Merkel wants reform rather than a halt to globalisation

International institutions founded after World War II must be modernised rather than created anew, German Chancellor Angela Merkel told the World Economic Forum, a statement that was seen as a direct rebuke of US Secretary of State Mike Pompeo‘s remarks to the annual gathering that the Donald J. Trump administration was only in favour of globalisation if it served the United States’ national interests. Merkel argued that global challenges – climate change, terrorism, natural disasters, and cyber-attacks – require an integrated approach to global governance. However, she did acknowledge the need for reform.

 “We have to accept new realities and reforms, and a new approach that will address those who harbour doubts about the international system,” Merkel said.

Recognising that global governance requires a willingness to compromise, Merkel cautioned that “multilateralism is not all that easy, but I always have to think of the possible alternatives: we have populist and nationalist challenges and we have to stand up against them.”

Merkel confidently asserted that globalisation has helped lift millions out of extreme poverty, suggesting that this challenge may be overcome by 2030. For Germany, the Eurozone’s biggest economy pointed to three big challenges ahead – a transition to a carbon neutral economy, the modernisation of its digital platforms and e-governance by 2025, as well as adapting to demographic changes caused by the movement of labour and forced migration.

In dealing with these challenges, Germany must be committed to multilateralism, as “anything else will lead us into destruction,” Merkel noted.

US’ Pompeo champions a globalisation that only serves national interests

US Secretary of State Mike Pompeo made clear on January 22 that Washington has embarked on a project of reviewing whether pre-existing alliances, including NATO and other international institutions, serve the national interests of an American president that is highly suspicious and publicly critical of multilateral institutions.

The United States is committed to its own leadership and national interests in a changed geopolitical landscape, a reference to the United Kingdom’s decision to unilaterally leave the European Union, the rise of an anti-establishment, Eurosceptic government in Italy, and the elections of presidents Donald J. Trump and Brazil’s Jair Bolsonaro.

“In Ohio, Rio de Janeiro, and in Rome, people are asking questions that haven’t been asked, or at least haven’t been taken seriously, in an awfully long time. Is economic globalisation really good for me? Are our political leaders adequately protecting us from threats like terrorism? Are they working to secure our national interests abroad?”, said Pompeo, who added, “Nations matter”.

Pompeo also made clear that the Trump Administration now stands opposed to the concept of globalisation that has been in place for more than a generation. He later went on to challenge global institutions, most of which were created after World War II with the US playing the lead role in their formation. Pompeo argued that institutions such as the UN, the EU, NATO, and the IMF must be “reflective of the world order as it sits today” and, if not, “we need to change them…update them. We need to bring them into this century.” Pompeo did not specifically name which international organisations the US administration had in mind, but Trump, himself, has repeatedly taken a hardline, and often incoherent, stance against the American participation in international organisations. He has publicly excoriated the UN, EU, NATO, and the IMF since coming into office just over two years ago. Trump has gone so far as to alarm key allies by parroting Russia’s stance that NATO – the key component in the West’s security architecture against the Kremlin’s military impulses – is “obsolete”.

Recent media reports have revealed that Trump is seriously considering having the US withdraw from NATO, a move that both foreign policy experts as well as former and serving military personnel say would be a major coup for Russian President Vladimir Putin.

Contrary to evidence that proves otherwise, Pompeo repeated Trump’s assertion that relations with Russia resemble Cold War tensions. Following the same line as Trump in his inability to criticise Putin, Pompeo did, however, take exception to the Kremlin’s policy towards Ukraine – which it remains at war with after invading Crimea and actively supporting a pro-Russian secessionist rebellion in Ukraine’s eastern Donbass region. “These aren’t behaviours of a nation that wants to be part of the international community…We (the US and Russia) are not destined to be antagonists,” he argued.

Leaders debate future of 5G networks amid Huawei controversy

Global digital industry leaders discussed the future of 5G networks amid an intensifying confrontation between China and the West for leadership over the development of the latest generation of cellular mobile communications

5G is seen as the spine of the so-called Fourth Industrial Revolution, a theme that was at the heart of a debate between leaders at the World Economic Forum. The importance of the infrastructure is evident from the recent controversy surrounding Huawei, the Chinese state-owned telecommunications behemoth with ties to Beijing’s secret intelligence services that is at the heart of a widening confrontation with the West about the future of the industry.

During a roundtable on the fourth industrial revolution on January 22, the focus of the discussion was on the technological potential for wider social access and economic productivity gains. However, concerns were voiced about the breach of trust between governments.

