also explains how the Ukraine was has led the Finnish public to support NATO membership.
After the Ukraine invasion, she tells the WEF annual meeting, the Finnish people began to ask what border Russia would not cross – the answer being the border with NATO, Finland’s PM explains.
Sweden’s foreign minister, Tobias Billstrom, has said that Turkey’s parliament should begin ratifying Sweden and Finland’s NATO membership bids, as the two Nordic countries have met the commitments they had agreed to with Turkey.
Billstrom told Reuters in an interview on the sidelines of the World Economic Forum today:
“We believe we have now reached a point where Sweden and Finland have done what we committed ourselves to in this (trilateral) memorandum and it is time for the Turkish parliament to begin the ratification process,”
“We believe very strongly that we have done what was being asked and we do not see any reason for the ratification not to start.”
Updated
Finland’s prime minister, Sanna Marin, says that a legal way to use frozen Russian assets to fund the reconstrution of Ukraine should be found.
She’s now speaking on a panel on War in Europe: Year 2, and points to the large amounts of frozen assets from the Russian central bank, and from oligarchs, since the invasion of February 2022.
We need to find solutions to how to use these funds to rebuild Ukraine, Marin says, adding:
It could affect the war more than we think, as there are many interests behind this money.
We need t0 find the legal framework to use these assets to help Ukraine, she insists.
We have to help #Ukraine win this war as otherwise all of us will be in danger.
— Méabh Mc Mahon (@MeabhMcMahon) January 17, 2023
President of Moldova @sandumaiamd tells @wef that gas prices increased 7 times for Moldovans in last 18 months.
Panel live now on @euronews with @MarinSanna @sashavakulina #warinukraine #Davos23 pic.twitter.com/BPJw33EjPj
Qatar’s foreign minister has told delegates at Davos that recent measures taken by Afghanistan’s Taliban-led administration were “very disappointing”.
However, Doha would continue engaging as the only way forward to achieve change on the ground, Sheikh Mohammed bin Abdulrahman Al-Thani says.
Al-Thani said Doha was also consulting with other Muslim countries to establish a dialogue with Taliban officials in Kandahar, and while it would “not be an easy job” it was important to keep trying.
Afghanistan’s Islamist Taliban-led administration has recently ordered all local and foreign non-governmental organisations (NGOs) to stop female employees from coming to work, and also imposed bans on women attending universities and high school.
Pedro Sánchez, prime minister of Spain, is giving a special address now, pledging that Spain will step up to tackle the challenges facing the global economy.
Sánchez says Spain will continue to donate Covid-19 vaccines until the global south has the same access as the global north.
And it will will continue to support Ukraine, until Putin withdraws his troops and Ukraine returns to being a successful, prosperous country again.
Sánchez says:
President Zelenskiy, we have your back.
Gabriel Zucman, Director of the EU Tax Observatory, is demanding that participants at the World Economic Forum make multinational companies pay more in taxes.
In a video, Zucman explains:
Multinationals must pay their fair share of taxes and contribute more to public finances. They are the big winners of globalization, yet their tax rates have collapsed.
Paying their fair share of taxes is in their very interest, because it will ensure the economic and political sustainability of the globalization.
In the opening of the World Economic forum, @gabriel_zucman has a message:#Davos #wef23 pic.twitter.com/QAcuBbGV9f
— EU Tax Observatory (@taxobservatory) January 16, 2023
Manchester United’s former goalkeeping great, Peter Schmeichel, has defended the club’s decision to set up a luxury lounge at the World Economic Forum here in Davos this week.
The appearance of a Manchester United lounge in the Swiss ski resort, where global tech firms, banks and consultancies have set up stall, has sparked speculation that it is being used to market the team to potential buyers.
Schmeichel, who is acting as an ambassador for the club, told AFP:
“If you look at what we say about ourselves -- we say that we are one of the biggest sporting brands in the world -- then I think you have to back it up by having a presence in places like this,”
“Of course, our football club is not just about the commercial side, making money.
The lounge includes a bar, multiple seating areas and screens showing club heroes, giving Manchester United a place to meet present and future corporate partners and sponsors, said Ellie Norman, a club spokeswoman.
In November, the Glazer family who own the club announced they were “commencing a process to explore strategic alternatives” for the club.
Norman says the review “is not connected to why we’re back in Davos,” she adding, stating that Manchester United had been a partner of the World Economic Forum since 2019.
Sanna Marin, Finland’s prime minister, says she is concerned about the debt levels of some European neighbours.
