The outcome of DAVOS 2023: THE EXPECTATION AND ITS EFFECTIVE ACHIEVEMENT

DAVOS 2023: THE EXPECTATION AND ITS EFFECTIVE ACHIEVEMENT

INTRODUCTION

As per the initiative and their supervision WEF Annual Meeting 2023 was held at Davos 2023 on the theme, ‘Cooperation in a Fragmented World,’ and convened leaders from government, business, and civil society to address the state of the world and discuss priorities for the year ahead. Among widespread global leaders, some as a representative of their governments and rest was invited and selected by WEF from corporate, academicians and other entities or persons WEF opinions their participation their views count of the theme   conversed at Davos from 16-20 January,2023 provide a platform to engage in constructive, forward-looking dialogues and help find solutions through public-private cooperation. The forum is pioneering the first global, purpose-driven metaverse platform - The Global Collaboration Village - to enhance more sustained public-private cooperation and spur action to drive impact at scale.

The Forum was chaired by Founder and Executive Chairman Professor Klaus Schwab. It's guided by a Board of Trustees, exceptional individuals who act as guardians of its mission and values, and oversee the Forum’s work in promoting true global citizenship. The agenda was to come along to deliberate a solution of a problem, and reach on certain commitments or resolution to chalk out   the bold collective action needed to drive impact at scale. The key themes at Davos: Resilience, Reimagining globalization, Inclusion and diversity, Sustainability, and the space economy   The WEF's Annual Meeting 2023 saw a record number of media mentions from influential global outlets. Topics of coverage included the economy, the Ukraine war and the climate crisis - here's a world tour of how the media covered the meeting. Each year, the World Economic Forum's Annual Meeting in Davos, Switzerland, generates great interest and debate in global media. The 2023 meeting was no exception. Back in person in January for the first time since the start of the COVID-19 pandemic, the 53rd Annual Meeting saw several recurring themes in the global media coverage. These ranged from the prevailing sentiment about the state of the global economy to the threat of global fragmentation to how to respond to the climate crisis to the potential for technology and innovation as a force for good. The meeting  saw a record number of mentions from influential global media on the core topics of debate in Davos and the announcements and updates on key impact initiatives. The coverage largely reflected the importance of cooperation and urgent action to address the main issues facing the world.

\The world today is at a critical inflection point of fragmentation. The sheer number of ongoing crises calls for bold collective action. Based on the importance of inter. We live in a highly interconnected world. Every region relies on imports for more than 25 percent of at least one important type of good, according to recent McKinsey Global Institute (MGI) research. Interconnections have created broad benefits over time, improving efficiency, increasing global product availability, and fostering economic growth. But recent supply chain disruptions, Russia’s invasion of Ukraine, and rising tensions between China and the United States have highlighted the importance of resilience. Firms and policy makers alike are examining where inputs come from and, in some cases, contemplating reconfiguring or even breaking certain long-standing trade ties.

Concentrated global trade creates complications. On the one hand, concentrated trade relationships can reflect and drive efficiency gains. On the other, interruption of concentrated trade flows can be particularly disruptive if products are harder to replace on short notice due to a lack of visibility and alternatives. In the face of new disruptions, how should companies and countries adjust these relationships, if at all? MGI’s recent research on global flows, analyzing concentration across more than 120 countries, roughly 6,000 products, and eight million individual trade corridors. About 40 percent of global trade is “concentrated”

journey in the direction of  a new global agreement to facilitate investment for development

Sustainable investment pitches in the development goals while following principles of responsible business conduct

delegates of above 110 economies have reached a draft Agreement on Investment Facilitation for Development at the WTO. This landmark agreement paves the way to amplify public-private collaboration that can try to deal with investment challenges and grow the benefits of FDI for development. The WEF has been promoting these efforts with pilot projects, technical inputs, and the launch of negotiations in Davos since January 2020.

The benefit of sustainable investment.

