On the basis of the readings write a brief essay on the significance and main topics discussed at the 2021 Davos Agenda.

2021 Davos Agenda

The Washington Post

Opinions

The world is de-globalizing. Trump set the example.

By
Fareed Zakaria 

Columnist
Jan. 23, 2020 at 6:32 p.m. EST

DAVOS, Switzerland — President Trump’s speech here at the World Economic Forum went over relatively well. That’s partly because Davos is a conclave of business executives, and they like Trump’s pro-business message. But mostly, the president’s reception was a testament to the fact that he and what he represents are no longer unusual or exceptional. Look around the world and you will see: Trump and Trumpism have become normalized.

Davos was once the place where countries clamored to demonstrate their commitment to opening up their economies and societies. After all, these forces were producing global growth and lifting hundreds of millions out of poverty. Every year, a different nation would become the star of the forum, usually with a celebrated finance minister who was seen as the architect of a boom. The United States was the most energetic promoter of these twin ideas of economic openness and political freedom.

Today, Davos feels very different. Despite the fact that, throughout the world, growth remains solid and countries are moving ahead, the tenor of the times has changed. Where globalization was once the main topic, today it is the populist backlash to it. Where once there was a firm conviction about the way of the future, today there is uncertainty and unease.

This is not simply atmospherics and rhetoric. Ruchir Sharma of Morgan Stanley Investment Management points out that since 2008, we have entered a phase of “deglobalization.” Global trade, which rose almost uninterruptedly since the 1970s, has stagnated, while capital flows have fallen. Net migration flows from poor countries to rich ones have also dropped. In 2018, net migration to the United States hit its lowest point in a decade.

The shift in approach can best be seen in the case of India. In 2018, Prime Minister Narendra Modi came to Davos to decry the fact that “many countries are becoming inward focused and globalization is shrinking.” Since then, his government has increased tariffs on hundreds of items and taken steps to shield India’s farmers, shopkeepers, digital companies and many others from the dangers of international competition. The Office of the U.S. Trade Representative recently called out India for having the highest tariffs of any major economy in the world.

Indian officials used to aggressively court foreign investment, which was much needed to spur growth. Last week, with India’s economy slowing badly, Jeff Bezos announced a $1 billion investment in the country. (Bezos owns The Post.) But the minister of commerce and industry scoffed at the move, saying Amazon wasn’t “doing a great favor to India” and besides was probably engaging in anti-competitive, “predatory” practices. Often, protectionist policies help favored local producers. Malaysian Prime Minister Mahathir Mohamad recently criticized some of Modi’s policies toward Muslims. The Indian government effectively cut off imports of Malaysian palm oil. In a familiar pattern, one of the chief beneficiaries was a local billionaire long associated with Modi.

The Economist notes that Europe, once one of the chief motors for openness in economics and politics, is also rediscovering state intervention to prop up domestic industries. And if you think the Internet is exempt from these tendencies, think again. The European Center for International Political Economy tracks the number of protectionist measures put in place to “localize” the digital economy in 64 countries. It has been surging for years, especially since 2008.

It’s important not to exaggerate the backlash to globalization. As a 2019 report by DHL demonstrates, globalization is still strong and, by some measures, continues to expand. People still want to trade, travel and transact across the world. But in government policy, where economic logic once trumped politics, today it is often the reverse. Economist Nouriel Roubini argues that the cumulative result of all these measures — protecting local industries, subsidizing national champions, restricting immigration — is to sap growth. “It means slower growth, fewer jobs, less efficient economies,” he told me recently. We’ve seen it happen many times in the past, not least in India, which suffered decades of stagnation as a result of protectionist policies, and we will see the impact in years to come. Nevertheless, today, nationalism and protectionism prevail.

This phase of deglobalization is being steered from the top. The world’s leading nations are, as always, the agenda setters. The example of China, which has shielded some of its markets and still grown rapidly, has made a deep impression on much of the world. Probably deeper still is the example of the planet’s greatest champion of liberty and openness, the United States, which now has a president who calls for managed trade, more limited immigration and protectionist measures. At Davos, Trump invited every nation to follow his example. More and more are complying.

