This week marks the start of the 2018 World Economic Forum. Every year the world leaders and multinational CEOs descend on the tiny Swiss Village of Davos to put the world to rights. Some argue that is an opportunity for the rich, and sometimes famous, to exercise their political and economic might, proclaiming to the world how they are making their nations’ citizens better off year on year.
Aside from the wining and dining that the rich elite indulge in during the course of the week, the forum does, of course, have serious implications. Primarily it acts as an opportunity to discuss the current performance of the global economy, and how political leaders and businessmen and woman can tackle the many pressing challenges that the global economy faces.
Going into this year’s forum, the overall economic picture seems rather fine and dandy. Stock markets around the world are hitting record highs, business optimism is generally positive, and the global economic growth forecast has been revised up to 3.9% by the World Bank. However, whilst the global economic outlook appears positive, one should be cautious in gazing too much through rose-tinted glasses. Things may be on the up, but there are grave concerns that the current pace of economic growth may merely be painting over the cracks in the global economy. Christine Lagarde, the chief of the IMF, has indeed alluded to such cracks, stating that: “we should be encouraged by the strength in growth but we should not be satisfied, there are too many people being left out the recovery.” Her point seems to be proven by the fact that last year one fifth of emerging and developing economies saw their per capita income (the average amount of money a person takes home) decline. This speaks volumes of the current economic outlook. The majority of the world appears to be getting better off, but this should not detract attention away from a large bulk of the world population who continue to struggle day-in-day out, battling to obtain the basic means of subsistence.
This week in Davos, the elite will try to convince us that the world is a far richer, and more financially stable place than it was in the immediate aftermath of the financial crisis. In reality, however, there some grave economic challenges that the world must seek to overcome if we can claim that economic growth is an inclusive phenomenon.
[Image: World Economic Forum]