World Economic Forum 2017

Authors: Anton Bendarzsevszkij, Viktor Eszterhai, László Gere, Péter Klemensits, Eszter Polyák

The 47th Annual Meeting of the World Economic Forum was held between 17th and 20th January, 2017 in Davos, Switzerland. Its main theme was responsive and responsible leadership. The event hosted approximately 3,000 participants, mostly political leaders, and the representatives of academic, economic, financial, business and research life from more than a hundred countries all over the world.

Europe’s Problems

Although Europe’s future and related challenges were in focus from the very beginning, several leading politicians, such as German Chancellor Angela Merkel or the European Committee’s Jean-Claude Juncker, did not attend the meeting. British Prime Minister Theresa May’s keynote speech on Brexit was the most-anticipated of all speeches and it attracted considerable interest from the political and business elite. In fact, the Prime Minister’s speech did not contain many novelties about the Brexit strategy, but took a clear stand for globalisation and talked about strengthening the global role of Great Britain. She hoped for a greater cooperation on behalf of politicians and finance to ensure positive outcomes from the era of globalisation for the majority of society.[1]

British Chancellor of the Exchequer Philip Hammond blamed Tony Blair for Brexit, who was not willing to introduce transitional arrangements to limit the flow of immigrants after the accession of Middle and Eastern European countries. He argued Brexit was contributed to the anti-immigrant sentiment, which consequently evolved. According to Hammond, the process negatively affects the British economy, and he expects an economic growth of merely 1.5 per cent for 2017.[2]

London’s Mayor Sadiq Khan warned that Brexit was not beneficial for either the British or the EU, a since the companies leaving Great Britain will not be likely to re-locate on the continent, but rather opt for the United States. Access to the common European market is still a crucial interest for the UK.[3]

Germany’s Federal Minister of Finance responded primarily to Theresa May’s statements made in London, in which the British head of government envisaged slashing taxes to attract business should Brexit talks with the European Union fail to strike a deal. As a global economy, Great Britain still has got to stick to what has been agreed globally, and cannot become a low-tax heaven, either, Wolfgang Schäuble argued.[4]

In addition to Brexit, the crisis of the EU was another central theme.  Dutch Prime Minister Mark Rutte declared that the idea of a European superstate had failed, Brussels must respect the sovereignty of Member States and, in the light of Brexit, internal movement of people within the EU also needs to be brought under control.[5]He was firmly rebuked by European Parliament President Martin Schulz, who said that European heads of state used Brussels as a scapegoat, failing to tell their citizens that they were responsible for the decisions made there. Schultz thinks the European Member States are unable to survive in the worldwide competition in which we are living, and the survival EU is a common interest shared by all of us. Frans Timmermans, the First Vice President of the European Commission, spoke of the middle-class frustration at falling living standards, which is fuelling a populist rejection of the European Union, thus the politicians’ criticism against European institutions can lead only to negative consequences.[6]

Xi Jinping: China Leading the World?

One of the most significant speeches of the World Economic Forum in 2017 in Davos was delivered by Xi Jinping, who was the first President of the People’s Republic of China to come to Davos, further increasing the significance of his address. His speech is also important because he was clearer about China’s future relation with and ideas about the existing world order, continuously reflecting on the policy expected from Donald Trump, winner of the presidential elections of the USA. Xi’s message was clear: China claims a new leadership role in the world.

Xi’s speech can be divided into several logical units.  His first, powerful meassage was that China is the engine of world economy, a major power of the future.  In his speech, the president called attention to the fact that—despite the unfavourable global economic environment—China’s economy grew by 6.7 per cent in 2016. China’s prospects are excellent to become the world’s leading power, especially if it can act as the primary representative of developing countries. In his speech, he referred to a fundamental turn going on in world economy: the importance of former centres of economy is fading, and the role of developing countries is dynamically increasing (in 2016, developing countries contributed to 80 percent of the growth of the global economy).

