TThe impact of the Russian invasion of Ukraine this year dominated the belated and lean World Economic Forum, but it took George Soros to express what many of those who traveled to the Swiss Alps thought.
Davos would not have been Davos without the pitfalls of a 91-year-old philanthropist and former speculator, but the conflict in Eastern Europe has triggered his as yet apocalyptic warning.
“The invasion may have been the beginning of World War III and our civilization may not survive it,” he said.
Others expressed similarly dark thoughts – some publicly, some privately. So much so that at times he felt as if the meeting had not taken place in May 2022, but in July 1914 or August 1939, in times past, when the world was on the brink of an abyss.
Historian Adam Tooze said: “War rules everything. The risk of nuclear escalation is not taken into account. It doesn’t seem like a Cold War to me. It is difficult to imagine the Cold War, when the United States openly announced that its policy was to eliminate Russia’s ability to take independent military action.
Similar feelings were expressed by a senior politician, who pointed out that a global pandemic was unthinkable in early 2020, that an almost unthinkable coup in Washington, instigated by Donald Trump was unthinkable, and that a war between Russia and Ukraine was unthinkable. early 2022. “Why should we think the unthinkable ended in early war?”
NATO Secretary General Jens Stoltenberg said that building a Western army in Eastern Europe was designed to discourage rather than provoke Vladimir Putin, but while Russia resisted the temptation to push a nuclear button, it had other ways to escalate the conflict. .
Solidarity with Ukraine was complete. In previous years, one of the hottest tickets in Davos was an invitation to a champagne and caviar handball banquet at Russia House on the Promenade. No Russians were invited this year, and the party premises became the “House of War Crimes in Russia”, where Ukraine exhibited evidence of atrocities committed since the beginning of the invasion.
However, solidarity with Ukraine costs something, as has been evident in many meetings. It was read as read that war would be bad for the global economy, with the only controversy over how bad it was. Estimates ranged from a moderate dose of stagflation to Soros’ prediction of depression.
Davos did not make sense for the West to ease its sanctions on Russia, but concerns about the health of the global economy reflected the fact that Putin had economic weapons at his disposal – energy and food – and had already shown a willingness to use them both. .
The Kremlin has cut off gas supplies to Poland, Bulgaria and Finland, and the European Union expects to be hit by a blanket embargo this winter, provided the war does not end prematurely. Few people in Davos believe that peace will break out before the annual WEF meeting returns to normal in mid-January 2023. “We can do it,” said one European politician, “but it will not be easy.”
Higher gas and gasoline prices since the start of the war three months ago have contributed to inflationary pressures in many countries and forced central banks to raise interest rates.
But for those who participated in Davos – and there were fewer than usual – it was food, not energy, that was a more immediate threat. European Commission President Ursula von der Leyen said Putin was “arming food” by seizing Ukrainian grain and blocking Black Sea ports.
Kristalina Georgieva, executive director of the International Monetary Fund, said: “Food prices are rising, rising, rising, rising. When growth slows, we can reduce gasoline consumption, but we have to eat every day. ”
Achim Steiner, administrator of the United Nations Development Program (UNDP), said developing countries face three threats: the food crisis, the fuel crisis and the financial crisis. Sri Lanka was the first country not to repay its debts since the start of the war, but the IMF fears it will not be the last to require its financial assistance.
It shouldn’t have been like this. After two years of dominating the global pandemic, it was billed as Davos, where global movers breathed a sigh of relief and planned a sustainable recovery. The aim was to use new technologies to create a green future in which growth is in line with tackling climate change.
In fact, the effects of the pandemic persisted, with Chinese locks in the fight against the spread of Covid-19 weakening global demand and adding to obstacles. Meanwhile, countries starving for Russian gas are switching to coal as a substitute.
According to one climate change expert, the countries pledged at the Cop26 conference in Glasgow to limit global temperature rises to 1.8 ° C, but still had to turn their commitments into action. At present, temperatures would increase by 4 ° C.
In the long run, Davos hoped that the war and the vulnerability it had exposed would accelerate the transition from fossil fuels to renewable energy sources. The prospect of the country accelerating progress to pure zero provided a rare glimpse of sunshine in what was otherwise a grim affair.