Tag Archives: Davos

Desperate in Davos — policymakers struggle for answers

(L-R) Martin Wolf, Associate Editor at the Financial Times, Christine Lagarde, Managing Director of theInternational Monetary Fund (IMF), George Osborne, Britain's Chancellor of the Exchequer, Arun Jaitley, Minister of Finance of India, Haruhiko Kuroda, Governor of the Bank of Japan and Tidjane Thiam, Chief Executive Officer of Credit Suisse attend the session "The Global Economic Outlook" during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich

(L-R) Martin Wolf, Associate Editor at the Financial Times, Christine Lagarde, Managing Director of theInternational Monetary Fund (IMF), George Osborne, Britain’s Chancellor of the Exchequer, Arun Jaitley, Minister of Finance of India, Haruhiko Kuroda, Governor of the Bank of Japan and Tidjane Thiam, Chief Executive Officer of Credit Suisse attend the session “The Global Economic Outlook” during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich

By Noah Barkin
January 23, 2016

DAVOS, Switzerland (Reuters) – Angela Merkel was missing from Davos this year, but the German leader’s optimistic mantra “we can do this” echoed through the snowy resort in the Swiss Alps.

China’s economic slowdown? Manageable. Plunging financial markets? Temporary. And Europe’s refugee crisis? A big challenge, but one which will ultimately push the bloc’s members closer together, audiences were told over and over again.

Beneath the veneer of can-do optimism at the World Economic Forum, however, was a creeping concern that the politicians, diplomats and central bankers who flock each year to this gathering of the global elite are at the mercy of geopolitical and economic forces beyond their control.

At the top of the lengthy list of worries was Europe, whose policymakers remain deeply divided in their approach to the refugee crisis at a time when the bloc faces a host of other threats, from Islamic extremism and the rise of far-right populists, to a possible British exit from the European Union.

“You’ve had deadly crises in Europe from day one and we’ve overcome them. However we always had one crisis at a time. Today we have about five, from Brexit to ISIS and everything in between,” said Josef Joffe, the publisher-editor of German weekly Die Zeit.

“In the past we had leadership. Today we are facing overwhelming demands on leadership and we are delivering less of it,” he added.

Amid the reassuring messages on the refugee crisis, came stark warnings from people like IMF chief Christine Lagarde that Europe faced a “make or break” moment. Dutch Prime Minister Mark Rutte and his Swedish counterpart Stefan Lofven gave the bloc 6-8 weeks to get its act together.

And frustration boiled over after Austria became the latest country in Europe’s Schengen passport-free travel zone to unveil unilateral steps at the border to stem the tide.

“There is no way you can cope with such a massive flow of people just by closing the borders,” said the EU’s top diplomat Frederica Mogherini. “What do you do? You close the border and it’s your neighbour’s problem, who closes the border, and it’s the other neighbour’s problem?”

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(L-R) Christine Lagarde, Managing Director of the International Monetary Fund (IMF), George Osborne, Britain's Chancellor of the Exchequer, Arun Jaitley, Minister of Finance of India and Haruhiko Kuroda, Governor of the Bank of Japan talk after the session "The Global Economic Outlook" during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich

(L-R) Christine Lagarde, Managing Director of the International Monetary Fund (IMF), George Osborne, Britain’s Chancellor of the Exchequer, Arun Jaitley, Minister of Finance of India and Haruhiko Kuroda, Governor of the Bank of Japan talk after the session “The Global Economic Outlook” during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016. REUTERS/Ruben Sprich

VERY CLEAR LIMIT

On the economic front, there was also a growing sense of policymaker impotence.

Last January, in a bold sign of policy activism, the European Central Bank unveiled its hotly anticipated stimulus, or quantitative easing (QE), programme in a bid to kick-start growth and inflation in a euro zone still reeling from financial turmoil and breakup fears.

A year later, despite Mario Draghi’s assertion that the bank still has “plenty of instruments” at its disposal, the consensus in Davos was that it has now used up all its monetary ammunition and that politicians have failed to use the time the ECB bought them to implement economic reforms at home. Meanwhile growth remains subdued and inflation close to zero.

“We understand that there may be no limit to what the ECB is willing to do but there’s a very clear limit to what the ECB can and will achieve,” chairman of Swiss bank UBS and former Bundesbank chief Axel Weber said after Draghi signalled yet more monetary easing.

The central theme of this year’s meeting was the “Fourth Industrial Revolution” — the idea that technological advances will allow ever greater levels of automation, transforming the global economy in profound ways.

But in a sobering report on the implications of these advances, UBS said they were likely to increase inequality across the globe, and the authors expressed scepticism about whether politicians could put a halt to this trend.

