As thousands of rich and powerful leaders head to Davos for the World Economic Forum (WEF) next week, the organization’s founder has urged international heads of state to come up with an “inclusive” approach to globalization.
The main theme of this year’s WEF meeting is “Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution. ”
The forum is scheduled to begin on Tuesday, January 22, and end on Friday, January 25.
Ahead of the annual gathering of business, political and cultural leaders, Klaus Schwab, executive chairman of the Geneva-based WEF, told reporters in Davos: “We have to define a new approach to globalization which is more inclusive.”
“Globalization produces winners and losers and there are many more winners in the last 24, 25, 30 years — but now we have to look after the losers, after those who have been left behind,” Schwab said Tuesday.
For decades, there had been a strong consensus that globalization helped to stimulate wage growth and create more jobs — not just for developed countries but also for poorer nations worldwide too.
However, in recent years, a populist backlash against globalization has taken hold. That’s prompted many to voice their anger as they see jobs being impacted by automation, old industries disappearing and migration disrupting the established order.
“So, if you speak about globalization 4.0, it has to be more inclusive, more sustainable — and it has to be based more on loyal principles. What we need is a moralization or a re-moralization of globalization,” Schwab said.
‘Show why the system should be reformed’
The forum released a “Global Risks ” report Wednesday in which it noted that “global risks are intensifying but the collective will to tackle them appears to be lacking.”
“The discussions at Davos come at a pivotal time, as the political backlash to globalization threatens not just the global economy but also the liberal international order that has been the cornerstone of unprecedented levels of post-war prosperity, growth, and security,” Brian Klaas, assistant professor in global politics at University College London, told CNBC via email.
The upcoming WEF meeting comes as market participants are increasingly concerned about the outlook for the global economy, linking a possible slowdown to factors such as trade wars and Brexit.
That’s because since the last forum in January 2018, global trade relations and diplomacy as well as domestic politics have been fractious, to say the least.
“I suspect that history books will remember 2016 as the year that both sides of the Atlantic gambled on populism; 2019 will be remembered as the year that those risky bets went bust,” Klaas said.
“As the empty promises of populism become apparent to voters who were demanding workable solutions to serious problems, the task for global leadership will be to win the argument — to show why the system should be reformed, not destroyed. That task is particularly urgent.”
— CNBC’s Holly Ellyatt contributed to this report.