Davos 2016: one year to solve the case

The snow falling in Davos may have covered the footprints, but the annual meeting of the World Economic Forum has left behind the clues of a world drama. Environmental crisis, social inequalities and conflicts make up a creepy narrative for the future of the planet. The story unfolded from the global risks analysis, the most somber report of the event, and evidence compounds the concerns.

Since the 1970s, human demand on nature has exceeded what the planet can renew. The organisation behind these calculations, Global Footprint Network, says that in a context where supplies diminish while the demand increases, the “global competition for natural resources is getting tighter” and in order to maintain the bargaining power in the market, what matters is the relative income compared to the rest of the world. This is not good news for many countries, as most are losing share. In Switzerland (the country of Davos), for example, the average resident is now taking home a share of the global income nearly 50% smaller than in 1980, even in spite of the recent hike of the Swiss Franc.

It may be a rebalance of the economic powers, but the planet is far from being the place of equality. Oxfam claims that “in 2010, it took 388 billionaires to equal the wealth of the bottom half of the world’s population and by 2014, the figure had fallen to just 80 billionaires.” If the trend continues, warns the humanitarian group, in two years the richest 1% will have more than the remaining 99%.

With dwindling resources and growing social inequalities, it is not difficult to predict the other major threat: conflicts. “Many observers believe that the world is entering a new era of strategic competition among global powers,” says the WEF’s Global risks report.

But the case can be approached from another angle. If the risks in the report are reformulated into positive results, a surprising similarity emerges with the Sustainable Development Goals that the UN will adopt this year. The risk of water crisis, for instance, becomes the goal to “ensure availability and sustainable management of water for all”. The risk of social instability is mitigated by the goal to “reduce inequality within and among countries.” You can try with the others. (Interestingly, there aren’t Sustainable Development Goals related to financial and technological risks and no threats seem to come from the lack of education or gender equality.)

Looking at the future from this perspective, there is a rare alignment of civil society, businesses and governments. Like a family gathering in the wake of a tragedy, the mix of participants in Davos has testified the pursuit of a better development and, not coincidentally, the Sustainable Development Goals have been part of the agenda.

However, if the world is to take this path, a new compass is also needed to ensure it heads in the right direction. So far, the mantra of Davos has been economic growth measured by Gross Domestic Product. But the way to disconnect GDP from a growing ecological footprint is yet to be found and the most important indicator of well being – GDP per capita – does not take inequalities into account. In fact, GDP was originally invented so that governments could calculate the income available to reinvest in warfare.

“There is almost universal agreement that GDP alone is an imperfect metric for growth and prosperity,” say the unsuspected analysts of McKinsey. In its latest report on the global economy, the consultancy questions GDP and calls for “a new conversation about long-term growth”. By McKinsey’s own admission, this new conversation “might feel uncomfortable.” But if it starts, there will be a good reason for champagne glasses clinking in Davos next year.

Read this article on The Huffington Post.

 

 

Photo: Winnie Byanyima, Executive Director, Oxfam International, United Kingdom; Co-Chair of the World Economic Forum Annual Meeting 2015, Roberto Egydio Setubal, Chief Executive Officer and Vice-Chairman of the Board of Directors, Itau Unibanco, Brazil; Co-Chair of the World Economic Forum Annual Meeting 2015, Katherine Garrett-Cox, Chief Executive Officer, Alliance Trust, United Kingdom; Co-Chair of the World Economic Forum Annual Meeting 2015; Young Global Leader Alumnus; Global Agenda Council on Values and Robin Niblett, Director, Chatham House, United Kingdom are captured during the session ‘The Global Agenda 2015’ at the Annual Meeting 2015 of the World Economic Forum in Davos, January 24, 2015. WORLD ECONOMIC FORUM/swiss-image.ch/Photo Remy Steinegger. Photo available under a Creative Commons license.

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