FDI can contribute an important role in committing the 2030 Agenda for Sustainable Development Investment (SDI) streams an aid to make progress of a nation’s development by contributing capital, employment, export opportunities, greater consumer choice, advanced technologies, managerial experience and overall economic growth. In 2017, 70 economies started a process at the WTO with the aim to enhance a new agreement on Investment Facilitation for Development (IFD) Three years later, negotiations were tossed during the WEF AGM 2020 in Davos, with 98 economies supporting the process. As of January 2023, there are over 110 economies that have reached a new draft agreement cutting red tape and making investment easier across all sectors of the economy. The Forum has helped drive impact by convening an advisory body with the International Trade Centre (ITC) and the German Institute of Development and Sustainability (IDOS) that has provided input from investors, investment promotion officials and experts on investment facilitation measures. The group has shared practical insights on what was needed to increase investment flows and their development benefits in practice.

With this support and that of other international organizations, business and civil society, countries have created a high-quality agreement that includes resolutions, inter alia, on:

· Transparency of rules

· Streamlining regulation

· Coordination between and within economies

· Innovative instruments such as supplier advancement programs and supplier databases to raised capacity and match capital with firms

Hurdle in sustainable investment

This agreement is needed to reveal contained capital, which is present but not attaining the communities and projects required. In 2021, sustainable capital rose despite uncertainty markets traumatized by the COVID-19 crisis. The value of sustainability (Sustainability is a societal goal that broadly relates to the ability of people to safely co-exist on Earth over a long time) themed investment products astonished by 63%, attaining $5.2 trillion in 2021. Yet over 95% of this capital remains in developed markets, indicating that more is needed to simplify sustainable capital flows to evolving markets and developing countries.

· The pandemic has exposed vulnerabilities in the global supply chain.

· Developing economies have been hardest hit by this disruption.

· Public-private efforts can help deliver trade facilitation reforms.

After two years of a global pandemic, global trade is injured and impaired. The judiciously tuned machinery (we call the supply chain) has turned inconsistent, impacting all parts of the world. We hyped the robustness of the system and underrated the costs of impairment in the function of the system. But global trade remains resilient, its recovery will likely take an attuned form.

TRADE FACILITATION CAN SUPPORT SUPPLY CHAIN DIVERSITY IN A POST-PANDEMIC WORLD

Emerging economies are bearing the brunt of the pandemic inflicted trade disruption. Countries that painstakingly invested in joining the international value chain producing textiles, machinery parts, electronic components and agricultural produce are feeling the pained. Fruits or vegetables are piling up in seaports due to scarcities of containers and carton boxes; vehicle parts manufacturers are gone astray their service level agreements due to late arrival of consignments at the assembly plants; and emerging e-commerce micro-enterprises are besieged as they bear increasing transportation costs.

COVID-19 is reshaping global supply chains

Behind the statistics and the headlines, there are people. Stretched supply chains threaten job stability, downsize business expansion plans, reduce investment, and undermine government tax revenues in the very countries that can least afford to cushion the blow by supporting the private sector through to recovery. We can counter this disruption by increasing our efforts to cut the unnecessary delays and red tape at borders that continues to cause frustration, generate unnecessary costs and affect livelihoods. What used to be considered an inconvenience, or the cost of doing business, risks terminally damaging developing nations competitiveness in supply chains. But a crisis can also be a catalyst for change and the sheer scale of this pandemic presents an unprecedented opportunity for reform. Large enterprises, realizing the fragility of their production processes, are scrambling to rethink their operations. Boardroom executives are considering spreading risk among multiple production plants, multiplying component suppliers, shortening the distances between production and assembly facilities, and bringing their manufacturing closer to their customers.

WEF role to assist to overcome global value chain disruptions

Such solutions would have been unbelievable before the pandemic but are now under possible position.  With production costs no longer the sole decision criterion, developing countries – especially those closer to main consumption markets – offer the potential to become manufacturing and distribution hubs, e.g., North Africa for Europe and the Caribbean for North America, Bangladesh, India, etc.