The second important message of the speech was that China is a status quo power in world economy. Although China is criticised by many for aiming at upsetting the order of world economy, President Xi emphasized several times that their country is committed to restore the institutions of world economy and their rules of operation. The Chinese president highlighted that globalisation is often identified as a problem today—as, for example, Brexit and the outcomes of the American presidential election demonstrate—, but in fact it is an irreversible trend. Furthermore, globalisation and free trade have greatly contributed to reducing global poverty, with China as one of the greatest winners.

Many problems troubling the world are not caused by economic globalisation; rather, it is the consequence of excessive chase of profit by financial capital and grave failure of financial regulation. Xi pointed out the importance of international agreements (e.g. adherence to the Paris Climate Agreement), and condemned pursuing politics driven by national interests only.  It was a double criticism for the USA: it was a criticism of Trump’s policy promoting the supremacy of national interest, and it also pointed out that the USA is unwilling to fulfil the tasks ordained by the institutions that were mostly created by the USA after the second world war. As Xi can see it, the world has been left without a leader, and this position will be fulfilled by China, understanding the sign of the times. He also added that that fulfilling the leadership role is not just China’s ambition but also the aspiration of the international community.

The third message of the President’s speech delivered in Davos is that China is a responsible major power: in addition to contributing to the growth of the word economy—first of all, by promoting domestic and international innovation (e.g. facilitating the fourth industrial revolution)—the country leaves its gates open to other countries as well. He added that China fosters the modernization of other countries and contributes to their rapid economic growth. This is, again, a double criticism directed towards the United States, attacking, on the one hand, protectionism, and the USA’s failure to provide the common good for smaller countries.

The fourth message of the President is that China, by reforming international regulations within the existing international framework, has opted for a more just system, which is more responsive to the needs of developing countries. The current system of world economy could not keep pace with the changes in the world, which inevitably led to mistakes, and China is determined to correct these. The President thinks developing countries—first and foremost, China, although not mentioned by name—must be ensured a greater share from global governance. The need for a more active participation in international politics was reflected by mentioning the regulation of the global financial system. However, this changed environment, Xi argues, also requires new fundamentals of new principles and values, with mutual benefits as key elements.

This means that China, pursuing a low profile of foreign policy on the global scene for decades, intends to act as a regulator in the future. China, however, unlike the USA, does not wish to take a hegemonic role or provide a universal model to be adopted by everyone else, but encourages to find individual paths.

It can be concluded that despite grand visions, Xi’s speech still reflects the pragmatic approach of Chinese foreign policy, which is in line with the national interests of the country. Xi expressed his hope that other countries would also leave their doors open to Chinese trade and investors because, he stressed, no one will emerge as a winner in a trade war.

To sum it up, we can conclude that in the Chinese leadership’s view, the American presidential election has caused such a shift in the international positions of the USA that enables the fast enhancement of China’s role. Although the reality of the above-mentioned objectives, the relationship between theory and practice is highly debatable, Xi Jinping’s speech in Davos may be regarded as one of the important moments in the period following the USA’s hegemony.[7]

The United States

America’s outgoing leaders

For the USA, this year’s World Economic Forum was organized on the brink of a new era. Joe Biden, Vice President of the outgoing Obama administration, outlined the history of world order, in which they professed faith in peace through institutions and alliances.[8]The world order on which the successes of the late twentieth century are based has been facing increasing pressures recently, and Biden thinks it is imperative that we act urgently to defend it. Globalisation has deepened the rift between the rich and the poor, as an impact of globalisation, which is destressing; but the fact that globalisation has also lifted millions of people in the developing world out of abject poverty cannot be ignored. The ach

ievements of the fourth industrial revolution may further increase inequalities as there is a shrinking demand for labour, but technological advancement cannot be undone—nor should be attempted. Implementing a tax system where everyone pays their fair share and providing access to tertiary education would make much more sense.

