This is a wrap of our Davos coverage. Scroll down for detailed reaction from key figures and read our take on the four big issues at the World Economic Forum (WEF) this year. Use TALK or EDIT to add to it.
DAVOS, Switzerland: President Donald J. Trump tried to reassure global political and business leaders that his “America First” agenda did not mean America alone. He said the entire world would grow thanks to his tax cuts and deregulation agenda at home.
‘When the United States grows so does the world’ – Trump
In the first speech by a U.S. president to the WEF in nearly 20 years, Trump put a new spin on the old truism that “what’s good for the country is good for General Motors…” saying that he believed the strength of the U.S. economy since his election was spreading to the rest of the world.
“America first does not mean America alone. When the United States grows so does the world,” Trump told assembled politicians, business leaders, and academics, with many of his most senior cabinet members in the front row, from Secretary of State Rex Tillerson to Treasury Secretary Steve Mnuchin.
In what was unmistakably the speech of a real estate mogul-turned politician, Trump declared there’s “never been a better time to hire, to build, to invest, and to grow in the United States.”
‘It was all about greed, money’ – economist, Joseph Stiglitz
Trump talked tough on trade saying the United States wouldn’t tolerate theft of intellectual property or multilateral trade deals that weren’t to its advantage. He said his country was diversifying its energy sources, increasing self-reliance, and cutting regulation imposed in the past by “unelected bureaucrats.”
‘He is really shaking things up’ – one business leader
He said he wanted to “de-nuke” the Korean peninsula and urged the world to be tougher on Iran. He hailed progress in pushing back Islamic State in Iraq and said the U.S. remained committed to Afghanistan.
Reaction to the speech in the hall was muted and there was no previously rumored mass walk-out, with the only protest seen being an American woman in a “Not My President” T-shirt. One global business leader, who didn’t want to be identified, told WikiTribune: “I loved it, I am a fan … He is really shaking things up.”
Joseph Stiglitz, Nobel Prize winner, former World Bank chief economist, and advisor to President Clinton, was appalled, telling WikiTribune: “It was not the kind of speech you expect of the leader of the free world. It was the kind of speech that you might have expected from a second-rate country trying to sell their country to a bunch of businessmen … It was all about greed, money.”
Speaking to a group of true believers in globalism, multilateral action, and the institutions – including the WEF – that have sustained that post-World War Two order, Trump said he would always act with the interests of Americans in mind and “listening to the voices of the forgotten.”
“I am here today to represent the interests of the American people and to affirm America’s friendship and partnership in building a better world,” he said in a speech which ended with respectful applause.
David Gergen, a veteran of the Nixon, Ford, Reagan, and Clinton administrations, told WikiTribune said it was clear Trump was on a different track to the other world leaders at Davos: “He doesn’t believe in the Washington Consensus, he wants to get rid of it.”
Despite his emollient, almost solemn, delivery, Trump couldn’t resist the chance to take a swipe at the media when WEF founder Klaus Schwab asked him what lessons he had brought to the White House from his life as a businessman. After saying he was a “great businessman,” Trump returned to a theme that has marked his first year in power and the hard-fought campaign – attacking the news media.
“As a business person I was treated well by the press … I’ve always had a good press. It wasn’t until I became a politician that I realized how nasty, how mean, how vicious, and how fake the press can be,” he said, noting – incorrectly, that the cameras were being turned off at that moment. There were then boos from the crowd but, as CNN reported, it wasn’t clear if they were aimed at him or the media.
Other key points, not already addressed earlier in this story, in the order he delivered them:
- “Regulation is stealth taxation.”
- “America is the place to do business, so come to America where you can innovate, create and build. I believe in America.”
- “America is roaring back and now is the time to invest in the future of America.”
- Tax cuts have become “a beautiful waterfall.”
- “We cannot have free and open trade if some countries exploit the system at the expense of others. We support free trade, but it needs to be fair and it needs to be reciprocal.”
- “America is a cutting edge economy but our immigration system is stuck in the past. We need a merit-based system of admissions, those who can support themselves financially.”
- “There’s a spirit in the U.S. that I have never witnessed before. I want to thank all of those who are pouring billions of dollars – or 10 dollars – into our country.”
- Stock market would have been 50 percent down, not 50 percent up if the Democrats had won, he said.
More reactions to the Trump speech in Davos in detail:
Joseph Stiglitz, Nobel Prize-winning economist, former chief economist of the World Bank and economics adviser to President Clinton:
“It was not the kind of speech you expect of the leader of the free world. It was the kind of speech that you might have expected from a second-rate country trying to sell their country to a bunch of businessmen. There was no vision, there was no mission except ‘America’s open for business.’ My understanding though of some of the responses was that he did say what a lot of businessmen wanted to hear.”
