Last week, Davos – the mountain resort, which sits high up in the eastern Alps of Switzerland in Graubunden – welcomed more than 2,500 movers and shakers – business, political and academic leaders from around the globe. They came to attend the yearly World Economic Forum (WEF), scheduled for January 23-26. It was the 48th forum to date.
As the U.S. dollar continued to plunge (losing approx. 17% of its value in a year) against the Euro and the news of his personal lawyer brokering a $130,000 payment to adult film star Stormy Daniels (whose real name is Stephanie Clifford) in October 2016 to prohibit her from publicly discussing the alleged affair before the election surfaced, President Donald Trump arrived without Melanie by his side at Davos. His speech was the most widely-anticipated moment at this year’s event. It was the first time since Bill Clinton in 2000 that a sitting U.S. leader joined the Davos elite.
Trump told the audience: “We cannot have free and open trade if some countries exploit the system at the expense of others.” His “America First” protectionism came under intense criticism at Davos. He declared, “America is open for business” and that he “wants the world to invest in America and create jobs for hard-working Americans”.
There was no talk of tearing up trade agreements or leaving the World Trade Organization. Instead, “we are working to reform the international trading system so that it promotes broadly shared prosperity and rewards to those who play by the rules.”
The U.S. didn’t want to pick fights but to “enforce our trade laws and restore integrity to our trading system. Only by insisting on fair and reciprocal trade can we create a system that works not just for the U.S. but for all nations.”
Trump even held out the possibility of rejoining the Trans Pacific Partnership (TPP), the draft agreement among 12 Pacific Rim countries he renounced within days of taking office.
These soothing words clearly came as a relief to the financiers, multinational executives and foreign officials in the audience. It was ironic that he would deliver such assuaging words just days after the U.S. had taken one of its most protectionist actions in years: the unilateral imposition of “safeguard” tariffs on imports of washing machines and solar panels. There is little sign, publicly, that the U.S. has bridged deep differences with Mexico and Canada on how the North American Free Trade Agreement should be rewritten.
Trump said the stock market had reached record highs on more than 80 separate occasions over the past year and tax cuts that offer most to corporations and the well-off were trickling down to workers. “We lowered our corporate tax rate from 35% all the way down to 21%. As a result, millions of workers have received tax cut bonuses from their employers in amounts as large as $3,000,” he said.
Trump’s claims were condemned by Winnie Byanyima, the executive director of Oxfam International, who said the speech amounted to a “billionaires-first” policy. “President Trump’s boastful sales pitch was a victory lap for the trillions of tax cuts that the wealthy elites and corporations have clamored for. The evidence is clear: these tax cuts are looting the US treasury to enrich the 1%,” she said.
Trump, true to his innate character, mixed facts with fictions in his speech. He falsely claimed that 2.4 million jobs were added since his presidency. However, as the New York Times showed, the actual figure is 1.8 million in the first 11 months of his presidency.
There was derision from the audience when Trump said in a question and answer session that he had not understood how “nasty, how mean, how vicious and how fake the media can be” before entering politics.
Like most autocrats and despots, Trump wants the press to act as his cheer leader and not a critic. He frowns at the notion that for a country to be responsible and powerful, its people must be informed by a free press. Way back in 1786, the 3rd US President Thomas Jefferson had famously mused that he would rather have newspapers without a government than a government without newspapers.
A sharp weakening of the US currency was one of the main discussion topics at Davos, following comments from the U.S. Treasury Secretary Steven Mnuchin when he said that a weaker dollar is good for the U.S. During a CNBC panel on Thursday, Jan. 25, the U.S. treasury secretary said that dollar weakness in the short term was “not a concern of mine.” He added: “In the longer term, we fundamentally believe in the strength of the dollar.”
Earlier in the week, Trump told CNBC that “the dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar.”
On Tuesday, Jan. 23, Indian Prime Minister Narendra Modi used the Davos event’s opening address in Hindi to speak about a “worrying trend” against globalization and towards isolationism.
