The World Economic Forum was once the most prestigious and glitzy gathering of the rich and powerful. But this year’s conference has gone practically unnoticed. Has the WEF become irrelevant?
Researched by: Sara Varghese & Nirmal Bhansali
First, some basic deets
Origin story: Forty five years ago, professor and economist Klaus Schwab, organised something called the European Management Symposium—bringing together 450 European leaders. The conference took place in Davos—a place that was until then best known as a skiing destination. The location was inspired by Thomas Mann’s novel ‘The Magic Mountain’—in which a very ill young man goes to a sanatorium in Davos—and has a life-changing experience. Schwab hoped the mountain air would have a similar effect on his conference attendees—minus the spectre of death, of course.
The purpose: The WEF’s official aim is to “engage the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas.” It’s basically a gargantuan networking event—with an A-plus list of attendees. While there are plenty of panels and speeches, the real action takes place behind closed doors—which is where corporate leaders and politicians cut big deals. As Axios puts it, the WEF “is basically the world's greatest hotel lobby: Power players can pack their schedules with high-level meetings, sip champagne with clients and keep up with their competitors.”
The pandemic effect: The WEF is always held in the winter in great snowy splendour. But the conference had to cancel its plans due to the virus in 2021—and push it to the summer in 2022. So 2023 was supposed to mark its return to former glory—which didn’t quite happen.
All about WEF 2023
A record number: of business and political leaders signed up to attend this year’s conference. There are 50 heads of state, 200 cabinet ministers and 1500 business leaders in Davos right now. And as is inevitable in almost any marquee international gathering, Ukrainian President Volodymyr Zelenskyy made a virtual appearance. India has sent a large contingent of four cabinet ministers, three chief ministers and 100 India Inc honchos, including Mukesh Ambani and Gautam Adani.
The ‘no thank you’ list: But the sheer quantity of attendees can’t compensate for the conspicuous absence of the world’s most powerful leaders. President Joe Biden and his Chinese and Russian counterparts Xi Jinping and Vladimir Putin are all giving it a miss—as is our PM Modi.
The most notable presence is that of the EU—which is represented by its president and German chancellor Olaf Schulz. According to experts, Davos is now seen as less important than other gatherings, such as the UN-held COP27:
The format seems slightly dated now. The private jets and oligarch parties are no longer in step with modern biz [business] life. The events around COP [the U.N.’s annual climate summit] now feel a bigger deal, given their focus on a specific global policy objective.
Also an issue: The optics of partying in the Alps while the world braces for a recession:
President Joe Biden, determined to present himself as fighting for ordinary working Americans, is unlikely to risk an appearance at Davos… As a new British prime minister, and one with a finance background, Rishi Sunak would normally be expected to seize the opportunity to woo the world’s most powerful chief executives. But the UK faces a wave of strikes, so he too will probably decide that it would be wise to miss Davos this year.
The agenda: The official theme for this year is ‘Cooperation in a Fragmented World’—which reflects the WEF’s anxiety about its relevance. As the Washington Post notes:
Beneath it all is a deeper Davos anxiety: Few institutions are so immediately connected to neoliberalism and the project of globalisation as the forum. In an age of ascendant nationalism and great power rivalry, where the United States itself is waging trade wars, where does globalisation go?
Davos’ existential angst was already apparent in the 2022 conference—when even WEF founder Klaus Schwab conceded: “We are living in a different world.” A year later, that anxiety is in full bloom.
An age of ‘polycrisis’ and ‘deglobalisation’
The buzzword at this year’s conference is ‘polycrisis’. Coined back in the 90s, the term captures a world enmeshed in “interwoven and overlapping crises.” Or to put it in plain English, there is no single underlying system—e.g late capitalism—whose flaws we can fix to address all our problems. We instead are dealing with a climate crisis, pandemic, war in Europe, inflation, collapse of democracies—all at the same time. As Adam Tooze describes it:
The variety of different shocks of the type that we’re dealing with right now is extremely unusual. That’s what the polycrisis notion is trying to get at—it’s like a bad breakfast buffet. The thing about it is that it’s an indigestible mixture of ingredients that do not normally go together in a constellation of forces.
The WEF argument: is that the global polycrisis makes its credo of international cooperation more relevant than ever. The WTO’s director-general declared:
“I see the world clouded in tension. If we don’t cooperate on the things that matter together, then we’re going to perish together.” And a defensive Schwab told reporters: “Only personal interaction creates the necessary level of trust, which we need so much in our fractured world.”
But, but, but: Even the WEF has been forced to acknowledge that the era of globalisation may be drawing to an end. Hence, the sessions titled “De-Globalisation or Re-Globalisation?” and “Keeping the Lights on amid Geopolitical Fracture.” As one attendee puts it, hopes have faded that "we would go back to the old normal, this sort of globalised world.”
We have instead entered “a new age of self-sufficiency”—where ‘localisation’ not ‘globalisation’ is the mantra of the day. This era of ‘de-globalisation’ reflects the lesson learned from the pandemic and ‘cold wars’ with China and Russia:
[T]he WEF’s first winter meeting in Davos since 2020 comes as economic heavyweights are playing by different rules, with companies moving supply chains closer to home, strategic stockpiling picking up pace and corporate executives who once extolled free trade appearing increasingly wary of rising geopolitical risks.
Both businesses and governments are rerouting their supply chains for key products—to reduce vulnerability and protect national interests. Example: Apple trying to move out of China. And the rise of populist nationalism around the world reflects growing disdain for globalisation. Borders are tightening, not dissolving—and transborder alliances like the EU are under increasing pressure.
The bottomline: It is far too early to make grand pronouncements about the future of the world. It is impossible to imagine that the world’s economy would survive a return to the pre-globalisation era. And it would be just as impossible to tackle shared challenges like climate change by simply taking care of #1. What we may be witnessing instead is a recalibration, as Rana Faroohar describes it: “Economic pendulums shift throughout history. Every time the pendulum shifts too far, which it clearly has, it starts to shift back a bit.”
TIME magazine, Washington Post and CNN have the most on the ‘polycrisis’—and debate over globalisation. France 24 and New York Times report on the mood on the ground at Davos. Axios argues that the WEF is still relevant—at least to global corporations. The Guardian has an interesting column on the rise of protectionism. For a scathing takedown of the WEF, check out this Spectator column. We did a detailed Big Story on the history of Davos last year—which offers more context.