Issues related to Economic growth

Key takeaways form the World Economic Forum’s annual meeting

Note4Students

From UPSC perspective, the following things are important :

Prelims level : World Economic Forum

Mains level : World Economic Forum annual meeting and key takeaways and new initiatives

World Economic Forum

Context

  • The World Economic Forum’s Annual Meeting 2023, held in the Swiss town of Davos, ended Friday a conference that started in a world possibly fundamentally altered, but whose processes and outcomes remained pretty much business as usual.

The theme this year was ‘Cooperation in a Fragmented World’.

World Economic Forum (WEF)

  • Headquartered in Geneva, Switzerland, WEF is an international not-for-profit organization, focused on bringing the public and private sectors together to address the global political, social, and economic issues.
  • It was founded in 1971 by Swiss-German economist and Professor Klaus Schwab in a bid to promote the global cooperation on these most pressing problems.
  • The first meeting of WEF was held more than five decades ago in Davos, which has been the home of the annual gathering almost ever since, also becoming the shorthand for the event.

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World Economic Forum

key takeaways from WEF on the economy

  • Positive outlook for economy: Most business leaders were upbeat about the economy, with US and the European Union (EU) seemingly beyond the risk of a recession now. China ending its zero Covid curbs and opening shop again added to the positive outlook.
  • Caution from central banks: Central banks of the major economies cautioned that concerns still remained, and said they would keep interest rates high to ensure inflation is under check. For example, Stay the course is my mantra, European Central Bank President quoted. The US Federal Reserve Vice Chair Lael Brainard was quoted as reminding investors that “inflation remains high, and policy will need to be sufficiently restrictive for some time.
  • Potential impact on energy prices: Many also pointed out that China opening up could mean a rise in its energy consumption, thereby driving up energy prices.
  • Concerns for developing economies: As the richer nations look to focus inwards, protecting their own workers, energy sufficiency, supply lines, etc., concerns were raised that this policy direction would hit developing economies.

World Economic Forum

Climate change and green energy discussions at World Economic Forum

  • The need for green energy and financing: Everyone agreed upon the need for green energy and the need for more money to flight climate change.
  • GAEA initiative to unlock $3 trillion financing: According to the WEF’s website, The World Economic Forum, supported by more than 45 partners launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.
  • International Concerns and Reactions: The EU raised concerns over a US green energy law that benefits products, such as electric vehicles, made in America.
  • New Initiatives and Partnerships: The Press Trust of India (PTI) reported that more than 50 high-impact initiatives were launched at the event. 1.Maharashtra Institution for Transformation (MITRA) signed a partnership with the forum on urban transformation to give the state government strategic and technical direction. 2. A thematic centre on healthcare and life sciences is to be set up in Telangana. 3. The Coalition for Epidemic Preparedness and Innovations (CEPI) aims to develop new vaccines for future pandemics.

Ukraine demands more military and financial aid

  • Military Aid and Financial Aid for Reconstruction: Ukraine kept up its demand for more military aid to fight its war against Russia, and more financial aid to rebuild after the war, saying the reconstruction fund commitments should start coming in now and not after the war ends.
  • President Zelenskyy’s Address and Criticism of US and Germany: While Ukraine President Volodymyr Zelenskyy gave a video address. In his address, Zelenskyy made an indirect criticism of the US and Germany dithering over sending tanks to his country.

World Economic Forum

Criticism and defence of the Davos Event

  • Spectacle of Rich and Powerful Talking about Poverty and Climate: The jarring spectacle of the Davos event where the uber-rich and powerful fly in on private jets to talk about poverty alleviation and climate action came in for criticism yet again.
  • Opportunity for Decision-Makers to Meet and Interact: However, others pointed out that despite its flaws, the conference is an opportunity for many decision-makers to meet and interact with each other.
  • The Economist’s View on the Importance of Communication and Conversation: As the Economist editor-in-chief Zanny Minton Beddoes put it, while the talks at Davos can be described as “highly-caffeinated speed dating”, more conversation and communication is better than less contact and less communication.

Conclusion

  • The World Economic Forum highlighted the pressing need for green energy and financing to combat climate change. Though the event remained focused on business as usual, we can see that the WEF provided an opportunity for decision-makers to meet and interact, and more than 50 high-impact initiatives were launched at the event.

Mains Question

Q. Discuss some of the key takeaways from the WEF’s annual meeting 2023, with a specific focus on the discussions and initiatives related to the economy and climate change.

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