“Forces of protectionism are raising their heads against globalization, their intention is not only to avoid globalization themselves but they also want to reverse its natural flow,” he said. He talked against a new wave of protectionism, saying that trade barriers posed a danger to the world that was equal to climate change and extremist attacks.
This is quite odd given the fact that for decades India maintained a tightly controlled economy and still has many regulations in place. Modi added: “The negative impact of this kind of mindset cannot be considered less dangerous than climate change or terrorism.” He urged governments not to turn towards isolationism and sought to hard sell India as an investment destination, saying those wanting wealth with wellness and peace with prosperity should come to India. He even quoted Indian independence leader MK Gandhi, by saying: “I don’t want the windows of my house to be closed from all directions. I want the winds of cultures of all countries to enter my house with assurance and go out also.”
Obviously, Mr. Modi did not talk about the current reality: since taking office, India has become an unwelcome house for tens of millions of its minority Muslim, Dalit and Christian citizens who face lynching daily in the hands of Hindutvadi fascists that his ruling party fosters. Who would be foolish to enter a house where one finds no assurance of peace, security and safety of life but only of dehumanization and slaughter? How can a state that fails to protect its own minorities, the marginalized citizens of non-Hindu faiths create a ‘heaven of future’ for outsiders?
Last year, the opening address was delivered by the Chinese President Xi Jinping who portrayed his country as a champion of free trade on the same week Trump was inaugurated president. He skipped this year’s forum. According to Chinese state media, he can take credit for shaping this year’s Davos theme, “Creating a Shared Future in a Fractured World.” State news agency Xinhua in a commentary published Jan. 24 said that specifically, the theme draws on this Xi remark: “As long as we keep to the goal of building a community of shared future for mankind and work hand in hand to fulfill our responsibilities and overcome difficulties, we will be able to create a better world and deliver better lives for our peoples.”
However, as we have seen repeatedly, talks are cheap while noble deeds are few or far between. Otherwise, how can one explain Xi’s policies that deny a ‘shared future’ for the Rohingyas who are victims of genocide inside Suu Kyi’s Myanmar (enjoying China’s protection inside and outside the UN)? How about the future of the persecuted Uighurs of Xinjiang (East Turkestan) inside China?
Germany is currently going through a political impasse — something that Europe wants to see fixed very soon with more integration. Speaking at Davos, German Chancellor Angela Merkel admitted that Germany has problems of its own. “Frankly speaking, the country I have the honor to represent and where I am chancellor has difficulties. And polarization is something that we see in our country as well, which we haven’t had for decades,” she said.
As I have noted elsewhere, Germany is not alone in experiencing the meteoric rise of neo-fascist forces in Europe, esp. since Trump’s election win. Such forces, unless checked persuasively, are bound to fracture our world irreversibly to a point of no return.
Praised by many in the business community, French President Emmanuel Macron vowed to reform France and Europe with a medium-term strategy, in order to provide clarity to investors.
“Let us not be naive, globalization is going through a major crisis and this challenge needs to be collectively fought by states and civil society in order to find and implement global solutions,” Macron said.
Is the world any safer today than before?
Billionaire investor George Soros believes that the open societies are in crisis today with the emergence of various forms of dictatorship and mafia states, esp. in the USA and Europe. He said, “Mankind’s ability to harness the forces of nature, both for constructive and destructive purposes, continues to grow while our ability to govern ourselves properly fluctuates, and it is now at a low ebb.”
Soros believes that the U.S. is on course for a nuclear war with North Korea. “The fact of nuclear war is so horrendous that we are trying to ignore it, but it is real,” Soros said during a speech on the outskirts of the World Economic Forum. “Indeed, the United States is set on a course towards nuclear war by refusing to accept that (North) Korea has become a nuclear power.” He said, “Beijing holds most of the levers of power against North Korea, but is reluctant to use them.”
Soros said, “The other major threat to the survival of our civilization is climate change, which is also a growing cause of forced migration… it is well known what needs to be done. We have the scientific knowledge; it is the political will that is missing, particularly in the Trump administration. Clearly, I consider the Trump administration a danger to the world.”
