TAKEAWAYS FROM DAVOS 2024

Samantha Amerasinghe reports on the main issues addressed at the recent summit

The World Economic Forum (WEF) held in Davos in January was convened against the most complex geopolitical and economic backdrops in decades. Global leaders in the fields of politics, business and economics gathered to discuss the most pressing challenges facing the world, in the hope that more purpose driven and impactful action will chart a way forward.

This makes WEF still relevant – although many have criticised the forum for its elitism and expensive nature.

Some of the hot topics that were on the agenda addressed issues such as AI, and its transformational capacity for human welfare, war, uncertainty and climate, and the economic growth potential of China and India.

Artificial intelligence took centre stage at this year’s meeting in the Swiss ski resort, and the overall consensus was that the positives far outweigh the negatives and human intelligence doesn’t face a major threat from it.

Conversations around the need for regulation of this burgeoning technology and how to apply it to scientific discovery were top of mind, followed by questions on how to monetise this opportunity.

War and the uncertain outlook for the world were also front and centre of discussions between world leaders but it was disappointing that no plans or strategic road maps for peace were offered to end the Israel-Gaza violence.

Instead, there was more rhetoric on the risks posed by a fragile geopolitical situation, wars in the Middle East and Europe, threats to global supply chains and uncertainty around food security.

Another hot topic was climate – in particular, the need for businesses to adapt to climate change and countries to work together to find solutions to the existential climate crisis that the world is facing.

Optimal resource allocation in the fight against climate change and need for businesses to adopt sustainable practices with a sense of urgency were seen as imperative actions for countries to move the dial.

Rebuilding trust between developed and developing countries was deemed crucial. Rich countries were reminded of their significant role in assisting developing nations in financing climate action if there’s to be a stop to widening inequality.

Positive growth stories in China and India were also a talking point. Despite China’s growth slowing and the country experiencing major structural economic challenges, it remains attractive to investors.

Economic progress at 5.2 percent GDP growth last year was below pre-pandemic levels but even China growing at three or four percent is a meaningful proposition for many businesses.

The rise of India, and its rapid transformation into one of the fastest growing and largest economies in the world, was also emphasised. However, it wasn’t only India’s economic potential that caught the world’s attention but also the great strid­es it has made on the technology, healthcare and other fronts such as gender equality.

An interesting idea put forward was how investment in women’s health could boost the global economy by US$ 1 trillion annually by 2040.

How India addresses critical issues such as its transition to clean energy, the responsible use of AI and its actions this year as crucial general elections approach will be closely watched as this will lay the groundwork for the country to become the world’s third largest economy in the next five years.

Last year, India overtook China as the most populous country in the world and raised questions on whether its demographic dividend – where approximately 65 percent of the population is below the age of 35 – would be advantageous to its growth story.

India’s consumption is growing at three times the global average and will account for 25 percent of the world’s energy demand. Its growing population and rising energy demand call for maintaining a delicate balance between economic growth and eco­logical responsibility with the urgent need to move towards adopting more sustainable practices.

Inflationary pressures from increased shipping costs and the possibility of oil price hikes paint the backdrop for what policy makers will have to grapple with as they tackle the pressing global challenges confronting them. Uncertainty on where interest rates are heading is another cause for concern.

Finally, 2024 is an election year with over two billion people across more than 50 countries including the world’s largest democracies going to the polls – the results of which will prove consequential for years to come. The outcome of the US presidential election will be critical as it could serve as a bellwether for the rest of the world.

The US presidential race, which will culminate in November, has the potential to pose the greatest danger to the world if former president Donald Trump secures a second term. A victory for the Republican Party could mean that American isolationism will affect other parts of the world once again.

Navigating the most pressing challenges will be made all the more difficult unless world leaders unite and adopt a more collaborative approach.