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Highlights from Davos

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01/24/2019 | 11:16am EDT

The 49th annual meeting of the World Economic Forum was held in Davos this week, from January 22 to 25. Several heads of state were conspicuous by their absence, including Donald Trump and Emmanuel Macron.

Is this a sign that the appeal of globalization is running out of steam? This year, the Economic Forum in Davos unfolded without French president Emmanuel Macron, officially due to an overloaded agenda. He must, of course, manage the "yellow vest crisis" and the launch of a major national debate. As for Donald Trump, he not only decided not to go, but he also was not replaced. Indeed, the journey of the delegation that was to be led by Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo was also cancelled on January 17. Trump blamed the current "shutdown", the longest in history. "For the sake of the 800,000 formidable American civil servants who do not receive a salary and for to be able to rely on his team if necessary, President Trump cancelled the delegation to the World Economic Forum in Davos," said White House spokesman Sarah Sanders in a statement.

And the list of defections does not end there. The forum was also without British Prime Minister Theresa May, who prefers to focus on Brexit, but also without Russia and India’s leaders, while China “only” sent the deputy of President Xi Jinping, Wang Qishan.

Rethinking globalization

These absences occur in a context of rising nationalism and rejection of globalization, of which Davos is one of the main representant. The organizers of the Forum seem to have taken note of this new spirit of the times, judging by the choice of the main theme of this edition: "Globalization 4.0: Designing a new world architecture at the age of the fourth industrial revolution".

However, the above-mentioned absences should not obscure the fact that this 49th edition has benefited from a large casting. While half of the 3,200 participants are from the business community, more than 60 Heads of State and some 300 ministers, secretaries of State and other members of the government visited the Swiss ski resort, including the German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe, but also Tim Cook, the boss of Apple, and Prince William.

And they did not lack topics for discussion, as the global economy is facing many challenges, including the trade war between the United States and China, Brexit and the slowdown in growth.

Here are some of the highlights:
  • The leaders of Germany, Italy and Spain each presented a different point of view on Europe’s future, ranging from a sense of despair for Giuseppe Conte to a more optimistic view from Angela Merkel, who stressed that Europe is a much better place to live in, with much less poverty, than in 1971.
  • Ireland’s finance minister, Paschal Donohoe, said the country is now better prepared for the next financial crisis. "We have national finances that are balanced, we have a far more diverse economy, and we have an independent and very well-resourced central bank," the minister told CNBC.
  • Jes Staley, the chief executive of Barclays believes that market volatility should return to a more normal level this year.
  • The chief executive of Lloyds said that a no deal Brexit is the most likely outcome.
  • We might see more money-laundering scandals in Europe in the coming months, following the current investigations into Danske Bank and Deutsche Bank, the European Investment Bank Vice-President Alexander Stubb told Bloomberg TV at Davos.
  • Prince William said mental health stigma must end.
  • Ken Hu, the deputy chairman of Huawei, was present, amid tensions with the US and Canada over the arrest of the company's chief financial officer (CFO), Meng Wanzhou. He spoke about 5G wireless technology, and said that the US-China trade war has had a damaging effect on its business.
  • Bill Gates spoke about the importance of vaccine accessibility in low-income countries for children under the age of 10.
  • Chinese Vice President Wang Qishan said the Chinese and U.S. economies are “inseparable”.
  • Bono spoke to finance experts including Christine Lagarde about funding for sustainability.
  • Japan’s prime minister, Shinzo Abe, draw  attention to Japan’s success in increasing the number of women in work.
  • Alibaba founder Jack Ma advised millennials to try and stick with their first job for three years. He said too many people change roles very quickly, which “can be a disaster”.

Romain Fournier
© MarketScreener.com 2019
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