Davos summit to grapple with double shock of war and energy crisis

From the ongoing Ukraine war to the looming threat of climate change, the 2023 World Economic Forum is clouded with uncertainty

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“The question is, when will this war end?” This was what a senior official at a multilateral organisation asked me as I bumped into him walking up the Davos promenade on Sunday, on the eve of the start of the World Economic Forum’s Annual Meeting.

The question is one that is on the mind of officials and heads of businesses and banks as the one year anniversary of the Ukraine war is fast approaching. The question will not be answered in Davos this week, but will cast a shadow over the gathering.

From the impact on energy markets to issues of food security, the war will continue to shape the year. However, with Russia absent from the meetings, and with a strong Ukrainian and European presence, discussions will be focused largely on maintaining support for Kyiv. The Ukrainian first lady, Olena Zelenska, will participate in an online session run by the Victor Pinchuk Foundation, while a number of Ukrainian representatives are expected to be in sessions and events.

Another shadow cast over the Alpine town this week is that of the global economy, with the World Bank cutting its growth outlook for 2023 to 1.7 per cent last week, there are concerns over how the coming months will develop. While crypto is much more muted this year compared to the past few years, big banks are here in full force.

They will not be hosting ostentatious parties or displaying too much optimism as living costs rise in much of the world. In its own Global Risks Report, the World Economic Forum’s survey of global experts showed that the “cost of living crisis” is expected to be the greatest risk facing the world in the coming two years, followed by “natural disasters and extreme weather”.

However, over the next 10 years, experts see “failure to mitigate climate change” and “failure of climate change adaptation” as the two greatest risks. Climate change and the need for action has been a theme at the Annual Meeting in Davos for several years now, when Al Gore was the most vocal political voice on the issue. Now, it is one that is seen throughout the programme of this week’s meeting, with eyes set on the UAE hosting Cop28 later this year.

Another key feature ahead of the start of the Annual Meeting on Monday night is the presence in full of major tech companies. From Microsoft and Meta to Amazon and Zoom, tech executives are in town to show their companies’ potential while questions abound about the financial woes some big tech names faced last year.

This will be the first full in-person meeting of the World Economic Forum since Covid-19 crippled much of global conferencing activity. And while Covid-19 testing continues for all delegates, and participants are asked to remain at home if they are unwell, the sense is that this meeting is an opportunity to look past Covid-19 and towards the future. As China slowly opens up, and economies contend with more uncertainties, from automation to stagnation, this year’s will be an even more telling Davos Annual Meeting.

Updated: January 15, 2023, 5:50 PM
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