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High in the Swiss Alps, the small ski town of Davos stepped up security at the World Economic Forum’s annual meeting, where armed guards perched on hotel roofs and world leaders and corporate executives sipped champagne below.
But today, everything Davos stands for — globalization, liberalism, free market capitalism, representative democracy – appears to be under attack.
Over the past half century, the aristocratic founder of the World Economic Forum, Klaus Schwab, has praised the virtues of an interconnected world where the free flow of goods, services, people and ideas will lead to shared prosperity and peace. it was an idealistic vision It survived despite the global unrest and found adherents in the corridors of power. From Palo Alto, California to Washington DC and Brussels to Singapore and beyond.
However, the last two years have fundamentally challenged the viability of this enthusiastic worldview.
The coronavirus pandemic has triggered a wave of isolationist foreign policy moves, exposing the fragility of supply chains and largely isolating China from the rest of the world.
Russia’s invasion of Ukraine brought ground war to Europe and fueled fears of wider global conflict.
Even before the pandemic and war, autocratic rulers were on the rise around the world, and internal divisions were straining superpowers like the United States.
Now, as Mr. Schwab prepares to preside over the first meeting of the World Economic Forum in Davos since the pandemic began, he is faced with a world not very similar to the one he has been trying to create for more than 50 years.
“I think this will be the first World Economic Forum where Klaus himself does not believe in a Western-led world and that other countries will simply adapt to it,” said political scientist Ian Bremmer. Attended the annual conference frequently. “I think he understands.”
As heads of state complete travel arrangements and wealthy companies set up shops on the promenade, Mr. Schwab himself seems to realize that the global order as he once imagined is little more than a fantasy, at least for the time being.
“We live in a different world,“Even when we got together in 2020, we had very serious concerns. Now we’ve had two additional events that really accelerated the seriousness of our situation.”
But although the world has changed, Davos has not. The annual convention will, as always, feature politicians, civil servants, executives, and nonprofit leaders – the privileged, globe-trotting type of idealists who coined the term.Davos ManPermanent threats such as climate change and cybersecurity will be discussed, as well as current issues such as war and Covid. Ukrainian president Volodymyr Zelensky will give a virtual address to other heads of state.
The only thing that will differ is the outside temperature. The annual meeting is usually held in January. But mandatory after an increase in Covid cases last minute cancellationThe World Economic Forum has been postponed to the end of May. This means there will be no snow on the ground, but the threat of a dull, constant rain is real.
“Actually, my biggest concern is the weather,” said Mr. Schwab.
‘Basically incompatible’
Nothing has challenged Davos’ worldview more directly than the Russian invasion of Ukraine.
While Moscow has been a strategic enemy for the USA and Europe for years, the economic ties between Russia and the West were also deep. Hundreds of multinational companies had major operations in Russia, and Europe emerged as a major importer of Russian oil.
Vladimir Putin’s decision to invade Ukraine, although based on a number of faulty assumptions, also exposed the fact that Western leaders fundamentally misjudged the Russian leader.
“This is logical or inexplicable to me,” said Schwab, who said he met with Putin in late 2019 in an unsuccessful effort to persuade the Russian President to come to Davos and deepen ties with the West.
Now the war is forcing even longtime advocates of globalization to rethink the limits of free market capitalism as a way to promote global cohesion.
“One of WEF’s big ideas was that shared economic prosperity would bring the world more together,” said Rich Lesser, global head of Boston Consulting Group. “I think this is a lot more challenging than we hoped, unfortunately.”
Indeed, the war itself—as well as the reluctance of other major countries like China, India, and Brazil to rally behind Ukraine—makes it clear that the world has never been as harmonious as some idealists would like to believe.
“The reality is that these countries are fundamentally incompatible because of their political systems, economic systems, and also because of their comparative wealth,” Bremmer said.
The World Economic Forum has previously played peacefully. In 1988, Greece and Turkey signed the so-called Davos Declaration, marking a new era of improved relations between longtime adversaries.
However, there will be no talks between Ukraine and Russia in Davos this year. Indeed, there will be no Russians at all.
While oligarchs like Oleg Deripaska have rented palatial chalets and hosted flamboyant parties at previous events, Mr. Schwab has decided not to have a Russian delegation at this year’s meeting. Mr. Schwab refused to allow not only Russian government officials, but all Russian citizens to attend.
