The annual meeting of the World Economic Forum (WEF) took place from 22-25 January 2019 in Davos, Switzerland, to mixed reviews. This SDG Knowledge Weekly focuses on papers and articles on issues that took the spotlight at Davos, such as climate change, data and digital economies, inequality, economic uncertainty, and increasing political volatility.

The 14th edition of the WEF Global Risks Report 2019 acknowledges that its publication takes place “against a backdrop of worrying geopolitical and geo-economic tensions.” The report sounds a major alarm on climate change, ranking as the top three risks in terms of likelihood of occurrence: 1) extreme weather events; 2) failure of climate change mitigation and adaptation; and 3) major natural disasters. Climate, weather and water are also ranked highly in terms of impact, preceded only by weapons of mass destruction. A summary post is available on the WEF blog.

In line with the Global Risks Report, an op-ed by former UNFCCC Executive Secretary Christiana Figueres and Greta Thunberg, a Swedish youth activist, calls for climate change to be considered “the number one priority,” which should be placed “at the center of every conversation in Davos.” They point to rising emissions in 2018 and the continued construction of new fossil fuel infrastructure as “outrageous, especially because there are feasible solutions” that reduce carbon emissions and air pollution alike.

Delivering a ‘State of the World’ address at Davos, UN Secretary-General António Guterres lamented that despite global problems becoming more integrated and complex, responses are increasingly “fragmented” and “dysfunctional.” However, amidst prospects of a global economic slowdown and populist sentiments in several countries where protectionist policies are on the rise and causing trade disputes, Guterres remained optimistic. He pointed to the recently held 24th session of the Conference of the Parties (COP 24) to the UNFCCC in Katowice, Poland, as an example of successful multilateralism. Finally, he described a need to show the “added value” of the UN, especially in the context of decreasing trust in governments and international institutions.

Protectionism doesn’t stand a chance in the age of connectivity, which shifts power towards individuals.

Hikmet Ersek, President and CEO of Western Union, offers a similarly optimistic take in a post on the WEF blog, arguing that protectionism, applied to both physical goods and services as well as data and digital information, “doesn’t stand a chance in the age of connectivity.” He describes the one-on-one connectivity and online platforms enabled by digitization as building both cultural and economic bridges, which shift power and the ability to shape economies away from governments and towards individuals. However, Ersek cautions that connectivity needs to be more inclusive, flagging digital financial inclusion and technological gaps and access as issues that must be addressed through collaborative efforts.

A WEF blog by Maria Ramos, CEO of Absa Group, and Achim Steiner, UN Development Programme (UNDP) Administrator, focuses on “the digital finance revolution.” Noting that 90% of the world’s data today were created in the past two years alone, they describe linkages between the SDGs, the Addis Ababa Action Agenda (AAAA) on financing for development (FfD), and how the digitalization of financial systems can drive capital towards fulfilling global agendas. Ramos and Steiner co-chair the UN’s Task Force on Digital Financing, which was announced by António Guterres in November 2018.

In its 2019 World Economic Situation and Prospects (WESP) report, the UN suggests that “growth has peaked.” It notes that even in countries with rapidly growing economies, there must be “steep reductions in unequal pay levels,” particularly in Africa, in order to achieve development goals and targets on poverty eradication. It also stresses that rising inequalities, conflict and climate change are all key challenges to address. Similar to the Global Risks Report’s recognition of intensifying climate risks, the WESP calls for the integration of climate risks into pricing policies and regulations. A more detailed writeup is available on the SDG Knowledge Hub.

Citing the WESP 2019 report, UN Under-Secretary-General for Economic and Social Affairs Liu Zhenmin emphasizes in an op-ed on IPS News that ending poverty is indeed possible, but that doing so “means facing up to inequality, within and between countries.” Within countries, he underscores that social exclusion, fragmentation and weak institutions are associated with high levels of inequality, whereas between countries, most laggard economies are dependent on imported commodities. To reduce these gaps and tap into countries’ development potential, he notes the importance of both economic diversification and effective management of natural resources.

An Oxfam report on inequality shows that the world’s 26 richest individuals own as much wealth as the bottom 50% of the global population. Titled, ‘Public Good or Private Wealth?’, the report calls for the transformation of economies to deliver universal health, education and other public services, arguing that such a transformation could be enabled by the richest people and corporations paying “their fair share of tax.” Beyond tackling inequality, a post on Oxfam’s Politics of Poverty blog notes that other business trends to watch in 2019 include elevating the political responsibility of businesses, shifting attention towards emerging markets and transforming today’s economic models.

Frans van Houten, CEO of Royal Philips, notes in a post on the WEF blog that social inclusivity is a prerequisite for sustainable and inclusive growth, highlighting that “economic growth and good health go hand in hand.” To this end, Van Houten stresses the importance of partnerships and technology to deliver healthcare solutions that enable both increased connectivity and sustainable development more broadly. He also highlights the company’s commitment to a more circular economy whereby companies and users of electronic and other capital equipment extend the life of their products, while stopping waste at the end of their lifespans, instead “capturing the economic value of materials.”

Also on the circular economy, an article on GreenBiz notes that Davos participants heard repeated calls for circularity and inclusivity. Despite indications to the contrary in the form of 1,500+ private jets flying to and from Davos, author Heather Clancy points to a growing sense of urgency on sustainability and resource efficiency, identifying several reports outlining how technology and innovation can deliver a more circular global economy. One such paper by the Ellen MacArthur Foundation, in collaboration with Google, examines means by which artificial intelligence (AI) can accelerate the transition to a circular economy, offering examples from the food and consumer electronics sectors. AI can help “design out” waste, with the potential value to be gained in food supply chains amounting to USD 127 billion a year, and in consumer electronics up to USD 90 billion.

Finally, an op-ed on IPS News by Daniel Mittler, Greenpeace International, describes linkages between Davos, inequality and climate change, and an earlier blog post by Homi Kharas, Brookings Institution, also considers recent trends on growth and inequality. The topics covered in Davos and discussed in this brief are all elements of the overarching theme of the 2019 WEF meeting, ‘Globalization 4.0,’ which is rooted in a context of transformation – of values, of technologies, and of how individuals, businesses and governments engage with the physical and digital world as well as each other.

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