“The fundamental point is that there was no sense of vision of what the world was going to be in five, 10 or 15 years. It was all about greed, money.”
On the attacks on the media, Stiglitz said: “The true Trump came out.”
Parag Khanna, an Indian-American global affairs commentator, senior fellow at the Le Kuan Yew School at the National University of Singapore, and a veteran of more than a dozen Davos events:
“It was probably in the end received positively because a non-negative experience counts as a positive with Trump … You are here to sell your country … If you’re a businessperson you’re saying ‘Hey, wait a minute this guy is really serious about the tax reform, he got it through … well maybe there is this tide and momentum I want to get on the back of.'”
On the unscripted attack on the media, Khanna said: “That was the real him coming out, revealing his true colors.”
The (non-American) head of a major international resources company who declined to be identified by name:
“I loved it, I am a fan. You don’t want to be heard saying it too loudly here. He is really shaking things up.”
Gene Sperling, who shaped economic policy in the administrations of Presidents Clinton and Obama:
“I am not one who shares in the view of having such low expectations that would allow me to think much of that talk. I think when you are at home using profanity to describe the homelands of countries around the world, when as you are speaking your White House staff is taking a very nationalist and hardline and cruel immigration stance, I don’t think a few nice words in a speech are going to affect your global perception.
“I think it’s sad that people do not think the President of the United States really wants to cooperate and work with the rest of the world on climate change or other issues.”
On the positive reception among businesses in Davos to the tax cuts, he said: “There was a huge transfer of wealth of borrowing significant amount of money that the American people have to pay back and transferring it to most of our major companies so it’s not surprising that they’re well off.”
David Gergen, a veteran of the Nixon, Ford, Reagan and Clinton administrations and director of the Harvard Center for Public Leadership: “I don’t think he changed any minds about who he is, personally and the dark sides of his personality. I do think he has won friends in the economic community, especially in business here in Europe. The atmosphere here is markedly different from the atmosphere in the United States. There is so much opposition to him among the chattering classes. There’s apprehension we can see most clearly in the UK.
“I don’t think he reached the general public very well in this but I do think he reached the business community. I bet he will find there are some European countries who will invest in the United States, especially in the infrastructure area he wants to push this year because they think he will do that more favorably.”
Gergen said it was clear Trump was on a different track to the other world leaders at Davos: “He doesn’t believe in the Washington Consensus, he wants to get rid of it. What is so striking is the difference in the conversation between Europe and America at the elite levels or at least at the business levels. Here we heard, I thought (French President Emmanuel) Macron who got a standing ovation here … and (Canadian Prime Minister Justin) Trudeau and (German Chancellor Angela) Merkel represent a very different concept of how the world should work. He rejects that. I thought he softened his tone today but it wasn’t a softening of his position.”
We did a Facebook Live video on this story and Joseph Stiglitz joined spontaneously – at minute 23. [We would have also interviewed someone on the right of politics had they walked up to my desk.]
Four big messages from Davos:
1. Donald – don’t forget the rest of the world
Almost every world leader has tailored their speeches to be heard in the Oval Office as much as in Davos: global problems need global solutions, so don’t turn your back on the post-war Washington Consensus. This takes in the U.S. withdrawal from the Paris climate accords, criticism of the United Nations, the need to support the IMF and World Bank, and to maintain U.S. leadership for democracy, free speech, and the development of emerging nations – not unilateral or impetuous actions.
“This generation that was born after the Second World War have to prove that we have truly learned the lessons,” German Chancellor Angela Merkel told the forum echoing the message from many others.
2. Inequality is dangerous and feeds populism
World leaders and some of the most powerful businesspeople warned that strong global economic growth was not being shared with the poor or even with the workers of the most successful companies. They warned that the failure to heed the lessons of the 2008 global financial crisis and to tackle growing inequality was being reflected in the rise of populism and a loss of faith in politics and the media.
“We must ensure that the benefits are shared with all of our citizens and not just the few,” Canadian Prime Minister Justin Trudeau told the WEF. He accused corporations of rewarding executives and shareholders while avoiding tax and cutting benefits for staff: “That approach can’t and won’t cut it any more.”
Larry Fink, chairman and chief executive of the world’s largest asset owner BlackRock Inc. used his pulpit in Davos to drive forward a controversial message that his fellow CEOs had to do more to spread the economic benefits of their growth and to promote financial inclusion (CNBC) or risk a backlash.
“Companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate,” Fink said in an open letter (DW.com) released just ahead of Davos.
