Donald Trump’s landslide victory in Iowa caucuses, cementing his front-runner status in the upcoming US election, cast a wintry shadow over this week’s World Economic Forum (WEF) in Davos.
The three central themes of the event – conflict, climate change and the advance of AI (artificial intelligence) – all interface with Trump, and in the eyes of most Davos attendees negatively.
The former US president has declined to commit to continuing military assistance to Ukraine if re-elected. His Republican Party is currently blocking $50 billion (€46bn) in aid to Kyiv. Will Trump pivot the US away from its current position of support? Who knows. He asserts that he could end the war “in 24 hours” if he is returned to power, without explaining how he would achieve this feat.
The last time Trump was in the White House he pulled the US out of the Paris Agreement on climate change, appointed fossil fuel lobbyists to various US environmental agencies and claimed – against the evidence – that the Earth was likely to “start getting cooler”.
The storming of the US Capitol Building on January 6th, 2021, was facilitated by false election conspiracy theories on social media. Rumours of suitcases full of ballots and dead people voting incensed Trump diehards. The potential for sophisticated AI tools to produce convincing deepfake images and videos is huge.
Videos featuring AI-generated deepfake voices of politicians spread widely in the lead up to the Slovak elections last year. The World Economic Forum’s latest global risks report, released ahead of the Davos event, warned that AI-driven misinformation was eroding democracy and threatening social unrest across the world. With close to three billion people voting in elections over the next two years, it listed “misinformation and disinformation” as the most severe short-term risk to human progress.
Either way the spectre of a second Trump term hung over proceedings at the Swiss Alpine resort this week. “Every question I’ve gotten as I’ve walked up and down the [Davos] promenade today is, ‘is he coming back’?” Tim Adams, president of the Institute of International Finance, told CNBC on Tuesday.
Not all participants partook in the “worried about Trump 2.0″ vibe, and billionaire banker and head of JP Morgan Jamie Dimon appeared to be full of praise for him.
“Just take a step back, be honest,” Dimon said, also on CNBC. “He’s kind of right about Nato, kind of right about immigration, he grew the economy quite well. He wasn’t wrong about some of these critical issues and that’s why they’re voting for him,” he added, urging people to think more about why people support him ...”I think this negative talk about MAGA [make America great again] is going to hurt Biden’s election campaign,” Dimon said.
The banker’s comments highlight the perils of summits like Davos becoming echo chambers where participants presume the world is populated by like-minded individuals. Regardless of what you think of the event – and it suffers from the perception of being a gabfest for the wealthy elite – it is the biggest single meeting of business and politics anywhere in the world and a showcase for globalisation, the dominant economic project of the past three decades. Some 300 public figures and political leaders and 1,600 business leaders attended this year.
The networking that goes on across the vast warren of halls and meeting rooms is more important than the showpiece speeches delivered by political leaders. Despite heightened geopolitical tensions and an uneasy detente between the world’s two superpowers, the US and China, they both had big delegations there.
Li Qiang, premier of the People’s Republic of China and US secretary of state Antony Blinken, the most senior officials from their respective countries, made similar speeches, lamenting the breakdown in global relations and highlighting the need for greater co-operation.
Li, effectively China’s number two, was the most senior Chinese official to attend the event since President Xi Jinping in 2017. He had lunch with a host of top US business leaders, including the chief executives of JPMorgan, Bank of America, Standard Chartered and Blackstone, before departing for an official visit to Ireland.
Ahead of his main address to the forum, in which he described Russian leader Vladimir Putin as a “terrorist” and “predator”, Ukrainian president Volodymyr Zelenskiy met Western business leaders in attempt to secure investment for Ukraine’s war-torn economy. Zelenskiy desperately needs the backing of investors to help shore up his country’s battered economy and with more than $100 billion in vital aid for Kyiv stalled in Washington and Brussels.
