WEF chief: Globalisation ‘easy scapegoat’ for global angst

Klaus Schwab [R], with Jacob Zuma. Davos, January 2016. [GovernmentZA/Flickr]

The man behind the annual Davos forum that for decades has been singing the praises of global trade insists that globalisation is only one factor in dramatic shifts provoking angst and anger.

Klaus Schwab, the 78-year-old founder and executive chairman of the World Economic Forum, told AFP in an interview this week he understood that rapid changes in our societies were provoking anxiety, but stressed that globalised trade was not the sole culprit.

“It’s not just a backlash against globalisation,” he said, adding that “what we are witnessing is a time of enormous change.”

Rapid shifts in technology, economies and social structures have fuelled “a certain anxiety of the people, (who) are looking for an identity in this new world,” he said.

This year’s Davos meetings take place next week, and Schwab’s comments come after a wave of anti-establishment populism over the past year which saw Britain vote to leave the European Union and maverick billionaire businessman Donald Trump elected as US president.

Other populists have also been gaining ground in many Western democracies, largely by stoking fears about globalisation, immigration and refugee flows.

How should Europe respond to calls for deglobalisation?

The last wave “hyperglobalisation” concluded with the onset of the financial crisis. It is important to take stock of the fruits of globalisation and decide whether Europe should welcome or alternately promote a new policy, writes Karl Aiginger.

Schwab said the world appeared to be in “emotional turmoil” but said the turbulence was rooted in a range of factors, including deep concerns over how new technologies are threatening jobs.

Globalisation, he insisted, is simply “a very easy scapegoat”.

A more fragile world

But while globalisation is easy to blame, there are no good alternatives to it, he suggested, warning of the dangers of growing isolationism.

A more isolationist world would be “different from today’s world,” he said, including a likely return of borders and border controls in Europe “with all the inconvenience for business but also for people that borders represent”.

“But what I’m much more concerned with is the fact that countries become much more egotistical under the pressure of the national electorate,” he said.

An isolationist world would be one that is no longer “based on shared values, but a world which will be characterised by interests,” he warned, saying that if global cooperation happened at all it would be based on shared interest alone.

Who fears the wolf of globalisation?

Trade unions and companies are more closely aligned against the harmful competition stemming from emerging economies’ low salaries and working conditions than ever before. But the EU’s export of jobs is harming itself and the global economy, write Ernest Maragall and Jordi Angusto.

“But a global cooperation which is based just on sharing interests will be very unstable because values remain the same, but interests move over time,” he said.

“We will be in a much more fragile world,” he said.

WEF, which for the past 47 years has been organising the Davos forum of political and business elites, pointed out this week that Schwab had been sounding the alarm on this issue for decades.

The organisation pointed to an opinion piece in the New York Times that he co-authored in 1996, in which he warned that the “mounting backlash against (globalisation’s) effects … is threatening a very disruptive impact on economic activity and social stability in many countries.”

Schwab said Davos is the perfect place to begin addressing the problem, with its strong focus on “the need for responsive and responsible leaders.”

“Responsive means that if you are a good leader, you have to listen to the people who have entrusted you with leadership,” he said.

German industry profits from globalisation

Results from a recent study reveal German industry is one of the winners in globalisation, while France and the United Kingdom lag behind. EURACTIV Germany reports.

“But in the end, it’s not enough just to listen. You have to solve the issues. You have to address… the root causes.”

“Why the people are angry, and why they are not satisfied. That’s responsibility which needs courage and which needs decision-making and which needs action orientation,” Schwab said.

But Davos is not just about political leaders, he said, insisting that the forum offered a unique platform for cooperation across politics, business, civil society and experts.

“The big issues in the world cannot be solved by governments alone or by businesses alone,” Schwab said.

“I think in a world which is disintegrating and which is polarising, you need a clue, and you need a mechanism for interaction, you need a mechanism for dialogue,” he said.

Cameron dreams of ‘re-shoring’ UK’s economy

In his speech to the annual gathering of world political and economic leaders in Davos, Switzerland, UK Prime Minister David Cameron said today (24 January) he saw a chance for his country to become the “Re-Shore Nation” and pull jobs and economic activity “back home”.

Subscribe to our newsletters