She’s taking part in a ‘conversation’ at Davos now, and explains that she really worries about the situation in Europe now.
Some countries have a lot of debt and a lot of costs because of that, she says, pointing out that Finland is ‘in the middle’ of the table when it comes to debt/GDP levels.
It is “a serious matter for all of us”, as European countries are in the same economy and many are in the eurozone, she explains.
Marin is then asked whether being a very young woman leader – something she is not happy about being raised – has helped her create a legacy or further certain issues.
Marin points out that we don’t have to raise the issue….
« I know that you don’t want to talk about your role as very young female leader. » - Answer of @MarinSanna « Yes, we don’t have to. » ☺️💪🏻 #inspiring #leader #Finland pic.twitter.com/cSuVwGIWe1
— Virginie Cavalli (@VirginieCavalli) January 17, 2023
… before pointing out that most of her time since becoming PM aged 34 has been spent on major crisis, which woud have been the same if a older, or male leader was in charge.
My gender and age has not affected that, Marin points out, adding that gender equality is very important in Finland as a small nation. With 5.5m people, Finland couldn’t cope if it didn’t use the resources of its people.
Updated
Outside the security cordon in Davos, an exhibition called UKRAINE IS YOU is showcasing how Ukrainians have been defending freedom in the face of Russian aggression in the last 11 months.
Visiting our UKRAINE IS YOU project at Promenade 59 today with Victor Pinchuk is Father Patrick Desbois, a great champion of shedding light on genocide and war crimes past and present and holding those responsible to account. @desbois_patrick #UkraineIsYouDavos #RussianWarCrimes pic.twitter.com/pXzzCjL2zl
— Pinchuk Foundation (@PinchukFund) January 16, 2023
Victor Pinchuk, the Ukrainian businessman and oligarch whose foundation is supporting the project, hopes it will encourage leaders in Davos of the need to support Ukraine with more weaponry.
Opening the UKRAINE IS YOU project, Pinchuk told attendees:
“What happened in Ukraine can happen to you, that’s why we invite you to be Ukrainian for a moment here. Join Ukrainians in the moment of liberation, in the empowering moment of restoring freedom, in the moment of the liberation of Kherson, for example.
But also join Ukrainians in their moments of suffering, because it’s happening every day and every hour.”
“This war has many fronts. Of course, the main one is the military front, where our heroes risk their lives and fight. But the cultural front is also very important, and I believe that art has potential to be a very efficient weapon. Maybe, it will convince decision makers to send necessary weapons much faster.”
Olga Tsilynko, volunteer from Kherson: “Families are living in permanent fear. There is nothing more horrific than the sound of Russian boots on the ground in the city where you live. We have no rights and live in constant fear." #UkraineisYouDavos #RussianWarCrimes
— Pinchuk Foundation (@PinchukFund) January 17, 2023
Vitali Kim, Governor of Mykolaiv Oblast: “Everyday people are dying. We need weapons, we need a normality to our civilian lives. Everybody needs to work towards victory. It is very dangerous in my region, but we need to rebuild the economy for the future.” #UkraineIsYouDavos
— Pinchuk Foundation (@PinchukFund) January 17, 2023
Updated
Credit Suisse chair warns on bonuses after horrifying year
Credit Suisse chairman Axel Lehmann has warned employees they should brace for bonus cuts as it launches a painful and costly turnaround after a “poor year”.
Lehmann told Bloomberg TV that:
“It was a horrifying year for Credit Suisse,”
So I think people will have realistic expectations that it will not look great [for bonuses].”
"Obviously we had such a poor year. It was a horrifying year for Credit Suisse, so I think people have realistic expectations that it will not look great," says Axel Lehmann https://t.co/70KQRy74hN pic.twitter.com/FgvD1FfqP6
— Bloomberg TV (@BloombergTV) January 17, 2023
Updated
Raghuram Rajan also expects a China recovery this year, maybe as soon as from March or April.
Chinese families are risk-averse still, he explains, but there will be a pumping up of demand.
That will help recovery – the question is how inflationary will it be. But while it could be a ‘mixed bag’ in terms of price pressures, it will boost world economic demand.
Senior economists are warning that 2023 will be a tough year, as central bankers continue to tighten interest rates to fight inflation.
Speaking on a panel here, finance professor Raghuram Rajan of the University of Chicago Booth School of Business warns that central banks may have to tighten policy more than they’d like this year, to squeeze out inflation.
Rajan explains that central bankers are looking at labour markets and trying to see some signs of slack, so they can pause their tightening programmes. But every time there’s a hint they may pause, the financial markets take off.