By 2025, the 5G mobile telephony technology will be rolled out in 110 countries noted Ken Hu, Huawei Technologies Deputy Chairman at the World Economic Forum Annual Meeting at Davos. Hu focused on the transformative potential of 5G technology and shared a vision of more inclusive globalisation, with telecommunications technology catalysing access to services for people with disabilities and enabling banking access for the masses, and catalysing support in the production of food for an expanding population.

His vision was echoed by Nokia’s Chief Executive Officer, Rajiv Suri, who predicted that 5G technologies will provide a much-needed productivity boost to mature economies, especially in health, transport, energy, and manufacturing. Suri projected that the “tipping point” for US productivity in a 5G environment will be 2028. Canada arrested Huawei’s Chief Financial Officer on December 1 that angered the Chinese government and sent shockwaves through the international markets. Hu’s only indirect remark regarding the incident focused on the need for a type of globalisation that is driven by “comparative advantage”. The elephant in the room was acknowledged by Eileen Donahoe, the Executive Director, Global Digital Policy Incubator, who noted that “erosion of confidence” among governments as technology advances and gets applied for surveillance purposes has eroded both confidence and trust between potential partners, saying, “We don’t need new values, we need a new architecture” – one that will protect the core values of liberty, equality and democratic process.

Gender equality in business and politics remains elusive

Part of the discussion at this year’s World Economic Forum focused on the fact that World Economic Forum, society needs more than a century is likely needed to achieve gender parity in employment and politics.

“There are false narratives and biased assumptions that we are using as justification for lack of progress,” said Carolyn Tastad, Group President for North America at Procter & Gamble. “We’ve got to get rid of labels,” she said, such as the idea that women lack confidence.

One study found that men apply to roles when they fit 60% of the criteria required, while women generally only apply when they fit 100% of the criteria. While many organisations have a 50-50 representation at lower levels of the workforce, this is not reflected in middle and upper management. Quotas and targets are one way to close that gap but should not be relied upon. “We don’t want fake promotions to close the gap,” said Tastad, but rather a fundamental change of the culture.

“Optimism gives some kind of certainty that what you do is important,” said Lithuanian President Dalia Grybauskaite to an audience in Davos. “Figures say one thing, but we are responsible for changing them,” she added.

Echoing the President of Lithuania, Canada’s Foreign Minister Chrystia Freeland urged for specific policy targets.

“We shouldn’t be afraid of having targets,” said Freeland, emphasising that forcing a woman to make a false choice between her family and career prevents women from succeeding. Sufficient paid maternity leave and more paternity leave can help to dispel that illusion, she noted, but employers should also think more holistically in establishing equality-based practices and norms.

Brazil’s Bolsonaro takes centre-stage amid key world leaders’ absence

Just over a month after being elected to lead a country of over 210 million people, Brazil’s controversial new President Jair Bolsonaro made his debut on the international stage to offer his vision of what he dubbed a “New Brazil” while attending the World Economic Forum.

Often portrayed as “the Donald Trump of South America”, the crux of Bolsonaro’s message focused on his promises to root out graft, privatise Brazil’s key industries, and repair his country’s standing on the international stage, which was severely damaged by massive corruption scandals involving members of the two previous administrations, including former presidents Luiz Inácio Lula da Silva and Dilma Rousseff – with the latter having been removed from office in 2016 for her involvement in a money laundering scheme. With high-level delegations from the United Kingdom and France noticeably absent from this year’s Davos conference, and with the US administration having abruptly cancelled its plans to attend just days before the opening of the annual meeting of the world’s economic and government heavyweights, Bolsonaro took the opportunity to cast himself as a crusader against the sort of graft that has stalled Brazil’s growth for the last half decade and to call time on South America’s Marxist-inspired “Bolivarian” left that has dominated the continent since the early 2000s, but has caused the economies of Brazil, Argentina, Venezuela, Uruguay, and Nicaragua to bottom out from the crushing debt that they accrued due to overspending and the corrupt inefficiency of their Cuba-style economic models.

His words proved prophetic as they came only days before pro-democracy protests erupted across Venezuela demanding the ouster of the country’s oppressive leftist dictator, Nicolas Maduro.

Bolsonaro insisted that his election last month was the start of a new, conservative era of clean governance in Brazil, one that would resonate across the rest of the continent. Using a terse and often combative tone, Bolsonaro pledged to improve the business climate in Latin America’s largest economy and protect the environment.

Sworn in as Brazil’s president this month, Bolsonaro said during his speech that he will put his country on a pro-market path and lower the tax burden on businesses, while also making the country more open to foreign trade.

“Brazil’s economy is still relatively closed…to change that is one of my administration’s major commitments,” said Bolsonaro while speaking to those in attendance on January 22, before adding that he would push to “harmonise environmental preservation with much-needed economic development.”