Political upheaval casts cloud over Davos
The World Economic Forum’s slogan is “Dedicated to improving the state of the world”. This year, however, a more fitting motto might be “Fending off a hostile world”.
Last year I ended my report from Davos, where the business and political elites have mixed since the 1970s, by writing: “It is possible — if still unlikely — that when the WEF gathers this time next year, Mr Trump will be US president and the UK will have voted to leave the EU . . . These developments would turn the Davos world upside down.”
In the interim 12 months, the unlikely has turned into reality. And although the delegates at Davos this week, fuelled by champagne and canapés, will do their utmost to pretend that it is business as usual, the fact is that the world view epitomised by the WEF is under attack as never before.
The chosen theme for this year’s forum is “Responsive and responsible leadership”. But the political context for the annual meeting will be set by the inauguration of Mr Trump — which also takes place this week. And Mr Trump is not the average Davos delegate’s idea of a “responsible leader”.
The distaste is mutual. For the incoming US president and his political advisers, Davos epitomises the “globalism” that they are pledged to destroy. Steve Bannon, who will be chief strategist in the Trump White House, has denounced “the party of Davos”, which he regards as a rootless global elite that has little concern for the common person or the nation state.
Mr Trump’s avowed protectionism is an assault on the central premise of Davos, which is that international trade and investment are forces for good. The president-elect’s call for a temporary ban on all Muslims entering the US — even if it is never enacted — is the very opposite of the plea for “earnest multicultural dialogue” that was made in this year’s WEF introductory overview. Mr Trump has also argued that “the concept of climate change” was invented by the Chinese as part of a plot to wreck American industry. And yet the WEF programme is traditionally packed with sessions on the politics and science of climate change.
Symbolically, the last day of this year’s forum, January 20, will coincide with the first day of Mr Trump’s presidency. He will be sworn in just as the Davos delegates are packing away their skis and preparing for the last night gala.
In the absence of Mr Trump, the big star of this year’s forum is certain to be Xi Jinping, the president of China. The Chinese leader’s decision to make his first appearance at Davos is intriguing. In the physical and spiritual absence of the new US president, Mr Xi may have decided to audition for the part of a “responsive and responsible leader” of the international economic system.
Mr Xi, who will be the first Chinese president ever to speak at Davos, can probably be counted upon to make reassuring statements about the concerns that are dear to the hearts of the delegates, in particular globalisation and climate change.
A good Davos performance could provide Mr Xi with a considerable reward. It is quite likely that the coming year will see heightened tensions between the US and China over trade, Taiwan, North Korea and the South China Sea. Mr Xi will be keen to use his appearance to make China’s case to an influential audience that includes some of the world’s most important businesspeople, financiers and government officials.
Another administration that will be looking to use Davos to shape international opinion is the British government. It is safe to say Davos man and woman neither predicted nor welcomed the result of the UK referendum on leaving the EU. On the WEF’s first day, Theresa May, the UK prime minister, is due to make a long-awaited speech in London on Britain’s approach to Brexit that will be listened to intently in Davos.
After mulling a trip to Switzerland, Mrs May is not now expected to speak at Davos. But other British visitors, including Philip Hammond, chancellor of the exchequer, will seek to define Brexit in positive terms. The UK delegation is likely to draw an implicit contrast with the Trump agenda by making it clear that Mrs May intends Britain to become a global champion of free trade. They will also seek to allay fears that the Brexit process is likely to be chaotic and disruptive to business. Many of the sectors represented — finance in particular — are anxious about Britain’s future access to the EU single market. The bigger question is whether British efforts to champion global free trade are likely to seem realistic in the context of a protectionist White House and a Brexit process that, almost inevitably, will see some increase in trade barriers.
If Mrs May does stay away from Davos, she will not be alone. Angela Merkel, the German chancellor, a frequent WEF attendee, will not be there for the second time in a row, perhaps mindful that Davos is not the place to be seen in an election year. Also absent will be François Hollande, the president of France, who is on his way out. But another politician who will leave office imminently — US vice-president Joe Biden — is expected to make a swansong speech there. It will be interesting to see how Mr Biden strikes the balance between condemnation of Mr Trump and reassurance for the WEF audience.
Although the Davos attendees will be desperate for reassurance, there is no avoiding the fact that the WEF is operating in a radically changed context — one with which the forum itself is only just beginning to come to terms.
The WEF’s introductory overview to this year’s meeting begins: “Global events this year have reminded decision makers that the more complex a system, the greater a community’s concern about its future.” But it then swiftly moves to the usual pious requests for “enhanced international co-operation and earnest multicultural dialogue”.
Well-meaning platitudes of this sort are unlikely to be much help as the WEF struggles to adapt to the political storms that are raging in the world beyond the protective mountains of Davos.