[Burning Issue] World Economic Forum (WEF) Davos Summit 2023

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Context

  • Recently, 53rd edition of annual summit of World Economic Forum (WEF) was held in Davos, Switzerland.
  • This edition of the Burning Issue will talk about the major outcomes of the summit.

About the Annual Davos Summit

  • The theme this year was ‘Cooperation in a Fragmented World’.
  • Davos attracts global business executives and policymakers. Usually attending will be the sitting U.S. president, top EU and UN leaders, business leaders and entrepreneurs, academics, heads of NGOs and charities, the media, activists and even some celebrities.
  • The conference includes hundreds of discussions, keynote speeches and panels, and all-important networking sessions, usually behind closed doors in five-star hotels.
  • CEOs and investors seize the opportunity for face-to-face deal-makings.

About 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.

Klaus Schwab and his concept of “Stakeholder Capitalism”

  • Klaus Schwab has pioneered the concept of “Stakeholder Capitalism.” According to Schwab, “it is a form of capitalism in which companies do not only optimize short-term profits for shareholders, but seek long term value creation, by taking into account the needs of all their stakeholders, and society at large.”
  • In his various books and papers on the topic, he says this form of economic organisation keeps society and the planet front and centre, moving beyond the narrow interests of a corporation.
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Key outcomes of the summit

  • On the 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. However, 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.
  • On Ukraine: 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. Odile Françoise Renaud-Basso, President of the European Bank for Reconstruction and Development (EBRD), said “The more we do now, the less we will have to do in reconstruction,”
  • On Climate: Everyone agreed upon the need for green energy and the need for more money to flight climate change. 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.”
  • On emerging technologies: Davos juxtaposed the industry’s potential and peril. Just as Microsoft Corp’s CEO and other Silicon Valley executives touted artificial intelligence such as ChatGPT to transform their businesses, they announced layoffs of tens of thousands of employees globally. Scrutiny of once high-flying cloud spending by businesses was at the forefront.
  • Financial services: Global financial institutions are grappling with how to right-size for a slowdown, while dealing with a host of other headwinds. With the threat of inflation still hanging over central banks, financiers are facing demands from regulators for higher capital levels to prepare for a downturn, making some businesses unprofitable.

India specific outcomes

  • 36 years of the Forum’s collaboration with India: A high-level delegation from the Indian side coupled with senior State Government representation will be present at WEF 2023 to strengthen India’s position as an important stakeholder shaping the global narrative. This year also marks 36 years of the Forum’s collaboration with India.
  • Support in multiple fields: Over the course of 5 days, Invest India organized several roundtables, panel discussions and fireside chats to deliberate on policy action and investment support in renewable energy, sustainability, infrastructure, healthcare and medical devices, startups, trade and logistics, technology, institutional investments, and so on.
  • Promoting India as an investment destination: In celebration of India’s ‘Azadi ka Amrit Mahotsav’, 75 years of Independence and the assumption of our G20 Presidency, DPIIT strengthened India’s presence at this year’s WEF in Davos for all global investors looking to make a home in India, one of the world’s most liberal investment destinations. The objective is to showcase a consolidated India presence with the Centre & States while projecting India as a strong, resilient economy, acting as a problem solver at the global stage.
  • India@100 report launched: A report titled, ‘India@100: Realising the potential of a USD 26 trillion economy’, was launched during the summit. The report stated that India’s economy will reach USD 26 trillion by 2047, the 100th year of the country’s independence.
  • India to remain resilient amid global slowdown: The end of the summit saw India emerging as a key pillar in the world order with WEF Founder and Executive Chairman Klaus Schwab describing the country as a bright spot in a fragile world. On Day 2 of the meeting, conversations revealed that India is expected to remain resilient despite the global slowdown impacting the emerging markets.
  • India’s high visibility: India seemed to be the most visible among its regional Asian peers, with major tech companies staging booths in Davos. Indian business leaders were seen at the forefront of debates over technology and supply chain issues.
  • Projects launched: The Press Trust of India (PTI) reported that more than 50 “high-impact initiatives” was launched at the event. Maharashtra Institution for Transformation (MITRA) signed a partnership with the forum on urban transformation to give the state government “strategic and technical direction”, PTI reported, while a thematic centre on healthcare and life sciences is to be set up in Telangana. The Coalition for Epidemic Preparedness and Innovations (CEPI) aims to develop new vaccines for future pandemics.

Conclusion

  • Remaining true to the World Economic Forum’s spirit of multi stakeholder cooperation, the annual 2023 meet brings together top decision-makers from government, business, and civil society to address major global issues and priorities for the year ahead.
  • 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. However, others pointed out that despite its flaws, the conference is an opportunity for many decision-makers to meet and interact with each other.
  • 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.

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