World Economic Forum 2018: Anti-globalist Trump and FDI-hungry Modi stand for clashing trends in Davos
As Prime Minister Narendra Modi leaves for Davos to attend and address the World Economic Forum 2018, the annual meeting in praise of global capital and globalisation, of reading the world as an interconnected place of interlocked economies and nations – seems poised at a cliffhanger. With the one-of-a-kind American president in Donald J Trump, whose protectionist “America First” motto is exactly the opposite of what WEF has stood for, there’s bound to be “clashes”, if not among personalities, at least among competing ideas at the forum in the snow-clad Swiss Alps, despite the splash of yoga on the mountains, thanks to India.
With both Modi and Trump scheduled to give keynote addresses – Modi at the opening plenary session on Tuesday, January 23 and Trump on the last day, January 26 – it seems the organisers have tried their best to avoid awkwardness, and any hijacking of the forum by Trump with his anti-globalist ideas. While there have been protests against WEF by the anti-globalisation activists of the left, environmentalists, anti-capitalists from Europe and Latin America, the concern about Trump is unique, since it’s the US president this time, usually a force of globalisation and undeterred flow of global capital, who is spewing policies and ideas that are clearly in the “far-right” of the socioeconomic spectrum.
On the other hand, despite immense criticism at home, Prime Minister Modi, who’s the first Indian PM to make an official trip to Davos after two decades since former PM HD Deve Gowda went in 1997, stands for pitching India as a global investment destination, even though it’s not going to be the easiest of tasks. With the investment-to-GDP ratio dipping at home, and the economic indicators that were paraded by the government, such as the Moody’s ratings and the World Bank ease of doing business rankings, both having faced criticism over their methodologies, thereby stealing Modi’s thunder somewhat with hard data, the task has become more uphill.
In fact, India is that rare big emerging economy that has seen its GDP growth rate shrink in 2017, while the world economy as such showed a healthy upward swing, 10 years since the 2008 Wall Street crash. This has been attributed to the twin economic shocks – demonetisation and GST – and PM Modi will have a hard time explaining the counter-trend in India as opposed to the global upswing.
This means at the World Economic Forum, which is hosting 2,500 delegates including several heads of states or elected premiers, along with 120 global CEOs, Modi and Trump would be doing the opposite jobs. While Modi will be looking for more FDI – it’s significant that 100 per cent FDI in single brand retail via automatic route has been sanctioned just before the WEF 2018 – and “hard-selling India” as a brilliant investment destination, Trump will be selling his America First policies to retain most of the CEOs who happen to be Americans, to pick the United States over emerging economies with huge markets such as India and China.
Hot-button issues
With business heads, prime ministers and presidents of countries, academicians, philanthropists, environmentalists, Silicon Valley honchos, human rights activists and members from art and cinema all descending on Davos for the WEF, it’ll be the usual potpourri of intense debates around the biggest hot-button issues of our times.
These include narrow nationalisms (including the Trump variety, but also perhaps the Modi variety), climate change, cyber-security and the impact of artificial intelligence (AI)-driven automation in manufacturing that is posing a serious threat to low-end jobs, refugee crises such as plight of the Rohingyas, and the ongoing battles creating fresh flux of conflict migrants, ecological damage owing to urbanisation, depletion of forest covers for agriculture and industry, river and ocean water pollution, etc.
On the sociopolitical side, the fallout of the Harvey Weinstein revelations and the #MeToo movement and the new feminist wave gripping the world, the demand for new equality, the women’s marches in the United States but also in other countries, the rights of LGBTQ peoples and their battles with law and social prejudice, especially in a country like India, sex education and reproductive rights for women, etc, would figure prominently in the debates.
The Global Risk Report 2018
Released a week before the WEF commences, the Global Risk Report 2018 underlines all the major threats and the likelihood of their occurrence or intensification, that the global systems need to face together. These include extreme weather events, natural disasters, cyber attacks, data fraud/theft, failure of climate change mitigation and adaptation, climate/war-induced involuntary migration, terror attacks, illicit trade, asset bubbles in major economies, weapons of mass destruction and the nuclear arms race, biodiversity loss, ecosystem collapse, spread of contagious diseases, water crises, food shortage, among others.
In fact, Klaus Schwab, founder and executive chairman of the World Economic Forum has clearly stated in the risk report that “unilateral nationalisms” pose a threat to the joint action needed to mitigate these enormous challenges, making a thinly veiled reference to Trump. While Europe is banking on French president Emmanuel Macron and German Chancellor Angela Merkel to bring more collaborative projects together, the presence of post-Brexit United Kingdom prime minister Theresa May, is likely to add to the clamour.
China versus India
Last year, in the aftermath of Trump’s election to the White House, WEF found an unlikely foothold in Chinese President Xi Jinping’s ode to globalisation, underlining the great irony of a communist country head batting for the global capital and free market of funds and ideas. While Xi hogged the limelight and China filled in the huge vacuum left by the US in matters of international leadership, this time, China is represented by Xi’s economic adviser Liu He, amid concerns over One Belt One Road initiative’s possible “economic colonialism". This leaves a big opportunity for PM Modi to pitch India’s as the global destination for investments.
As part of his Make in India scheme, PM Modi is likely to use the hoopla surrounding his Davos visit to signal that India is greenlighting major global companies to invest in India. His business dinner with corporate heads on January 22 and his keynote address on January 23 at the opening plenary session are both being looked forward to by Indian and foreign observers alike.
On India’s platter
Though Union finance minister Arun Jaitley is not attending the WEF, PM will be accompanied by a retinue of ministers, including Piyush Goyal, Suresh Prabhu, Dharmendra Pradhan, MJ Akbar and Jitendra Singh at Davos, and Modi’s motto is going to be “India means Business”. In two recent interviews, a rare occurrence in themselves, PM Modi maintained that his stint at Davos would be about “sharing his vision for India’s future engagement with the international community”. PM Modi is likely to meet Swiss premier Alain Berset to discuss issues of financial transparency and black money.
Being the face of the world’s seventh largest economy with an excellent growth rate that was stymied somewhat by the twin shocks of 2016 and 2017, PM Modi’s handling of the 2.3 trillion dollar economy has been keenly watched in the almost four years into his government’s tenure. While the Indian delegation of business leaders and members of the CII (Confederation of Indian Industry), including Mukesh Ambani, Gautam Adani, Azim Premji, Chanda Kochar, Uday Kotak, Ajay Singh, Rahul Bajaj, among others, will be signing or negotiating pacts with their foreign counterparts, superstar and king of Bollywood Shah Rukh Khan will receive the annual Crystal Award (along with Cate Blanchett and Elton John) for his work towards “improving the state of the world”.
While Ramesh Abhishek, secretary, department of industrial policy and promotion, has confirmed that PM Modi’s business dinner with 60 top global CEOs, including 20 from India, on January 22 night, would be a big deal, literally, other informal interactions at the sidelines with representatives of General Motors, Sakesforce, Royal Dutch Shell, Nestle, JP Morgan, Airbus, Hitachi, BAE Systems, IBM, etc would be top calls on the part of the prime minister.
The mix of soft power in the yoga classes, as well as the hard power through strong negotiations at the financial high table, would nevertheless be met with puzzling questions on India’s economic performance at home, as well as the case of Aadhaar which has now garnered international bad press, despite fawning editorials earlier. This would naturally put a question mark of Modi’s other flagship scheme, Digital India, and would also sit well with the prognosis on data fraud and risk posed by digitisation encapsulated in the Global Risk Report 2018 by the WEF organisers themselves.