Day Two at Davos 2024

Davos 2024 opened with a call for global cooperation. Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, explained the diverse and profound challenges the world faces.

“At the beginning of the year we come together to analyse the state of the world in a systemic and strategic way and hopefully to find common ground to generate positive impact,” he said at today’s Welcoming Remarks.

Ursula von der Leyen, President of the European Commission, told us this morning that this is ‘a time to drive global collaboration more than ever before.’ Europe is uniquely placed to foster this global solidarity and cooperation, she said.

Jake Sullivan, United States National Security Advisor, also offered a message of hope, if we foster an atmosphere of collaboration and cooperation.

We can achieve peace and security for all, he explained, if all of us ‘pull together and make the wise and bold decisions’ necessary.

Building global resilience and security
This collaboration is ever more important as a result of the complex geopolitical and geoeconomic backdrop against which Davos takes place, explained World Economic Forum President Børge Brende.

In the face of these geopolitical challenges and tensions, there were multiple reminders throughout the day of the need for global unity and cooperation. Sheikh Mohammed bin Abdulrahman Al-Thani, Prime Minister and Minister of Foreign Affairs of Qatar, called for all parties to come to the table in response to the conflict in Gaza, and build a way foward. Meanwhile, Ukrainian President, Volodymyr Zelenskyy, announced plans for a global summit to push for peace, hopefully to be held in Switzerland.

He also called on the global community to remain united in its support for Ukraine in response to continued Russian aggression. It was a call that Ursula von der Leyen echoed, as she urged predictable financing for Ukraine throughout 2024 and beyond.

Jake Sullivan told his special address that the US would continue to support Ukraine. “The United States and our partners will continue to stand with them,” he said.

He explained their approach in the Middle East as well, particularly as tensions rise in the Red Sea: “Through a combination of steady deterrence and steadfast diplomacy, we seek to stop the spread of conflict and to create the conditions for de-escalation.”

The complexity of these challenges was a talking point in the Securing an Insecure World session this afternoon, which featured political leaders from across the globe. It made clear where there is common ground, and the desire for cooperation, on issues from a sustainable ceasefire in Gaza to China-US relations.

And, we also heard from Bisher Hani Al Khasawneh, Prime Minister of the Hashemite Kingdom of Jordan, on the situation in Gaza.

What next for the global economy?
As the January edition of the Chief Economists Outlook makes clear, the global economy enters 2024 with an uncertain outlook.

Driving growth will require conversation and collaboration, on a global level, on areas from economic governance and the multilateral trading system, Chinese Premier Li Qiang told Davos today.

Viet Nam’s Prime Minister Pham Minh Chinh echoed many, though, when he called for pure economic growth to not come at the expense of social equity or environmental protection. This includes in the context of gender parity, as Gabriela Sommerfeld, Minister of Foreign Affairs and Human Mobility of Ecuador, explained in The Economics of Gender Parity session.

Beyond the nature and speed of growth, the direction monetary policy will take this year, particularly whether we will see a drop in interest rates, was a key topic today. We brought together voices from the business community and public sector this morning in The High Rate Reality. The conclusion? Rate drops are probable this year in some economies, but there is still work to be done, even if the landing so far has been softer than we might have expected.

‘To put it in a nutshell, it will be an era of fair money probably rather than easy money, or free money,” François Villeroy de Galhau, Governor of the Central Bank of France, told the session.

The impact of AI
Participants were clear today on the widespread impact artificial intelligence will have on our lives. In our Generative AI: Steam Engine of the Fourth Industrial Revolution? session this morning, the speakers were clear that AI is more than hype and it will bring about significant change.

And if individuals, businesses and the economy are to take advantage, reskilling is essential.

But, governance and responsible use were key talking points in Davos, with leaders, including Chinese Premier Li Qiang, who stressed the need to balance development and governance.

“We would like to step up communication and cooperation with all parties to improve the global AI governance mechanism,” he said.

This need for balance between innovation and open access, with regulation, was also front of mind for Yann LeCun in The Expanding Universe of Generative Models.

Daphne Koller also struck an optimistic note in the same session, predicting that AI will help us solve really hard problems that humans can’t.

Building future energy systems
Recent years have seen significant shocks to energy supplies and security. But, as Ursula von der Leyen told us this morning, the joint response of business and nations, is a sign of our capacity to collaborate and respond.

Li Qiang also emphasised the work that has already happened in China to build the energy systems of the future, from photovoltaic capacity and transportation.

However, there is work remaining to ensure an equitable and sustainable energy transition. Our Transforming Energy Demand session explored the need to improve energy efficiency. There are several key benefits from this, Fatih Birol, IEA Executive Director, told the session, from lower bills to improved energy security.

As John Kerry, Special Presidential Envoy for Climate, told the COP28 and the Road Ahead, whether on energy efficiency or other elements of the challenge, the private sector will be really important in meeting these challenges. He believes there’s significant momentum behind the changes we’re making, in particular the ‘economic revolution’.

These efforts are also part of global action to combat and limit climate change. In sessions today, we explored the link between climate change and health – the subject of a new World Economic Forum report – and also the role of technology in decarbonizing hard-to-abate industries.

CT Bureau