Biden also highlighted the small-mindedness of extremist ideologies: populism, protectionism and isolationism lead to wars.  On the contrary, they need to tap into the big-heartedness that conceived a Marshall Plan and proposed a United Nations. In addition, the outgoing Vice President talked about the fight against cancer, on which he would work as head of the National Cancer Moonshot initiative after leaving office.


For the Forum, IMF released its most recent projections, which had been slightly modified since instead of emerging markets, it is Europe, the USA, Japan and China that will be responsible for the increase of expected economic growth in 2017 and 2018. After the turmoil in world financial markets in the first half of 2016, growth has stabilised. A significant repricing of assets followed the U.S. presidential election and the dollar strengthened while the yen weakened. The adjustment of asset markets, however, reflect the future expectations of the USA’s internal affairs; IMF have moderately raised its projections for U.S. growth because of the likely shift in its policy mix. Some countries are now operating at close to full capacity, including the USA; they should focus on long-term investments and a more equitable tax reform. The final conclusion of the analysis reflects the opinion of most speakers of the forum: sustainable growth must also be inclusive growth.

The future of free trade deals and protectionism are continuously on the agenda of global economic debates. Roberto Azevêdo, Director-General of the World Trade Organization (WTO) expressed his concern after having attended the meeting of Ministers of Trade, including 29 WTO members. The trade war envisaged would not create jobs, but result in a severe crisis—even talking about it is harmful.[9]


Focus on Donald Trump

“The beginning of a new era” was the term most frequently mentioned in connection with the United States. According to Anthony Scaramucci, Head of the White House Office for Public Liaison, the great majority has misunderstood the new President: it was just his style that was harsher than the one that leaders were used to, and he is actually anexcellent strategist, a geopolitical thinker with the best political instincts, who values human relationships.[10]It was populism that put Donald Trump into the fore, and the trust of voters placed in their leaders has been undermined in several other countries in the world.  Eric I. Cantor, Managing Director at Moelis & Company investment bank and former House majority leader also backed Trump, since he thought the country needed a powerful leader, especially in economy. Belgian Deputy Prime Minister Alexandre De Croo called for caution, saying the combination of fear and identity in politics is very toxic, and we must be careful about the language that leaders legitimize. The root of the problem is, however, that if mainstream politicians do not listen to the general population, it ends up with extreme forms of politics. The participants of the conversation hope that young people can possibly stop populism.[11]

 Since the event took place in the run-up to the inauguration of Donald Trump as US president, several participants expressed that they still sit on the fence.[12]Jack Ma, Founder of Alibaba, would give Trump more time, and thinks that America and China should never have a trade war.  John Kerry, outgoing US Secretary of State, does not believe Trump will reverse his achievements, such as the agreement with Iran, which is supported by several allies of the USA. As for trade, he can’t wait to see how the incoming administration deals with technology, the main cause of unemployment.

Igor Shuvalov, First Deputy Prime Minister of Russia, hopes Trump will be as superb as president as suberb he was as an entrepreneur, and, holding a dialogue, agree with Russia on how to solve Ukraine crisis. Jeanine Hennis-Plasschaert, Minister of Defence of the Netherlands, hopes for retaining a strong Transatlantic Alliance, while Isabel de Saint Malo de Alvarado, Foreign Minister of Panama, expects gender correct communication from the new US President.

America’s Future

Ideas around Trump’s presidency are fundmentally defined by isolationism, protectionism and the fears of a multipolar world left without a leader. Former Secretary of State Henry Kissinger was also interviewed about the future of the United States and the world. He argued that the world order which we were familiar is disintegrating, and he called attention to the new possible international order in the economic field put forward by China’s President Xi Jinping.[13]

President Trump will have to define what and where America can lead and where it must contribute to the creation of an international order. One of the major achievements of President Obama was to withdraw America from some positions; but giving up its indispensable role of leadership in many countries caused concerns in many parts of the world. As for the policy on Russia, Kissinger agrees with Trump’s general attitude of being less confrontational, since Russia is a country with a very special history. He hopes for a serious dialogue which would limit military pressure, and that should be a major priority for Trump.[14]

In a multipolar world, the Atlantic Partnership is crucially important; world order is required in a world where any key actors can disturb the equilibrium anywhere and any time. Without the alliance, the Transatlantic region would be threatened; the relevance of institutions, however, should be re-examined in the face of new challenges. Decades ago, the USA and Europe started constructing the Atlantic Partnership with different attitudes, thus roles must be redistributed now.

