Crying wolf or real concern in Davos

by Antonis D. Papagiannidis

 

The themes put forward for discussion in the Davos get-together of leading industrial, financial, political, diplomatic, academic, even media personalities can sound inspiring  (“Mastering the Fourth Industrial Revolution”/2016, “Stakeholders for a Cohesive World”/2022), slightly ominous (“A shared Future for a Fractured World”/2018, “Cooperation in a Fragmented World”/2023) or stiff-upper-lip encouraging (“Working Together, Restoring Trust”/2022, plus this year’s “Rebuilding Trust”).

This way of revisiting the notion of trust – a commodity not widely shared in our conflictual times of geopolitical mistrust (if not outright paranoia) must mean something. The fact that the ghost of a Donald Trump victory in the US presidential race haunted the Alpic resort (“clearly a threat” according to Christine Lagarde of the ECB) should be seen in parallel with the observation that American participants seemed less worried than their European counterparts. Both the future pace of the green transition and the fortunes of international trade were of concern, but the outcry about the consequences of a Trump victory was more pronounced among those less acquainted with the American system.

In Davos 2024 the (short) presence of Ukrainian President Zelensky and the quite faint Russian attendance allowed for an easy validation of the West (the Davos get-together, however dogged the assertion that it has a global ambition in still a Western-world institution) intention to stay the course with Kyiv. Still, the focus on Ukraine as an issue was less visible than last year: the fact that Chinese Prime Minister Li Qiang – easily the most weighty presence in Davos 2024 – declined to respond to expectations for some sort of shifting Beijing’s stance on the war in Ukraine cannot be missed.

As to AI, the all-pervasive issue of the era, concern over security aspects or over loss-of-human-control was of lower intensity in Davos 2024 than what one might expect. But neither tech-originating messianic promise was around: earlier days’ flare-ups of Prof. Schwab enthusiasm for social engineering based of tech breakthroughs seem to have lost steam.

Last but by no means least: Christine Lagarde unsheathed her sword in Davos against professional economists, calling them a “tribal clique”, in fact addressing them a thinly veiled call/reprimand to show more modesty – in their analysis as well as in their projections, even more so in their over-reliance on their own models. Her admonition-cum-encouragement to the profession to include experts from other disciplines, such as climatologists of epidemiologists in their own deliberations has caused more than surprise.

Even more eyebrows were raised when the ECB (earlier IMF) chief turned her annoyance to the markets: quipping that “aggressive bets on rate cuts don’t help” is quite a departure from expected behavior on part a high-finance personality.

Is such a new spirited approach a turn for the Davos crowd? Is it a mark of real concern or some sort of crying wolf?