SUMMIT OF FRACTURED WORLD

The 53rd summit of the World Economic Forum (WEF) was held in Davos, Switzerland on January 16-20, 2023. Impressions and outcomes were mixed.

The WEF is well known to be an annual attraction point for the most influential people on the planet, including heads of state, leaders of major international corporations, businessmen, owners of big capital, renowned experts and journalists. Many issues are known to be decided there behind closed doors, which contributes to the significance and intrigue of the event. After a long break due to the pandemic, this year's summit was the first one held in person, with a record number of 2,600 participants, including 50 heads of government, 56 finance ministers, 19 central bank governors and 35 foreign ministers. Topics of discussions included the most important for the planet: climate and the environment, current economic situation, transition to green economy, cryptocurrencies, digital technologies, AI development, situation in the labour market, strengthening of defence potentials and, of course, the war in Ukraine.

Crisis of globalisation

Many observers have suggested that Davos was losing its influence and credibility. Among the leading sceptics is billionaire and the owner of Tesla, SpaceX and Twitter, Elon Musk. Experts attribute such negative assessments and sentiments to the obvious crisis of the globalisation project, as the world is increasingly disintegrating. Even the official agenda of the forum read Cooperation in a Fragmented World. This sounds rather scary given that ten years ago Davos was full of discussions about the successes and benefits of globalisation, the post-crisis phase, world-wide reforms, global competitiveness, and the era of prosperous liberalism. Thus, the WEF has long been a symbol of a globalising world. However, a series of events, including Brexit, the US-China trade wars, the coronavirus pandemic, the withdrawal of several countries from international organisations and treaties, severe climate change, and the war in Ukraine have become powerful obstacles impeding the globalisation.  We are likely to see a search for new forms and expressions.

Remarkably, a report published on the WEF website just before the forum on the results of a survey held among leading economists on the prospects of the global economy, in particular the US and European economies has also contributed negatively to the overall background. Notably, two-thirds of respondents expect a global recession to begin in 2023, while some 18% believe it is "extremely likely". Also, the World Bank has lowered its forecasts for global economic growth for 2023 to near recessionary levels of nearly one per cent.

A growing number of financiers, such as former US Treasury Secretary Lawrence Summers, believe that the world is facing the worst economic and financial challenges since the 2008 crisis. Central banks are increasingly raising interest rates, restraining lending to economies, while many countries are moving towards protectionism. In a new edition of the Global Risk Report released ahead of the Davos meeting, the World Economic Forum warned everyone of the expected advent of "unique and turbulent decade full of uncertainties". Bloomberg reports that up to 20% of respondents are afraid of "catastrophic outcome" in the coming decade, while "economic instability" threatened by local "shocks" are allegedly worrying as much as 70% of respondents. Even the WEF founder Klaus Schwab notes the importance of the event as a platform for stakeholders to meet and points out that the world is now facing a multitude of crises. That is why it is so important to maintain dialogue in the hope of finding solutions to existing problems.

New threats

The main geopolitical threat is the increased risk of various conflicts, including full-scale wars and even the Third World War, using weapons of mass destruction. Another significant risk is climate change, which is getting more unpredictable, abrupt and severe every year.

In addition, our societies face a difficult dilemma, when on the one hand the progress in information technology, robotics, nanotechnologies and automation is increasing the quality of life, its comfort, access to advanced healthcare services, education and entertainment, while on the other hand the same process is increasing inequality and unemployment. According to Oxfam specilised in inequality studies, 63% of the capital created since the pandemic till the end of 2021 has gone to just 1% of the global population.

Interestingly, in parallel with the development of new treatment methods for deadly diseases, high technology also leads to the birth of new lethal weapons. They change the classic image of warfare and all the rules that the mankind has hardly developed and set since the Second World War. All these problems eventually lead to social discontent. It can take various forms, but more often it brings forth onto the political arena individuals with extreme views and various populists.

Apparently, the countries are not unwilling or unable to cooperate in order to find effective solutions jointly. According to The New York Times, "there is no longer a political consensus on how to ensure a prosperous common world", "great power rivalry on a warming planet is the new reality".

Meanwhile, Schwab has already announced that he would speak at another important platform, the Munich Security Conference in February. Many expect that the Davos challenges will somehow get answered in Munich. It is clear that we will have to cooperate and find mutually acceptable solutions, as neither ordinary citizens nor the global elite have any other options.

Role of Azerbaijan

Perhaps the best thing to do in the current situation is to concentrate on working calmly. To confidently implement own plans by adapting to the changing situation as much as possible. Apparently, Azerbaijan is a good example of such a country that can pursue its course even in the turbulent global geopolitical and economic environment. President Ilham Aliyev has held a number of bilateral meetings in Davos, including with Kees t'Hart, president and CEO of Carlsberg Group, Rafiq Hanbali, CEO of Kromatix S.A., Jared Cohen, Global Affairs President for The Goldman Sachs Group Inc., Jürgen Rigterink, First Vice-President of the European Bank for Reconstruction and Development (EBRD), etc.

Leaders have exchanged views on promising areas of cooperation in various fields, ranging from IT to renewable energy. UN-Habitat Executive Director Maimunah Mohd Sharif underlined that Azerbaijan has been leading worldwide in terms of voluntary financial donations to UN-Habitat. It was also noted that Azerbaijan has achieved excellent results in sustainable urban planning and continues activities in this direction. Moreover, other countries are also showing interest in Azerbaijan’s experience in urban planning.

The Azerbaijani leader has also had a detailed conversation with his Latvian counterpart Egils Levits and invited him to Baku. President Levits has gratefully accepted the invitation and noted that Azerbaijan was a very important partner for Latvia, as well as for the European Union. He praised Azerbaijan's role in Europe's energy security and in ensuring its needs for natural gas.

The Davos Forum was a reflection of both the global economic and political realities and how one can survive and develop under these circumstances. There have always been those who see only problems and those who interpret them as real opportunities.