Davos 2019: Overview
This week one of the most important global events is taking place, the World Economic Forum in Davos, Switzerland. Davos is known to be a gathering of the most important global leaders, who seclude themselves for several days in the Swiss winter resort to discuss their plans for the future and set the political agenda for the year ahead. Last year the forum drew immense attention and President Trump used it to announce his plans to “fix” the inequality of global trade by implementing trade tariffs, a decision that ended up reverberating throughout 2018. This year, however, Trump chose not to attend the event; the US President has been increasingly isolating himself even at previous gatherings, such as the G8 and G20 summits. So, what does the economic forum look like this year?
Despite Trump’s absence, a number of key figures are attending the forum. For starters, Germany’s Chancellor Angela Merkel will be there; she will be joined also by Japanese PM Shinzo Abe, the President of Brazil Jair Bolsonaro, Israel’s PM Benjamin Netanyahu, the PM of New Zealand Jacinda Ardern, Italian PM Giuseppe Conte, and many other political leaders. The IMF Director Christine Lagarde will also be in attendance. Besides Trump’s administration (who cancelled their visit due to the government shutdown that they are causing), other notable faces who are missing are those of French President Macron, as well as British PM Theresa May. With the protests in France and the Brexit shenanigans in the United Kingdom, both of them are too busy with domestic issues and chose to skip the global forum.
This year the theme of the symposium has to do with globalization and what they call the Fourth Industrial Revolution. Common topics that circulate the forum each year include climate change, income inequality, and global economic growth.
One of the issues discussed this week was Venezuela. The South-American country had slipped into a major economic crisis with inflation over 80,000% and a widespread famine. The issue was caused when populist President Maduro decided to start printing more money, without considering the implications for inflation. Venezuela is a country very rich in crude oil, but even that did not save them, as the inflation made it too expensive to run the refineries and they had to withdraw from the oil market. This week the people of Venezuela chose the opposition leader Juan Guaido as President; he was recognized by the rest of South America, as well as Canada and the United States, even though Maduro refuses to accept the vote. Guaido plans to serve as an interim leader and hold free elections in the near future.
Another achievement noted during the forum was Africa’s recent success to unite 49 countries across the continent in a free trade agreement. This is supposed to foster further cooperation between the countries and help drive economic growth upward by forming a single market.
When it came to Europe, there were a number of differing opinions presented. Italy’s PM Conte gave a speech in a rather subdued tone, painting a grim picture of Europe’s future. Note that his government is mostly euro-skeptical and last year had a three-month-long dispute with the European Commission over its budget. Conte pointed to growing poverty in Italy and a need for better welfare programs.
Angela Merkel, on the other hand, was more positive in her speech. She discussed how the world is overall better off today than several decades ago and how the key to improving what we have today is for politicians to work together internationally. This could, from some perspectives, be seen as a direct response to Conte, since the Italian government’s desire to increase spending would have had a negative impact throughout the entire eurozone.
Merkel’s message about global cooperation was echoed in China’s Vice President Wang Qishan’s talk. He spoke about China’s economic development and his desire that this happens together with the rest of the world, urging politicians not to get too preoccupied with national interests.
Mike Pompeo, who spoke via a video call, said that there are hopes for resolving the trade dispute with China. The United States and China are working hard to negotiate a deal to solve their trade dispute, as almost two-thirds of their 90-day truce have passed.