Dubai: There is a real danger that as multiple shocks continue to affect the world, policy makers are paralysed while waiting for the perfect moment in order to restart normal thinking. Averting this disaster is the mission of the World Economic Forum’s forthcoming Global Agenda Council in Dubai.
The world’s largest organised brainstorm is made up of over 88 Global Agenda Councils, each of which focuses on particular topic, which might be regional (eg: Middle East or China), or sectorial (eg: water security or biotechnology) or a major issue (eg: global financial system or youth unemployment).
The three-day meeting in Dubai allows each Council to debate its own priorities and then to network with other related Councils to find common ground and break out of the specialist silos of knowledge that often cripple cross-industry debate. The results of this work will feed directly into building the agenda for the World Economic Forum’s Annual Meeting in Davos, and the regional meetings that the WEF organises around the world.
Resilience
This year’s over arching theme is “resilient dynamism”, which was described to Gulf News by Lee Howell, the Managing Director of the World Economic Forum, as a way to prepare for the inevitable Black Swans that will continue to hit us, but also to find the energy to plan ahead at the same time.
“We still live in a period when there are going to be shocks despite coming out of the financial crisis. We constantly have to prepare for Black Swans that will surprise us.
For example, the earthquake and tsunami in Japan had a dramatic impact on energy and nuclear strategies. And there will be other unexpected external shocks in many markets and in many countries,” said Howell.
“The dark side of global interconnectedness is that we have such efficiency, but also the systems are also transmission systems for major shocks around the world. So what will be the next shock? It could be the Eurozone and Spain, or the fiscal cliff in the United States, or problems with Iran, or the Senkaku Islands in the South China Sea. We do not know where it will come from, but these external variables are there that no one can truly mange or mitigate, but we need to be able to bounce back from them.”
“In Dubai a lot of the discussion will be about the where the next major shock will come from, but also about how we can be more resilient to it. Both at the global system level, and also at a sectorial and regional level.”
Dynamism
But if resilience means being ready for the next crisis, the dynamism element of the WEF’s theme of ‘resilient dynamism’ requires people to be prepared to take risks and tackle the great underlying problems that continue to face the world even if the political noise has obscured them.
“We need to focus on finding this dynamism because if we are preoccupied with looking for the next great external shock, we end up with policy paralysis. This inertia is what we have in Europe at the moment as we lurch from crisis to crisis and do not share a vision to get out of the more troubling structural issues that remain.
“Our leaders need to take some risks to move ahead and break through the policy logjams. For example, in the Middle East, there are global issues that will require whoever is in power to deal with them. The problem of reviving economic growth, but making sure that it tackles the major crisis of youth unemployment in the region, will be vital. Other major underlying issues in the Middle East include ensuring energy security, as well as food security and water security. Clearly also there is the immediate economic outlook but governments will need to face these major global issues in their own back yard,” said Howell.
The meeting in Dubai will focus on the global economic outlook. And Howell was clear that this new outlook will have to take into account the changed political landscape: the November meeting in Dubai will be after the uncertainties of the US elections are resolved. In addition other G20 countries will have gone through important changes, as China will have formally announced its next generation of leadership. In addition, Russia already has a new president, and in the EU new government in Paris has helped build a new dynamic.
The Dubai GAC summit will need to evaluate the long term implications of these changes to the economies and societies, said Howell.
Brains trust
“The Global Agenda Councils are the brains trust of the World Economic Forum, and also of many of its members and stake holder from government and industry partners, who want to be active and engage with this community,” he said. “The GAC discussions offer us the chance to build a resilient conceptual frame work which allows us to react more effectively.”
Seeds of Dystopia
A lot of this framework is drawn from the WEF’s Global Risk Report which analyses which risks to the global landscape are the more likely, and which are the more important. In a particularly gloomy scenario it calls the Seeds of Dystopia, the Risk Report outlines a constellation of fiscal, demographic, and societal risks that could result in a world with a large youth population contending with chronic high level of unemployment, as the same time as the largest ever population of retirees becomes dependent on heavily indebted governments. Both young and old could face an income and a skills gap, which could threaten social and political stability. The purpose of such scenario building is to identify the threats in advance, and find ways to mitigate them, and put plans in place to avert the gathering storms.
Howell outlined the major issues affecting the Middle East in the aftermath of the revolutions of the Arab Spring, which included the obvious issues of countries like Egypt and Libya with chronic systemic imbalance which cannot be redressed by fiscal means, but a desperate need to settle their balance sheets. This means that their leaders are going find it very difficult to address the societal issues which were such an important part of their appeal to their electorates, when their economic growth is nowhere near what they need to get on. “First and foremost you need political stability to build economic growth,” he said.
But even if all the immediate economic issues were resolved and the politics was stablised, there would still be the underlying issues or unemployment, food security, energy security, and water security. People have to get around the fact that past the political news cycles, there are still these core problems in the region, so who ever brings stability to the country, will still have to deal with these issues. “That is what the Global Agenda Councils are all about”, said Howell.
