Key Points from the 2024 World Economic Forum in Davos

Key Points from the 2024 World Economic Forum in Davos

The 54th annual meeting of the World Economic Forum (WEF) was held from January 15 to January 19, 2024, at a local Swiss Alpine school in the heart of Davos, Switzerland. The annual meeting brought together 3,000 participants from around the globe. That included 1,600 business leaders, 350 heads of state and government ministers, and hundreds of academics, civil society leaders, and entrepreneurs. Davos 2024 also witnessed a gender realignment. Of the 3,000 participants, some 800 (28%) were women, a record high.

While the event has been criticized for being elitist and expensive, according to Reuters, it remains a relevant gathering that provides useful insight into "how the rich and powerful respond to the most pressing issues."

What were the key issues raised at the meeting?

  • Achieving security and cooperation amid rising geopolitical tensions
  • Global economic concerns
  • Artificial Intelligence as a driving force for the economy and society
  • A long-term strategy for climate, nature, and energy

Achieving security and cooperation amid rising geopolitical tensions

Three events were actively discussed in this sector:

  • Prolonged war in Ukraine;
  • Deadlock in the Middle East;
  • Attacks on shipping in the Red Sea.

Ukraine

Ukrainian President Volodymyr Zelenskyy has spoken out about his country's plight and warned delegates that Russian leader Vladimir Putin is seeking conquests outside Ukraine. After talks with more than 80 national security advisers, Switzerland stepped forward and agreed to host the peace talks. Zelensky also met with JP Morgan boss Jamie Dimon and other bank executives on the issue of financial support for reconstruction. Urging Kyiv's Western allies to continue supplying arms and financial support, European Commission chairwoman Ursula von der Leyen said: “Ukraine can prevail in this war, but we must continue to empower their resistance.”

Palestine/Israel

In recent months, no progress has been made in finding a ceasefire in the war between Israel and Hamas. The head of the Palestinian Investment Fund said at a WEF panel event that at least 15 billion dollars would be needed to rebuild Gaza's housing infrastructure alone. However, Arab states are not inclined to help with funding until a lasting peace is negotiated. In the meantime, economies throughout the region are in decline.

“We agree that regional peace includes peace for Israel, but that could only happen through peace for the Palestinians through a Palestinian state,” said Saudi Foreign Minister Prince Faisal bin Farhan.

Red Sea

Continued attacks on Red Sea vessels by Iran's Houthi group in Yemen will make it much more expensive to transport goods from Asia to Europe. Yemeni and Iranian officials have said the fighting will not stop until Israel ends the war in Gaza. Meanwhile, in Davos, CEOs talked about alternative supply routes that bypass the Red Sea - particularly around southern Africa.

Global economic concerns

Concerns about the state of the global economy persisted, with global bank governors warning of inflationary pressures. Their fears were linked to a possible rise in oil prices and increased transportation costs, especially given the current problems in the Red Sea. Bank executives were concerned that the market had misjudged the decline in interest rates, and geopolitical risks were expected to cause further volatility.

Income inequality was also raised. In 2022, CEOs in the U.S. earned 344 times more than the average worker, up from a 21-fold gap in 1965. In addition, the fortunes of billionaires have grown by 109 percent over the past decade. At the same time, during the pandemic, there was a new billionaire every 30 hours. While billionaires have greatly increased their wealth, governments have become noticeably poorer. To address this problem, governments will have to find funds and redistribute income and wealth.

And this can be accomplished through three key tax-based measures:

First, prioritizing progressive taxation. Countries that do so have lower income inequality.

Second, wealth taxation. A two percent annual wealth tax for multimillionaires and a five percent tax for billionaires would generate $2.52 million a year. Given that the richest 10 percent account for about half of the world's carbon dioxide emissions, this would also help address the climate crisis.

Third, a tax on excess profits earned by large corporations, such as oil companies. The revenue would be redistributed to those struggling with rising food and energy prices and the effects of the climate crisis.

Artificial Intelligence as a driving force for the economy and society

Speaking of artificial intelligence, the tone of panel discussions about the technology has been optimistic rather than dystopian. Even OpenAI CEO Sam Altman, who has previously joined the chorus of voices warning that AI could lead to human extinction, said that AI "will change the world a lot less than we all think."

Altman was referring to general-purpose artificial intelligence or AGI. It's a technology broadly defined as an AI system that can perform tasks on the same level as a human or even better. According to Recruit Holdings, the parent company of Indeed and company review site Glassdoor, even after AI has made huge strides in recent years, the number of job postings in most countries still exceeds pre-pandemic levels. Altman says his opinion of artificial intelligence has changed: Whereas he once thought robots would replace us all, he's now impressed by how companies are using it as a tool to supplement human work.

A long-term strategy for climate, nature, and energy

It discussed approaches to achieving carbon neutrality and a clean world by 2050 and developing strategies that can be implemented to ensure affordable, secure, and inclusive access to energy, food, and water.

Fewer energy executives attended Davos this year. At the same time, several panel sessions focused on ending the use of fossil fuels. However, the head of Aramco dashed the hopes of many delegates by saying that peak oil demand would not come in the foreseeable future.

There were also discussions about how climate change is affecting human health. At one, Nisia Trindade Lima, Brazil's health minister, spoke about her long list of concerns, including waterborne and mosquito-borne diseases that result from floods and extreme rainfall, malnutrition that can result from drought, the overloading of health infrastructure during climate crises, the damage to these facilities caused by extreme weather, and the impact of the physical stresses of climate change on mental health.

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