Fintech – Danger, Opportunity or Financial Fact of LifeJune 13, 2022
Time to Call TimeJune 13, 2022
Notorious as the world’s most exclusive and expensive talk shop, the World Economic Forum (WEF) meeting at Davos 2022 was different and more ‘business-like’ than usual for a number of reasons. Held in late May, rather than mid-January as is customary, the most notable physical feature of this year’s talk fest was simply the absence of snow. Denuded of sleigh rides and glühwein, the famous Swiss village was missing some of its characteristic charm, but this also removed a number of excuses for the rich and famous to engage in playtime while out of office. This was also the first time for two years that Davos has been held face-to-face, rather than virtually. Often the most important discussions at the annual Alpine retreat are held in side-bars and other bars, so this first ‘post-pandemic’ WEF was a welcome manifestation of global normalisation. If nothing else, the WEF sends important signals to both business and political leadership regarding market and investor sentiment and so it was encouraging to see leadership engaging with each other in the flesh.
An important point of distinction to Davos 2022 was the recognition of the unique complexity confronting global business and political leadership. Historically, the WEF has been susceptible to criticism of being comfortably removed from the harsh realities facing billions of ordinary people across the world and in debating big picture abstract issues that do little or nothing to solve global challenges of poverty, inequality, underdevelopment, conflict and climate change. Indeed, far too often, Davos is reduced to a corporate and political reputational beauty parade, replete with sincere pledges of commitments to “work together to find solutions to some of the greatest challenges facing humankind”. Not so this year. This was the year that Davos grew up and got real.
The highest levels of inflation in decades have come back to stalk the global economy after being held in check and it is far from clear that central bankers and treasuries have the repertoire and policy tools to force the genie they released, back into the bottle. This is compounded by the inconvenient truth of an apex energy producer going rogue and invading a major food producer and by so doing holding millions in Europe to an energy ransom, and millions more in Africa to a food ransom. Beyond the immediate human security issues, the crisis in the Ukraine has also relegated climate change commitments made at the Glasgow CoP26 just last November, literally onto the back burner.
But the most profound realisation that forced its way onto the WEF agenda this year, was that given the re-emergence of aggressive and protectionist nationalism, globalisation itself may be over, at least as we knew it. After all, the entire basis of the WEF is predicated on deepening and spreading the virtues of globalisation. So, while this year’s Davos delegates were confronted with a unique set of global challenges, the really sobering truth is that the very raison d’être for the WEF may, in fact, be over.