So some central banks are saying ‘we can’t stop until they see clear signs of labour market slack’, so they may overtighten, he fears. That means there is a danger of a cliff-edge effect.
At this point, central bankers will probably go a little further than they’d like to, because they can’t see the impact of what they’ve done so far, Rajan explains.
The markets are betting on not just a pause, but a cut this year – that’s overly optimistic, he argues.
House prices, he says, may start to drop once people start losing their jobs and are forced to fell, Rajan argues.
He also warns that weaker companies were not able to push out their debt maturities, so they may hit trouble due to rising borrowing costs.
Gilles Moëc, AXA group chief economist, says he expects a “very shallow” recession this year.
He explains that in 2022, the world economy took a massive inflation hit, but companies were able to push those costs onto consumers. This year, that will be harder, so cost-cutting will become a priority for many companies.
He also warns that companies face a jump in borrowing costs when they refinance – that, and the diminished ability of consumers to swallow price rises, will squeeze companies this year.
Nela Richardson, chief economist at ADP, explains that labour markets has been resilient in the face of higher inflation and interest rates.
She predicts wages remain relatively robust, but may not keep up with inflation (meaning falling real wages).
It’s a race, she says, to whether wages or inflation moderate first.
In US and many advanced economies, it’s a dead heat, a tie. But other countries, workers will lose out, Richardson warns.
China's Covid situation 'steady', Liu He tells Davos
The Covid situation in China “is steady”, Liu He tells delegates at Davos.
Asked about the situation in the pandemic since Beijing lifted its restrictions, the vice-premier says that China has passed the infection peak, and people are returning to normal life.
But, Liu explains, there is a short spell of time between the infection peak and returning to normal, which somehow is “beyond our expectations”.
But he says that dining out, consumption and tourism are returning to normal levels.
Now the priority remains the elderly and those with underlying conditions such as diabetes and high blood pressure.
As things stand, supplies of hospital beds, doctors and medicines are available, he says.
And Liu reminds the audience that foreign visitors are now free to visit China, and welcome. They only need a negative PCR test taken 48 hours previously, with no quarantine or additional requests.
He adds that he met friends yesterday who plan to visit China to attend events this year – another sign of life returning to normal.
Vice Premier Liu He asked about Covid situation in China after his Davos speech.
— Dave Lawler (@DavidLawler10) January 17, 2023
His basic message: we’re back to normal, we’re open for business, you should all come visit.
He says infections have peaked and situation is “steady” with no shortage of doctors, nurses, medicine or hospital beds. All signs show normal life has returned, including that 5 billion (!) trips are expected over Chinese New Year.
— Dave Lawler (@DavidLawler10) January 17, 2023
If the translation and my notes are correct, he did say: “there’s a short period between the infection peak and a return to normal that is somehow beyond our expectation.”
— Dave Lawler (@DavidLawler10) January 17, 2023
And he said there’s some concern for people with underlying conditions.
But overall, very optimistic.
China has reported 60,000 Covid-related deaths in just over a month, but Beijing has been accused of underreporting coronavirus deaths, despite reports of hospitals and crematoriums being overrun.
Updated
On global issues, Liu He says the world economy must be opened up.
China continues to oppose unilateralism, he says, and looks forward to working with other countries to enhance global cooperation.
He touches on inflation, warning that the measures taken by some countries to fight inflation (ie interest rate rises) mean they risk a “hike, recession, recovery loop.”
More attention should be paid to the risk of spillover effects from the rate hikes by advanced economies on developing and emerging markets, he says.
And he says there must be a global response to climate change, adding that most countries are keenly aware of need for common actions.
[reminder. China is now the world’s biggest carbon emitter, contributing almost a third of the world’s greenhouse gases in 2020 – but is also most exposed to the damaging impact of climate change – more here]
On China’s property crisis last year, Liu He says liquidity in the sector has been greatly enhanced.
This has led to a “noticeable improvement” in supply and demand in China’s real estate market, Liu adds.
China will support the future healthy development of the property market, the vice-premier pledges.
Liu He: China's growth will return to normal trend, if we work hard enough
Next up on stage here in Davos is China’s vice-premier, Liu He.
Liu begins by reminding the audience that China’s GDP grew by 3% last year (as today’s economic report shows).
Liu says China’s focus in 2023 is on expanding domestic demand, keeping industrial and supply chains smooth, supporting the healthy development of the private sector, deepening the reforms of state owned enterprises, attracting foreign investment and defusing financial risks
If we work hard enough we are confident that in 2023, China’s growth will most likely return to its normal trend, he says.