The issue of global security, and in connection with that, the new American leadership, appeared in several roundtable discussions.[15]In the field of security policy, the relations with Russia and their impact on the Middle East may be the first item on Trump’s agenda, and the China-USA relations will also be handled  with priority. Certain risk factors, such as the history of relations between Russia and Ukraine, are clear indications; and North Korea poses a high nuclear risk.

Tzipi Livni, who also participated in the security forum, claims it should be clarified what the slogan “Make America great again” actually means; if it meant that the USA is a very important global player and wants to defend its values, the vision would gain greater support.

Russia and Davos

This year’s Russian delegation to the World Forum in Davos was represented by First Deputy Prime Minister Igor Shuvalov and Minister for Economic Development Maxim Oreshkin. Several representatives of the Russian business life also attended the event, including Herman Gref, CEO of Russia’s largest bank, Sberbank; Andrei Kostin, President of Russia’s second largest bank, VTB; Anatoly Chubais, head of the Russian innovation centre, RUSNANO; and Russian tycoon Oleg Deripaska.

Head of the Russian delegation, Igor Shuvalov mostly talked about the positive tendencies of the Russian economy. He said the government was expecting a GDP growth of 1 or 2 per cent in 2017, and an infloew of direct foreign investments was also expected again after the divestments of 2014. Those who do not invest in Russia now, “will regret later”, he added.[16]

Shuvalov’s presentation gave the impression that the Kremlin was not sure about the evaluation about what this year would bring, but did its best to convince its partners that 2017 would be a turning point, and Russia’s economic crisis was over. The first time when the country was represented by Igor Shuvalov was two years ago, in 2015; and he had a much harder task then. He had to prove that international efforts and isolation did not affect Moscow’s positions and the Russian leadership had everyone behind its back. “We will survive any hardship in the country”, he said back then.[17]

Russia’s official appearances this year, taking place under much calmer circumstances, conveyed a much different message: the precursor of Russian rapproachment. In 2018, presidential elections will be held again in Russia, and, in view of international events, Vladimir Putin’s policy does not seem eccentric at all, but perfectly fits international trends. There was no mention of reforms in Shuvalov’s presentation—unlike in Dmitry Medvedev’s speech in Davos in 2013—;[18]stagnation itself was more important than development, because it may mean a recovery from crisis. It des not matter whether the sanctions will be lifted or not—although Shuvalov suggested that everyone would benefit from cancelling the sanctions. Despite external circumstances, everything will fall into place, the Russian economy, albeit not significantly, but has started to grow, the Russian ruble is stable and oil prices are also increasing.

DAVOS/SWITZERLAND, 27JAN11 – Igor Shuvalov, First Deputy Prime Minister, Office of the Prime Minister of the Russian Federation, speaks during the session ‘Russia’s Next Steps to Modernization’ at the Annual Meeting 2011 of the World Economic Forum in Davos, Switzerland, January 27, 2011.
Copyright by World Economic Forum by Michael Wuertenberg

In his speech, Russian tycoon Oleg Deripaska (who is the owner of RUSAL, the second largest aluminium company in the world) reinforced this passive message, although in a more moderate tone: he thinks sanctions against Russia will remain this year as well, and they must adapt to this. The businessman thinks Trump is over-evaluated, and the new president will not cause significant changes to Russia’s economic circles.[19]For Moscow, it is much more important who governs Germany, one of Russia’s major business partners, Deripaska added.

