Widening geopolitical rift

“The return of war, epidemics, and the climate crisis: all these disruptive forces have derailed the global recovery,” according to Professor Klaus Schwab in his opening remarks at the start of the 2022 World Economic Forum (WEF) in Davos, Switzerland.

Schwab, WEF founder, has for half a century been bringing together key global political and business leaders to discuss and find solutions to some of the world’s most urgent problems, including inflation, food security, and rising poverty numbers.

During the WEF’s last meeting before the coronavirus pandemic, the topics that took center stage were climate crisis and the forthcoming new industrial revolution, including the rise of artificial intelligence. During this year’s meeting, Ukraine top bills the agenda, with Ukrainian President Volodymyr Zelenskiy addressing the summit virtually from Kyiv.

The Russian invasion of Ukraine has played a huge role in the disruption and devastation of many aspects of the global economy, and Schwab’s WEF has made its position of dismay over Russia’s actions quite clearly by not inviting any from Russia to the Davos meeting this year.

In previous years, Russia had a sizeable delegation to the WEF meetings made up of its top officials, influential bankers, and even prominent economic scholars. The parties that they hosted were considered glitzy and lavish by any standard of this famous ski resort city.

Historical turning point

The WEF stands solid in its support for stakeholder capitalism, and consequently disdains the disruption caused by Russia’s aggression on Ukraine, and potentially to other parts of Europe based on Russian President Vladimir Putin’s previous pronouncement of restoring the Russian Empire’s historical reach.

Russia’s actuations are now seen as a threat against the capitalist ideology that the rest of the Western world upholds, and which could signal the start of a breakdown of the post-World War II and post-Cold War order.

“In Davos, our solidarity is foremost with the people suffering from the atrocities of this war,” stated Schwab, adding that, “We will do whatever we can in Davos to support Ukraine, its people, and its recovery. And the World Economic Forum hopes that – one day – the space for bridge building emerges once again.”

Ideological war

Schwab, the WEF, and all the democracies of the world are fighting for the survival of an economic world order that believes in a balanced working relationship between private entities and governments to bring about inclusive growth for all people.

Unfortunately, this runs counter to the autocratic governance that Russia and China believe in, and which has now become a more popular idea for a growing number of sympathetic right-leaning governments, the Philippines included.

An unholy alliance of Russia and China poses an undeniable threat on Europe and the United States, both of which are now reassessing their strengths on the global stage, not only from a political or ideological standpoint, but also economically and militarily.

Russia and China have demonstrated that under a strong state capitalist doctrine, they are able to amass economic power that benefits their citizens, while providing the extra resources to beef up their technological capabilities for the forthcoming industrial era – and, in addition, in the development of war weapons.

Truly, the threat of a third world war, one that draws a line on ideological beliefs, has never been too real.

Capitalism with a heart

Schwab’s stakeholder capitalism echoes many of Western multilateral agencies’ concerns: “Our global economy is out of balance. There is too much debt, too much inflation, too much inequality, and not enough growth.”

For WEF 2022, over the course of the five-day summit in Davos ending on May 26, establishing a stronger public-private partnership will be crucial to building stronger global and regional cooperation, responding to initiatives supporting climate preservation, developing new economic and social policies, accelerating responsible environment, social, and governance industry transformation, and using disruptive technologies for the benefit of society.

Over 400 sessions are expected to enlighten the WEF participants and to encourage them to come up with new insights supporting decision-making. Other issues that are forefront during the summit include resilience building in the event of another pandemic or life-threatening crisis, food security especially for those hardest hit by the Russia-Ukraine conflict, and the pressing importance of protecting nature and climate.

Walking the talk

For all the altruism that Davos spouts, its relevance and germaneness are under growing scrutiny in the face of an outburst of wealth in the hands of the world’s few elite.

A report by Oxfam published in January showed that the world’s billionaires added $5 trillion to their assets during the pandemic, while hundreds of million more people around the world were pushed into extreme poverty, initially because of the lockdowns, and more recently because of the Ukrainian-Russian conflict.

A small group of millionaires, who tag themselves as patriotic, have been critical of what they deemed is an underlying apathy masking the enthusiasm of those attending Davos. If WEF members are seriously concerned about the world, they should do more than attend the summit, according to these millionaires.

Governments should do more, including radically hiking taxes on the rich, to bridge the growing gap between the rich and the poor. This way, governments in developed economies will be able to bring much needed help to people in developing economies.

Something more substantial must be done to address the fundamental impacts of war and climate change in the immediate future, lest more people think of and treat Davos as irrelevant and of no consequence.

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