Liu He points out that over the last decade, China’s economy has grown from 54trn yuan to 121bn yuan in 2022.
Life expectancy has risen, from 74.8 years to 78.2 years
Liu says this improvement was due to five priorities pushed by China.
First, economic development must be the primary and central task, with a goal of ‘high quality economic devleopment.’
Second, making the establishment of a socialist market economy a goal of reform.
The market must be allowed to play its role in resource allocation, He insists, adding “It is by no means possible to go for a state-planned economy.”
China want to promote fair competition, oppose monopoly and promote entrepeneurship, he pledges [an interesting point, given Ursula von der Leyen’s comments a few minutes earlier].
EU chief Ursula von der Leyen took China to task over clean-technology industries on Tuesday, threatening investigations over Beijing's subsidies in the sector. https://t.co/GsZNCgwhBg
— Straight Talk Africa (@VOAStraightTalk) January 17, 2023
Third, policies must always support the opening up of the economy, which can be a catalyst of reform in China and a key driver of economic progress.
China’s door to the world can only open wider, Liu says.
Fourth, complying with the rule of law – both government and market activities must stay within the law.
And finally, promoting “innovation-driven development”. That means growing human capital faster, and boosting productivity.
Updated
Von de Leyen tells Davos attendees that Ukraine needs “every helping hand on board” to help with its reconstruction.
Knowledge, as well as money, is needed to move forward in the relief, repair and reconstruction process, she says. The Ukraine people “really deserve it”.
Von der Leyen: Europe must derisk from China
We had expected Ursula von der Leyen to launch a more stinging attack on the US over its Inflation Reduction Act… but instead, she singles out China as a concern.
She says China is targeting foreign companies, trying to persude them to move their manufacturing operations to China with the promise of cheaper energy.
She also points to the heavy subsidies which Chinese firms benefit from.
Europe must ‘derisk’ its relations with China, she insists, saying:
We still need to trade and work with China, so we need to refocus our approach on derisking rather than decoupling.
This means using all tools available to deal with unfair practices. “We will not hesitate to open investigations” if Europe thinks its procurement processes or markets are being disrupted by subsidies, Von der Leyen adds.
Expected EU to criticize US green protectionism. Instead, @vonderleyen went after China, saying EU won’t hesitate to strike back over industrial subsidies and loose enviro regs. “Climate needs a global approach but a fair approach” #davos #wef pic.twitter.com/sZB7DrVumY
— john stackhouse (@StackhouseJohn) January 17, 2023
Fighting the climate crisis must have a fair appraoch and a level playing field, Von der Leyen adds.
And she believes that the story of the clean tech economy wil be written in Europe.
EU's von der Leyen outlines detailed plan for clean tech future boosted by subsidies at #wef23 to compete w/US & China. Says must respond more robustly to unfair trade. https://t.co/YYPH8FkWUi pic.twitter.com/qZPDu6swJI
— Holger Zschaepitz (@Schuldensuehner) January 17, 2023
Turning to trade, Ursula von der Leyen says Europe is “trying hard to resolve” its differences with the United Kingdom.
Von der Leyen promises new law and cash to help Europe's green industry
The European Union will prepare a law to make life easier for its green industry and back it up with state aid and a European Sovereignty Fund to keep firms from moving to the United States, von der Leyen continues.
She says the plan is part of the EU’s Green Deal industrial plan, which aims to make Europe the home of clean technology and industrial innovation in the push for net-zero.
Von der Leyen tells delegates here in Davos:
“To help make this happen, we will put forward a new Net-Zero Industry Act
“The aim will be to focus investment on strategic projects along the entire supply chain. We will especially look at how to simplify and fast-track permitting for new clean tech production sites,” she said.
The aim is to keep European industries in Europe, rather than seeing them move to the United States to take advantage of its $369bn scheme to subsidise green production.
Von der Leyen explains.
“To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU.
Our Green Deal Industrial Plan will cover 4 pillars:
— Ursula von der Leyen (@vonderleyen) January 17, 2023
⁰→ Ambition and acceleration with a Net-Zero Industry Act and a Raw Material Act
→ Boosted investment for the net zero industry
→ Skills to make the transition happen
→ Global trade with benefits for all pic.twitter.com/YKJhv1WfFm
Von der Leyen: We're talking to US on IRA concerns
Ursula von der Leyen turns to Europe’s concern’s over the US Inflation Reduction Act (IRA).
