More efforts urged for global recovery
Public-private cooperation key to sustainable world economic growth, WEF founder says
Cooperation in a “fragmented world”, with multiple crises deepening divisions, has emerged as a rallying call at the World Economic Forum’s annual meeting, which opened in Davos, Switzerland, on Jan 16.
With elevated inflation, higher interest rates, reduced investment and disruptions caused by the Ukraine-Russia conflict, the meeting, which runs until Jan 20, has brought calls for world political and business leaders to take collective action, engage in constructive dialogue and help find solutions through publicprivate cooperation.
“We see the manifold political, economic and social forces creating increased fragmentation on a global and national level,” Klaus Schwab, founder of the forum, said at a media briefing before the opening.
“To address the root causes of this erosion of trust, we need to reinforce cooperation between the government and business sectors, creating the conditions for a strong and durable recovery.
“At the same time, there must be the recognition that economic development needs to be made more resilient, more sustainable, and nobody should be left behind.”
More than 2,700 leaders from 130 countries, including 52 heads of state and government, participated in the forum year. Among them were German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, UN Secretary-General Antonio Guterres and International Monetary Fund Managing Director Kristalina Georgieva.
They have been joined by more than 600 CEOs from sectors such as financial services, energy, materials and infrastructure, information and communication technologies.
At the invitation of Schwab, Chinese Vice-Premier Liu He also attended the meeting. He delivered a speech on Jan 17.
The meeting program featured more than 450 sessions on accelerating progress on global challenges. The focus was on advancing new systems for energy, climate and nature; investment, trade and infrastructure; private sector innovation and resilience; work, skills and care; and dialogue and cooperation in a multipolar world.
John Beirne, vice-chair of research at the think tank Asian Development Bank Institute, said: “Given the uncertain global economic outlook for 2023 related to ongoing geopolitical tensions coupled with debt sustainability risks in developed and emerging markets, this year’s World Economic Forum takes place at a critical juncture.
“Mechanisms to tackle the cost-ofliving crisis and alleviate macroeconomic instability will be key, as well as driving greater efforts on energy transition reforms.”
Higher global interest rates and amplified economic uncertainty have hampered the growth outlook for 2023. In its latest forecast, the World Bank has cut projections for global growth to just 1.7 percent, down from 3 percent predicted in June last year.
“With investor sentiment projected to deteriorate and worsening risks of debt distress in developing economies, lower overall global growth can be expected compared to previous projections,” Beirne said.
Christopher Bovis, international business law professor at the University of Hull in the United Kingdom, said: “The world leaders face a massive challenge in 2023. Not only geopolitics and economic headaches, but a consistent battle to raise productivity and bring on economic growth to their respective economies.”
Michel Ruimy, an economist and affiliate professor at ESCP Business School in Paris, said: “There is no doubt that 2022 was a difficult year economically. 2023 will continue to be dominated by uncertainty.”
Given the precariousness of the economic situation, Ruimy said any new “adverse developments could push the global economy into recession and threaten the development of emerging and developing economies, which have been experiencing sluggish growth for several years due to high levels of debt and insufficient investment”.
This year’s forum also took up public-private collaboration through impact initiatives, which address issues ranging from pandemics and the climate crisis to education, technology and the energy transition.
Bovis said he believes that the role of the private sector will emerge as a lever of economic growth in 2023 and beyond, as private sector investment represents the acid test of resilience and ultimate performance in economies, both developed and emerging.
Following China’s recent move on the optimization of its COVID-19 policy, observers are watching the country’s 2023 economic prospects with great anticipation. According to the World Bank’s projection, China will be one of the very few countries that will exhibit strong growth this year, at 4.3 percent.
“China’s projected economic recovery in 2023 will support global growth, underpinned by domestic macroeconomic policy stimulus and its emergence from the pandemic,” Beirne said.