3. Blockchain is here to stay; bitcoin is being watched
If 2018 is the year of Trump at Davos it is also the year the blockchain technology that underpins bitcoin and the global cryptocurrencies book made it to the top table of the global elite.
Dozens of sessions were devoted to the potentially revolutionary impact of blockchain in achieving secure, exchangeable digital records on everything from land records to meat to financial transactions, and more. Blockchain promoters were as prominent as the world’s biggest corporations with publicity pavilions and hospitality. They could scarcely cope with the demand to know more.
Cryptocurrencies were more the subject of concern despite glitzy promotions for the latest digital currency or initial coin offering. Davos was where the global regulators finally said ‘standby for being regulated’ – if it looks like a security, acts like security, and people invest in it like a security, then it probably is a security.
“We do not want them to get too big and too widely traded in China,” Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, told a session titled “The Next Financial Crisis.”
4. Where are the women?
The World Economic Forum has taken pride in the fact that a record 21 percent of the 3,000-odd delegates to Davos this year are women – up from 17 percent three years ago. It also had a forum committee entirely composed of women to organize this year’s event – including the ultimate “Davos Woman,” IMF managing director and former French minister Christine Lagarde.
The agenda has an amusing and instructive story from the Norway’s Erna Solberg: “Even the Prime Minister of Norway has been mansplained to.” Pop-up booths promote the role of women in corporations and the importance of education of women in global development.
“If girls are not part of your plan then you are missing out on the greatest untapped resource,” Pakistani female education campaigner Malala Yousafzai, treated like a rock star by the Davos crowd, told guests at a party promoting the UN’s 17 Global Goals for sustainable development.
There were conference sessions on women in work, barriers, and the #MeToo movement but it’s clear that Davos has to do more. As one delegate said: “It’s lazy. The low numbers of women may reflect politics and the finance industry but they most go faster.”
Canadian Prime Minister Justin Trudeau told the Davos crowd they could not ignore the women’s marches after Trump’s election, the #MeToo movement, or #TimesUp: “We must take them seriously. As women speak up it is our responsibility to listen.”
Earlier reporting – Trump, IMF, go-it-alone
In the address to the World Economic Forum (WEF), Trump had been expected to deliver a strong message that he will act first and foremost in the interests of the United States. However, the indications are that he will also say that his tax cutting and deregulatory agenda at home is already actually benefiting the very people he’s speaking to from around the world.
“A lot of people are coming back to the United States. We are seeing tremendous investment and today has been a very exciting day. Very great day and great for our country. Thank you very much,” Trump told reporters as he arrived in the Swiss ski resort of Davos on Thursday.
The International Monetary Fund (IMF) opened the WEF event by raising its forecasts of global economic growth to 3.9 percent this year and next partly driven by the impact of tax cuts by Trump which have accelerated investment decisions and driven stock markets sharply higher. Businesspeople from the United States at Davos have also hailed the reduced taxes which led Apple and others to work on repatriating hundreds of billions of dollars of profits held overseas to avoid U.S. taxes.
Speaking in Washington just before he left for Switzerland, Trump’s economic advisor Gary Cohn said: “America first is not America alone. When we grow, the world grows; when the world grows, we grow. We’re part of it, and we’re part of a world economy. And the president believes that.”
At the same time, the “America First” concept and market-moving words related to it still have the capacity to jolt the world leaders at Davos. Treasury Secretary Steve Mnuchin triggered a fall in the dollar two days ago with remarks suggesting he favored a weaker dollar to benefit U.S. exporters. Trump reversed course on that the next day (CNBC). That prompted confusion and fear among world central bankers of competitive currency strategies.
It is that sort of “go-it-alone” strategy on a range of issues that most concerns the political leaders at Davos. Almost all national leaders have used their speeches to send a clear message to Trump that he should not destroy the post-World War Two consensus that they say has delivered seven decades of relative security and growing global prosperity. They now wait to see quite how big a rhetorical stone he will throw in that pond.
Go here for all of WikiTribune’s coverage of Davos
Please “ask me anything” in the TALK section on this story. You need to be a registered user. Register here.
Thursday: Big business, Netanyahu, Soros
DAVOS, Switzerland, Thursday: Donald J. Trump helicoptered into Davos on Thursday, arriving to a crowd of hundreds of delegates who took photos of the first sitting U.S. president since Bill Clinton to visit the World Economic Forum.
Trump met the prime ministers of Britain and Israel, before hosting a dinner with leaders of some of the world’s largest corporations, including Nestle, SAP and Siemens, Deloitte and Bayer.
“A lot of people are coming back to the United States. We are seeing tremendous investment and today has been a very exciting day. Very great day and great for our country. Thank you very much,” Trump told reporters in Davos.