Now geographical proximity is to remain important enough. To succeed, these countries need to rapidly envision for logistics improvement and implement plans backed by steadfast commitment from every public sector stakeholder involved in trade and investment, from government ministers to customs officials. There is no scope of vague regulations, uncertainty of processes, huge volume of paper works, partial digitalization systems, smoothness and ease of payments on real time basis and other existing endemic impediment to trade.

TRADE FACILITATION CAN SUPPORT RECOVERY

, The Global Alliance for Trade Facilitation formed six years before but   achieved deep insights and expertise into assisting those countries fully resolved to trade facilitation reform. We have developed our skills to be in focus, implementing solutions block-by-block step wise. We have seen how Pvt sector and government can design a win-win relationships that guarantee to economic health. Entrusting trade facilitation should be easy to implement, economical, but it necessities goodwill, trust, expertise, and consistent. The WTO Trade Facilitation Agreement (TFA), and related trade facilitation structures in the African Continental Free Trade Area (ACFTA) and elsewhere, provide the impetus, direction, and the essential tools to smoothen trade. These efforts are buttressed by fund via donation, and technical assistance. As the TFA rejoices its 5th anniversary, the possibility of a general consensus that monitoring is being done with measurable, positive outcomes. If this mechanism materializes by trade community the WTO members and the Pvt sector are very curious to look rapid progressing objective outcome.  Therefore, strategy has been formed and gradual implementation Now is the time to act – by doing. There has never been a better time to seize the opportunity to facilitate trade.

We observed that FDI fell by 35% globally in 2020, but as lockdowns slowed existing investment projects, before rebounding in 2021. FDI flows in the 2nd quarter of 2022 were down 31% compared to the 1st quarter due to hurdles posed in food, fuel and finance, importance of the demanding to scale investment facilitation works as a tool to negate  these trends.

OUR APPROACH TO FACILITATING SUSTAINABLE INVESTMENT.

The Forum has been piloting sustainable investment facilitation in several countries. These projects have made development of the WTO agreement and found that both public-private collaboration can recognize and aid support implementation of measures needed to facilitate investment for development.

In Cambodia, the Forum, in collaboration with the Council for the Development of Cambodia, created the first domestic supplier database with sustainability dimensions. This tool allows foreign firms to work with local firms that operate sustainably and helps match environment, society and governance (ESG) capital to ESG investments. At the same time, the database incentivizes other domestic firms to shift to sustainable operations to attract and qualify for these funds. The country also adopted in late 2021 a new investment law, which includes the use of smart incentives for investments linked to development goals. Supplier databases are part of the new WTO agreement.

In Ghana, the Forum, together with the Ghana Investment Promotion Centre, is working with investors to adopt sustainable investment standards. Through tax legislation, Ghana also created a new category of recognized sustainable investor, or investors that make a commitment to follow principles of responsible business conduct and invest sustainably. These investors are then eligible to receive additional support, including shorter timeframes for approvals, a “green channel” for imports and exports, or “red carpet” treatment for aftercare. Responsible business conduct and transparency on incentives are part of the new WTO agreement. "We are determined to scale up public-private collaboration around the SDGs to unlock innovative and sustainable financing to bridge the financing gap." — — Nana Addo Dankwa Akufo-Addo, President of Ghana.

In Kenya, the Forum partnered with the Kenya Investment Authority to showcase and measure sustainable businesses. Leading organizations from both the public and private sectors are working together to create two new mechanisms to grow sustainable investments. These are:

· Sustainable Investment Ambassador Program (SIAP) – to promote and showcase these kinds of businesses

· Sustainable Investment Country Metric (SICM) – to measure and encourage progress at growing these kinds of businesses at the local level

Cooperation on investment facilitation and monitoring of implementation are part of the new WTO agreement, which is finalized.

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Building on this country-level work, the Forum, together with partners, also organized virtual, high-level roundtables for the Caribbean, Latin America, Asia Pacific, Africa and Middle East and North Africa to build awareness, facilitate input, and grow support for the new WTO agreement on Investment Facilitation for Development (IFD).

