Major Takeaways : From the Annual Meeting of the World Economic Forum

INTERNATIONAL RELATIONS
23 Jan, 2023

NEWS HIGHLIGHT 

 

Theme : International Relations
Paper:GS-2

 

The World Economic Forum’s Annual Meeting 2023, held in the Swiss town of Davos.The theme this year was ‘Cooperation in a Fragmented World’.

 

 

TABLE OF CONTENT

  1. Context
  2. World Economic Forum
  3. Key Takeaways from WEF
  4. Green Energy discussions at WEF
  5. Various views of Davos Event
  6. Road Ahead

Context : The World Economic Forum’s Annual Meeting 2023, held in the Swiss town of Davos.The theme this year was ‘Cooperation in a Fragmented World’.

World Economic Forum : 

  • Headquartered in Geneva, Switzerland, WEF is an international not-for-profit organization, focused on bringing the public and private sectors together to address the global political, social, and economic issues.
  • It was founded in 1971 by Swiss-German economist and Professor Klaus Schwab in a bid to promote global cooperation on these most pressing problems.
  • The first meeting of WEF was held more than five decades ago in Davos, which has been the home of the annual gathering almost ever since, also becoming the shorthand for the event.

Key Takeaways from WEF : 

  • Positive outlook for economy: Most business leaders were upbeat about the economy, with the US and the European Union (EU) seemingly beyond the risk of a recession now. China ending its zero Covid curbs and opening shop again added to the positive outlook.
  • Caution from central banks: Central banks of the major economies cautioned that concerns still remained, and said they would keep interest rates high to ensure inflation is under check. For example, Stay the course is my mantra, the European Central Bank President quoted. The US Federal Reserve Vice Chair Lael Brainard was quoted as reminding investors that “inflation remains high, and policy will need to be sufficiently restrictive for some time.
  • Potential impact on energy prices: Many also pointed out that China opening up could mean a rise in its energy consumption, thereby driving up energy prices.
  • Concerns for developing economies: As the richer nations look to focus inwards, protecting their own workers, energy sufficiency, supply lines, etc., concerns were raised that this policy direction would hit developing economies.

Green Energy discussions at WEF : 

  • The need for green energy and financing: Everyone agreed upon the need for green energy and the need for more money to fight climate change.
  • GAEA initiative to unlock $3 trillion financing: According to the WEF’s website, The World Economic Forum, supported by more than 45 partners launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.
  • International Concerns and Reactions: The EU raised concerns over a US green energy law that benefits products, such as electric vehicles, made in America.
  • New Initiatives and Partnerships: The Press Trust of India (PTI) reported that more than 50 high-impact initiatives were launched at the event. 
  1. Maharashtra Institution for Transformation (MITRA) signed a partnership with the forum on urban transformation to give the state government strategic and technical direction. 
  2. A thematic center on healthcare and life sciences is to be set up in Telangana. 
  3. The Coalition for Epidemic Preparedness and Innovations (CEPI) aims to develop new vaccines for future pandemics.

Various views of Davos Event : 

  • Spectacle of Rich and Powerful Talking about Poverty and Climate: The jarring spectacle of the Davos event where the uber-rich and powerful fly in on private jets to talk about poverty alleviation and climate action came in for criticism yet again.
  • Opportunity for Decision-Makers to Meet and Interact: However, others pointed out that despite its flaws, the conference is an opportunity for many decision-makers to meet and interact with each other.
  • The Economist’s View on the Importance of Communication and Conversation: As the Economist editor-in-chief Zanny Minton Beddoes put it, while the talks at Davos can be described as “highly-caffeinated speed dating”, more conversation and communication is better than less contact and less communication.

Road Ahead : 

  • The World Economic Forum highlighted the pressing need for green energy and financing to combat climate change. Though the event remained focused on business as usual, we can see that the WEF provided an opportunity for decision-makers to meet and interact, and more than 50 high-impact initiatives were launched at the event.

FAQs : 

  1. What is WEF?

ANS.

  • Headquartered in Geneva, Switzerland, WEF is an international not-for-profit organization, focused on bringing the public and private sectors together to address the global political, social, and economic issues.
  • It was founded in 1971 by Swiss-German economist and Professor Klaus Schwab in a bid to promote global cooperation on these most pressing problems.
  • The first meeting of WEF was held more than five decades ago in Davos, which has been the home of the annual gathering almost ever since, also becoming the shorthand for the event.
  1. What are key takeaways from WEF?

ANS. 

  • Positive outlook for economy: Most business leaders were upbeat about the economy, with the US and the European Union (EU) seemingly beyond the risk of a recession now. China ending its zero Covid curbs and opening shop again added to the positive outlook.
  • Caution from central banks: Central banks of the major economies cautioned that concerns still remained, and said they would keep interest rates high to ensure inflation is under check. For example, Stay the course is my mantra, the European Central Bank President quoted. The US Federal Reserve Vice Chair Lael Brainard was quoted as reminding investors that “inflation remains high, and policy will need to be sufficiently restrictive for some time.
  • Potential impact on energy prices: Many also pointed out that China opening up could mean a rise in its energy consumption, thereby driving up energy prices.