Davos and a reference point for 2017

With inequality lurching wider every day, the middle class thinning out, one percent of humanity as wealthy as all the rest put together etc, one cannot but give a slight frown when viewing a gathering such as that of the annual World Economic Forum (WEF) at a ski resort in Switzerland earlier this month.

Davos 2017 is over. For several days articles and blogs have surfaced about the event and will continue to do so as the year proceeds apace.

• Ashburton Investments defends Davos as “not just an elitist talk shop”.
• The South African BizNews editor, in introductory notes to the daily newsletter this week, reported feeling “greatly encouraged” about the country’s prospects afterwards.
• Fortune magazine writes that “the decline in American importance … was palpable”.
• The Guardian pointed to the ability of Chinese president XiJinping to fill both the conference hall and also the overspill room.

In preparation for the annual event, the WEF released its Global Risks Report, identifying certain challenges. The report warned of economic, environmental, geopolitical, societal and technological challenges.

Prof Jonathan Michie (Oxford University) believes that, to have the desired effect, the report should have been debated elsewhere, “in working class hubs like Sunderland in the UK and Michigan in the US” (as opposed to London, Washington – and Davos). Will any sincere movement towards addressing the challenges singled out in the report result from the ski resort in Switzerland?

We thought it would be useful to list the challenges set out in the pre-conference report here, as a marker or reference point for us, as we navigate the year. 

Rising income/wealth disparity

• The growing mood of anti-establishment populism suggests that reviving economic growth needs to be accompanied by adding reforming market capitalism to the agenda to “remedy fractures in society”.
• How to make economic growth more inclusive?

Increasing polarisation and intensifying national sentiment and, linked, facing up to the importance of identity and community.

• Cultural schisms which have arisen from rapid changes in areas like international cooperation, gender and race, multiculturalism and sexual orientation which have led to people feeling left behind in their own countries. These are “testing social and political cohesion and may amplify many other risks if not resolved”, the WEF warns.
• How to reconcile growing identity nationalism with diverse societies?

Managing technological change

• Technological change can be highly disruptive, particularly if occurring simultaneously with other challenges to social and political cohesion.
• New technology = new risks. Cyber attacks highlight the vulnerability of companies and nations.
• And how tightly does one regulate? How do you implement new technologies at a time of “significant unemployment”?

Protecting systems of global co-operation

• There are institutions which are meant to encourage global co-operation, such as the International Criminal Court. African countries like South Africa are withdrawing from it. Others like the USA and Russia were never part of it.

Environment-related risks

• Extreme weather events, failure of climate change mitigation and adaption and water crises feature as high as ever on this year’s WEF report.

Government crack downs on civic space

• Surveillance of digital activities, restrictions, even physical violence has affected academic, philanthropic and humanitarian entities.

“An issue underlying the rise of disaffection with the political and economic status quo is that social protection systems are at breaking point”, the WEF points out. Individuals are increasingly shouldering costs from economic and social problems like unemployment, exclusion, sickness, disability and old age.