Five things to look out for in Davos this week

Trump's decision on whether to attend at all will be interesting, while Germany, India and China will be there to show their economic strength 

Hamish McRae
Sunday 21 January 2018 14:29
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Chinese premier Xi Jiping needs remind no one that his country is set to become the world's largest economy
Chinese premier Xi Jiping needs remind no one that his country is set to become the world's largest economy

If you want one moment to catch a feeling for the big issues in global economics and politics, this week’s annual gathering of the people who run the world is as good as any. This is not about democracy; it is about elitism. And it is extremely efficient because the business leaders who pay for it can meet more people they need to in three days in Davos than they otherwise would in three months. For the rest of us, we have to aim off for the hypocrisy, the cant, the self-regard of many of the participants (not all – some are a delight), and learn what we can. So what to look for?

Well, the first is who does not go, always more interesting that who does. Donald Trump has a good excuse not to go this year because of the US government shutdown, and as of Sunday the decision was open. If he does go as planned, he will have a large entourage with him, including the Treasury secretary Steven Mnuchin. People will expect a show of strength, an opportunity to promote the “America first” doctrine, and indeed to kick other global leaders about a bit. But it is just as possible that Trump might adopt a gentler tone, showing that America still wants to lead the world, for there is an ambivalence in his approach. If he doesn’t go, the meeting will be somewhat shellshocked, as it was last year. The key element in the decision-making – both as whether to go and what to say – will be what plays best to the US domestic audience, not what goes down well in Davos.

Next we need to learn about the mood of Germany. Angela Merkel has only just confirmed in the past few hours that she will attend, but she will be much diminished. Writing ahead of the key decision of the Social Democrats as to whether they will join another grand coalition under her conservatives, we don’t even know if she can form a government. Even if she can it is hard to see her lasting a full term as Chancellor. So what does German industry think? It is riding high on the still competitive euro, but is well aware of the social tensions within Europe.

Leaders of both China and India will be there, providing a reminder that economic power is shifting to Asia. China is the world’s second largest economy and India will soon be its most populous nation. Within another 20 years China is almost certain to have become the world’s largest economy (more likely in 10 years), while India will be the third largest. Can we learn more about those two nations’ ambitions and hopes?

Finally, there is always a lot of emphasis on the duties of big business and indeed on its flaws. Businesses want to present themselves as cuddly, caring enterprises when of course they are quite the reverse. So there will be the usual handwringing about global inequality, odd given the shift of power to many poorer countries, not just in Asia but in Africa too. But what will be new this year will be the challenges to high-tech America. With the possible exception of Uber the West Coast corporate giants are used to thinking of themselves as doing good and have up to now basked in that glow. Now they are challenged from a number of quarters, over their tax, their treatment of suppliers, their attitudes to female employees and privacy, and so on. How will they respond?

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