Incentives and sustainability Additionally, the Forum supported the development of the new agreement by hosting public webinars, together with the ITC, IDOS, and World Association of Investment Promotion Agencies (WAIPA). These sessions helped inform various stakeholders on the potential benefits of the new agreement, with specific information, for example, on: Transparency and streamlining administrative procedures, optimizing national and sub-national cooperation, Support for outward FDI, the role of partnerships in facilitating investment, Supplier databases, FDI and climate goals, Responsible business conduct and gender, and Implementation of the new WTO agreement. Through deep collaboration with others, the Forum also helped launch the World Investment for Development Alliance at the World Economic Forum Annual Meeting 2023 in Davos as a mechanism to grow cooperation on investment. WIDA brings together 11 leading organizations to formally collaborate on investment for the first time, including through coordinating disparate investment facilitation efforts to improve development assistance effectiveness and technical assistance efforts. The Platform for Shaping the Future of Trade and Investment works to modernize international rules, national policies and business processes, with the aim of delivering more sustainable investment and trade flows globally, in a rules-based system for the benefit of all. Companies and economic state agencies are invited to join the platform as partners, contribute their resources and expertise to projects and get engaged. FDI fell by 35% globally in 2020 due to the COVID-19 crisis.

Sustainability-focused finance increased by 80% in 2020, reaching $3.2 trillion.

INDUSTRIAL POLICY AND INTERNATIONAL COMPETITION: TRADE AND INVESTMENT PERSPECTIVES

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The economy: from recession fears to cautious optimism

On the cusp of the meeting, the World Economic Forum released its latest Chief Economists Outlook, which painted a bleak picture of the economy. Almost two-thirds of respondents considered a global recession likely in 2023, as high inflation and low growth contribute to reduced investment. This received blanket coverage from the major news outlets. For Reuters it cast a long shadow over the meeting, while the Wall Street Journal suggested the news had put a chill in the Swiss mountain air. Once the meeting was under way, that sentiment shifted. Gita Gopinath, deputy managing director of the IMF told an audience at Davos that although it would be a tough year ahead “there are signs of resilience”. This, coupled with recent positive economic data from Europe and the US and China’s reopening, saw the Financial Times reporting that the mood was more positive.

'Polycrisis': the growing threat of fragmentation

A week before the meeting, the Forum released The Global Risks Report, which outlined the most pressing global issues facing the world, including the cost-living-crisis in the short term and the climate crisis in the long term. Against that insight of complex interconnected threats, "polycrisis" rapidly became a buzzword of the meeting, as the media quickly picked up on the term. Forbes warned that while ‘polycrisis’ might have been overused at the meeting, corporate boards should take note, arguing that they not only look more broadly at global risks, but look at them in a different way.

Global Risks 2023: The turbulent twenties, when risks collide

There was also a spotlight on the Ukraine crisis, as coverage focused on the question of security, the role of NATO, reconstruction, and the food and energy crises that have resulted from the conflict. Modern Diplomacy reported on the further pledges of support to Ukraine that leaders made during the event, as well as the wider security fears that the war is creating. Many outlets, including France24, covered Ukrainian President Volodymyr Zelenskyy’s livestreamed address to Davos participants, in which he called for the country’s allies to take swifter decisions. His wife, First Lady of Ukraine Olena Zelenska, attended the meeting, using the event to bolster humanitarian support for Ukraine's people, as outlets including AP reported.

Climate change: where’s the snow?

The apparent "lack" of snow at Davos was a headline grabber. Over the course of the week, the media reported on multiple aspects of the climate crisis, reflecting the diversity of sessions. Business Today suggested that the climate crisis had taken center stage at the event, dominating debate thanks to the high-profile speakers and number of issues. A stark warning by US Climate Envoy John Kerry was well covered in the media, including by CNBC. Kerry said that while he was convinced the world would reach a no-carbon economy, he wasn’t convinced it would be swift enough to avoid the worst consequences of the climate crisis, affecting millions of people worldwide. He added that it was a question of “money, money, money, money, money, money, money” to get to net zero.

