The spirit of Davos | By Naghmana Alamgir Hashmi

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The spirit of Davos

AFTER a gap of two years, the World Economic Forum was finally held in Davos from 22 to 26 May 2022.

This year the Forum was organized under the theme, “History at a Turning Point: Government Policies and Business Strategies.

” For the last two years the forum was being held virtually-a far cry from the spirit of Davos which brings together around 3000 world leaders, politicians, top executives, journalists, economists and academics among others.

It is a gathering of the rich and powerful where people network and share their ideas and optimism for finding new innovative ways for solving the world’s problems.

The geo-political and geo-economic landscape of the world has dramatically changed during the last two years.

At the time of the last Davos summit in 2020, the coronavirus outbreak in China was just a distant peril, world economy was buzzing and a major armed conflict in Europe was not on the list of major issues threating the political and economic stability of the world.

Therefore, an enhanced sense of anticipation surrounded WEF 22 as it was the first physical Annual Meeting since the outbreak of COVID-19, the war in Ukraine, meeting of global climate leaders since COP26, and growing US-China confrontation.

The atmosphere at WEF 22 was evidently different and the positivity of past meetings was replaced by the gloom of Ukraine war, persistence fear of resurgence of COVID-19, looming fears of world recession, surging inflation, tightening monetary policies, dismal markets and crypto crash.

All these factors are perplexing investors and business leaders. The daily chaos of markets is frighteningly challenging for most.

Against this backdrop of deepening global frictions and fractures and heightened fears about world economy, the absence of President Xi Jinping and President Putin was conspicuous, who have both attended the Davos gatherings in the past.

Discussion, therefore, focused not only on who was there, but on who was not further solidifying fears that the world was receding to the politics of divisions of the cold war era.

On the political front, foreign affairs leaders shared their perspectives on the global geopolitical outlook.

Participants emphasized that unity in the face of unprecedented challenges was crucial. Highlighting the direct consequences of Russia’s invasion on not just Ukraine, but the rest of the world too.

President of Ukraine thanked the international community for their support and appealed for continuous help.

The leaders of European Union issued calls for continued cooperation, stressing that Russia should not be allowed to win this war.

A palpable distrust of Russia and the underlying fear in Europe of the consequences of the Ukraine war escalating further and affecting all of Europe was quite evident.

Pakistan has been a permanent feature at the WEF right from its inception and has always contributed constructively to the discussion.

As usual Pakistan boldly put forward its position with the Minister of State for Foreign Affairs stating that, “the success of the global liberal order has been respecting and understanding the varying interests of countries.

If current global leaders choose confrontation at this critical period over collaboration-we will create a much more dangerous place for future generations.

” She further stated the world had reached an inflexion point where every country was being asked to choose sides or get branded as being on the opposite side.

She urged the world leaders to choose collaboration over confrontation, follow a rule-based policy without cherry picking the rules and to stop weaponising the economic tools.

Foreign Minister Bilawal Bhutto shared Pakistan’s perspective on the economic and social impacts of the evolving geopolitical developments as well as the challenges arising from the COVID-19 pandemic, food and energy security, and climate change.

He also met his counterparts attending the annual meeting and interacted with the media. Some of the key takeaways of this year’s WEF can be briefly identified as follows:

• Temperatures continuing to rise on the Ukraine war, dividing the world.

• Deep anxiety on the state of global economy with economists raising concerns about inflation, wages and global trade affected by COVID pandemic and suggested ways to stabilize.

• Investors debated the new investment regime, one in which rising interest rates, higher levels of inflation, fragmented de-globalization, heightened geopolitical risks and shifting structural forces, including a changing relationship between stocks and bonds, are creating the need for a new approach to building a resilient portfolio.

• There was also frustration about the need for a step increase in transition finance – both in the West and emerging markets.

In the West, much of investors’ time and money has been focused on high growth companies enabling and providing solutions towards a green economy.

• The future of globalization was a question that was of deep concern to many in the backdrop of the state of flux of the world politics.

The concept of the regionalization of globalization caught the imagination of many while the others questioned whether globalization was a thing of the past and may be difficult to resurrect.

• Food and energy security and two crises linked to the war in Ukraine were also high on the agenda.

Experts were of the opinion that that it was the first truly global energy crisis and warned that that the world faced the possibility of a long multi-year food crisis if things don’t change.

• Strategies to navigate the shifting frontiers of the energy transition were discussed. It was emphasized that linked to energy was the issue of environment.

What was required was an energy transformation on the scale of the industrial revolution at the speed of the digital transformation. To achieve this a revolution in finance was required.

• Critically important role of businesses and entrepreneurs was stressed.

Pfizer committed to providing all its current and future patent-protected medicines on a not-for-profit basis to 45 lower-income countries.

• Ongoing impact of COVID-19 pandemic remained central to many discussions and how to prepare for next pandemic were discussed in detail. How to address mental health and health equity were also high on the agenda.

• The future of work was a new theme that attracted much enthusiasm and interest.

For many, COVID-19 pandemic brought about fundamental shifts for four-day week, at hybrid work and also tackled issues of diversity and inclusion.

• Technology and metaverse also underpinned many conversations at the Forum.

In the face of titanic geo-strategic and geo-economic shifts in the world, it remains to be seen whether Davos will survive and maintain its optimism or will become yet another victim of rising political tensions in the world.

—The writer is former Ambassador, based in Islamabad.