The decision itself could damage Davos’ reputation as a place where all voices can be heard. “This is a place where everyone is invited, isn’t it?” said Mr Bremmer. “And now, suddenly, it’s not.”
Mr. Schwab said he hoped that would change. “I reached when we cut off relations and at the same time I said, ‘Forum is available for bridge construction at any time in the future,'” he said. “We want to be a bridge builder”
It is unclear when that time will come. With the war ostensibly ending and other global alliances shifting, there are questions looming over whether the war is an isolated conflict or the beginning of a much broader realignment of world powers.
“It’s much more complicated than one country breaking into another and causing destruction,” said Dambisa Moyo, a Zambian-born economist and author. “Of course it’s terrible. But I think the broader question is whether this will be a conflict that, in retrospect, what we think was a much more catalytic event in terms of dividing the world and deglobalizing it.”
‘Best story’
While the war in Ukraine shows the limits of Davos’ worldview, many still believe in the virtues of an interconnected economy.
“Basically, I believe that the faster movement of people, ideas, goods and services across borders, globalization has made you a global middle class over the last 50 years,” said Mr Bremmer. “This is the best story out there.”
Statistics show that globally, the number of people living in extreme poverty has fallen in recent years, with access to electricity, clean water and nutritious food steadily increasing.
“Globalization has helped millions and millions of people out of poverty,” said Mr Schwab. “Perhaps unevenly, because some countries benefited from it, others profited less.”
Yet even proponents of globalization acknowledge its limits, noting that there are deep, systemic problems all over the world and even in the richest countries.
“If there was such a thing as a Davos woman, I think I would sum it up in a way,” said Ms. Moyo. But it is clear that there are many problems in Western economies, from insufficient investment in education to healthcare costs and a lack of infrastructure,” she said.
Still, Mr. Schwab said the need for multinational cooperation is only becoming more urgent.
“Global cooperation in solving our global problems is absolutely necessary,” he said, “because we are interdependent.”
This is especially true when it comes to addressing climate change. While most countries around the world have pledged to rapidly reduce planet-warming emissions, few seem to be on track to achieve their goalswhich means that global temperatures will likely continue to rise.
And as the effects of the war in Ukraine ripple outward, experts warn of an looming food crisis that could stretch from Africa to South America and trigger further social unrest and mass migration.
“Hungry people are angry people,” said Mr Schwab.
‘The shattering of the world’
In a world that can feel as if it is leaving, Davos is one of the few places where power brokers from a wide variety of industries and geographies converge.
“It really is the only source of water for public policy, business and civil society to come together,” Ms Moyo said.
While most executives attending the meeting may choose to negotiate deals from their hotel suites, policymakers and nonprofit leaders will likely be the focus. How can we prevent a wider escalation of war, the impending food crisis, the rapid realignment of global powers, and the years to come.
“For a group of people, they only have five days to make as much money as they can because they are the masters of the universe and they see the other masters of the universe and meet every 30 minutes and make deals,” said Mr. Bremmer.
“But for people who really think about Davos’ role in the world, the thing to talk about is the new Cold War, Russia’s forced separation from the West, and the surprising harmony of the United States and Europeans.” said.
While Mr. Schwab refrains from calling it a new Cold War, he said we are facing the possibility of “dividing the world”.
“This is mainly a result of aggression against Ukraine,” Mr. Schwab said. “We risk the world being divided into a very powerful system. We have different philosophies, ideologies; There is a polarization that you did not experience 10, 15 years ago, even within the country.”
But these words reflect a world that could only have existed in the minds of regular Davos attendees. Even as globalization combined far-flung economies with a common set of snack foods, cell phones and banks, hundreds of millions of people continued to live in poverty, many countries suffered from underinvestment, corruption remained rampant, and polarization was growing even within superpowers like the United States. States.
Today, with Covid and the war in Ukraine exacerbating these trends, there is a risk that there is less and less space for all parties to come together when we need global solutions to our biggest common problems.
So, there is a risk that the World Economic Forum is not really a forum for the whole world, with Russia being banned, China is being isolated, and more global unrest is expected ahead.
“This is not what Klaus wants,” said Mr. Bremmer. “Obviously, this shouldn’t be what any of us want.”
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