Financial Times
Davos 2020: US confronts rest of world over growth outlook
Diverging views on prospects for global economy on show at annual Swiss gathering

Christine Lagarde and Steven Mnuchin have clashed over how best to achieve environmentally-friendly growth, in a row that highlights the difference in economic performance between the US and other major global economies. Speaking as the World Economic Forum in Davos came to a close on Friday, the European Central Bank president called for greater efforts to think about investment in green technology alongside taxes and regulations to “push companies in the direction of anticipating the transition [to a reduced carbon emissions]”.

This would result in stronger productivity growth, a healthier global economy and, in Europe, inflation rising back towards the ECB’s target that it has missed for so long, she suggested. But the US Treasury Secretary accused Ms Lagarde of falling for unworkable policy ideas and argued that access to cheap energy was more important for growth than investment in green technologies. “You can have a lot of people look at this and model it, I just don’t want to kid ourselves . . . there’s no way we can possibly model what these [climate] risks are over the next 30 years with a [sufficient] level of certainty,” he said. “The world is dependent on having reasonably priced energy over the next 10 or 20 years or we’re not going to create jobs and we’re not going to create growth.” The spat was symptomatic of the different economic perspectives on show all week in Davos between President Donald Trump’s US administration and politicians and officials representing most other countries.

Earlier in the week Mr Trump hailed the US economy as “a roaring geyser of opportunity”. European and Japanese officials admitted, sometimes reluctantly, that US economic performance had been consistently better than theirs over the past decade. But few were as optimistic as Mr Trump and many blamed the president’s trade policies for last year’s bout of global economic weakness.In their latest economic outlook, released this week, IMF economists warned there “were no clear signs of a turning point” in global growth, and trimmed their forecasts downwards.The IMF slightly cut its global growth forecast for 2020 from 3.4 per cent in October to 3.3 per cent and reduced the forecast for next year from 3.6 per cent to 3.4 per cent.

These figures are only a little better than the 2.9 per cent achieved in 2019, the worst year for the global economy since the financial crisis more than a decade ago.Few think the world is about to enter a boom, productivity growth rates in advanced and emerging economies are disappointing and many are worried that a better 2020 performance might simply be because low interest rates are fuelling the accumulation of debts that ultimately will go sour.

“What you have once again is the unending search for yield fuelling very questionable quality borrowers,” said Carmen Reinhart of the Harvard Kennedy School. “It shares a lot of similarities with subprime [lending] before the global financial crisis.”Kristalina Georgieva, IMF managing director, said on Friday that growth remained “sluggish”, but she was hopeful that the data would soon improve given the recent trade truce between the US and China, fresh monetary easing by leading central banks and a stabilisation in the performance of the manufacturing industry around the world.

“We are in a better place in January 2020 than in October 2019,” she said.Mr Trump argued that his tariffs had been the catalyst that had brought China to the negotiating table and delivered the phase one trade agreement this month, a boost to global economic confidence that the US should get credit for.

The US has also stepped back from its threat to impose tariffs on French goods and, after many tense meetings, appeared ready to remove the roadblocks it had erected to multinational talks at the OECD; those should now get under way next week. But Mr Trump’s warning that “we’ll be using [tariffs] on others too” suggested that the past two years of trade uncertainty could prove difficult to dispel. These threats continue to hang over companies’ investment decisions and are likely to make some cautious about big spending in the months ahead.

The New York Times
The Davos Plutocrats Warm Up to Trump

By Andrew Ross Sorkin
Jan. 20, 2020
26

DAVOS, Switzerland — The last time President Trump arrived at the World Economic Forum’s annual meeting, his trip was treated with deep skepticism, if not disdain, by the business and political leaders who gather once a year in this ski town in the Swiss Alps. It was 2018 and even with his newly enacted tax cuts, his populist, antiglobalist rhetoric and Twitter outbursts were more than enough to make the event’s collection of plutocrats uneasy.
This time is likely to be different.

With the stock market at record highs, two trade deals announced and the possibility that Mr. Trump may be in office for another four years, there is an increasing sense that he will be accepted, if not embraced (although some attendees may roll their eyes behind his back) when he arrives on Tuesday, even as he faces an impeachment trial.

As anathema as it may be to some participants, Mr. Trump may be the new Davos Man.

