The weight of the Ukrainian war is heavy as an apocalyptic mood overshadows Davos.


teaHe said the effects of Russia’s invasion of Ukraine dominated the delayed and curtailed World Economic Forum this year, but it took George Soros to explain what many travelers to the Swiss Alps were thinking.

Davos would not have been Davos without the 91-year-old philanthropist and former speculator. But the conflict in Eastern Europe sparked his most tacit warning.

“The invasion was the beginning of World War III and our civilization may not survive,” he said.

Others expressed similar dark thoughts, some publicly and some privately. So sometimes it felt like the meeting wasn’t held in May 2022, but in July 2014 or August 1939, a time in the past when the world was on the brink.

Historian Adam Tooze put it this way: “War rules everything. The risk of nuclear expansion is not reflected in the price. This doesn’t feel like the Cold War. It’s hard to think of a time during the Cold War when the United States publicly announced a policy that would eliminate Russia’s ability to act independently,” he said.

Similar sentiments were expressed by senior policymakers who noted that a global pandemic at the beginning of 2020 was unthinkable, a Washington coup triggered by Donald Trump in January 2021 was unthinkable, and a war between Russia and Ukraine was unimaginable. Beginning of 2022. “Why should you think that the unimaginable is over with the onset of war?”

NATO Secretary-General Jens Stoltenberg said Western military build-up in Eastern Europe was meant to deter Vladimir Putin rather than provoke it, but there are other ways to exacerbate the conflict, even if Russia rejects the temptation to press the nuclear button. .

Solidarity with Ukraine was gross. One of the most popular tickets to Davos over the past few years has been an invitation to a champagne and caviar bash from the Russia House on the promenade. No Russians were invited this year, and the party building became a “Russian War Crimes House”, displaying evidence of atrocities committed by Ukraine since the start of the invasion.

No Russians were invited this year and the Russia House became the 'Russia War Crimes House'.
No Russians were invited this year and the Russian House became the ‘Russian War Crimes House’. Photo: Fabrice Coffrini/AFP/Getty Images

But solidarity with Ukraine comes at a cost, as is evident from many meetings. It was read that war would be bad for the world economy, with the only debate over exactly how bad it was. Estimates ranged from slight stagflation to Soros’ prediction of depression.

It made no sense for Davos in the West to ease sanctions on Russia, but fears about the health of the global economy suggest that Putin has economic weapons at his disposal (energy and food) and has already shown a willingness to use both. reflects the facts. .

Kremlin shuts down gas supply Poland, Bulgaria, Finland, And the European Union expects to be hit by an all-out embargo this winter, assuming the war doesn’t end prematurely. In Davos, few believe that peace will come until the WEF’s annual meeting returns to mid-January 2023. “We can afford it, but it won’t be easy,” said one European policy maker.

Since the war began three months ago, rising gasoline and gasoline prices have added to inflationary pressures in many countries, causing central banks to raise interest rates.

But for those attending Davos – and fewer than usual – the more immediate threat was food, not energy. European Commission President Ursula von der Leyen said Putin was “weaponizing food” by seizing Ukraine’s grain and blocking Black Sea ports.

IMF's Kristalina Georgieva said, 'If growth slows, you can cut your gasoline usage, but you have to eat it every day.'
IMF’s Kristalina Georgieva said, ‘If growth slows, you can cut your gasoline usage, but you have to eat it every day.’ Photo: Fabrice Coffrini/AFP/Getty Images

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) said: “Food prices are going up. If growth slows, you can cut down on gasoline, but you have to eat it every day.”

Achim Steiner, director of the United Nations Development Program (UNDP), said developing countries face three threats: a food crisis, a fuel crisis and a financial crisis. Sri Lanka was the first country to default on debt since the outbreak of the war, but the IMF fears it won’t be the last country in need of financial aid.

It shouldn’t be this way. After two years of global pandemic dominance, this has been billed as a global move and Davos where the shakers breathed a sigh of relief and planned a sustainable recovery. The idea was to leverage new technologies to build a green future where growth coincides with tackling climate change.

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In fact, the impact of the pandemic continues as China’s lockdown measures to contain the spread of COVID-19 weaken global demand and increase bottlenecks. Meanwhile, gas-hungry countries in Russia are turning to coal as an alternative.

As one climate change expert said, countries promised to limit global temperature rise to 1.8C at the Cop26 meeting in Glasgow, but have yet to put their promises into practice. If the situation remains the same, the temperature will rise by 4C.

In the long term, Davos’ hopes were that the war and its vulnerability to Russia’s exposure to it would accelerate the transition from fossil fuels to renewable energy sources. The prospects that countries will accelerate progress toward net zero provided rare sunshine in an otherwise grim situation.

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