At a lunch entitled “The End of Political Consensus”, there was broad agreement that rising inequality, and the sense that elites were only looking out for themselves, was fuelling more and more resentment of established politicians, and giving rise to a tide of populism — in the form of politicians like Donald Trump and France’s Marine Le Pen.

However the attendees, including Harvard historian Niall Ferguson and former European Commission President Jose Manuel Barroso, had few answers about how to combat this trend beyond more responsible leadership.

“We are witnessing the decay of power,” Moises Naim of the Carnegie Endowment for International Peace told the audience. “The view is that anything is better than the people in power.”

Justin Trudeau, Prime Minister of Canada and Sheryl Sandberg, Chief Operating Officer of Facebook attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 22, 2016. REUTERS/Ruben Sprich

Justin Trudeau, Prime Minister of Canada and Sheryl Sandberg, Chief Operating Officer of Facebook attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 22, 2016. REUTERS/Ruben Sprich

OPTIMISM ON CHINA

On the positive side, there was optimism that the Chinese economy was heading for a soft rather than a hard landing, despite the struggles of policymakers there to manage the shift to lower growth rates.

And few doomsayers thought that what Credit Suisse CEO Tidjane Thiam described in the final session on Saturday as “the worst start to any year on record in financial markets ever” was a harbinger of another global financial crisis.

The optimists pointed to the climate deal struck in Paris in December as a sign of what policymakers can still do at a global level when they put their minds to it.

But building on the momentum from that deal looks tougher than ever. In her outlook for 2016, Citi’s global political analyst Tina Fordham, said geopolitical risks looked more acute than they have in decades, pointing to the refugee crisis as the challenge “where everything converges”.

“Not even Angela Merkel has the capacity to make all of this work,” she said.

Copyright Reuters 2016

(Additional reporting by Paul Taylor, Carmel Crimmins, Dmitry Zhdannikov, Martinne Geller and Sujata Rao; Writing by Noah Barkin; Editing by Alexander Smith)

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When will the penny drop at Davos?

 

WEF publicity photo/Michael Buholzer

WEF publicity photo/Michael Buholzer

It’s not unusual for environmental risk to come up at the World Economic Forum, held this month in Davos, notes Natural Security columnist Chris Wood. “What appears to be harder for the high-net-worth and high-power-quotient individuals meeting in the Alps to accept, is that the rising incidence, mounting costs and escalating risk of natural security failures proceed directly from the very system that the World Economic Forum was invented to promote,” he writes in his new column, Davos: Pantomimes of Concern From the One Percent. Excerpt:

The one percent are meeting in Davos, Switzerland, this week—or at least, that fraction of the one percent that retains either a trace of social conscience or an instinct for personal survival that entails more than a private army and a fortified island somewhere.

The World Economic Forum (WEF) is the one annual event at which the rich and powerful gather to consider the prospects for further expanding and entrenching the free market, neo-liberal economy that has made them the masters of their universe and ours. And as in other years, they will consider the threats that haunt their agenda.

The conversation-starter for that discussion is a single, colourful graphic (see illustration, below) locating nearly 30 “risks” to the globalized economy along axes of likelihood and impact. They include low-likelihood, high-impact eventualities like the use of weapons of mass destruction, as well as high-likelihood but low-impact risks like failures of urban planning.

But here’s the thing: of the 25 risks that the WEF planners ranked as either highly likely, or likely to have a high impact (above 4.5 on either scale of zero to six), or both, more than half (13) are consequences of local and global-scale failures of natural security.

Some are straightforwardly so. Water crises, biodiversity loss, ecosystem collapse and extreme weather events, are all direct manifestations of our biophysical habitat strained to breaking point. The strangely neutral phrase, “Failure of climate-change adaptation” is a technocrat’s portmanteau for everything from droughts enduring decades to abandoned coastlines to super-storms to mortality-raising heat waves and cold snaps. Log in first to continue reading Davos: Pantomimes of Concern From the One Percent (subscription*)

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Noteworthy: Davos, Ebola, media matters

Davos Conference Center, Switzerland. World Economic Forum photo via Wikipedia, Creative Commons

Davos Conference Center, Switzerland. World Economic Forum photo via Wikipedia, Creative Commons

The World Economic Forum, AKA the “annual summit for the one per cent,” kicks off in Davos-Klosters, Switzerland, tomorrow. Subjects range from bicycles for African kids to global trade, Ebola to climate change, “honey laundering” to oil markets. Switzerland’s tourism industry is delighted at the publicity. Even China’s premier will be there. For the rest of us, well, there’s always online attendance. Click here for the WEF agenda and links to online webcasts.

