For the first time since the corona epidemic, the top meeting of the World Economic Forum in Davos will take place again in its traditional format. The snow will somewhat isolate the Swiss town from the crowds, and the low temperatures will force participants to congregate in halls and casual hallway meetings. The last time the convention, which is expected to be attended by 2,700 participants this year, was held in this way, just weeks before the Corona epidemic disrupted global life. While the consequences of the epidemic are now mainly confined to Asia, this year’s meeting stands as a sign of the global order that went wrong last February, after Russia invaded Ukraine.

“Cooperation in a divided world” is the title of this year’s meeting, which will begin this Monday and continue until Thursday (January 16-20). As was also decided regarding the previous meeting, which in 2022 was postponed to the month of May due to the desire to gather physically and not virtually – there will be no Russian delegation that will participate in the discussions. The World Economic Forum announced the suspension of cooperation with any Russian entity – governmental or commercial – after the outbreak of the war. Sponsorships of Russian companies that generated millions for the body every year were stopped.

More economic, less political

The forum has lost a little of the luster it once had. In contrast to high-profile summits in which the presidents of the United States, the leaders of China and others appeared, the most senior person who will participate in this year’s conference is expected to be German Chancellor Olaf Schulz. The German leader will be the only one of the G7 (Organization of Industrialized Nations) leaders who will participate in the forum, which was founded by the German Klaus Schwab in the years The 70’s. This year’s discussions will focus on the global economic situation, the increasing risk of recession in large parts of the West, and the deteriorating security relationship between the US and China. Loyal to the vision that led him to found the forum, Schwab said this week that “only personal interaction creates the necessary level of trust, which is so necessary in our fragmented and fractured world.”

Even if there will be a lack of prominent political leaders who will realize this vision in Davos, the economic presence will be more significant, with 56 finance ministers from around the world participating in this year’s gathering, along with 19 central bank governors, including the president of the European Central Bank (ECB) Christine Lagarde. Along with the hundreds of politicians and the hundreds of journalists who come to the forum by special invitation, the majority of those present will be businessmen, among them about 600 CEOs. Companies and organizations annually pay membership fees of hundreds of thousands of euros to the World Economic Forum, and in return receive tickets to the event.

Christine Lagarde, Governor of the European Central Bank / Photo: Associated Press, Michael Probst

Subsidy war

A preliminary survey conducted by the forum among 1,200 of the representatives who will arrive in Davos revealed that a large majority (about 70%) fear that in the short term a series of shocks will threaten the Western economy. The most burning issues, according to the survey, are “inflation, the food situation and security crises”. The most burning crisis among them, according to the respondents, is the cost of living crisis, which leads both to the fear of political unrest and to the deepening of the national debts of many countries that use assistance programs for residents. In Europe alone, the total commitments intended to subsidize help for the residents exceeded one trillion euros, according to the calculations of the “Bloomberg” news agency. The economic forum estimated that the European cost of living and energy crises will continue for at least another two years.

Another issue that will be at the center of the discussions is the renewal of the trade war between the US and Europe, this time against the background of the “Inflation Reduction Act” (IRA) promoted by the US. The ambitious plan of the Biden administration is expected to allocate more than 400 billion euros in government subsidies to a series of areas, including electric cars, batteries, hydrogen industry and green industry. European leaders have expressed concern in recent months that the American plan will “draw” large businesses from Europe to the United States, and will result in European lagging behind in the field. The fact that the United States is energy independent, while Europe has to import energy at huge costs (due to the war in Ukraine and the withdrawal from Russian energy), also affects It is about huge European and global corporate plans regarding future production. In recent days, Schultz has expressed support for raising a common European debt to fight the American plan, thereby offering generous European subsidies to companies in the same fields. Schultz is expected to detail his vision in the field during his speech at the conference.

The interest rate: a danger to the climate

The president of the World Economic Forum, Norway’s Borga Brenda, said that this year’s conference will serve as a ground for talks between US and European trade representatives on this issue. “Industrial policy is back on center stage,” Brenda said. While the Union accuses the US of violating the law The global trade rules of the World Trade Organization, the Americans are determined to move forward with it. Industrial production in the West in general will also be at the center of the discussions, among other things due to the new restrictions on chip trade, issues of intellectual property and the effect of Western sanctions on Russia on the creation of separate “trade blocs” in the global economy. “The new economic era may be an era in which there will be a growing gap between rich and poor countries, and the first step back in human development in decades,” reads the forum’s announcement ahead of the meeting, “Economic wars are becoming the norm.”

The climate issue, which has penetrated in recent years from the margins of the conference and the protests against it to the center of its discussions, will also attract a lot of attention. In this respect, the long-term vision of the “Green New Deal” in Europe and the US will be confronted with the fact that the borrowing costs of the Western countries are increasing due to the climbing interest rates, which may call into question the huge investments of the kind required to cut carbon dioxide emissions by the rates To which the governments committed themselves in the Paris Agreement.

“There is no doubt that our 53rd meeting in Davos will take place against the background of the most complicated geopolitical and economic situation in decades,” Brenda said in comments published in the media. The composition of the Ukrainian delegation to the conference remains confidential for security reasons, he said. Last year, Ukrainian President Volodymyr Zelensky addressed the audience and asked for military assistance. Also this year, the supply of tanks to the Ukrainian army is on the agenda, for the first time since the war began.

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