The war in Ukraine. A rapidly slowing economy, fragmentation and de-globalisation. The rising cost of living. Climate change. There is plenty for the global great and good to get their teeth into this week as Davos resumes after a three-year hiatus.
Strictly speaking, it not the first gathering of world leaders, businesspeople, academics and civil society since the start of the pandemic, but last May’s World Economic Forum event was a slimmed-down and not especially well-attended affair. As a dry run it was fine, but a real Davos traditionally happens in January, when the snow is thick on the ground in the Swiss village 1,500 metres up in the Alps. In the past, the mood at Davos has oscillated between extreme optimism and unbridled gloom, depending on the state of the world economy. This year it looks certain to be the latter. As Klaus Schwab, founder and executive chair of the WEF put it last week, “economic, environmental, social and geopolitical crises are converging and conflating”. The aim of this year’s Davos, he added, was to get rid of the “crisis mindset”.
That will be easier said than done. Before there existed a “crisis mindset” there was a “Davos mindset”, in which the annual get-togethers fostered an inclusive form of globalisation, and attendees from around the world worked collaboratively to tackle cross-border problems such as climate change.
But as the risks to peace, prosperity and the future of the planet have increased so the willingness to cooperate – the spirit of Davos, as Schwab likes to put it – has ebbed. Last week’s WEF global risks report, an annual publication that details what experts consider to be the most pressing short- and long-term risks, was stark in its warning.
“Concerted, collective action is needed before risks reach a tipping point,” it said. “Unless the world starts to cooperate more effectively on climate mitigation and climate adaptation, over the next 10 years this will lead to continued global warming and ecological breakdown.”
The popular perception is that the WEF is a secretive and sinister organisation akin to something out of a James Bond novel. In reality, it has no executive power whatsoever and is more of a gigantic global talking shop at which world leaders take the opportunity to rub shoulders with each other and executives do deals behind closed doors. Bond flies over Davos on his way to Blofeld’s mountaintop lair in On Her Majesty’s Secret Service but that’s as close to an Ian Fleming novel as the WEF gets.
Instead, the IGWELs – informal gatherings of world economic leaders, attended by prime ministers, presidents, central bank governors, and top executives – are designed to see if there is a way of coming up with global solutions to global problems. In one sense, Davos sets the scene for summits later in the year where real decisions are made.
Some world leaders – Donald Trump, for example – have used Davos to brag about how wonderfully things are going back home. Others come to Davos with the intention of mobilising support for a global cause, which in the case of Tony Blair in 2005 meant talking about the need for debt relief and more aid for struggling developing countries.
Rishi Sunak will not be following in Blair’s footsteps on Monday, even though the prime minister would find plenty of soulmates among the tech entrepreneurs and the Wall Street bankers who always attend Davos in numbers. It is a matter of frustration to the WEF organisers that the UK government does not use Davos to sketch out its global agenda, but the prime minister and the chancellor, Jeremy Hunt, think it would not be the greatest of looks to be hobnobbing with the global elite while Britain is gripped by a cost of living crisis and strikes.
Instead, the most high-profile UK politicians in Davos will be the opposition leader, Keir Starmer, and the shadow chancellor, Rachel Reeves, who are taking the opportunity to show how business-friendly the Labour party has become.
Much has happened since the 2020 Davos was dominated by a spat between Trump and the climate activist Greta Thunberg. Relations between the US and China are worse than they were two years ago. The pandemic and its aftermath have made countries much warier of being exposed to long, complex supply chains. The golden age of globalisation in the late 1990s and early 2000s is now a fast-fading memory.
For all Schwab’s talk of breaking a vicious circle of short-term and self-seeking policymaking, the Davos crowd have to contend with a world which is de-globalising and increasingly fragile. In a way, a bit of soul-searching and humility would be no bad thing, because for those struggling to get by, there are few things more nauseating than the self-styled masters of the universe wringing their hands about the need to address inequality.