The Davos forum, marking its 50th year, has always sought to foster a sense of multilateral unity. But Mr. Trump, along with his counterpart in Britain, Prime Minister Boris Johnson, is seemingly moving the world into a tariff based, decoupled universe, based on bilateral negotiations and diplomacy by tweet.
To the surprise of many Davos regulars, the economic results have yet to prove as disastrous as they expected — and, at least in the short term, have seemingly proven to be quite positive. (The long-term effects, of course, are still unknown.)

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Even Mr. Trump’s most ardent detractors acknowledge that an acceptance of the president is settling in among the Davos crowd.
“We are all adjusting to his abnormal behavior,” said the investor Anthony Scaramucci, Mr. Trump’s onetime spokesman turned enemy who has been a Davos regular for over a decade and hosts a wine tasting party that has become a hot ticket for the boldfaced names. “The economic strength helps their cognitive dissonance,” he said.

Just last week, a lineup of some executives who will attend the Davos forum were in the audience at the White House when Mr. Trump signed the initial China trade deal. They more than politely applauded.

“Will you say, ‘Thank you, Mr. President’ at least? Huh?” Mr. Trump asked Mary Erdoes, the chief executive of JPMorgan’s asset and wealth management division and a Davos regular, along with Jamie Dimon, the bank’s C.E.O. “They just announced earnings, and they were incredible,” Mr. Trump said about JPMorgan. “They were very substantial. I made a lot of bankers look very good. But you’re doing a great job. Say hello to Jamie.”
Stephen Schwarzman, the co-founder of Blackstone, who often gets calls from global C.E.O.s seeking advice on how to manage relations with Mr. Trump because of his close relationship with him, said there has been a shift among the C-suite crowd.

“The attitude of the business community toward the Trump Administration appears quite positive,” said Mr. Schwarzman, who runs one of the world’s biggest investment funds. Among the reasons for the warm feelings, he said, are the strength of the economy, trade deals with China, Mexico and Canada, the tax bill and the elimination of regulations.
Still, if there is one topic expected to dominate the week here besides Mr. Trump himself, it will be an issue that he and the Davos community vehemently disagree about: climate change

Just last week, Satya Nadella, the chief executive of Microsoft — and a Davos participant — announced the company would be carbon negative by 2030, and by 2050 it would seek to remove all of the carbon it has ever emitted since its founding in 1975. The World Economic Forum itself announced the meeting would be carbon neutral after it bought carbon credits to offset carbon emission from the event.

Greta Thunberg protesting at a climate change protest on Friday in Lausanne.

Of course, Mr. Trump doesn’t believe in climate change and pulled out of the Paris Climate Agreement to the horror of most of the executives and attendees of Davos.
He is likely to hear criticism from activists like Greta Thunberg, the high school phenom who has become a global icon for the climate. And he may get some nudging from C.E.O.s, but, unlike the activists, they will be unlikely to confront him publicly out of fear that he might turn on them or their companies.
“The Davos crowd are well respected followers of fashion and love whomever is in power,” said Jeffrey Sonnenfeld, the senior associate dean at the Yale School of Management and an expert on corporate leadership. “They celebrate when the people are rich and powerful.”
Mr. Sonnenfeld pointed out that, despite the stock market run-up, only “12 percent anticipate economic conditions will improve over the next six months, up from just 4 percent in the third quarter,” according to the Conference Board’s most recent survey of chief executives.
While the business community has come to accept Mr. Trump — one executive described the view by saying “life is relative” — Mr. Sonnenfeld noted that a poll he conducted three weeks ago found that 56 percent of C.E.O.s favored the president’s impeachment and removal from office.
Mr. Trump may find himself flattered by the Davos audience. Whether it is genuine flattery or something else remains an open question. Whatever the answer, Mr. Scaramucci is convinced it is all self-interested: “The unspeakable truth is that C.E.O.s and their staff are horrified.”

Andrew Ross Sorkin is a columnist and the founder and editor-at-large of DealBook. He is a co-anchor of CNBC’s Squawk Box and the author of “Too Big to Fail.” He is also the co-creator of the Showtime drama series Billions. @andrewrsorkin • Facebook

A version of this article appears in print on Jan. 21, 2020, Section B, Page 1 of the New York edition with the headline: Globally Warming To Trump.

On the basis of the readings write a brief essay on the significance and main topics discussed at the 2021 Davos Agenda.

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