She says that together, European countries and the United States are are putting forward almost a trillion euros to accelerate the clean energy economy
This has the potential to massively boost the path to climate neutrality, she says.
But, she says, it is “no secret” that some parts of the IRA raise a number of concerns, with regard to incentives for companies.
She says Europe is working with the US on the issue:
We are working with “our United States friends” to find solutions, so that European-made components and cars can also benefit from the Inflation Reduction Act, she says.
The aim is to avoid restructions in TransAltantic trade and investment, von der Leyen, But we should ensure that our respective packages are “fair”.
Von der Leyen explains that setting out joint standards would allow Europe and the US to jointly benefit from the spending that is being made.
Competition and trade are the key to speeding up climate neutrality, she says, adding:
We Europeans need to get better at nurturing our clean tech industry.
The EU and the US share a deep commitment to addressing the climate crisis and accelerating on the way to net-zero.
— Ursula von der Leyen (@vonderleyen) January 17, 2023
We are working to ensure that our incentive programmes for clean tech are fair and mutually reinforcing.⁰#EUGreenDeal#IRA pic.twitter.com/INn4Jo8FVx
Updated
Von der Leyen: Europe will always stand with Ukraine
European commissioner Ursula von der Leyen now takes the stage, and begins by hailing Ukraine’s courage since Russia’s invasion last year.
Back in February, she says, many predicted Keiv would fall in a matter of days.
But those predictions did not account for the “morale and physical courage” of the Ukraine people, von der Leyen says.
They have pushed back against the aggressor against all odds, von der Leyen says, adding that “not even Russia’s relentless attacks on civilisans, or the spectre of a brutal winter”, have shaken that resolve.
Addressing Olena Zelenska in the audience, she says that “in the last year your country has moved the world and inspired Europe.”
Von der Leyen adds:
Europe will always stand with you.
She points out that Ukraine is now a candidate country to join the European Union, and that European countries have provided “more and more critical weapons” and are hosting four million Ukrainians.
[however, arms manufacturer Rheinmetall warned yesterday that the battle tanks from German industrial reserves wanted by Ukraine will not be ready to be delivered until 2024]
Von der Leyen declares:
There will be no impunity for these Russian crimes.
And she insist Europe will stand with Ukraine:
We are in it for as long as it takes, and stand by our Ukranian friends.
Nothing is off limits for Russia, Zelenska warns. She cites the use of an anti-aircraft missile on apartments in Dnipro.
The world must unite for peace, Zelenska says, saying she has handed letters from her husband to several leaders here in Davos, including China’s vice-premier Liu He.
Olena Zelenska, First Lady of Ukraine during remarks at the WEF 23 in Davos says how can the world achieve climate neutrality if it can't stop Russian aggression. #wef23 #davos pic.twitter.com/YmHk81PuMh
— Rukshan Fernando (@therealrukshan) January 17, 2023
We must not allow another Chernobyl to happen, Olena Zelenska continues.
And turning to Russia’s weaponisation of Ukraine’s food supplies, she says that everyone has a right to food.
It is an insult to have mass starvation in 21st century, bcasue of the targeted aggression of one country, Zelenska says.
No child in the world should do homework by candlelight, and doctors should not be performing surgery by flashlights, she adds.
No child in the world should do homework by candlelight or doctors performs surgery by flashlights . Olena Zelenska #Ukraine️ #Davos #wef23 pic.twitter.com/hnsSyAuzYL
— Aleksandr Yampolskiy (@ayampolskiy) January 17, 2023
Olena Zelenska warns crisis will worsen unless Russia loses Ukraine war
Olena Zelenska takes the stage here in Davos, to warm applause.
Speaking in Ukranian, she tells delegates at WEF that they have significant influence.
But, she says, “not all of you are using this influence, or you use it in a way that divides even more”.
Global cooperation is needed, Zelenska says, as Russia’s aggression in Europe is creating a major crisis.
We face the collapse of the world as we know it, Zelenska warns.
She questions what world we have, where tanks are allowed to strike at nuclear power stations
What happens to inflation when state borders start to collapse, Zelenska says.
And what happens to the cost of living when tens of millions are forced to flee starvation and become refugees.
And she insists that the crisis will worsen, unless Russia loses the Ukraine war:
This war can go further and make the crisis larger, unless the aggressor loses.
Updated
Olena Zelenska has discussed the situation in Ukraine with WEF president Klaus Schwab today, she tweets.