He also threatened to withdraw Palestinian aid after meeting with Israel’s Prime Minister Benjamin Netanyahu. It was the first time the pair had met since Trump announced the U.S. would recognize Jerusalem as Israel’s capital and move the U.S. embassy there. Palestinians were outraged and refused to meet with Vice President Mike Pence during his recent visit to the Middle East.
“They disrespected us a week ago by not allowing our great vice president to see them and we give them hundred of millions of dollars in aid and support,” Trump told CNBC. “That money is not going to them unless they sit down and negotiate peace.”
It is the first time that Trump has been invited to Davos and seemed to indicate a thaw in the relationship with global business leaders.
Goldman Sachs chief executive Lloyd Blankfein and JPMorgan Chase chief executive Jamie Dimon have been highly critical (CNBC) of the president for pulling out of the Paris climate accord and making racially charged remarks after a white supremacist rally in Charlottesville (CNBC).
However at Davos, their opinions appeared to have mellowed on the back of Trump’s $1.5 trillion tax bill (Bloomberg) and more relaxed business regulations.
“I like a lot more stuff than I don’t like,” Blankfein said of Trump’s policies at a Davos session hosted by CNBC.
Dimon said Trump’s policies would drive an economic boom (Washington Post).
When Trump was asked by a journalist whether he thought he would be received well, he responded, “I already am.”
The United States has grown at an annual rate above three percent for the past two quarters and most forecasters, including the International Monetary Fund, predict a bump in growth in 2018 (Washington Post) from the tax bill.
Trump is due to address the forum on Friday and White House aides said his message would be that United States wants strong ties with its allies but is also determined to reduce its chronic trade deficits with many of them.
Trump earlier tweeted that the message he is taking is “our country is finally WINNING again!”
Delegates to the World Economic Forum (WEF) have been in a strange limbo in the Swiss ski town this week, waiting for tweets from the president or any insight into his attitude towards the leaders of business, politics, and academia who gather each year to discuss big ideas – “improving the state of the world.”
“No one knows whether he is going to embrace us or piss all over everything we stand for,” one delegate told WikiTribune in an aside she asked to be unattributable. The controversy over Trump’s “shithouse” or “shithole” scatological description of Haiti and apparently the continent of Africa is fresh in the minds of Davos attendees who see themselves as champions of the downtrodden.
George Soros, the billionaire hedge fund manager and philanthropist who also supported Hillary Clinton’s campaign, accused Trump of being a “danger to the world” (CNBC). Speaking in Davos he said Trump played with the risk of a nuclear confrontation with North Korea and wanted a “mafia state” at home.
Trump’s former strategic adviser and campaign manager Steve Bannon has often portrayed what he called the “Davos Party” (Breitbart) as a collection of globalists with their own agenda that isn’t in the interest of the ordinary Americans who brought Trump to power. With Bannon fired from the White House and in apparent disgrace for his unguarded comments to an author, Trump is now in the epicenter of globalism.
His warm-up man, Treasury Secretary Steve Mnuchin, said Trump was coming with an open mind but wanted deals to be “reciprocal” and not against American interests. The president, he said, would “talk a lot about his economic program and the impact on the global economy.”
Economists and businesspeople, the International Monetary Fund (IMF), and the WEF itself have all said recent corporate tax cuts in the United States are feeding through to a buoyant and relatively benign picture for global economic growth. At the same time they – and leaders such as France’s Emmanuel Macron and Angela Merkel of Germany – have said they fear a “race to the bottom” on taxes and regulation.
Will soon be heading to Davos, Switzerland, to tell the world how great America is and is doing. Our economy is now booming and with all I am doing, will only get better…Our country is finally WINNING again!
With around 1,000 American business leaders and other representatives at the event – many of them among the wealthiest and most powerful people in the world, including the CEOs of most big U.S. banks and internet corporations – Trump may feel somewhat at home in the luxury resort, despite the wall-of-steel security perimeter which almost starts far away in Zurich.
“He will love hanging out with the billionaires,” said another WEF delegate who asked not to be identified. (Everyone at Davos wants to be invited back another year and few business leaders will go on record criticizing the president of the world’s largest economy.)
Some of Trump’s advance guard can already be seen walking the ice-covered streets of Davos with their scarlet “Make America Great Again” caps: quite noticeable among the fur hats of other delegates.
Speaking in Washington just before he left for Switzerland, Trump’s economic advisor Gary Cohn said: “America first is not America alone. When we grow, the world grows; when the world grows, we grow. We’re part of it, and we’re part of a world economy. And the president believes that.”
British Prime Minister Theresa May – the first foreign leader to visit Trump in Washington after his election – didn’t quite say “Britain First” in her address but laid out the welcome mat for the technology leaders represented at Davos from Google to Microsoft and Facebook, and China’s Tencent and Alibaba.
