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September 20, 2020
EDITORIAL

Time to act after Davos

A World Economic Forum takes place in the hibernal landscape of a Swiss resort every year. This forum, now in its 42nd edition brings together top figures of the world economy – heads of corporations, major banks, etc. – as well as outstanding international political representatives – heads of international organisations and states from all continents – representatives of media and arts, sciences and entertainment as well as of the various sectors of the civil society. It is therefore a veritable global elite managers and pioneers in science and art, celebrities of the international public opinion coming together to identify and discuss the illnesses of the planet and their remedies, trends in art and directions of research and innovation in science, in general to take the pulse and set the planet’s health standards.

In order to have an image of the forum, here are two things deemed relevant by Martin Wolf, British ‘Financial Times’ newspaper special reporter from Davos: This is the only place where the world’s top business people ‘have to suffer often long queues to enter buildings and leave their coats and pick them up again,’ unable to ‘ push through the queue, because the person in front of them is quite likely to be even more important than they are’ and, the second one: Davos during the WEF is ‘one of the few places where walking is generally faster than limousine.’

The themes of debates, established by the organisers months before the meeting, are the very hot ones of the global economic, political, social and cultural landscape, designed to enable the participants to imagine solutions and models to apply to help the planet move on in better and more efficient conditions. Those are capital issues affecting the huge contingents of poor inhabitants of the planet – food, access to water, youth unemployment – the crisis of current capitalism, major geopolitical shifts or the future of globalisation. Last year, for instance, the pre-set themes were eventually overshadowed by the ‘Arab spring’ which, given the flexibility of adjustment shown by this global elite, generated a generous support for the major transformations going on in the Middle East. This year’s meeting naturally dealt with topical themes. Here are the titles of a few of the panels out of the many that took place: ‘Global Energy Outlook’, ‘Pundits, Professors and their Predictions’ (among panellists: Nouriel Roubini, Thomas Friedman and Kishore Mahbubani), ‘Pain and gain: prosperity with austerity’, ‘Big banks – cure or curse?’, ‘Global Energy Outlook: how are transformations in demand and supply patterns affecting energy security around the globe?’, ‘Global Economic Outlook 2012’ (panellists: IMF head Christine Lagarde, British Chancellor of the Exchequer George Osborne, German Finance Minister Wolfgang Schauble, World Bank President Robert Zoellik) etc.

However, beyond the titles of the numerous panels, what could be distinguished from the positions taken by the participants in the debates as well as from the many private functions and talks held on the margin of the official schedule were the main concerns of the day, valid for the entire planet: developments of the sovereign debt crisis in Europe, the global nuclear crisis, the public’s dissatisfaction with the current social and political status quo, even with the steadfastness and immobility of capitalism (also reflected by the ‘Occupy WEF’ movement that also built an igloo serving as headquarters), the future of globalisation, and so forth. In some opinions, the ‘inequity’ manifesting itself in the society at a global scale has become one of the main  – if perhaps not the most important – concerns of the Davos meeting this year. A very meaningful episode happened last Friday. While, among other panellists, British Labour Party leader Ed Miliband and Stephen Roach, Chairman of Morgan Stanley in Asia were debating in a parallel WEF panel on how capitalism should be remoulded, they were interrupted by about 30 ‘Occupy WEF’ protesters who urged the panellists to come down from the stage and join the audience consisting of some 300 people and carry on with their debates right there. The audience- Swiss in its majority – proved hostile to the demonstrators’ intervention. Numerous informal meetings taking place in the framework of WEF were opportunities for some interesting conclusions drawn by observers. Here is one of them: ‘During the last year confidence among chief executives has apparently plunged, as many fear that the macroeconomic outlook looks dangerously uncertain. On a micro level, however, many companies say that their own operations are going quite well. In other words, even amid individual company success, the world seems a scary place.’

The future of euro, actually of Europe, of the European Union, was the central theme, which was not at all an accident. Some troubled times are announced for the old continent, especially with the Greek bankruptcy around the corner in the absence of decisive measures. Since before the beginning of the summit a trend had become visible to consider that it would be almost overwhelmingly focussed on the euro issues. A participant said: ‘the focus will be on one thing and one thing only: euro, euro, euro,’ another one predicted ‘the key theme has to be: have France, Germany and the ECB agreed to stop this institutional destruction of Europe?’ Maybe the interminable euro theme did not exclusively occupy the WEF stage, being accompanied by subjects such as inequity or future of the world trade, but it was definitely central, which is but a sign of the importance the European economy has in the global ensemble. Many participants, especially American – this year China did not attend because the WEF coincided with the Chinese New Year celebration.- pointed out that a failure to give the correct treatment to the European crisis would have some grievous consequences on the world economy. German Chancellor Angela Merkel, as well as French President Nicolas Sarkozy addressed the matter and indicated a few directions of action.

But even more interesting – perhaps premonitory – for the thinking and action on the old continent regarding the solving of the crisis is the conversation taking place between a European official and the reporter of an influential British financial publication. Here is a report by the latter: ‘we agreed – however – that the single currency will not survive without some form of fiscal and political union. I said it would never happen. On the contrary, I was told, it’s already happening. ‘We don’t even need the new treaty, we already have the powers to control national budgets. ‘We discussed the recent case of Belgium, where the commission demanded changes in a national budget – and its current action against Hungary. This morning, I feel remarkably fresh (considering), and I see a remarkable story on the front page of the FT that is very germane to our conversation: Germany wants a budget commissioner to be able to control the Greek budget. I think that could cause a political explosion.’

Davos-2012 has shown – an informed observer said – that the time for talks is gone and that now it is the time for action to secure a recovery of the global economy.

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