World worries mount ahead of Davos talks
Inequality, divisions in society top concerns
DIVIDED societies, rising populism and fears for the world’s climate top the list of risks facing politicians, central bankers and business leaders who will gather in Davos, Switzerland, next week.
The world has changed dramatically in the year since they last met in the Swiss Alps, with Donald Trump’s election in the US and Britain’s vote to leave the European Union exposing deep public disenchantment with globalisation.
Those who meet each year at the World Economic Forum (WEF) face further threats, with elections in the Netherlands, France, Germany and probably Italy all offering scope for an anti-establishment backlash.
Ahead of its annual meeting, the WEF’s Global Risks report yesterday highlighted rising income and wealth disparity as the trend most likely to determine global developments over the next decade.
The report also pointed to rapid changes in social attitudes that meant many voters were feeling left behind in their own countries, undermining social and political cohesion.
Another risk is the rise of robots and the threat posed to jobs.
The report names artificial intelligence and robotics as the technologies with the greatest potential for both positive and negative consequences, including exacerbating the threat posed by hacking.
Without effective governance and retraining of workers, technology may destroy more jobs than it creates at a time when cash-strapped governments can no longer afford high levels of welfare.
The report analysed 30 global risks and 13 underlying trends over a 10-year horizon by surveying around 750 experts and decision makers.
While the world economy is expected to carry on growing this year – helped by anticipated US tax cuts and infrastructure spending under a Trump administration – the threat of protectionism presents a rising long-term risk.
Other dangers have not gone away, with climate concerns moving up the agenda as Trump’s arrival as US president casts a shadow over curbing carbon emissions.
Extreme weather events are now rated as the single most prominent global risk. “Many of these risks have been highlighted in past reports, except now they are moving in the direction of having a higher impact,” Zurich Insurance chief risk officer Cecilia Reyes said. She is one of the report’s authors.
The January 17-20 Davos meeting will bring together 3 000 participants, including President Xi Jinping, the first Chinese head of state to attend the WEF, and British Prime Minister Theresa May.
But German Chancellor Angela Merkel and Canadian Prime Minister Justin Trudeau have decided to skip the event.
Trump, who will be inaugurated on January 20, will also not be there.
The fallout of Trump’s pledge to “make America great again” will be debated intensely, however, and his stance on the Middle East and the threat of terrorism is also an area of uncertainty.
WEF founder and executive chairman Klaus Schwab said earlier this week he hoped this year’s gathering could brainstorm about how to address “the root causes” of the widespread anxiety in the world today and answer the question “why the people are angry, and why they are not satisfied”.