“We’re absolutely determined to make our country the place to come and set up for the future of artificial intelligence (AI),” she said. Google earlier announced at Davos that it is building an AI center in France. More coverage on May’s speech on WikiTribune.
Trump lavished praise on May in a news conference, trying to put aside a fracas earlier this month about his cancelling a recent visit to London: “The prime minister and myself have had a really great relationship, although some people don’t necessarily believe that, but I can tell you, I have a tremendous respect for the prime minister and the job she’s doing.”
Other developments in the Trump visit included a meeting with Israel’s Prime Minister Benjamin Netanyahu, after the President threatened to cut aid to the Palestinian Authority if it didn’t pursue talks with Israel. He also accused Palestinian leaders of snubbing Vice President Mike Pence (Reuters).
He also told a CNBC interviewer from Davos that the United States could reconsider joining a trans-Pacific trade deal signed this week by a dozen other countries if it “made a much better deal than we had. We had a horrible deal.” (Reuters)
Wednesday: Merkel, Macron, Mnuchin
A child of the communist era in postwar East Germany, German Chancellor Angela Merkel told world leaders they had to show they understood the lessons of the Second World War and act together to deal with the complex challenges facing the modern world. She warned against a slide into nationalism.
In a vigorous defense of the entire concept of multilateralism, which is at the core of the European Union and the World Economic Form (WEF) she was addressing in Davos, Merkel set the ground for Friday’s speech by U.S. President Donald J. Trump, whose “America First” message has the global elite on edge.
“This generation that was born after the Second World War have to prove that we have truly learned the lessons,” said the 63-year-old Merkel. Trump is 71. Chinese President Xi Jinping is 64. French President Emmanuel Macron, who also addressed the WEF, is 40.
“We have to seek multilateral answers and not a unilateralist protectionist course,” Merkel said.
Merkel also said she regretted Brexit, felt Germany had to do more to build a digital economy, and warned major U.S. internet companies that they would not be permitted to be the sole controllers of public data. More on Merkel’s speech here.
French President Emmanuel Macron struck an equally vigorous tone in his support of the multilateral approach typical in the European Union, but seemingly anathema to Trump: “To live in a totally Darwinian world is not good and certainly it is not good for our populations.” More on Macron’s speech here.
Macron also made the best joke of the day, setting the scene for the economic reform he promises in France: “I often say in France it is forbidden to fail and forbidden to succeed.”
Earlier, U.S. Treasury Secretary Steve Mnuchin said Trump will promote the benefits of “reciprocal” trade deals and the benefits for the world economy of his tax cutting and deregulation at home.
Acting as warmup men for Trump’s much-awaited address on Friday, Mnuchin and Trade Secretary Wilbur Ross strongly defended Trump’s “America First” agenda, saying that a strong U.S. economy was good for the rest of the world.
Mnuchin said Trump will “talk a lot about his economic program and the impact on the global economy.”
“What we know is that the economy that’s good for the U.S. is good for the rest of the world,” Mnuchin told a news conference in Davos, where nearly 3,000 businesspeople, politicians, media, and NGO leaders are meeting under the WEF’s globalist agenda: “Committed to Improving the State of the World.”
Trump, Mnuchin said, favored bilateral and truly “reciprocal” trade. He spoke after Canadian Prime Minister Justin Trudeau hailed the signing of a trans-Pacific trade deal with a dozen nations – but without the United States.
“Protections are essential to having markets operate properly, to have everyone play by the rules,” Ross said.
Asked if recently announced U.S. tariffs on imports from China and other countries risked a trade war, Ross said: “Trade wars are fought every single day. Unfortunately every single day there are various parties violating the rules and taking advantage. There have always been trade wars: the difference now is U.S. troops are now coming to the ramparts.” Link to fuller transcript from the WEF.
Our curated suggestions of the best coverage elsewhere on Davos:
- The New Yorker “Trump in the world that he insults”
“This is what might be called the Davos dilemma: countries may scorn Donald Trump, but they are not quite ready to dismiss the President of the United States.”
- Financial Times deputy editor Roula Khalaf on “Reasons why Donald Trump decided to take the Davos stage” (may be behind a paywall).
“Barack Obama never went to Davos, which means it must be the right place for Mr. Trump to make an appearance. Second, the president is a man who believes above all in his own greatness and wants to dominate the stage left last year to Chinese leader Xi Jinping, and this year to Mr. Macron.”
- Breitbart “Irony Alert: A Thousand Private Jets Deliver Globalist Elite to Davos for Climate Change Summit”
- Bloomberg has significant coverage of Davos including news from Uber’s CEO that he expects the company to be profitable within three years.