She hopes that global business will listend and respond to the need for reconstruction at cities across Ukraine.
🇺🇦 is among the main topics of #WEF2023. We’re still recovering from 🇷🇺 strike at Dnipro. Discussed the current situation with esteemed @ProfKlausSchwab. I believe that global business will hear us & respond to the need for reconstruction – both of Dnipro & dozens of other cities pic.twitter.com/HtIBAZTRD9
— Олена Зеленська (@ZelenskaUA) January 17, 2023
Olena Zelenska, the First Lady of Ukraine, is to give a special address to Davos shortly (as her husband Volodymyr Zelenskiy did by video call at last May’s annual meeting).
She’s attracted a big turnout in the large Congress hall here in Davos – it’s packed.
There is heavy security for Zelenska, with extra bag checks at the door before attendees are allowed in (we’ve already gone through airport-style security scans to get into the WEF congress building).
Alain Berset, president of the Swiss Confederation, is speaking now, saying Switzerland will make “every effort to strenthen international law” following the Ukraine war.
Berset warns that the rule of law under threat, even in some democratic states, which is undermining the international system.
Updated
North Macedonia president sees Western Balkans as European security 'soft spot'
Speaking at Davos, North Macedonia’s president has described the Western Balkans as a soft spot in Europe’s security architecture having been targeted by influence campaigns by Russia.
President Stevo Pendarovski told an event at the World Economic Forum that Vladimir Putin’s regime had, for years, tried to provoke the people in the region.
In the past year or so, Russian fake news, propaganda and ‘hybrid threats’ has not intensified, Pendarovski explained, because Russis was fully preoccupied with countering the Western alliance, due to the war in Ukraine.
But instead, local actors – some who are ‘not quite happy’ with the peace agreements reached in the 90s – are doing that work instead.
Pendarovski says his judgement is that if Russia tries to deflect the West’s attention from Ukraine, then the Western Balkan region is more prone to that risk than the Baltic countries.
Pendarovski adds:
It seems to me that the so-called soft spot in the whole pan-European security architecture right now, apart from Ukraine of course, from that danger from the Kremlin is the Western Balkans.”
President of North #Macedonia 🇲🇰 @SPendarovski giving a state of play of Russian influence in the Western Balkans at @Davos:
— Rainier Jaarsma (@RJaarsma) January 17, 2023
- "The Western Balkans is more prone to Russian deflections from #Ukraine 🇺🇦 than the Baltics"
- "The U.S. is the key player here." pic.twitter.com/8yxupeSmZQ
Pendarovski added that he believed the United States should pay more attention to the situation in the region.
North Macedonia president sees Western Balkans as European security ‘soft spot’ https://t.co/htYhL8jq8x pic.twitter.com/d9eiCA16f0
— Kathimerini English Edition (@ekathimerini) January 17, 2023
Rudd: China's growth to bounce back
At a panel on China, Kevin Rudd, the former prime minister of Australia, said the world’s second biggest economy was likely to bounce back now that it had abandoned its zero-Covid policy.
While there was likely to be a surge in infections, Rudd said the December u-turn was inevitable.
China had no choice because zero-Covid was not working for the economy.
Growth was now likely to recover from around 3% in 2022 to 5% this year as consumers spent some of the 2tn dollars of savings accumulated during lockdowns.
Rudd, who will soon be taking up the post of Australia’s ambassador to the US, added:
I am expecting a solid growth number for 2023.
That’s good for China but in a world where growth is challenged it will underpin global growth in the year to come.
Economic data released early today showed that China grew by 3% in 2022, better than the 2.8% forecast in a Reuters poll.
Updated
Czech minister likens Inflation Reduction Act to doping in sport
A leading European industry minister has warned the United States’ $369bn Inflation Reduction Act risks fuelling a subsidy race and likened it to doping in sport.
Jozef Sikela, the Czech Republic’s minister of industry and trade, told a panel on energy at the World Economic Forum that Joe Biden’s landmark policy is in danger of luring companies away from Europe to the US with the promise of cheap energy.
“When it comes to subsidies, as a former banker we should be careful because subsidy is something like doping in sport,” Sikela said, adding:
“If you then have to live without subsidies it is difficult to turn back to a normal life.
“Sometimes we see that the entrepreneurs are not thinking about what is good for the people but where I can get subsidies.”
European governments and some of the continent’s biggest companies are increasingly warning about the risks from the Inflation Reduction Act (IRA), which offers big subsidies for technologies that will be crucial to the transition away from fossil fuels, including electric cars, batteries, and renewable energy technologies such as solar panels and wind turbines.
