DAVOS, Switzerland (AP) — The Latest on the World Economic Forum gathering in Davos, Switzerland:
The head of the International Monetary Fund is warning that letting international tensions fragment the global economy could cost trillions in lost growth.
IMF Managing Director Kristalina Georgieva urged business and political leaders during the World Economic Forum’s gathering in Davos, Switzerland, to “wake up” and preserve global trade even as they look to insulate their supply sources from disruption.
Georgieva says the pandemic and Russia’s war in Ukraine showed that some redundancy is needed when it comes to where businesses source parts and raw materials.
But the smart way is “to keep that to the level where we make the world economy more resilient and not drag the world into a place where we will be all poorer and we will be less secure.”
Reorganizing supply chains in a way that doesn’t restrict trade would reduce global growth by only 0.2% of global output. But if trade collapses, that could balloon to 7% of global economy over time, or $7 trillion — the size of the economies of Japan and Germany together.
“My fear is, we are sleepwalking into this world. But hey, here is Davos! Wake up! Do the right thing!” she said, drawing a round of applause.
— Ukraine’s first lady urges leaders to use influence amid war
— EU chief offers clean tech plan to compete with China, US
— Online conspiracy theories target World Economic Forum
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Two top Ukrainian officials said reforms to the country’s economy to attract investors can’t wait until the end of the war, even as utility workers struggle to repair infrastructure destroyed by Russian missiles.
Oleksiy Chernyshov, head of state energy company Naftogaz, said cutting red tape and reforming the country’s judiciary will be key in finding new investment to help rebuild the country.
He spoke Tuesday during a panel on Ukraine’s future during the World Economic Forum’s gathering in Davos, Switzerland, with First Deputy Prime Minister Yuliia Svyrydenko, who is also economy minister.
Svyrydenko said the government’s aim is to make Ukraine a favored destination for investors “on the second day after the victory.”
Before the war, Ukraine struggled to curb the influence of politically connected business figures known as oligarchs and to reform its legal system.
Economists working on the country’s reconstruction issues say the war offers the chance to accelerate reforms by making them an issue of patriotism and national survival.
Samantha Power, administrator of the U.S. Agency for International Development, announced that USAID would be providing more support for the Global Alliance for Trade Facilitation.
Power, speaking during a panel discussion on democracy Tuesday at World Economic Forum’s gathering in Davos, Switzerland, said the program was developed in conjunction with the forum, with the private sector saying business is hard to do certain countries and asking USAID and other government actors to make it easier.
She says “we’re going to surge support to Ecuador, Tanzania, countries like that again are doing those hard things to try to facilitate trade and not merely again the classic tool toolkit for democracy promotion.”
Power said many countries are taking difficult steps to address problems as they try to implement political reforms. She said those efforts could be helped by public-private partnerships.
She urged businesses to check about investment opportunities in countries that are “doing hard things, that are fighting for more transparency, fighting those anti-democratic forces.”
Polish President Andrzej Duda says efforts to build an international coalition that could send “at least an armored brigade” to Ukraine “will take some time.”
Duda stressed that Ukraine is asking for modern Western weapons and tanks as it has been fighting for Russia’s invasion since February and is “counting on the allies to each give a few or about a dozen tanks.
Speaking to Polish reporters after a panel at he World Economic Forum gathering in Davos, Switzerland, he said he’s counting on Finland and on other European countries, including Germany, which have Leopard tanks.
Duda stressed that Germany’s permission will be required for the German-made Leopard tanks to be handed over to Ukraine.
Britain has offered to provide its Challenger tanks, with Duda expressing thanks for the U.K. government.
Former U.S. Vice President Al Gore emphasized the need to reform multilateral development banks if the world wants to rapidly decarbonize and meet its climate goals.
He pointed to the World Bank, whose leader David Malpass faced criticism in September for not directly answering when asked whether the burning of fossil fuels has contributed to global warming. Instead, he said, “I am not a scientist.”
He has denied Gore’s accusations of being a climate denier. Fore said during a panel session at the World Economic Forum gathering in Davos, Switzerland, on Tuesday that “if we have a global allocation system for capital that deprives the vast majority of people that live in developing countries from any meaningful access then we are kidding ourselves.”
According to Gore, 88% of the projected increase in emissions of planet-warming gases will come from the developing world but most of them don’t have access to private capital today.
He said that Nigerians, for example, have to pay an interest rate that is seven times higher than those in a European or North American country.
The leader of the Belarus opposition says a trial against her opening in Minsk is “a farce” and that she still hasn’t been made aware of the charges.
Speaking to The Associated Press on Tuesday during the World Economic Forum gathering in the Swiss town of Davos, Sviatlana Tsikhanouskaya said she feared Belarus was being “overlooked” by the war in Ukraine and warned that without a democratic Belarus there would be no stability in the region.
The elite gathering of political leaders, business executives and cultural trend-setters will tackle issues facing a divided world as 2023 begins with conflict and economic pressures.
Tsikhanouskaya said she would welcome a meeting with Ukrainian first lady Olena Zelenska, who is also attending the meeting, or the Ukraine government but understood the sensitivity and the fears it could provoke Belrusian President Alexander Lukashenko.
___ Chinese Vice Premier Liu He laid out an optimistic vision for the world’s second largest economy following the battering it took over nearly three years of lockdowns, quarantines and strict COVID-19 containment measures.
Liu, a senior economic official on the State Cabinet, China’s Cabinet, said Tuesday in an address at the World Economic Forum gathering in Davos, Switzerland, that “if we work hard enough, we are confident that in 2023, China’s growth will most likely return to its normal trend. The Chinese economy will see a significant improvement.”