Davos 2023: What to expect for climate and nature action

The Washington Post, among other outlets, covered a blistering speech by UN Secretary-General António Guterres, who called on politicians and business leaders to “stop our self-defeating war on nature.” Reuters highlighted the comments of Peter Sands, executive director of the Global Fund to fight AIDS, Tuberculosis and Malaria, who said that climate change is increasing the incidence of malaria and that it was emerging in new places because of warming temperatures. Meanwhile, the Asia News Network focused on the growing trend of climate litigation and the effects this is likely to have on government and business.

Trade talk: regional tension or competition for good?

Trade was a big topic of coverage at the Annual Meeting, as coverage of the supply chain shocks of the past few years turned to theories about trade's role in the green transition and addressing the climate crisis. Many outlets covered European Commission President Ursula von der Leyen’s announcement that under the EU’s Green Deal industrial plan, state aid and a sovereignty fund will be used to retain home-grown talent and make local green industries more competitive, with the aim of making the region a center for clean technology and innovation. Some media presented this in the negative, as a direct contest to US President Joe Biden’s Inflation Reduction Act, which would subsidize American green industry and manufacturing, while others saw opportunity for new industrial policy and healthy competition to spur the green transition. The meeting also featured a discussion about globalization, with some media weighing in on whether or not globalization was, as Al Jazeera put it, "dead". The resounding sentiment was that it wasn’t. France24 reported it wasn’t dead, but instead adapting, while the Financial Times decided that there was still life left in globalization.

Calls for collaboration and innovation: the role of Davos in a changing world

As talk of crises range from Davos at the start of the week, they were soon drowned out by talk of solutions. Global media covered the many calls for unity and cooperation from world leaders, business executives and civil society attending the meeting. Coverage of technological innovation - whether as a means to decarbonize hard-to-abate industries or as an industry-changing tool for increasing access and spurring growth - was largely hopeful and optimistic.

Many covered the launch of the Global Collaboration Village, an immersive purpose-driven metaverse platform, as an example of emerging technology's potential. At the same time, discussions of frontier tech in AI such as ChatGPT sparked analysis of how breakthrough technologies will change our lives.

A vision for a Global Collaboration Village

And, of course, the Annual Meeting itself was a topic of discussion, as some questioned its relevance in an evolving world. For Forum Founder and Executive Chairman Klaus Schwab, these meetings, where people can talk face to face, are essential. In an interview with TIME, Schwab described Davos as “an immersive experience”. Others agreed that the meeting has value for encouraging collaboration and action on the key issues facing the world. As one Financial Times columnist conceded, "One always learns something from the World Economic Forum." Or, as the BBC put it: “However distant a ski resort full of global leaders may sound, WEF is the sort of place where you get a sense as to whether a three-year storm may start to subside.”

Regional coverage: local stories with global impact

A new era for global business and investment in Africa

A main focus of coverage from Africa was the economy and trade. Arise News (Nigeria) reported on World Trade Organization Director General Ngozi Okonjo-Iweala calling for trade to be "digital, green and inclusive." SABC Africa (South Africa) presented an overview of the key focus of the meeting, while Newzroom Africa reported how the meeting highlighted the vulnerability of African economies in the face of global risks.

Is ASEAN on the cusp of fulfilling its long-held promise? 

Responding to the climate crisis and identifying areas of cooperation were big stories for ASEAN media covering the meeting. The Jakarta Post featured the Forum partnering with the Indonesian government to unlock the potential of blue carbon. The Financial Times covered Philippines President Ferdinand Marcos Jr’s approach to working with businesses. In the Republic of Korea, media reported on President Yoon Suk Yeol calling for strengthening the resilience of global supply chains and meeting South Korea’s net-zero targets.