“I understand the importance of the Inflation Reduction Act from the US perspective but on the side of Europe it is seen as much more controversial,” said Sikela.
“It is saying to European investors ‘Go to the US because it is more profitable to you because they will give you much cheaper energy that you can get in Europe’.”
But Fatih Birol, the executive director of the International Energy Agency, said the IRA is the “most important climate action after the Paris 2015 agreement”.
Speaking at the same panel as John Kerry, former Bank of England governor Mark Carney said philanthropy could leverage huge amounts of capital into the fight against climate change.
Carney, the co-chair of the global coalition for net zero, said “we need layers of capital to catalyse the investment that needs to happen to prevent the wanton destruction of our ecosystem.
“We need a just transition,” Carney added.
Borge Brende, managing director of the World Economic Forum, said currently only 2 per cent of philanthropic funding went to climate change and nature projects.
John Kerry criticises lack of action on climate crisis
At a panel here on how philanthropy can help in the fight against global heating John Kerry, Joe Biden’s climate envoy, criticised big business and some US politicians for failing to back action.
Kerry warned that time was running out for the world to tackle climate change, saying:
“How is it the case that adults, human beings, CEOs, senators want to ignore science, mathematics and physics and can’t bring themselves to do what we have to do”.
Kerry said a “destructive process of growth, a robber baron growth" was killing species, adding:
“We have to find a way to get really serious about bringing the corporate world on board around the world.”
Kerry said many companies had committed themselves to becoming net zero by 2050 but “didn’t have a clue how to get there.”
Pledges had been made but the world was not delivering on its promises, he warned.
“I am convinced we will get to a low carbon / no carbon economy because we have to. I am not sure we’re going to get there before we have the worst consequences of the crisis.”
Kerry said 17 of the worst affected countries from the climate emergency were in Africa and it was vital to build a global consensus for action.
Idris Elba and Sabrina Dhowre Elba call for investment and support for world's poor
Actor Idris Elba and his wife Sabrina Dhowre Elba are in Davos this week, urging attendees to support small scale farmers in the developing world.
Last night, they were handed a WEF ‘Crystal Award’ in recogition of “their leadership in addressing food security, climate change and environmental conservation”.
And they warned Davos delegates that people hit by food scarcity and climate change need more support.
The couple, who are Goodwill Ambassadors for the United Nations’ International Fund for Agricultural Development, urged businesses to continue investing in mitigating climate change, and to invest in small farms and the small and medium-sized businesses they support.
Idris Elba argues that with greater access to finance, to markets, to resources, to technology, to knowledge and to people “we can define a different future.”
Elba told delegates:
Let’s be frank, it’s taken decades for corporates, for governments to understand that for economies to be build to last we need to empoyer the youth, we need social equity, we need to protect our environment.
He added:
The poor of this world are not just looking for aid and handouts. They are looking for investment. Investment in people, in nature, in innovation, in partnership.
Sabrina Dhowre Elba explained to reporters last night that her mother grew up in a rural community in Somalia. She is pushing for more support for small farmers, who she says produce 80% of the food in parts of Asia and Africa, and a third of the food on the planet.
She explained:
Small farmers are at the heart of the sustainable food systems.
They are incredibly efficient. They are not a major source of greenhouse emissions and they do not depend heavily on fresh water for crops. They preserve biodiversity instead of depleting it.
She warned delegates at the crystal awards ceremony that Somalia was on the brink of famine, and that millions of Yemeni children were acutely malnourished. Afghanistan, the Central African Repubic, DRC, Haiti, Sudan and South Sudan all face ”catastrophic levels of hunger”, she said.
Sabrina Dhowre Elba pointed out:
Hundreds of millions of people are being forced to flee their homes because of conflict, becuase of climate change, and in some cases both.
And by attending WEF this week, she hopes to highlight those who are not being heard.
We are here at Davos to highlight the people and countries who are not making the headlines as much as my husband.
Updated
People’s hopes for their financial futures suffered a “massive collapse” worldwide over the past year, the latest annual survey from global communications firm Edelman has found.
Edelman’s 2023 Trust Barometer has found a year-over-year double-digit decline in the belief that their families will be better off in five years’ time, in half the countries surveyed.
In a sign of global pessimism over the state of the world, the report found:
Further, not one developed nation has over 36% of its people confident that their family will be better off in five years, and 24 of the 28 countries surveyed dropped to all-time lows in optimism, including the US (36%), the UK (23%), Germany (15%) and Japan (9%).
