The messages of Davos

Sunday 22/01/2017

Davos is over. Long live Davos. This year’s World Economic Forum talked about a different sort of globalisation than usual: Inclusiveness around the globe.

It was a sign of the times and an acknowledge­ment of the restive state of the global village. Every year, for nearly half a century, Davos has served as a euphemism for a certain world view — support for globalisation and for greater cosmopolitanism. Davos participants are automat­ically assumed to be in favour of the rapid changes that began in the late 20th century, with greater integration of world trading, financial and production systems.

But in 2017, many of those who attended Davos acknowledged that the process of globalisation may not necessarily be the whole answer. There is awareness that huge swathes of the world, not least the overwhelmingly young populations of the Middle East and North Africa (MENA) region, do not see globalisation as having delivered.

Understandably, in many parts of the region, there is wariness about the process of globalisation, which is not perceived as having brought about the promised economic growth, job crea­tion and poverty alleviation. This was often the consequence of inadequate policies and unrealistic expectations. Regional conflicts and the threat posed by terrorism have further inhibited global investments and trade within MENA.

All of this while technological change has enabled everyone, particularly the young, to see what development and prosperity looked like in faster-growing parts of the world. If the unceasing flow of migrants to the West revealed the despair of millions in the MENA region, it also underlined the limits of the open-borders model in the global village.

Ironically, the region has been one of the best guarantors of global economic stability. The region’s oil producers integrated into the international oil market early on. Of late, they have made efforts to diversify their economies and spur growth. But by weaning local populations off state subsidies, governments now face unprecedented pressures at home. No longer can poorer countries in the region rely on their monetary support.

For the long term and to really benefit from globalisation, MENA countries need to adapt their socioeconomic and education systems in particular to the coming age of automation and other transformational changes. It must enable entrepreneurship so the young and creative can compete in the global marketplace. It must slash bureaucratic red tape and reform business practices to attract foreign investment — not as charity but as corporate good sense.

And finally, to properly engage in globalisation, there is an urgent need for a pan-regional trade and business vision that goes beyond expedient political posturing.

Worldwide, the prospects for globalisation seem bleaker than ever before after last year’s Brexit vote, Donald Trump’s victory in the US presidential election and the rise of protectionism and populism in the West.

But that is no reason to give up on the possibilities of globalisa­tion. Not yet. The region’s enterprising young people are not necessarily a threat or a burden. They may be the main source of hope. We owe it to them to keep the faith.