The beginning of the end of Davos Man
World Economic Forum at Davos has come to symbolize the rise of global economy, companies and executives . It is annual meeting is highly sought after event in calendar of Prime Ministers, Presidents, Finance Ministers to woo global companies and their CEOs to make investment in their respective country. Along side this , the emergence of WTO and rule bound trading arrangement;the rise of European Union and Euro; IT, Internet , media and social media revolutions have created a different world what it was 40 years ago. The rise of China and India and a global middle class demanding global products and brands have created a new semi globalized world if not fully globalized one.
This great and good story continued till the financial crisis in 2008. After financial crisis and slowdown in western economies, there is loss of job for blue collar jobs in the developed economies and also the skilled jobs going to skilled people of emerging markets who are willing to work at much lower salary. The western companies have gained in the process but the gains are mostly going to the top 5 percent population. The blue collar workers and lower middle class are up in the arms because of the rise in relative inequality. People at the basic level are getting restless and globalization and its proponents are easiest targets for leaders to attack. Donald Trump has mastered this art and Boris Johnson is another.These leaders who may come from elitist background but have tapped the anxieties of the masses to build a new narrative of nation first.
The rise of Donald Trump in US, Boris Johnson in UK , Erdogan in Turkey, Modi in India, President Xi of China and Putin of Russia, Mohammad Bin Salman of Saudi Arabia are all trying to promote their national interests first even at the cost of global or regional integration. But there are consequences for this insular economic and international policy. Recently, USA has blocked appointment of judges in the appellate body of WTO. The policy of Trump government is to dictate the agenda of US in WTO which will lead to virtual stopping of WTO as an effective global trade body.
The election of Boris Johnson and Brexit of UK from European Union will make EU weaker body in the longer run. Many more such exits from weaker EU nations may come in future. The question marks on EU will make global and regional integration a slow and halting process.
The executives of Huawei are facing the brunt of these forces and the distrust among nations. Indian IT companies are supposed to hire more US nationals for their onsite contracts . European workers and UK workers in Continent Europe will face new ground rules. Mergers and Acquisitions which are politically sensitive are not going to coming through.Companies will also find it difficult to navigate new rules and regulations related with environment and the cost for the local community.
The end of Davos Man is in sight who have been benefited enormously with the process of increasing trade, investment and technological innovation leading to higher growth of business and profits. The rising inequality ,climate change and financial crisis have put an halt to this unprecedented growth. The attempt is to bring in concept of conscious capitalism with universal basic income scheme may not provide lasting solution. The future of Davos Man who visit world economic forum as a Mecca of the new of ideas of economic growth and change seems to be gloomy . If Trump gets reelected in US along with Boris Johnson in UK, it looks to be the beginning of the end of Davos Man.