Davos 2019: What to watch for

The Financial Times
Davos 2019: What to watch for

Global leaders, corporate titans, academics and thinkers are gathering in the Swiss ski resort of Davos for the annual World Economic Forum, which begins on Tuesday morning. Some 3,000 participants have converged on the Alpine town for the annual meeting of the global elite that this year features some 350 sessions, centred around issues such as improving global co-operation, embracing the digital revolution and tackling climate change.

Financial Times reports in its article Davos 2019: What to watch for at this year’s World Economic Forum that here’s what delegates are likely to be talking about at Davos 2019:

Dropouts: Who’s not going reflects global turmoil

US President Donald Trump and other world leaders, including UK prime minister Theresa May and Emmanuel Macron of France have cancelled trips to Davos in the face of domestic difficulties. The absentees underscore the backdrop to this year’s event: a world in turmoil, fuelled by anti-establishment sentiment and populist politics.

Mr Trump, who delivered the keynote address at last year’s forum, called off his trip as the US government remains in partial shutdown, with lawmakers at an impasse over his demand for a federal budget that includes funding for a wall on the Mexican border.

Last week, Mr Trump decided that the rest of the US delegation would also stay home, including Treasury secretary Steven Mnuchin and secretary of state Mike Pompeo. They were expected to speak on several panels, including a discussion on the future of America’s place in the world economic system.

In London, Mrs May called off her visit after a crushing parliamentary defeat on her proposed Brexit deal. Mr Macron, meanwhile, is struggling to contain nationwide street protests that have shaken France in recent months. He perhaps thought it best not to seen in the company of chief executives and corporate high-fliers.

Other notable absentees include Xi Jinping, Chinese premier who is grappling with an economic slowdown, and India’s Narendra Modi, who is dealing with a re-election campaign amid the fallout of his party’s embarrassing defeat in state elections last month.

Nevertheless, dozens of national leaders will attend, including Angela Merkel of Germany, Italy’s Giuseppe Conte and the new Brazilian president Jair Bolsonaro.

Brazil’s Bolsonaro make his world debut

Less than a month after his inauguration, Brazil’s leader Jair Bolsonaro will make his debut on the world stage with a special address on Tuesday afternoon.

Without Mr Trump in attendance, Mr Bolsonaro, dubbed the “Trump of the Tropics”, is one of the big names to watch this year — yet he is likely to come under fire on issues such as the environment and human rights, on which several talks will be centred.

The former army captain swept to victory in Brazil with hardline policies on tackling crime and promises to combine “traditional family values” with economic liberalism. Yet he has a long history of disparaging gays, women and black people, and like Mr Trump, is a climate change sceptic. His election has raised fears among environmentalists that he will relax curbs on deforestation, which could lead to further destruction in the Amazon rainforest.

Mr Bolsonaro will probably look to present himself as a safe pair of hands to foreign investors. His case will be helped by a strong rally in Brazilian equities since he took office.

Tackling climate change will be centre stage

The WEF asked its members to rank their worries ahead of this year’s event, and this year’s “worry” list was dominated by climate change concerns.

WEF members fear that extreme weather events are becoming more common, and that the world has no effective mechanism to respond. Climate issues account for three of the five risks deemed most likely to materialise in 2019 — and four of the top five risks that could cause the most damage. The only other topics cited are weapons of mass destruction, and cyber risks.

With rising nationalism and a push for economic protectionism, there are growing fears that countries could turn their backs on global co-operation to address climate change — as Mr Trump did by pulling out of the 2015 Paris climate accord.

How leaders tackle the issue will be a focal point in Davos, which will host a panel debate on Tuesday featuring the veteran broadcaster and naturalist Sir David Attenborough. At 92, Sir David is the oldest participant to brave the wintry conditions in Davos this year. He will be joined by Al Gore, the former US vice-president and climate activist, and New Zealand’s prime minister Jacinda Ardern. Sir David will also be interviewed by Prince William, the Duke of Cambridge.

Gloomy backdrop as global growth slows

Optimism peaked at Davos last year amid economic momentum buoyed by new US tax legislation and rising growth in Europe and Asia. But the economic backdrop has since changed markedly. With the escalation of a US-China trade war, uncertainty over Brexit, volatility in financial markets and a US government shutdown, pessimism is rising.

The IMF on Monday said the global economy was weakening faster than expected as it revising down its economic forecast. The new figures represent a significant shift for the global outlook and come as a result of weak data in Europe and Asia.

New GDP data from China released on Monday also showed that growth had now slowed for three consecutive quarters, prompting concern among investors that the country could drag down the global economy.

The Chinese economy, which contributes nearly one-third of global growth, could be the most pressing issue for nervous business chiefs in Davos. With Chinese leader Xi Jinping staying home, Wang Qishan, China’s vice-president, will give a special address on Wednesday as he seeks to reassure business leaders and make Beijing’s case for its economic reforms.