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Amid virtue-signalling, optimism galore at Davos

A report heralded the return of good times but cautioned against underlying economic fears

Gulf News

The annual World Economic Forum took place last week amid freezing temperatures in snowy Davos, Switzerland with the US President Donald Trump making a key speech at the high profile event.

The Guardian highlighted the state of gross inequality in the world and how leaders, bosses and corporate czars should do more to mitigate the world’s suffering. “The rich, as F. Scott Fitzgerald noted, “are different from you and me”. Their wealth, he wrote, makes them “cynical where we are trustful” and their affluence makes them think they are “better than we are”. These words ring truest among the billionaires and corporate executives flocking to the Swiss ski resort of Davos last week. The highs recorded by stock markets, the tremendous monopoly power of tech titans and spikes in commodity prices reassure the rich cosmocratic class that they have weathered the storm of the financial crisis. The moguls can talk safely about inequality and poverty. But they will do little about it because they do not think their best interests are aligned with citizens. This is a mistake of historic proportions.”

The paper warned against the sense of complacency that is typical of giant corporations and big banks. “Since 2015, Oxfam calculates, the richest 1 per cent have owned more wealth than the rest of the planet. The very wealthy think they no longer share a common fate with the poor. Whatever the warm words at Davos, no company bosses will put their hands up to the fact they play one country against another in order to avoid taxes; no firm will be honest about their attempts to stymie trade unions or about how they lobby against government regulation on labour, environment or privacy that tilts the balance of power away from them and towards the public. The largest western corporations and banks now roam the globe freely. As memories of the financial crisis recede, they are going back to the myth that they are no longer dependent on national publics or governments.”

The Wall Street Journal carried a comment piece heralding the return of good times but cautioned against underlying economic fears. “Behind the optimism [at Davos] is the strength of corporate earnings, but some investors feel the froth has gone too far. Bankers and executives at the World Economic Forum are celebrating a growing economy and rising markets. They see a continuing string of deals flowing their way, cost-saving new technology and a boost from US tax cuts. But underlying worries persist despite an upbeat economy in practically all corners of the world, delegates feel. Among them: The market’s ascent has been eerily, steadily calm ... Artificial intelligence, blockchain and other developing technologies permeated Davos presentations, and also meetings among bankers and company executives. Technology is driving deals but also presents risks.” Digital major Quartz ran a commentary panning the much-hyped speech of the Indian Prime Minister Narendra Modi at Davos. “The first Indian prime minister to speak at Davos in two decades, Modi used his hour on the stage to showcase his government’s economic track record, emphasising the “inclusiveness” apparently achieved during his term. But the prime minister’s salesmanship abroad won’t undo the cracks that are showing at home. Modi’s flaunting of his economic reforms abroad belies the strong undercurrent of discomfort at home. Both demonetisation and the goods and services tax (GST) have been disruptive to say the least, and the promised benefits of both are yet to show up.”

In an op-ed, the Independent highlighted the hypocritical virtue-signalling at Davos. “To its advocates, the WEF, while it doesn’t save the world, helps influential and intelligent people of good intent devise solutions to the world’s intractable social, economic and political problems. To its more vehement critics, Davos represents a kind of nefarious elite conspiracy against the world’s powerless. Some take a less extreme, albeit still cynical view, arguing that Davos essentially produces lots of hot air and hypocritical virtue-signalling from the planet’s most privileged individuals.”