- Trump calls the tune at Davos party. Gideon Rachman in the Financial Times (may be behind a paywall): “The idea of elite-driven globalization, however, is much more contested than it was a decade ago. President Trump’s speech may well give a strong signal about whether the Davos era may be coming to a close.”
- Reuters News Agency offers comprehensive coverage of Davos with particular strength on business, economics, and the political developments from more than just the first-tier countries.
- Why Trump is going to Davos.
Ian Bremmer of the Eurasia Group think tank on CNNMoney: “If Steve Bannon were still employed at 1600 Pennsylvania Avenue (or even at Breitbart), President Trump would not be heading to Davos.”
- The New Yorker “Trump in the world that he insults”
Tuesday – Modi, Trudeau and Cate Blanchett
The prime ministers of India and Canada delivered a defense of globalization in the spiritual home of the concept before the arrival of President Donald J. Trump, whose protectionist rhetoric and “America First” approach hang over the gathering of global elite in Davos, Switzerland.
“All the world is one family,” Indian Prime Minister Narendra Modi said in his address, covered fully here.
“We must ensure that the benefits are shared with all of our citizens and not just the few,” Canadian Prime Minister Justin Trudeau said of a major new trans-Pacific trade deal signed between Canada, Japan, and 10 other Asia-Pacific states. The pact, signed shortly before Trudeau spoke, conspicuously omits the United States, which withdrew from the Trans-Pacific Partnership in January 2017, shortly after Trump took office. Enlarged coverage of Trudeau here.
Trump is due to speak at the WEF on Friday. He’ll be the first U.S. president to do so since Bill Clinton in 2000. The U.S. president clearly looms over the thoughts and carefully coded speeches of the nearly 3,000 politicians, business leaders, and their retinues at the conference. Delegates can only guess if he’ll come to condemn them as the “Davos Party,” or to offer some form of partnership to repair his international image.
“What (Trump) wants to … convey is that he is not this ogre that he has been portrayed [as] … I don’t think he is coming to castigate [but to say] ‘I can work with you but you have got to work on somewhat different terms,'” influential U.S. businessman David Rubenstein, co-founder of global private equity and investment firm The Carlyle Group, told a panel discussion.
India took center stage on Tuesday with Prime Minister Narendra Modi expected to put new impetus behind his “Make In India” project. Modi hopes to follow China’s example in seeing India become the workshop of the world while lifting large sections of the country’s billion-strong population into middle-income status.
Modi follows Chinese president Xi Jinping as keynote speaker and has a lot to live up to. Xi’s speech last year, presented a few weeks after the election of a populist American president on an “America First” platform, was a spirited defense of the ideas of free trade and free movement of capital worshipped by the globalists at Davos.
India is strongly represented on a national level at this year’s gathering of political, business, and academic leaders. But it’s also promoting Indian states such as Andhra Pradesh, as well as the huge multinational manufacturing, technology, and outsourcing firms, such as Tata and Infosys, that drove a boom in investment in the 2000s.
“We are removing red tape and laying the red carpet,” Modi said.
“India has been booming at a higher growth rate than China in recent years and Modi has done a great job in bringing in capital,” Rubenstein told a panel on the “next” financial crisis (WEF video here).
Prospects for economic growth were a focus on the first full day of the WEF summit, a day after the International Monetary Fund (IMF) raised its forecasts for growth for last year, this year, and next year. Economists and business leaders are looking at risks to growth, which could be sparked by an isolationist United States, a debt crisis in China, or a likely rise in global interest rates through 2018.
Despite the apparently positive forecast, leading economists also see risks in the rise of global asset prices, financial stability in China, and growing inequality. Kenneth Rogoff, Harvard professor of economics and the author of “This Time is Different” – an analysis of financial crashes – told a panel the world had to remain vigilant: “I don’t know how everything from art to bitcoin to stock prices will react as interest rates go up.”
Trudeau made an impassioned defense of free trade while being deeply engaged in a renegotiation (CTV) of the North American Free Trade Agreement (NAFTA) with the United States and Mexico.
Speaking to nearly 1,000 of the world’s most powerful and wealthiest individuals, politicians, and business people, Trudeau said the audience was “immensely privileged” and warned they had to do more with the responsibilities that come with that privilege: “It is well past time … you need to give back.”
Australian actor Cate Blanchett was honored for her work as a goodwill ambassador for the United Nations High Commissioner for Refugees.
Donald Trump, whose populist policies, threats against free trade, and market-moving Twitter feed discombobulate the entire Davos set, is scheduled to speak on Friday. Rubenstein said Trump’s unpredictability means he could come to “castigate” the globalists at Davos, or say he’s been misunderstood and attempt to reach out to them: “I don’t know which message he is going to bring.”