The policies of the U.S. president were under scrutiny, but not everyone was unhappy with the direction Trump is taking. “I’d say I like a lot more stuff than I don’t like, and some of the stuff I don’t like I really don’t like,” Lloyd Blankfein, CEO of Goldman Sachs, told CNBC during an interview. “But I don’t want to be hypocritical, either. I’ve really liked what he’s done for the economy,” he added.
Canadian prime minister Justin Trudeau challenged business leaders and politicians to end gender inequality and tackle unacceptable and systemic sexual harassment. He warned that businesses and politicians are failing to help their workers and citizens in today’s “rapidly changing world”.
“Even without testosterone, we can produce positive, constructive energy,” the Managing Director of the International Monetary Fund Christine Lagarde said in Davos.
Lagarde was one of seven female co-chairs at this year’s forum, drawing attention for women’s rights, including equality in the workplace.
Malala Yousafzai, the youngest Nobel Prize laureate and activist for education told the World Economic Forum that the only way to ensure women’s rights is by educating young boys. “The education of young boys on the subject of women’s rights is crucial. When we talk about feminism and women’s rights, we are talking to men. We have to teach young boys how to be men,” Malala Yousafzai said at Davos.
Australian actor Cate Blanchett criticized politicians for pandering to anti-refugee sentiment, instead of helping the millions of people displaced worldwide. She was ‘bewildered’ to see the multi-cultural Australia she grew up in “flouting the UN human rights convention”. Out of 65 million displaced people in our globe, 22 million are refugees, but just 1 per cent have been resettled in advanced developed countries. She said, “It’s the developing world that is shouldering the deep burden of refugees.”
How about the health sector?
From 2000 to 2016, the number of malaria cases worldwide dropped 60%, thanks to a large global public health effort, a number of tireless nonprofit NGOs—and targeted spending from organizations like the Bill & Melinda Gates Foundation. Bill Gates offered his take on what would allow us to eliminate this scourge by 2040—which is a real possibility, he says, if we keep relentless energy and focus on the effort. More sophisticated precision data tools to understand how, where, and why infections are spreading, where mosquito populations are thriving, whether prevention strategies are working or not, and where we’re making progress or backsliding are needed. “We need smart data and analytics to guide the path,” Sue Desmond-Hellmann, CEO of the Gates foundation, said.
As can be seen, from the speeches and the comments on global trade, the depreciation of the dollar and women’s rights, the World Economic Forum of 2018 made headlines once again.
In his Davos speech, Trump said something that is interesting. He said, “Only by hearing and responding to the voices of the forgotten can we create a bright future that is truly shared by all.” The rich and powerful people that gathered at the Swiss mountain resort had the power to transform lives and shape their countries’ destinies, Trump added. “With this power comes an obligation, however, a duty of loyalty to the people, workers, customers, who made you who you are,” he said.
I only wish that Trump’s wonderful rhetoric here is backed up by good deeds. He has three more years to create a bright future for that ‘forgotten’ people who are fast becoming an extinct group.
As I see it, the great beneficiaries of globalization have been the richest 1% in the society. Obviously, the lectures, dialogues and discussions at Davos in the last five decades have miserably failed to make a difference. There must be a complete change in the economic model.
Getting back to Soros’s call, can our movers and shakers, leaders and governmental and non-governmental institutions and organizations empower local people to deal with their own problems, assist the disadvantaged and reduce human suffering to the greatest extent possible? Can they help to develop local economies to stop migration crisis? Do they have the sincerity and will to make that difference in the lives of so many – from the stateless Rohingyas dwelling either in the refugee slums inside Bangladesh or in the concentration camps inside Apartheid Myanmar to the ‘forgotten’ or marginalized many that live in the ghettos of Europe, Americas, Africa and Asia?
A report by Oxfam published in advance of the Davos summit revealed that half of the world’s population received no share of all wealth created globally in 2017. Billionaires increased their wealth by $762 billion last year, enough to end “global extreme poverty seven times over”, the UK-based charity’s annual inequality report said.
As long as such inequalities exist in our world, the WEF would only be viewed – and rightly so – as a “talking shop” incapable of delivering meaningful change.