Davos: Where the su­per-rich rub shoul­ders with the political elite

Financial Mirror (Cyprus) - - FRONT PAGE -

Politi­cians and busi­ness lead­ers gath­er­ing in the Swiss Alps this week face an in­creas­ingly di­vided world, with the poor fall­ing fur­ther be­hind the su­per-rich, and political fis­sures in the United States, Europe and the Middle East run­ning deeper than at any time in decades, ac­cord­ing to EU news por­tal EurAc­tiv.com.

Just 62 peo­ple, 53 of them men, own as much wealth as the poor­est half of the en­tire world pop­u­la­tion and the rich­est 1% own more than the other 99% put to­gether, an­tipoverty char­ity Ox­fam said on Mon­day.

Sig­nif­i­cantly, the wealth gap is widen­ing faster than any­one an­tic­i­pated, with the 1% over­tak­ing the rest one year ear­lier than Ox­fam had pre­dicted only a year ago.

Ris­ing in­equal­ity and a widen­ing trust gap be­tween peo­ple and their political lead­ers are big chal­lenges for the global elite as they con­verge on Davos for the an­nual World Eco­nomic Fo­rum, which starts Wed­nes­day and ends on Satur­day.

But the divi­sions go far be­yond those that ex­ist be­tween the haves and have-nots. In the Middle East, the di­vide be­tween Shi’ites and Sun­nis has reached cri­sis point, with Iran and Saudi Ara­bia jostling openly for in­flu­ence in a re­gion reel­ing from war and the bar­barism of Is­lamic ex­trem­ists.

The con­flicts there have spilled over into Europe, caus­ing deep ide­o­log­i­cal rifts over how to han­dle the worst refugee cri­sis since World War Two and - with Bri­tain threat­en­ing to leave the Euro­pean Union - rais­ing doubts about the fu­ture of Europe’s six-decade push to­wards ever closer in­te­gra­tion.

The shock emer­gence of Don­ald Trump as the front-run­ner for the Repub­li­can pres­i­den­tial nom­i­na­tion has ex­posed a gap­ing political di­vide in the United States, stir­ring anx­i­ety among Wash­ing­ton’s al­lies at time of global tur­moil.

Among the key fig­ures in Davos, will be US Vice Pres­i­dent Joe Bi­den, Sec­re­tary of State John Kerry, Is­raeli Prime Min­is­ter Ben­jamin Ne­tanyahu and the for­eign min­is­ters of both Iran and Saudi Ara­bia.

Canada’s new Prime Min­is­ter Justin Trudeau will be on hand, as will Bri­tain’s David Cameron and Mario Draghi at a time when a new transat­lantic mon­e­tary pol­icy di­vide is open­ing up be­tween his loos­en­ing Euro­pean Cen­tral Bank and a tight­en­ing US Fed­eral Re­serve.

Celebri­ties will force, in­clud­ing Leonardo Di Caprio Spacey.

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Trust Barom­e­ter sur­vey shows a record gap this year in trust be­tween the in­formed publics and mass pop­u­la­tions in many coun­tries, driven by in­come in­equal­ity and diver­gent ex­pec­ta­tions of the fu­ture.

The gap is the largest in the United States, fol­lowed by the UK, France and In­dia.

“The con­se­quence of this is pop­ulism - ex­em­pli­fied by Trump and Le Pen,” Richard Edel­man, pres­i­dent and CEO of Edel­man, told Reuters, re­fer­ring to French far-right leader Marine Le Pen, whose Na­tional Front has surged ahead of tra­di­tional par­ties in opin­ion polls.

The next wave of tech­no­log­i­cal in­no­va­tion, dubbed the fourth in­dus­trial rev­o­lu­tion and a fo­cus of the Davos meet­ing, threat­ens fur­ther so­cial up­heaval as many tra­di­tional jobs are lost to ro­bots.

The Ox­fam re­port sug­gests that global in­equal­ity has reached lev­els not seen in over a cen­tury.

Last year, the or­gan­i­sa­tion has cal­cu­lated, 62 in­di­vid­u­als had the same wealth as 3.5 bln peo­ple, or the bot­tom half of hu­man­ity. The wealth of those 62 peo­ple has risen 44%, or more than half a tril­lion dol­lars, over the past five years, while the wealth of the bot­tom half has fallen by over a tril­lion.

“Far from trick­ling down, in­come and wealth are in­stead be­ing sucked up­wards at an alarm­ing rate,” the re­port says.

It points to a “global spi­der’s web” of tax havens that en­sures wealth stays out of reach of or­di­nary cit­i­zens and gov­ern­ments, cit­ing a re­cent es­ti­mate that $7.6 tril­lion of in­di­vid­ual wealth - more than the com­bined economies of Ger­many and the UK - is cur­rently held off­shore.

“It’s a ma­jor wake-up call,” said Jyrki Raina, gen­eral sec­re­tary of In­dus­tri­ALL Global Union, which rep­re­sents 50 mln work­ers in 140 coun­tries in the min­ing, en­ergy and man­u­fac­tur­ing sec­tors. “In­equal­ity is one of the big­gest threats to eco­nomic well-be­ing and it needs to be ad­dressed.”

US Pres­i­dent Barack Obama touched on the is­sue in his re­cent State of the Union ad­dress, not­ing that tech­no­log­i­cal change was re­shap­ing the planet.

“It’s change that can broaden op­por­tu­nity, or widen in­equal­ity. And whether we like it or not, the pace of this change will only ac­cel­er­ate,” he said.

“Com­pa­nies in a global econ­omy can lo­cate any­where, and face tougher com­pe­ti­tion... As a re­sult, work­ers have less lev­er­age for a raise. Com­pa­nies have less loy­alty to their com­mu­ni­ties. And more and more wealth and in­come is con­cen­trated at the very top.”

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