ZELENSKYY TAKES THE PLIGHT OF UKRAINE TO DAVOS
▶ War is the focus as global leaders meet for World Economic Forum
Ukraine’s President Volodymyr Zelenskyy yesterday took his country’s rallying cry to the World Economic Forum in Davos.
He told the assembled political and business leaders that their annual gatherings would become pointless if Russia succeeded in getting its way by force.
“This is really the moment when it is decided whether brute force will rule the world,” Mr Zelenskyy said.
He said that without tougher sanctions to stop Moscow, there would be “no need for further meetings in Davos”.
The first day of the summit in the Swiss Alps was dominated by the war in Ukraine.
Kyiv Mayor Vitali Klitschko said the violence was unfolding only 2,000 kilometres away from the idyllic summit venue, playing the sound of air raid sirens from his phone and telling his audience: “We are defending you personally.”
The head of the UN’s food programme urged the super-rich to tackle food insecurity, a growing concern amid a war between two of the world’s biggest agricultural exporters.
“There’s a lot of wealthy people in the world who can step up,” said David Beasley.
The UAE announced cooperation on food innovation between the World Economic Forum and the Mohammed bin Rashid Al Maktoum Global Initiatives.
Mr Zelenskyy said the Russian invasion had led to a “sea full of mines and blocked ports” and blighted Ukraine’s skies with thousands of bombs and cruise missiles.
“This is what the world would look like if this turning point does not receive a proper response from humanity,” said Mr Zelenskyy, who called for at least $5 billion a month in extra weapons and financial aid.
He said sanctions needed to go further to cut off all trade with Russia and weaken its banks and oil exports. EU leaders this month proposed an oil embargo, but the move has been viewed warily by pipeline-reliant member states.
The sanctions “should be maximum so that Russia and every other potential aggressor who wants to wage a brutal war against its neighbour would clearly know the immediate consequences for their actions,” Mr Zelenskyy said.
“If the aggressor loses everything, then it definitely deprives him of any motivation to start the war.”
Russian delegates were banished from Davos after the war broke out, while Ukraine has sent a team to lobby for more support from world leaders.
The event is taking place in person for the first time since early 2020, after a pause enforced by the pandemic.
What was previously Russia House in Davos has been transformed by critics, including Ukrainian tycoon Victor Pinchuk and Ukraine’s Foreign Ministry, into the “Russia War Crimes House”, displaying pictures of alleged atrocities.
Threats to the global economy topped the agenda at the World Economic Forum in Davos yesterday, with some attendees flagging up the risk of a worldwide recession.
Political and business leaders met against a backdrop of inflation at its highest level in a generation in major economies including the US, Britain and Europe.
Price rises have hit consumer confidence and shaken the world’s financial markets, prompting central banks, including the US Federal Reserve, to raise interest rates.
Meanwhile, the repercussions on oil and food markets of Russia’s invasion of Ukraine and Covid-19 lockdowns in China have compounded the gloom.
“We have at least four crises, which are interwoven. We have high inflation, we have an energy crisis, we have food poverty and we have a climate crisis. And we can’t solve the problems if we concentrate on only one of the crises,” said German Vice Chancellor Robert Habeck.
The International Monetary Fund last month cut its global
growth outlook for the second time this year, citing the war in Ukraine and singling out inflation as a “clear and present danger” for many countries.
IMF managing director Kristalina Georgieva, speaking in Davos yesterday, said the war, tighter financial conditions and price shocks – for food in particular – have clearly “darkened” the outlook in the month since.
Asked if she expected a recession, Ms Georgieva said: “No, not at this point. It doesn’t mean it is out of the question.”
European Central Bank President
Christine Lagarde, due to speak in Davos today, has said that growth and inflation are on opposing paths, as mounting price pressures curb economic activity and hit household purchasing power.
“The Russia-Ukraine war may well prove to be a tipping point for hyper-globalisation,” she said yesterday.
“That could lead to supply chains becoming less efficient for a while and, during the transition, create more persistent cost pressures for the economy.”
However, Ms Lagarde essentially promised rate increases in July and September to put a brake on inflation, even if rising borrowing costs are bound to weigh on growth.
Francois Villeroy de Galhau, governor of the Bank of France said everyone knew “from day one that this war was bad economic news. Less growth and more inflation”.
“This is the price we accepted together to pay to protect our values. It was worth paying this price.”
Although the economic drag from the Ukraine crisis is being most keenly felt in Europe, it is the American economy that is experiencing the greatest price pressures.
The Consumer Price Index there shot from near zero two years ago to a 40-year high of 8.5 per cent in March.
The Fed responded this month with its largest rate rise in 22 years, and chairman Jerome Powell has signalled increases of a similar magnitude – half a percentage point – at its next two meetings at least.