Our earlier coverage: Growth, China, blockchain
World political, business, academic, and media leaders are gathering in the Swiss ski town of Davos for the World Economic Forum – the epicenter of the globalist movement which believes in government and business cooperation across borders to address what they see as “shared problems.”
That worldview is about to go head to head with the more populist “America First” thinking espoused by President Donald J. Trump who is due in Davos later this week, the first and perhaps least likely U.S. president to attend since Bill Clinton in 2000.
Against that background the most “Davos” of organizations – the International Monetary Fund (IMF) – raised its forecast for global economic growth this year and next.
“Global growth has been accelerating since 2016 and all signs point to a continuous strengthening of that growth this year and next year in 2019,” Christine Lagarde, managing director of the IMF, told a news conference in Davos. She warned there were risks ahead as well and called on world leaders to tackle debt and difficult problems from inequality to climate change while they had the advantage of growth.
Releasing its 2018 World Economic Outlook, the IMF said growth in 2017 was 3.7 percent – up 0.1 percent from what was forecast last fall and half a percentage point higher than 2016. It raised forecasts for 2018 and 2019 by 0.2 percent to 3.9 percent. See the full IMF report. The IMF attributed the forecast strength in part to the economic impact of tax cuts in the United States and robust world trade and growth in China.
We’ve launched a WikiProject on the IMF report if you’d like to expand on it.
The IMF’s Lagarde and its Chief Economist Maurice Obstfeld focused on inequality and risks to the outlook for growth from political dissatisfaction: code for the rise of populism across the world. Obstfeld noted that the “fruits of growth have been quite unequally distributed” – a theme that will only enlarge at Davos.
On two key elements at Davos, Obstfeld said in response to questions:
– China: “We see China as a strong driver of global growth going forward.”
– Asked about bitcoin, he preferred to discuss the underlying blockchain ledger: “We don’t like to comment on specific cryptocurrencies (but) on blockchain technology in general we see possible advantages in terms of efficiency of payment systems and inclusion …We also see cryptocurrencies could also offer risks and it’s important for regulators to be watching carefully.”
Davos founder warns on isolationism
“No issue can be solved in an isolated way,” WEF founder Klaus Schwab said ahead of the arrival of guests. For someone not given to hyperbole he also used strong language to address the challenges faced by the rise of populism, isolationist tendencies, and inequality which challenge his treasured vision of “improving the state of the world.”
“There is today a real danger of a collapse of our global systems,” he said (YouTube).
Schwab almost invented the concept of “stakeholders” – thinking beyond leaders and owners to include those affected by, or with a stake in politics and business decisions. Davos on Monday was a mini-global village with nation states like Ukraine literally setting out their investment stalls, security search group Palantir opening its pavilion, and this year several blockchain groups promoting their methods alongside the traditional banks, insurance companies, and outsourcing groups like India’s Tata and Infosys.
‘The United States is enduring an unprecedented crisis of trust’ – Richard Edelman
Trust – whether it be in government, corporations, or the media – is at the center of the thinking of many at Davos. If you don’t place “trust” in the ideas behind globalism – multilateralism, freedom of information, free movement of capital and people – then there’s a sense you slide into populism: hence the “Trump factor.”
A steady decline in trust in key institutions of government, media, and other institutions was evident in the latest “Trust Barometer” released by international public relations firm and Davos stalwart Edelman. It found that confidence in American institutions – including media – had fallen sharply since the Trump election while Chinese people felt far more trusting in their institutions. Media organizations and the social media platforms like Facebook are strongly represented in Davos.
“The United States is enduring an unprecedented crisis of trust,” said Richard Edelman, head of the communications marketing firm that commissioned the research (Reuters).
Trump is expected to fly into the Alpine resort late in the week – overshadowing two other emerging world leaders he couldn’t be less like: France’s magnetic and fastidious President Emmanuel Macron and India’s Narendra Modi who at least “gets” populism with his history of hardline-Hindu nationalism.
Despite his wealth, Trump is an outlier in this group of what the British would call “the great and the good.” It’s the natural home of the sort of urbane, multi-lingual, global traveler who Trump’s rough-hewn former campaign chief and White House strategy director Steve Bannon called “the party of Davos.” (Breitbart)
On the little red Swiss railways train from Zurich up to the mountains, a friendly Indian businessman adapted one of the tropes about Davos which has a ring of truth about it: “Someone once described it as billionaires telling millionaires how the middle classes should live.”
