Now that the parade of private jets, luxury cars and masters of the universe has departed from Davos, it’s worth taking some time to think about important topics that didn’t seem prevalent on the agenda at the World Economic Forum this year.
The theme of this year’s WEF was “Cooperation in a Fragmented World.” On panels throughout the week, participants discussed ways to solve the problems of the world by implementing new systems to address challenges like climate change, economic stagnation and geopolitical risks. It’s no surprise that some of the most common topics raised in these discussions were the war in Ukraine, environmental social and governance (ESG) in all its manifestations, and concerns among Europeans that U.S. President Joe Biden’s Inflation Reduction Act is placing them at a competitive disadvantage by discriminating against EU countries.
The speakers and attendees at this year’s event presented innovative ideas about how to navigate what organizers called the current “cascading crisis” of interconnected risks. Their commitment and creativity filled me with hope. Nevertheless, after listening to the speakers and participating in the discussions, I couldn’t help but dwell on some important issues that I thought deserved more attention.
At the top of that list is COVID-19. Although I did spot an occasional mask, almost no one was talking about the pandemic. I understand that many of us are feeling ‘over vaccinated,” but the near silence on this issue was shocking. After all, it was only a few years ago that COVID-19 shut down the global economy, and even now the virus continues to infect millions of people around the world. Experts estimate that COVID-19 has infected 80% of China’s population of more than 1.4 billion. Most of those infections have occurred since the start of December 2022. In the United States, COVID has infected more than 100 million people and killed more than a million. Around the world, a new surge of Omicron sub-variants is again straining hospital capacity. And what about the next virus? What about opportunities to leverage MRA research to solve other health and welfare issues? It seems like the WEF missed an important chance to energize action on both the ongoing crisis and the challenge of defending against the next pandemic.
For an event organized around the theme of cooperation, there was also very little talk about the need for the world to work together to resist de-globalization. Almost everyone agrees that the globalization trend that powered the economy for the past two decades has at the very least slowed, and possibly even stopped entirely or shifted into reverse. The IMF estimates that fragmentation in global trade could reduce global output by up to 7% in the most severe scenario, roughly equivalent to the combined annual output of Germany and Japan. Technological decoupling could bring those losses to up to 12% of GDP for some countries.
Although de-globalization is the result of many trends and factors, one of the main drivers has been the rise of nationalism. Events like the Scottish Referendum, Brexit and the election of Donald Trump in 2016 signaled a shift from outward-looking to inward-looking politics. The latter two events also began a dismantling of trade agreements and other geo-political arrangements that had been advancing globalization for decades. Since then, nationalist politicians and movements have gained ground in countries around the world, and negotiations about how to further liberalize trade have been replaced with new trade restrictions like the Trump tariffs on Chinese goods. At a time when the world is facing a set of challenges that will require a global response, combatting nationalism and returning the world to a path of economic integration should be top priority for all world leaders.
Restarting the globalization engine is also probably the most effective way to tackle a problem that was discussed at some length at Davos this year—addressing global wealth inequities. One of the most compelling speakers at the WEF was chef Jose Andres, who told the gathering that the underprivileged “don’t need your pity, they need your respect.” The best way to show respect for the world’s neediest individuals is to create opportunities for them to thrive. Behind all the glitz, that really is what WEF participants are trying to accomplish. Hopefully, next year’s agenda will feature success stories on how the companies, NGOs and governments represented at Davos are helping ensure those opportunities through their efforts to address climate change and other key challenges.
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