As the world's financial and political elites convene here in the Swiss Alps for the World Economic Forum, their vision of ever-closer commercial and political ties is under attack — and the economic outlook is darkening.
Britain’s political system has been thrown into chaos as the country negotiates a messy divorce from the European Union.
Under President Donald Trump, the United States is imposing trade sanctions on friend and foe alike, and the government is paralyzed by a partial shutdown over immigration policy that forced Trump and a high-level US delegation to cancel the trip to Davos.
A year after getting a standing ovation from the elites at Davos, French President Emmanuel Macron is sinking in the polls as he contends with “yellow vest” protesters who have taken to the streets to call for higher wages and fairer pensions. Nationalist political movements are gaining strength across Europe.
And the economic backdrop is worrying: experts are downgrading their forecasts for global growth this year amid rising interest rates and tensions over trade.
“Judging by the state of the world right now 10 years on from the financial crisis, and the dysfunctional state of global politics I would suggest that these annual events have achieved the sum total of diddly squat,” said Michael Hewson, chief market analyst at CMC Markets UK. The collective worries have sent a shudder through global financial markets: The Dow Jones industrial average is down nearly 9 per cent from Oct. 3. David Dollar, a senior fellow at the Brookings Institute, said the buckling market “represents a lot of anxiety that we're seeing from the corporate elite who meet at Davos.”
How times have changed. For most of the past quarter century, the worldview symbolized by the World Economic Forum — of ever-freer world trade and closer ties between countries — had dominated. Then came a backlash from Americans and Europeans whose jobs were threatened by low-wage competition from countries like China and who felt alienated at home by wealth inequality and immigration.
The Davos confab has always been vulnerable to snark: hedge fund billionaires flying into Davos in fuel-guzzling private jets to discuss the threat of climate change; millionaire CEOs discussing inequality while downing cocktails; endless conversations between people who describe themselves as “thought leaders.”
Access to the elite gathering, for businesspeople anyway, doesn't come cheap. It first requires a WEF membership, which starts at 60,000 Swiss francs ($60,259) and rises up to the "Strategic Partner" level at a cost of 600,000 ($602,605). But getting into the Davos event requires an invitation and an extra fee, which spokesman Oliver Cann said is 27,000 francs ($27,117) per person.
That's just for corporate chieftains. Civil society, non-governmental groups, UN leaders and governmental officials don't pay: They get in free. Lodging during high-rent Davos week, however, is another matter.
Although Davos is seen as a redoubt for global elites, populists have come, too. Trump got a polite reception when he showed up in 2018, and he had planned to come again this year before the shutdown intervened. Brazil's newly installed president, the populist Jair Bolsonaro, will attend this year.
Davos serves as a global stage for world leaders and executives, and the conference center transforms into a warren of public and private meetings. Executives talk possible deals. Government leaders either meet and greet each other or seek to iron out differences — mostly quietly. Academics and chiefs of non-governmental groups speak out in webcast panel sessions or comb corridors looking to rub elbows with decision-makers.