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World Economic Forum’s 2023 Davos event ends: Here are the major takeaways
The business world appeared optimistic about the economy, even as central banks urged caution. Here is all you need to know about Davos 2023.
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The World Economic Forum’s Annual Meeting 2023, held in the Swiss town of Davos, ended Friday – a conference that started in a world possibly fundamentally altered, but whose processes and outcomes remained pretty much business as usual.
The theme this year was ‘Cooperation in a Fragmented World’.
On the economy front, there was cautious optimism, with many seeming to believe the worst was behind them. On climate, there was much talk but little action. Russian oligarchs, usually prominent in the annual summit, were absent for obvious reasons, even as Ukraine made a strong pitch for more aid, both military and financial.
Here are some key takeaways from Davos 2023.
On the economy
Most business leaders were upbeat about the economy, with US and the European Union (EU) seemingly beyond the risk of a recession now. China ending its zero Covid curbs and opening shop again added to the positive outlook. Indeed, Chinese Vice Premier Liu He made a strong pitch about his country’s opening up, saying a “noticeable increase of import, more investment by companies, and consumption returning back to normal can be expected” in 2023. “If we work hard enough, we are confident that in 2023, China’s growth will most likely return to its normal trend,” Liu said in his address on January 17.
However, central banks of the major economies cautioned that concerns still remained, and said they would keep interest rates high to ensure inflation is under check.
“Stay the course’ is my mantra,” European Central Bank President Christine Lagarde was quoted as saying by Bloomberg. The US Federal Reserve Vice Chair Lael Brainard was quoted as reminding investors that “inflation remains high, and policy will need to be sufficiently restrictive for some time.
Many also pointed out that China opening up could mean a rise in its energy consumption, thereby driving up energy prices.
Also, as richer nations focus on protecting their own workers, energy sufficiency, supply lines, etc., concerns were raised that this policy direction would hit developing economies. Raghuram Rajan, former Reserve Bank of India Governor, was quoted by Reuters as saying, “This becomes a rich-country game, right? We can subsidise this, you can subsidise that – what about the poor countries, who have limited fiscal room? They get left out in the cold.”
Ukraine kept up its demand for more military aid to fight its war against Russia, and more financial aid to rebuild after the war, saying the reconstruction fund commitments should start coming in now and not after the war ends. “The more we do now, the less we will have to do in reconstruction,” Odile Françoise Renaud-Basso, President of the European Bank for Reconstruction and Development (EBRD), said, as quoted by Reuters.
While Ukraine President Volodymyr Zelenskyy gave a video address, First lady Olena Zelenska went to Davos in person. In his address, Zelenskyy made an indirect criticism of the US and Germany dithering over sending tanks to his country. “There are times where we shouldn’t hesitate or we shouldn’t compare when someone says, ‘I will give tanks if someone else will also share his tanks,’” Zelenskyy was quoted as saying by Reuters.
Everyone agreed upon the need for green energy and the need for more money to flight climate change. According to the WEF’s website, “The World Economic Forum, supported by more than 45 partners launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.”
Greta Thunberg and other activists organised a protest, with slogans such as “There is no planet B” and “Fossil fuels have got to go”. Pakistan brought up the issue of a loss and damage fund for developing countries.
The EU raised concerns over a US green energy law that benefits products, such as electric vehicles, made in America. But West Virginia senator Joe Manchin said the idea was not to hurt any other country but to benefit the environment. “You better be able to do it quicker, faster and better than any place in the world and then share it with your friends. That’s what we’re going to do,” Manchin, a Democrat, said.
The AP reported that “International Monetary Fund Managing Director Kristalina Georgieva, when asked for one thing she would change to accelerate the net zero transition, said she would lock the US, China, India and European Union in a room. “Let them out after they sign in blood a commitment to work together to save the planet,” she said.
The Press Trust of India (PTI) reported that more than 50 “high-impact initiatives” was launched at the event. Maharashtra Institution for Transformation (MITRA) signed a partnership with the forum on urban transformation to give the state government “strategic and technical direction”, PTI reported, while a thematic center on healthcare and life sciences is to be set up in Telangana. The Coalition for Epidemic Preparedness and Innovations (CEPI) aims to develop new vaccines for future pandemics.
Who needs Davos
The jarring spectacle of the Davos event – where the uber-rich and powerful fly in on private jets to talk about poverty alleviation and climate action — came in for criticism yet again. However, others pointed out that despite its flaws, the conference is an opportunity for many decision-makers to meet and interact with each other. As the Economist editor-in-chief Zanny Minton Beddoes put it, while the talks at Davos can be described as “highly caffeinated speed dating”, more conversation and communication is better than less contact and less communication.
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