Liu said China expects to see a major rise in its imports, more investment by companies and return to regular consumption habits over the coming months. He says easing COVID restrictions ending quarantines for people arriving from abroad are key factors in the economy’s recovery.
His remarks come after China on Tuesday released data showing China’s economic growth fell to its second-lowest level in at least four decades last year under pressure from anti-virus controls and a real estate slump.
China’s economy grew by 3% in 2022, less than half of the previous year’s 8.1% rate. That was the second-lowest annual rate since at least the 1970s after 2020, when growth fell to 2.4%.
Liu emphasized government efforts to manage the earlier decline, particularly in supporting the real estate industry that accounts for 40% of all bank lending and 50% of local government revenue. After years of breakneck economic growth, he says China’s goal is “high quality economic development,” reforming state-owned enterprises and supporting the private sector.
He also reiterated China’s commitment to its carbon reduction goals and to improving its environment. China has said it will peak carbon output by 2030 and become carbon neutral by 2060. He says China will do so through a mix of renewables.
China, the world’s largest carbon emitter, relies on coal to generate most of its energy.
U.S. climate envoy John Kerry says that despite nearly a $1 trillion committed by global philanthropies for various causes over the last few years, only 2% of this amount goes toward climate action.
He said Tuesday during a panel session at the World Economic Forum in Davos that it’s estimated from $7.5 billion to $12.5 billion of global philanthropy is directed toward climate action. He and others urged philanthropies across the world to come together and contribute more to climate action.
“So how do we get there?” Kerry asked about keeping global climate goals alive. He answered, “Well, the lesson I’ve learned in the last year — I learned it as secretary of state and it has since been reinforced in spades, is money, money, money, money, money, money, money.”
The panel session also launched GAEA’s Call to Action, the World Economic Forum’s new global effort to raise additional philanthropy that can fund climate action.
The European Union is pushing forward with a massive clean tech industrial plan that not only should keep the continent in the vanguard of plotting a greener future but also guarantee its economic survival as it faces challenges from China and the United States.
EU Commission President Ursula von der Leyen presented the outlines for her “Green Deal Industrial Plan” that will make it much easier to push through subsidies for green industries and pool EU wide projects that are boosted with major funding as the EU pursues the goal to be climate neutral by 2050.
Speaking Tuesday at the World Economic Forum in Davos, Switzerland, von der Leyen says the 27-nation bloc will become much more forceful in countering unfair trading practices, if they come from Washington, or more important, from Beijing.
Von der Leyen’s outline will now become the key driver for debate among the member nations before their 27 leaders meet for a Feb. 9-10 summit on the issue.
Ukraine’s first lady hit out at Russia as the anniversary of the war in Ukraine nears, saying parents are in tears watching doctors trying to save their children, farmers are afraid to go back to their fields filled with explosive mines and that “we cannot allow a new Chernobyl to happen.”
Olena Zelenska also scolded government leaders and corporate executives in a speech Tuesday at the World Economic Forum gathering in the Swiss town of Davos for not always using their influence to do enough.
With the war raising inflation and expanding food insecurity in developing nations, she called it “an insult to mankind and human nature to have mass starvation.”
She says the war can expand beyond Ukraine’s borders and worsen the crises but “unity is what brings peace back.”
Zelenska says she brought letters from Ukrainian leadership to European Commission President Ursula von der Leyen and to Chinese President Xi Jinping that she will give to Vice Premier Liu He, who’s speaking Tuesday at Davos along with von der Leyen.
The head of the International Energy Agency says Russia’s invasion of Ukraine has spurred new support for renewable energy as worries over security of supply join environmental concerns.
But IEA Executive Director Fatih Birol said Tuesday during a panel discussion at the World Economic Forum in Davos, Switzerland, that investment in clean energy still lags far behind what’s needed.
He says the disruption of oil and natural gas supplies from Russia means that “the biggest driver of renewable energy growth today is energy security … because home-grown renewables are the energy of peace.”
Birol cited as progress the shift to battery-powered cars, saying they were only 3 in every 100 vehicles sold in 2019 but reached 13% last year. He says every other car in major markets will be electric by 2030.
He welcomed government support like the Inflation Reduction Act in the U.S. and the EU’s Fit for 55 goals but warned that rich countries’ efforts won’t be enough if developing nations can’t afford the transition to energy sources that emit less climate-changing carbon dioxide.
Right now, Birol says there is $1.50 in investment in clean energy for every $1 investment in fossil fuels: “If we want to reach our target, the ratio needs to be one to nine.”
Polish President Andrzej Duda is predicting that the German government will agree one day to send powerful Leopard tanks to Ukraine, citing Germany’s membership in NATO and rising public support for Ukrainians beleaguered by Russia’s war.
The Polish leader quipped during a panel at the World Economic Forum in Davos on Tuesday: “We don’t mention that Ukraine will win this war, we mention that Ukraine will not lose this war,” before chuckling.
His Lithuanian counterpart, Gitanas Nauseda, quickly replied: “I mention that Ukraine will win this war.”
Ukrainian President Volodymyr Zelenskyy have been clamoring for more supplies of Western weaponry like tanks and air defense systems nearly a year into the war.
Duda said it was an “important moment” that NATO members, like Britain have vowed to send modern tanks to Ukraine, which could affect the thinking of Chancellor Olaf Scholz’s government.
Scholz, who is speaking at Davos on Wednesday, has said Germany will “weigh every step carefully” and consult with its allies on further weapons deliveries to Ukraine.
Duda also said German public opinion was becoming “stronger and stronger and stronger” in favor of Ukraine, and he hoped that would result in the “very needed decision” to send Leopards to Ukraine.
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