China

A main topic of coverage in China was the special address by Vice-Premier Liu He. Many outlets reported on his address, which served to declare his country open following the pandemic and welcome foreign investment. Others picked up on his call for the world to “abandon the Cold War mentality” and instead “join hands to respond to global challenges” and preserve an “equitable international economic order”. Also on the topic of collaboration, the South China Morning Post ran a piece about comments that von der Leyen made about the need to “work and trade with China”.

EUROPE

Recent months have seen the energy crisis dominate headlines in Europe, and the week of the Annual Meeting was no exception, as the conversations in Davos spilled over to ongoing debates on how to address the urgent interconnected energy and economic crises while accelerating the energy transition. Some covered the mood of optimism on display in Davos and the potential for collaboration against the backdrop of polarization. Much coverage also focused on German Chancellor Olaf Scholz, who delivered an upbeat message, announcing that his country’s economy was back after suffering a huge energy-related shock, as well as von der Leyen's address on the economy and green transition, and Zelenskyy's appeal for sending urgent aid to Ukraine.

India holds the key to hitting global climate change targets.

Many Indian publications, including The Hindu, featured the “significant” Indian presence at the event, which CNBC-TV18 suggested would “solidify its [India’s] position as a strong, resilient economy.” Business Today picked up Bharti Enterprises Founder and Chairman Sunil Mittal’s comments that India was benefiting, particularly in electronics, from “brewing tensions between the US and China”, while a number of outlets – including the Hindustan Times – ran stories on the announcement made by Klaus Schwab that India was one of the few bright spots in the global economy.

Japan’s greatest export today: stability

Coverage in Japan focused on the Japan Governor Haruhiko Kuroda's comments about interest rates, as well as the economic outlook more broadly. There was also much broader regional coverage about how Japan and neighboring countries could prepare to face the risks discussed during the meeting, notably security concerns, the climate crisis and rising inflation.

How Latin American can navigate global risks and emerge stronger

The economy also took central stage in Latin American media, as did the debate on the future of globalization and the potential for regional and global cooperation. Media also covered the remarks of political leaders from the region, including Presidents of Costa Rica, Colombia, Ecuador; the Vice President of the Dominican Republic and Brazil's Minister of Finance and Minister of the Environment and Climate Change.

MENA needs to pivot towards sustainability during 2023. Here’s why and how

Coverage in the Middle East and North Africa, which hosted COP-27 in Egypt last fall and will host COP-28 in the UAE this year, zeroed in on the environment, in addition to broader economic stories. For example, media covered Guterres's remarks about the urgency for climate action, the pressing food crises facing much of the globe and importance for increasing investment in climate protection.

US and Canada

The climate crisis also dominated conversations in media in the US and Canada, alongside coverage of the economy and the future of jobs. The Wall Street Journal, among others, covered the threat of the fragmenting global economy, while Bloomberg, Business Insider and others highlighted the climate solutions and climate activism on display in Davos.

CONCLUSION

The analytical analysis of the entire event gives insights from Davos 2023 into a new investment narrative as the war in Ukraine, China's reopening, the energy crisis, climate change and deglobalization dominated discussions around inflation and interest rates. From the United States to Europe, energy security and decarbonization are changing the investment narrative, although the landscape of energy transition remains messy. Concern remains over whether central bank intervention will be in step with economic growth without risking a recession. The mood at Davos was one of relief, along with a measure of giddiness about what comes next. Rarely has the group been so split in its investment outlook. Relief at least came because three macro scenarios are not playing out as feared: China has ended its zero-Covid policy and reopened; inflation is abating; and Europe got lucky with a warm winter and falling energy prices. Whoever you spoke with around inflation and rates, however, the war in Ukraine, China’s reopening, the energy crisis, climate change and deglobalization dominated discussions. Sitting across 40 private meetings and panels.

If whatever is decided and acted accordingly with true spirit, then the short-term relief does not convert into long term relief. Uncertainty and volatility for long duration will make the situation at unrecoverable