Inflation, poverty, struggle for resources: “Economic wars are becoming the norm” – Economy

The elite are concerned. At least it has to be when it comes back to the annual meeting of the World Economic Forum in Davos. Because the problems that will be discussed by the highest politicians, business leaders and investors in Switzerland are massive. The World Economic Forum risk report warns shortly before the meeting of the social consequences of the increased cost of living in the coming years, the military and economic conflicts and the resource problems caused by the climate crisis. The “weakest parts of society and already fragile states” are particularly affected, it says. That means more poverty, hunger, violent protests, political instability. The middle class in many countries also has to see what they have built up endangered. Among other things, the risk report uses data from a survey of 12,000 experts. As in previous years, they rank the climate crisis and failure to vigorously mitigate it as the greatest long-term risk facing the world.

were still at the beginning of 2022 in the annual report the consequences of the pandemic became the dominant current topic and then, during the meeting in Davos, Russia’s attack on Ukraine. 2023 will now be a time to take stock of what all this has done to states and societies worldwide. Because the problems at that time – inflation, energy, war and a possible recession – have intensified. Inflation has risen, the central banks have reacted with higher interest rates and the era of cheap government debt has ended. States are in a quandary: they must absorb the cost of living without increasing inflation, nor can they rely on a stable economy.

Anyone who can afford it cushions problems

In Europe, for example, countries have invested billions to cushion the social and economic impact. The German government relieves citizens, for example, with the gas price brake and also helps the industry. The US launched the largest program, worth $430 billion, to bring in investment and attract the most innovative companies. The EU fears that this will harm you and wants to fight back. The risk report predicts more of these conflicts: “Trade wars will become the norm, conflicts between global powers will intensify.”

Such billion-euro programs, such as those that rich industrialized countries are now launching, are unrealistic for poorer economies. Technical progress, which is actually wanted and necessary in the fight against the climate crisis, also depends on resources. Many countries simply could not afford the technologies: “The new economic era will probably be characterized by poor and rich countries drifting further apart. This period is the first step backwards in human development in decades.”

The World Economic Forum places a special focus on the interaction of all these problems. Future food security, for example, or the question of when a battle for energy resources will break out, depend heavily on whether states and societies succeed in preserving nature and mitigating the climate crisis. Ecosystems are already collapsing, countries whose economies are particularly affected by the climate crisis are losing their livelihoods. The founder of the Davos meetings, Klaus Schwab, puts it this way: “We won’t find any solutions if we don’t look at the problems together and understand how they are connected.”

This is exactly where the hope lies in all the gloomy forecasts that there is still a window of opportunity: “Many of the risks described are about to materialize. Now is the moment to act together, decisively and with a long-term view,” it says in the report. Warnings about climate change or pandemics often go unnoticed because people always solve acute problems first – and rightly so. However, “those risks that are actually at the root of the current problem are losing attention,” according to the report. You have to shift the focus and not ignore long-term risks. An example of this is the flooding in the Ahr Valley in 2021, which of course needed a solution immediately. The actual problem – extreme weather due to global warming – has not yet been combated.

The World Economic Forum is seen by many as the backroom gathering of the most powerful, an extremely elitist event. In fact, every year the list of participants is exclusive, the important meetings are not open to the public. According to the organizers, 56 finance ministers and 19 central bankers will take part this year. However, the meeting in Davos is also an attempt to exchange ideas and cooperate globally in order to solve conflicts. The participants come from 130 countries. This year, for example, many Chinese participants will also be arriving, for the first time since the outbreak of the pandemic.

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