Economic optimism has 'collapsed' globally, survey findshttps://t.co/bDMdM26hky
— FOX Business (@FoxBusiness) January 16, 2023
The report also found that business is the only global institution seen as competent and ethical.
Business now holds “a staggering “53-point lead over government in competence and is 30 points ahead on ethics, Edelman reports.
"Business, done properly, is having a positive societal benefit."@EdelmanPR CEO @richardwedelman discusses his firm's latest trust survey, which shows that business is the only global institution seen as competent and ethical. pic.twitter.com/nSGu83HDK6
— Quest Means Business (@questCNN) January 16, 2023
Edelman argues that “Trust is the ultimate currency”, with founder Richard Edelman insisting that businesses must continue to lead on societal issues.
However, as writer Adam Lowenstein points out here, critics question whether the company follow its own advice about the importance of trust.
Adam points out:
The firm’s clients have ranged from ExxonMobil to the Saudi government and members of the Sackler family, the former owners of the opioid manufacturer Purdue Pharma.
Updated
Introduction: Gloom as Davos begins
Good morning from Davos, where world leaders, business chiefs and policymakers are gathered for the World Economic Forum.
Fears of a global downturn, the cost of living crisis, the threat of natural disasters and extreme weather events and the Ukraine war all loom over WEF.
Two-thirds of chief economists surveyed by WEF believe there is likely to be a global recession in 2023, with nearly one in five saying it is extremely likely to occur.
More than half expect inflation to be high in Europe this year, while there was unanimity that European growth will be weak in 2023. Over 90% of chief economists predicted economic growth in the United States would be weak.
Corporate leaders are also anxious, with 73% of CEOs around the world believe global economic growth will decline over the next 12-months. That’s the most pessimistic outlook since consultancy PwC started asking the question 12 years ago.
Bob Moritz, global chairman, PwC, pointed out last night that many CEOs have not managed in an era of high interest rates, with inflation, macroeconomic volatility and geopolitical conflict all major concerns for bosses.
Moritz says:
A volatile economy, decades-high inflation, and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade.
But happily, CEOs are still looking to retain staff as the wrestle with a labour and skills shortages.
The theme of this year’s Annual Meeting is Cooperation in a Fragmented World, recognising the massive shifts since WEF’s last January meeting in 2020 (2022’s meeting took place in May).
The European Commission’s president, Ursula von der Leyen, will address Davos this morning, at 11.15am local time, and may touch on Europe’s concerns over the US Inflation Reduction Act. Europe is worried that the IRA, a sweeping tax, health and climate bill, could breach trade rules by, for example, providing tax credits for electric cars made in North America.
Von der Leyen will be followed by Chinese vice-premier Liu He, in his first appearance at the forum since 2018.
The US Treasury secretary, Janet Yellen, is scheduled to meet with Liu He in Switzerland tomorrow to discuss economic ties between the countries; a sign that Washington and Beijing are keen to improve ties.
Good Morning from #Davos where Europe & Ukraine are in spotlight: EU President von der Leyen & Polish President Duda among speakers on 1st full day of #wef23. In afternoon, showdown between German Econ & FinMin Habeck & Lindner, who will appear one after other, will be exciting. pic.twitter.com/ijGC0zjsdj
— Holger Zschaepitz (@Schuldensuehner) January 17, 2023
The agenda
8.30am Davos / 7.30am UK: Panel on Philanthropy: a catalyst for protecting our planet, with John F Kerry, special presidential envoy for climate of the United States of America; Mark Carney, United Nations special envoy for climate action and finance
8.30am Davos / 7.30am GMT: Mastering New Energy Economics session including Fatih Birol, executive director, International Energy Agency
11:15am Davos / 10.15am GMT: Special address by Ursula Von Der Leyen, president of the European Commission
11:45am Davos / 10.45am GMT: Special address by Liu He, vice-premier of China
1.15pm Davos / 12.15pm GMT: Media briefing: 2023 Explained: chief economist briefing on state of world economy, with Gilles Moëc, chief economist, AXA; Raghuram G Rajan, Katherine Dusak Miller, distinguished service professor of finance, University of Chicago Booth School of Business, Nela Richardson, senior vice-president & chief economist, automatic data processing
5.30pm Davos / 4.30pm GMT: A Conversation with Henry Kissinger: Historical Perspectives on War
6.45pm Davos / 5.45pm UK: Press conference with Mykhailo Fedorov, vice-prime minister of Ukraine
Updated
