Key Takeaways from 2018 Davos Meeting
The 48th Annual meeting of the World Economic Forum was held last week. at Davos, Switzerland. The State of Qatar was well represented at this forum by Deputy Prime Minister and Foreign Minister H E Sheikh Mohamed bin Abdulrahman Al Thani, Minister of Finance H E Ali Shareef Al Emadi and Minister of Economy and Commerce H E Sheikh Ahmed bin Jassim bin Mohamed Al Thani who met various dignitaries at Davos. The CEOs of various leading Banks in Qatar were also present at the event. Dr. R. Seetharaman, CEO of Doha Bank also participated in the event. He gave an update on the key takeways from 2018 Davos meeting and also on key reforms which were taken by Qatar in recent times.IMF in its latest World Economic Outlook update, released in Davos on the sidelines of the World economic forum revised up its forecast for world economic growth in 2018 and 2019, saying sweeping U.S. tax cuts were likely to boost investment in the world’s largest economy and help its main trading partners. The new global forecast has growth of 3.9 percent this year and next year. The advanced economies expected to grow by 2.3 percent in 2018 and 2.2 percent in 2019 respectively. The emerging and developing economies expected to grow by 4.9 percent in 2018 and 5 percent in 2019 respectively. India is projected to grow at 7.4 percent of its gross domestic product (GDP) in 2018 making it the fastest growing economy among emerging economies following last year’s slowdown due to demonetization and the implementation of goods and services tax (GST). The Indian Prime Minister Shri Narendra Modi had stated at the event that India is well poised to become a five trillion dollar economy by 2025 and the government has opened up the economy to foreign direct investment and the path chosen by the government is that of reform, perform and transform.
After a decade of stagnated productivity, the Fourth Industrial Revolution is expected to create up to $3.7 trillion in value by 2025 which was a key subject discussed at Davos. Technologies such as the internet of things, advanced robotics, artificial intelligence and additive manufacturing are already helping to generate net productivity increases. However, to achieve the desired broad-based economic and societal impact and to maximize productivity benefits, technology must be adopted at scale and diffused throughout the ecosystem. Advanced robots and computers can perform a range of routine physical activities. Manufacturing companies, suppliers and customers will ultimately be connected on a common IoT platform. Governments need to develop the right set of policies and protocols to facilitate the dissemination and adoption of technology at the national level. Moreover, international cooperation and public-private partnerships must help to elevate productivity so that it benefits the global economy. Block chain continues to feature almost everywhere, with firms across fintech, insurance and even travel talking about ways to use technology to power their businesses in the future. The Cryptocurrency Bitcoin was also touched upon at Davos on account of its huge surge in recent times and challenges in regulating the same.
World merchandise trade volume is forecast to grow 3.6% in 2017 and trade growth should moderate to 3.2% in 2018. Recovery could be undermined by downside risks, including trade policy measures, monetary tightening, geopolitical tensions and costly natural disasters. American President Mr. Donald Trump has told global finance leaders he will always put the US first when it comes to trade, but “that does not mean America alone”. Some Global leaders expressed concern at Davos due to greater protectionism, greater fragmentation and undoing what globalisation has been able to achieve. It needs to be seen how such challenges are addressed going forward. In a world of rapid technological change and digitization, trade policy must evolve to empower new forms of digital commerce and reduce barriers that hold back growth opportunities. Public-private collaboration to define and implement digital trade policy by Steering and shaping policy developments related to e-commerce, digitization of trade and cross-border data flows nationally, regionally and globally. Last but not the least at the event various Investors, activist shareholders from millennial funds and some pensions are increasingly demanding greater visibility on how companies are responding to the issues from Gender Parity.
The reforms undertaken by Qatar were highlighted at the forum. Qatar Budget 2018 has allocated for key sectors such as health, education and infrastructure Total allocations for health, education and transportation reached QR83.5 billion or 41% of total expenditure. A new law for Public Private Partnership (PPP) businesses in Qatar should provide an additional level of comfort to the private sector and foreign investors. In Feb 2017, Qatar issued a new law on arbitration (the “Arbitration Law”), inspired by the UNCITRAL Model Law (the “Model Law”), an international template for law on arbitration. In terms of food security, Qatar now have many local companies that are supporting the country and it can develop these businesses further and boost its food production to provide both locally and internationally. Qatar’s landmark residency plan is a welcoming social and economic reform. Qatar has also waived entry visa requirements for citizens of 80 countries. The Davos 2018 forum had touched upon key issues impacting global scenario amidst expectations of improvement in global growth and the solutions need to be taken forward to promote inclusive growth and sustainable development.