Tackling Distrust At Davos

As global leaders gather in Davos for the annual meeting of the World Economic Forum, conflicts rage in West Asia and Europe. WEF has chosen the theme of “Rebuilding Trust” to deepen the focus on unifying societies and countries. 

Challenges in healthcare, economic growth and the impact of technologies on societies will dominate the conversations at Davos. 

“We face a fractured world and growing societal divides, leading to pervasive uncertainty and pessimism. We have to rebuild trust in our future by moving beyond crisis management, looking at the root causes of the present problems, and building together a more promising future,” said Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

A clutch of studies and report are providing sobering facts to decision makers of the world. As conflict zones threaten to increase in the world, WEF launched a Global Cooperation Barometer to track the level of coordination on crises between countries. 

The Global Cooperation Barometer, developed in collaboration with McKinsey & Company, uses 42 indicators to measure five pillars of global cooperation between 2012 and 2022: trade and capital; innovation and technology; climate and natural capital; health and wellness; and peace and security.

“The greatest challenges – and the most promising opportunities – for our planet, societies and economies are not bound by borders, which means the only way to address them is through cooperation,” said Børge Brende, President, World Economic Forum. “What the barometer shows is that cooperation on many issues is possible, even in the midst of competition and confrontation. In other words, leaders can work together despite not seeing eye-to-eye on everything.”

The National Security Advisors of 83 countries and international organisations met at Davos to discuss the steps to end the war in Ukraine. 

The Chief Economists Outlook painted a grim picture. “The latest Chief Economists Outlook highlights the precarious nature of the current economic environment,” said Saadia Zahidi, Managing Director, World Economic Forum. “Amid accelerating divergence, the resilience of the global economy will continue to be tested in the year ahead. Though global inflation is easing, growth is stalling, financial conditions remain tight, global tensions are deepening and inequalities are rising – highlighting the urgent need for global cooperation to build momentum for sustainable, inclusive economic growth.”

The highlights are: 

• 56 per cent of chief economists expect the global economy to weaken in 2024
• 7 in 10 say pace of geoeconomic fragmentation will accelerate
• 2/3 say industrial policies will create new growth hotspots
• Majority warns of rising fiscal strains and divergence between higher- and lower-income economies
• Generative AI is seen to increase productivity and innovation, with experts notably more optimistic about AI-enabled benefits for high-income economies

India and South Asia remained bright spots in the overall scenario. The outlook for South Asia and East Asia and Pacific remains positive and broadly unchanged compared to the last survey, with a strong majority (93 per cent and 86 per cent respectively) expecting at least moderate growth in 2024.

A new report on the Future of Growth flagged several obstacles to economic development. Some of its main points are: 

• Economic downturn is exacerbating a range of interconnected global challenges, including the climate crisis and a weakening social contract, which are collectively reversing progress in global development
• New framework takes a holistic look at GDP alongside the quality of growth across 107 economies
• Report calls for a new approach to economic growth that balances efficiency with long-term sustainability and equity, examining speed and quality together
• New Future of Growth initiative will support policy-makers from around the world, together with economists and other experts, in identifying the best pathways in balance growth, innovation, inclusion, sustainability and resilience goals. 

The Global Cybersecurity Outlook brought home the need for increased vigil in a digital society. There has been a sharp increase in cyber inequity globally, with 90% of executives warning that urgent action is needed to address it, according the Outlook. About 81% of those surveyed feel more or as exposed to cybercrime than they did last year. 

“As the cyber realm evolves in response to emerging technologies and shifting geopolitical and economic trends, so do the challenges that threaten our digital world,” said Jeremy Jurgens, Managing Director, World Economic Forum, Switzerland. “We urgently need coordinated action by key public-private stakeholders if we are to collectively address these complex, ever-evolving threats and build a secure digital future for all.”

These assessments and reports are aimed at spurring global leaders to build trust and seek active solutions. This Davos will need hard work to tackle distrust in the world.

Pranjal Sharma has been analysing, commenting and writing on economic and development policy in India for 25 years. He has worked in print, TV and digital media in leadership positions and guided teams to interpret economic change and India’s engagement with the world