As global economic summits go, it was a bit of a dud. For the World Economic Summit in Davos, Switzerland, indications came early that not all was well when Britain’s Theresa May and France’s Macron declined to appear. And then President Trump opted to scrap the entire American contingent. It wasn’t out of lack of interest but more due to democratic fallout – May and Brexit, Macron with his country’s riots, and Donald Trump with the government shutdown crisis. On major investor, Seth Klarman, complained about the obvious: “It can’t be business as usual amid constant protests, riots, shutdowns and escalating social tensions.”
It was clear pretty quickly that it was democratic troubles with the some of the world’s most powerful nations that had become the key story. You know something serious is up when the nations that both drive and benefit from the directions slated at Davos have urgent reasons for skipping this year’s gig.
Canada made an okay job of it, sending ministers Freeland, Morneau, Bains and Carr, in what was to be one of the higher-level delegations to the Swiss resort.
Nevertheless, the entire affair was subdued, at times even despondent. The dreaded “R” word was used liberally in intimate conversations but banned from public declarations. No one desired to panic markets or even admit they had little clue as to whether the global “recession” was imminent.
It wasn’t supposed to turn out this way. The theme for Davos 2019 was Globalization 4.0 – an effort to drive leaders from all sectors to innovate, explore and build on new opportunities for collaboration for the sake of growing the world’s economy and for overcoming what is clearly an escalating economic inequality narrative. But everything was clouded by uncertainty, infused by the knowledge that the global financial system is frequently at odds with democracy in many of its various forms.
The normally secure global order has for too long ignored the environmental blindness and stagnant wages of the affluent countries and many worried at Davos that those chickens were now coming home to roost. Wealth can still be generated, but the lack of social progress threatens to derail much of what has been built in the decades since World War Two.
The current levels of democratic dysfunction weren’t missed by the tech giants in attendance – Google, Facebook, Amazon, to name a few – and who have done more than their share to create it. It is no longer governments expressing concern about the “information bubbles” created by these platforms, but the corporate sector as well, as they increasingly come to grips with the importance of healthy political situations for the success of their operations.
There is a vacuum, a growing gap, in how our world functions, as America retreats from its global leadership role, democracies deal with disfavour, and financial sectors seem more detached than ever from on-the-ground realities. That absence of capable leadership and popular unrest left Davos with a kind of numbness and the understanding that authoritarian regimes like China and Russia are only part of the problem. Trade, global order, political and financial alliances – these were what used to be staples of the modern world but have now grown more lethargic and unsure as to how to proceed into the future.
The annual Davos summits have regularly been criticized for being alienated from the lives of average people. The “Davos Man” has been something of an icon for years – networked, rich, affluent, influential and the ultimate powerbroker. Lately, however, he has appeared to be more like a wealthy detached grandfather than someone interested in the state of democratic family and the life and well-being of its members. Issues of gender equality, environmental ransacking, stagnation of wages, and loss of infrastructure have always been on the Davos agenda, but still wait to be effectively addressed.
That was also true of this year’s version in the Swiss resort. Nevertheless, there appeared to be more of an awareness of the ineffectiveness of the elites regarding these challenges. Whether such knowledge and concern translate to effective policy and financial regulations to address our greatest challenges remains to be seen.
Davos was a reminder that somewhere during the last few years, someone released the lines tying together the world order and its leading nations together, and they now float out to sea with no GPS and few charts of the waters they are about to navigate. When the world’s decision makers end up unmoored like this, one is left to wonder where tomorrow’s leadership will come from. Can relatively stable middle-power countries like Canada work together to fill the gap? A world at sea represents great risks to Canada, yet also opens the door for us to step up and fill the void with direction, humanity, responsibility and accountability to our allies.