Davos 2017: The forum’s turn to the disenfranchised

Pablo Balsinde // 25 January 2017

The rise of protectionism and populism around the globe shaped this year’s conversations at the World Economic Forum. Overlapping with Donald Trump’s inauguration, the meeting dedicated an unprecedented amount of time to the concerns and priorities of all people. Discussions revolved around issues like designing a global tax agreement to avoid legal tax avoidance and, whereas in 2010 for example panels argued for the appropriate size of financial institutions, last week panels were dedicated to the dangers of corporations becoming too large. This new approach to honestly live up to the forum’s motto of being ‘committed to improving the state of the world’ was different in that its focus was on improving, rather than only promoting globalisation – regardless of growing protectionism in some parts of the world, including the U.S. There was a common acknowledgement that the forums’ attendees in the past had made mistakes.

 

In the opinion of most media coverage, this meeting was unique in that it represented a shift in the usual roles world powers play in the discussion of globalisation – epitomised by Chinese president Xi Jinping’s speech defending the merits of globalisation. Delinking global trade from the rise of protectionism, Davos was reported as the moment China became the champion of free trade; with the financial times referring to the speech as “symbolic”. However, rather than these speeches like his or Theresa May’s, the truly significant change in Davos was the clear consensus around the fact that “the establishment” had to rethink its approach to these economic dynamics. As Tidjane Thiam, CEO of Credit Suisse, put it: “The problem is to make sure globalisation works for everybody so that people don’t end up taking extreme political options.”

 

This year’s meeting represented a change in agenda from a push for free trade to a push to refine free trade. In close agreement with a Chomskyan view of the structural implications of corporations, Sir Martin Sorrell, CEO of WPP, critiqued the largest corporations in America for thinking too much about the short term – spending reckless amounts on share buybacks and dividends. During a different panel, Zambian economist Dambisa Moyo reiterated the point that we could not deem the current system as one of truly free trade given, for example, farming subsidies (disguised as safeguards or dumping duties) in western countries that suppress their counterparts in emerging markets. The many problems of globalisation, like how patent rights make drugs unreasonably expensive in emerging markets, were the theme of the G20-dedicated panel, where their conversation tried to address the causes of populism and ways in which we can optimise the benefits of globalisation.

 

Not to say that in the past they were explicitly concerned with the interests of the upper classes, there was, clearly, a newfound concern for the lives of middle class people. One can argue about the reasons for this shift, whether populism is threatening to the forum or because of benevolent intentions, but the shift was clear. Exemplified by Managing Director of the IMF Christine Lagarde’s commentary, attendees were forced to engage with these populist movements beyond the economic level, considering the identity politics behind them and how to deal with them. The sociological treatments of these movements forced conversations about supranational identity or the politics of fear, discussing what it means for a society to be multi-cultural. Even though this might seem arbitrary, these are the discussions that are necessary to engage in truly global and multilateral relationships. For example, from these conversations came derivative discussions on ways to convey the benefits of globalisation and to understand why liberals and centrists have not been able to connect emotionally with voters.

 

For a more concrete example at the level of policy, one of the main points at a panel on global taxation was that, in order to have an international system to deal with tax evasion a common set of values and a sense of respect were necessary to avoid self-harming behaviour such as a race to the bottom on corporate taxes. This new narrative of needing a global approach free from national interests was widely accepted during the week, and shaped other conversations in innovation and technology to see how they should be aimed towards helping people around the world. Whereas in 2015 robotics were discussed independently, this past week people discussed the way financial technology could help the worlds underbanked.

 

This year’s World Economic Forum was not just a reiteration of the benefits of globalisation, and it did not just symbolise geopolitical developments and realignments related to populism and protectionism, it signified a realisation by world leaders that global integration had to be reconsidered on a fundamental level to make it work for everyone.

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