Given that Trump is now dealing with the shutdown of almost the entire U.S. government – which he’s blamed on Democratic politicians despite his Republican Party controlling both houses – it’s possible his trip to Davos could be cancelled. The presence of a U.S. Air Force C141 “Starlifter” at Zurich airport, which I assumed to be an early part of the entourage, suggested preparations are going ahead.
Of the national political leaders Trump, Macron and Modi are the leaders of the moment. They follow China’s Xi Jinping who was the star turn last year. In an unusually groundbreaking speech Xi, speaking just before Trump’s inauguration, portrayed China as a leader in free trade and the forces behind the very globalization which had made China rich and led Trump to threaten a trade war. (Bloomberg)
“Countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others,” Xi said in a surprisingly direct rejection of the “America First” rhetoric which drove Trump’s campaign and which has been evident in decisions as president since.
The Xi speech could almost have come from the mouth of Schwab, the founder of the Davos event and the World Economic Forum. Schwab said he was still expecting Trump to come despite the shutdown and heavy snow and low visibility in Davos itself.
Schwab is a child of post-World War Two Germany, who embodies that national determination to embrace multi-lateral methods to solve problems and viscerally reject populism. He founded the WEF to promote discussion on major global issues spanning governments, big business, and non-governmental organizations – on the basis that all were common “stakeholders” (The Guardian). The Davos conference has provided a “neutral ground” over the years for progress in the Balkans, South Africa, on the Israel-Palestine question as well as in business and philanthropy.
George Soros is perhaps the ultimate “Davos Man” – a billionaire hedge fund manager, political donor, commentator on global affairs and philanthropist who has invested billions in promoting civil society, free speech, and democratic principles, particularly in Eastern Europe, including his native Hungary. He is on the list of attendees while the Prime Minister of Hungary Viktor Orban – who has run a vicious campaign at home against Soros – is apparently not due to attend.
Trump is a clear challenge to the globalist ethos of Davos: the idea that cooperation between governments, business, and academia can help solve shared problems, even spread democracy and increase global wealth or counter global inequality. Historically, that was the essence of the “Washington Consensus” which underpinned western economic theory in the post-war era: a consensus Trump’s “America First” message confronts. This week will test how the Davos Consensus stands up to America First.
What’s Davos about?
The World Economic Forum (WEF), usually referred to simply as “Davos” for the name of its annual winter meeting place in the Swiss Alpine resort of Davos-Klosters, embodies the phenomenon of globalization (free trade, universal human rights, free movement of people, ideas, and technology) as an answer to seemingly intractable global problems.
This year’s WEF comes face to face with one of its greatest challenges – or challengers – in the form of U.S. President Donald J. Trump, flag-bearer of the populist political movement that took power in the United States after the 2016 presidential elections.
With its message of “America/ Hungary/ Poland/ Russia/ Cambodia/ Your country’s name here First,” populism confronts the essence of the Davos perspective that we’re all in this together. Davos, instead, promotes the concept that the world’s leading corporations and nations must work together to resolve common problems.
Trump’s appearance may be as significant as last year’s keynote speech by Chinese Premier Xi Jinping. Speaking three months after Trump’s election, Xi mounted a stout defense of globalization and said China would keep its doors open to the world even if other countries closed theirs.
‘New India’ expected to make big impact
The theme of this year’s conference was “Creating a Shared Future in a Fractured World.” Sessions will cover topics such as economics, human rights, media, and artificial intelligence.
Indian Prime Minister Narendra Modi, the first Indian prime minister to attend the conference in 20 years, will deliver this year’s keynote address at the plenary session. With Modi heading a 100-strong delegation of Indian business and political leaders, domestic expectations for a showcase of the “New India” are high. The Times of India reports the country is “expected to dominate the show.”
Regular attendees constitute a who’s who list of global business and politics leaders. Philanthropist and hedge fund manager George Soros is a regular attendee, as are Facebook chief operating officer Sheryl Sandberg and International Monetary Fund managing director Christine Lagarde. Wikipedia and WikiTribune founder Jimmy Wales will attend the conference.
For those who lean toward notions of global conspiracies, the guest list more resembles a rogue’s gallery of the entitled and unelected. The conference reliably attracts protests from anti-globalization groups opposed to the idea of corporations and governments cooperating to tackle international problems behind closed doors.
According to this year’s program, the objective in Davos is to engage communities “to advance multiple agendas.” These include improving “global governance through public-private cooperation,” convening “public- and private-sector leaders, and defense, intelligence, and public-security experts to prepare for and respond to a rapidly changing geopolitical landscape,” and shaping “the evolution of industry ecosystems and business models, particularly in the context of scientific, technological, and policy transformations, by engaging industry leaders with their peers from government to better prepare for the Fourth Industrial Revolution.”