Davos and the world we live in
The resort town of Davos, situated at 5,000 feet in the Swiss Alps, offers spectacular mountain views, phenomenal skiing and costly hotel rooms. These rates rise to stratospheric levels the week each year when Davos hosts the “World Economic Forum” and its population swells from 11,000 to 30,000. This annual gathering started rather modestly in 1971 as the “European Management Forum” when about 450 West European business leaders gathered to discuss how European firms could catch up to America’s more advanced management techniques.
In the years since, the annual Davos forum has evolved into much more as the event attracted growing numbers of the world’s business and political leaders who found the venue ideal as a neutral forum for discussing key global concerns. In turn, this gathering of the world’s decision makers also began drawing the cultural glitterati, social entrepreneurs, technology gurus, and — of course — hordes of demonstrators for and against various causes.
This year’s event has drawn 3,000 participants among whom are 70 world leaders, 900 major company CEOs, and elites and activists from among global media, entertainment, non-governmental organizations, social causes, environmental concerns, etc. This year’s stated conference theme is “Creating a Shared Order in a Fractured World” and one of the key topics for discussion is “a deterioration in the (world’s) geopolitical situation.”
The forum’s use of “fractured” is a most appropriate term for describing 2018’s bifurcated global “order.” On the one hand, the world’s overall economy seems to be enjoying a “Goldilocks moment.” All major economies — America, China, Europe, India, even Japan (for the first time in decades) — are conjointly experiencing respectable growth, along with the emerging and frontier markets. Commodity prices have recovered, global inflation is tame (with a few outliers like Venezuela’s estimated 10,000 percent!) and interest and currency exchange rates seem reasonable. Even oil has settled at a price range acceptable to producers and consumers. Could the bears come home prematurely and eat Goldilocks? Sure! Some actions which could crash this benign environment include central bankers raising interest rates too high, too soon, or an escalating trade war between key economic powers. But the greatest threat comes from the other side of the coin — the state of global geopolitics.
It is here where I fear we are like people who are unaware they are living on top of tectonic plates that have been shifting dangerously. Actually, there are two converging forces at work, one evolutionary and the other revolutionary. Since the end of the Soviet Union the world has been evolving away from the system of multilateral institutions and global alliances America helped establish after World War II. While there was a brief post-Soviet period of U.S. hegemony, as National Security Adviser H.R. McMaster recently said: “Geopolitics are back, and back with a vengeance, after this holiday from history we took in the so-called post-Cold War period.”
It seems clear that the world we are moving toward will be one of multiple poles with regional powers exerting their influence in their neighborhoods and at times rubbing up against other powers much like tectonic plates before an earthquake or volcanic eruption: e.g. Pakistan vs. India; India vs. China; China vs. the United States; Saudi Arabia vs. Iran vs. Turkey; etc. And of course, there is North Korea — where any conflict would not only derail global prosperity but cause mass casualties across the region and perhaps even in the United States. This is a new world “order” of much greater uncertainty, fluidity, and — most important perhaps — where alliances will be much more transactional, rather than constant. Or, as Henry Kissinger said decades ago: “America has no permanent friends or enemies, only interests.”
The other force at work whose impact can be both greatly beneficial or harmful to our world is the light-speed acceleration of disruptive technologies. We have already seen the early stages of how cyber-tech can be weaponized and how social media can be exploited. Still to come will be the full impact of artificial intelligence, robotics, drones and hyper speed weapons on conflicts large and small. Add to that asymmetric tactics that terrorists, criminals and weak states can use to harm or demoralize stronger states they cannot confront directly. On the one hand, for global civilization overall, the 21st century has been the safest yet, and the number of nuclear warheads in the world is some 90 percent lower than it was in 1986 (the high point).
But the potential for global turbulence is higher than ever, especially given technological threats we don’t even yet fully recognize. So here is hoping that all the high-priced champagne and networking in Davos produces some creative ideas and approaches for addressing our fractured world.
... as Henry Kissinger said decades ago: “America has no permanent friends or enemies, only interests.”
Nagy is the former vice provost for international affairs at Texas Tech University and served as U.S. ambassador to Ethiopia from 1999 to 2002 and to Guinea from 1996 to 1999.