Speaking of Ebola, there’s (somewhat) good news. The head of the United Nations said progress in fighting the disease in West Africa shows it can be done. The World Health Organization reported that Guinea, Liberia and Sierra Leone this month reported their lowest tally of new cases since August.

It’s possible to fight the virus, Secretary-General Ban Ki-moon told a UN meeting today, after a trip to the region. But he said to avoid a new surge of cases a regional response will be needed.  In case you missed them, two pieces on F&O add perspective to the deadly virus:

Ebola: the Black Death Revisited. By Ewa Bacon

There is no rational reason to fear Ebola in the developed world, writes Ewa Bacon, because we know the source of contagion and have methods to deal with it.  However, panic has set in.  Image: Plague is defeated -- a detail of the "Column of the Plague" (Pestsäule), in Graben, Vienna, Austria. Photo by Jebulon via Wikimedia, Creative Commons

There is no rational reason to fear Ebola in the developed world, writes Ewa Bacon.  Above: a detail of the “Column of the Plague” (Pestsäule), in Graben, Vienna, Austria. Photo by Jebulon via Wikimedia, Creative Commons

It is not Ebola that is stalking the land, but anxiety and fear. We fear an extinction event. We search the environment and note the loss of plants and animals. We worry as we examine “Martha,” the last ever passenger pigeon. We examine the geological record and note that not even the mighty dinosaur survived the cataclysm of Cretaceous period. Could that happen to us as well? We search history and note some sobering examples of global catastrophes. Few are as renowned as the “Black Death.” Early in the 1300’s Europeans received news of unprecedented diseases raging in the wealthy, remote and mysterious realm of China.

Ebola’s first casualty: clear thinking. By Jonathan Manthorpe (paywall)

The ebola panic overshadows far more deadly diseases. Unfortunately, humans are appalling bad at risk assessment. In recent weeks Ebola has tweaked our primal fears of the first Horseman of the Apocalypse, Pestilence, in the same way as my run in with the Black Death. Politicians, world health officials and the media are near hysteria as they pump out fear-inducing prophecies about the looming pestilential scourge.

What else we’re reading, with a focus on media matters:

Preparing for Fidel Castro’s death – How Florida news organizations plan to cover the Cuban dictator’s passing, by Susannah Nesmith in the Columbia Journalism Review is funny, in a black-humour sort of way. Excerpt:

Every year or so, a rumor bubbles up that the world’s most famous Cuban has this time, finally, truly, died. The local press corps sends crews to Versailles, the iconic Little Havana restaurant where presidential candidates appear to appeal to Cuban American voters and where journalists gather when anything about Cuba might be happening. Pretty early in the news cycle of a Fidel-is-dead rumor, The Associated Press writes a story that essentially says Castro might not be alive but no one on the island says he’s dead. This year, on Jan. 9, the AP’s Havana bureau chief, Michael Weissenstein, wrote that story, noting the rumor that the foreign press was being called to a press conference.

Weissenstein also took to Twitter. “Foreign correspondents now furiously calling each other about supposed press conference, an event not usually kept secret from press itself,” he wrote.

For the schadenfreude file: City of Paris Threatens to Sue Fox News Over False Report, in Rolling Stone report. Excerpt:

The city of Paris has threatened to sue Fox News over an erroneous report the network made claiming Paris had “no-go zones” for police and non-Muslims. The network later apologized for the error.

“When we’re insulted, and when we’ve had an image, then I think we’ll have to sue, I think we’ll have to go to court, in order to have these words removed,” Paris mayor Anne Hidalgo told CNN on Tuesday. “The image of Paris has been prejudiced, and the honor of Paris has been prejudiced.”

The comments stem from numerous segments Fox aired last week claiming that police and non-Muslims refuse to enter certain areas in France and England out of fear, with one show, Fox & Friends, erroneously showing a map “highlighting” the non-existent zones.

A F&O reader recommends a disturbing report in the Guardian about how British spies are snooping on journalists, whom they hold in similar regard to terrorists: GCHQ captured emails of journalists from top international media. Excerpt:

GCHQ’s bulk surveillance of electronic communications has scooped up emails to and from journalists working for some of the US and UK’s largest media organisations, analysis of documents released by whistleblower Edward Snowden reveals. …

One restricted document intended for those in army intelligence warned that “journalists and reporters representing all types of news media represent a potential threat to security”.  

It continued: “Of specific concern are ‘investigative journalists’ who specialise in defence-related exposés either for profit or what they deem to be of the public interest.

The country so concerned about journalists as security threats would be the same Britain whose premier David Cameron joined other world leaders in Paris this month, marching in the massive rally for freedom of expression after the terrorist attacks on the Paris satirical paper Charlie Hebdo.

 

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Posted in Canadian Journalist, Current Affairs, Gyroscope Also tagged , |