Global leaders at the World Economic Forum in Davos are intensely debating this year’s theme History at a Turning Point: Government Policies and Business Strategies. The theme is meant to assess the impact of the deep shifts created by the Covid-19 pandemic. Adding further complexity to the post-pandemic world are the geo-political risks being triggered by Russia and China. Business, political, and technological leaders are clear that deeper collaboration is essential to rebuild a world damaged by the pandemic and geo-political aggression.
Central bankers and economists are increasingly fearful that the world may be headed for recession. Supply chains remain choked as many of China’s factories are still shuttered because of Covid-19, markets are panicky, with technology stocks in particular distress, and inflation is running high across much of the developed world, WEF has assessed.
“We are not in a recession yet, but the signs are not good,” said David Rubenstein, Co-Founder and Co-Chairman of Carlyle. “The war is not likely to end tomorrow and it will be a precipitative factor.”
“We have downgraded projections for growth for 143 countries, accounting for 86% of GDP,” said François Villeroy de Galhau, Governor of the Central Bank of France. “The horizon has darkened.”
The war in Ukraine is forcing some leaders to recalibrate the growth story. “Freedom is more important than free trade,” NATO Secretary-General Jens Stoltenberg said, and “the protection of our values is more important than profit.”
Business leaders however are keen to accelerate the process of healing the global economy and maintaining focus on climate change and technological advancement.
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WEF released a paper that calls for new collaboration between humanitarian and development organizations, businesses, investors, and entrepreneurs to make a difference to the lives of the nearly 1 billion people living in fragile and conflict-affected settings worldwide. “It takes more than a single intervention to unleash transformational change in complex ecosystems. To truly leverage the potential for positive and sustainable social impact while meeting investor demand for returns, new ways of collaboration across sectors are needed,” said Børge Brende, President, WEF.
The EDISON Alliance for digital inclusion launched a new programme to accelerate digital inclusion in the “life critical” sectors of health, education, and finance.
A network of “Lighthouse Countries” including Bahrain, Bangladesh and Rwanda will work with the United Nations Development Programme (UNDP) on the new programme in their respective countries. By facilitating new partnerships, incentivising projects, and unlocking capital at scale, the Lighthouse Countries Network will further the EDISON Alliance’s 1 billion lives vision of providing affordable digital solutions by 2025.
Rwanda continues to move towards a cashless economy supported by mobile payments. Working with the EDISON Alliance as a “Lighthouse Country”, it will prioritise innovative partnerships towards equitable and affordable access to smart mobile devices. “We are excited about the partnership possibilities on the important issue of devices, financial inclusion and broader digitalisation that we can achieve through the EDISON Alliance,” said Paula Ingabire, Minister for ICT and Innovation, Rwanda.
The emerging markets continue to focus on improving infrastructure and digital capabilities. The digital transformation of customs and borders in Africa could improve efficiencies in processes, such as administration at customs and borders, and yield trade gains on the continent of $20 billion a year according to a new report released by WEF at Davos.
On the climate change front, global leaders sought common rules and multilateral frameworks for measuring sustainable practices. As regulators in North America, Europe, and Asia grapple with how to ensure companies report accurately on their environmental, social and governance (ESG) performance, the chief executive of one of the world’s largest consumer goods companies warned of the danger of jurisdictions setting varied, onerous ESG standards that will prevent thousands of small and medium enterprises (SMEs) from getting onboard with sustainability reporting.
Alan Jope, CEO of Unilever, speaking on ESG disclosures Davos said: “We are at a point of great danger right now of letting perfect get in the way of good, of letting complex get in the way of simple and of letting local get in the way of global.”
International ESG funds and investee companies across Asia and the west are struggling to create a common framework to track and measure ESG practices.