Taoiseach Leo Varadkar, Minister for Finance Michael McGrath, Minister for Public Expenditure Paschal Donohoe and IDA chief executive Michael Lohan were there to bang the drum for Irish investment. McGrath said he had meetings lined up with a number of IDA target companies. The three Irish Ministers were speaking on various panels but the real objective was to meet with business leaders to showcase Ireland as a leading investment location.
It’s hard, then, in the midst of Davos to subscribe to the thesis that the world is on a path of deglobalisation triggered by the pandemic (with firms relocating business closer to home) and driven by the fragmentation of politics globally and accelerated by Russia’s invasion of Ukraine. Trump’s “America first” trade policy was also a driver before that but according to the Economist magazine so is current White House incumbent Joe Biden’s economic policy.
In a cover story ahead of this year’s Davos the magazine pinpointed the Biden administration’s “abandonment of free-market rules for an aggressive industrial policy”, highlighting Biden’s subsidy-heavy Inflation Reduction Act and moves to onshore semiconductor manufacturing as acts of deglobalisation. This had “set off a dangerous spiral into protectionism worldwide”, it claimed.
Besides war and deteriorating geopolitics the other big theme of this year’s Davos was the disruptive impact of AI technologies. Accenture boss Julie Sweet said her company had 150 people signed up to do workshops on AI rather than attend discussion panels.
There was a clear divide between politicians warning about the dangers of unchecked AI and business leaders highlighting the productive sea-change the new technology represented. One panel discussion was titled: Generative AI: Steam Engine of the Fourth Industrial Revolution.
Ironically, while many of these AI debates were taking place, Mr AI himself, Sam Altman, boss and founder of ChatGPT company OpenAI, could be seen out sauntering around Switzerland’s highest town, taking in the Alpine air, seemingly at peace with his disruption of global technology.
Microsoft chief executive Satya Nadella downplayed the risks, particularly in the upcoming US election. “It’s not like this is the first election where disinformation, or misinformation, and election interference is going to be a real challenge that we all have to tackle,” he said, speaking at Bloomberg House in Davos.
Altman said: “I don’t think this will be the same as before. It’s always a mistake to try to fight the last war.”
One of the more chilling warnings aired at the forum was called “Disease X”, a hypothetical virus 20 times deadlier than Covid-19. In a session entitled Preparing for Disease X, a panel led by the World Health Organisation chief Tedros Adhanom Ghebreyesus discussed how to plan for another pandemic. “Of course there are some people who say this may create panic. It’s better to anticipate something that may happen because it has happened in our history many times, and prepare for it.”
Perhaps unsurprisingly his comments launched another round of far-right conspiracy theories, suggesting a global elite were intent on launching a new pandemic to “restrict” free speech and reinstate mask-wearing.
Davos has become a magnet for conspiracists. The forum’s 2020 theme – “the great reset” – morphed into an online conspiracy that claimed a global elite was using the pandemic to enforce radical social change upon an unsuspecting public.
Last year’s Davos was all about the incoming recession predicated on the back of cost-of-living squeezes and interest rate hikes but that didn’t materialise to the degree predicted. Growth has been weaker but not negative, and labour markets remain strong in the circumstances of 10 European Central Bank’s (ECB) rate hikes.
Until Davos ECB officials had been dampening the prospects of an interest rate reduction any time soon but president Christine Lagarde and several of her colleagues appeared to signal there might be moves in the middle of the year when the inflation data is clearer. Lagarde described the prospect as “likely” albeit with the usual caveats but that was much stronger than her previous comments. Of course there were several other speakers puncturing the soft landing narrative for inflation and economies.
The four-day event in the Swiss Alps generates a mood of co-operation and progress, one that is perhaps at odds with the deteriorating state of geopolitics and the world’s stuttering attempts to address climate change. Critics will say it is merely a talking shop for global elites, grounded in self-serving platitudes. Conversely, organisers insist the forum remains “committed to improving the state of the world”.
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