From the USA’s behalf, former Vice President Joe Biden made accusations against Russia in Davos. Biden argued Russia’s actions had proven the necessity of sanctions, which must be upholded.[20]Biden thinks Europe should decrease its energy dependency on Russia, and devise effective defence against cyber intrusions, learning from the hacker attacks agains the USA.[21]

Geopolitician and former Secretary of State, Henry Kissinger, however, had an entirely different view. Speaking via live stream at the World Economic Forum, Kissinger said that he agrees with Trump’s general attitude toward Russia.[22]The geopolitician said America needed to be less confrontational with Russia, and that that should be a major priority for Trump.

China’s paramount leader Xi Jinping’s meeting in Davos with Ukraine’s head of state Petro Poroshenko was remarkable. After the meeting, Poroshenko expressed his hopes that China could act as a mediator in the Ukraine conflict on the international stage, which would mean another opportunity for China’s diplomacy.[23]There is very little chance that Russia would let China be a partner in resolving the Ukraine crisis, but the action of the Chinese leader is symbolic, indicating the existence of China’s aspirations in Europe.  Trade in goods between Ukraine and China has been gradually increasing in recent years, and China was Ukraine’s second most important commercial partner in 2015.[24]

Technology, Innovation

The World Economic Forum also pays special attention to the economic impact of technological inovations; several panels were directly or indirectly dedicated to this topic this year as well. These conversations concluded that we inevitably stand on the brink of the fourth industrial revolution, whether we are ready for it or not; but obviously, countries should prepare appropriately if they intend to retain competitiveness.

All conversations of this panel were centred around how fragile countries can cope with the overall impact that the online era, artificial intelligence and automatization have on the labour market. All speakers agree that long-term thinking is needed to be prepared for the significant changes ahead of us. In this process, the role of responsible leaders is to give workers the opportunity to acquire the skills required in the future.[25]

As Hewlett Packard’s CEO Meg Whitman put it, “Technology is now disrupting every single industry and every single job. And my view is that the pace of change is only going to accelerate.”[26]

Jack Ma, Founder of Alibaba thinks that the next 30 years are critical for the world, since every technological revolution takes about 50 years, and in the first 20 years, we witnessed the rise of technology giants like eBay, Facebook, Alibaba and Google. Now we need to focus on what comes in the next 30 years, and this period of time should be about handling the implications of this technology. The most important thing is to make the technology inclusive. Next, pay attention to those people who are 30 years old, the so-called internet generation. They will change the world, they are the builders of the world. Third, let’s pay attention to the companies who have fewer than 30 employees. Ma thinks these 3 trends will define the future:  30 years, 30 years old, and 30 employees.[27]

Sergey Brin, the co-founder of Google, said he didn’t expect an artificial intelligence revolution of such scale, since none of the experiments with AI conducted in the 90s worked. Google Brain, the company’s AI research project, has advanced so much that it now, touches every single one of their main projects, ranging from search to photos to ads. Now that AI is widely used across numerous fields, its future and potential uses have become even more difficult to predict; there are practically no limits. AI is the natural continuation of the industrialization of the past 200 years, Brin added, but what does this mean for education, skills and employment?[28]

Digital innovation is reshaping industries by disrupting existing business and operating models. But it is also having a profound impact on society, presenting a series of opportunities and challenges for businesses and policy-makers. The World Economic Forum has compiled a Digital Transformation White Paper, with the aim to give insights into the impacts of a digital economy on companies and on broader society over the next decade.[29]

Some studies indicate that automation may threaten half or two-thirds of current jobs. Yet the world is already slated to need 500 million new jobs by 2020. “The coming jobs crisis needs more political attention, or the political backlash we’ve already been seeing will amplify,” said Philip Jennings, General Secretary, UNI Global Union.

Policymakers summarised in three main options how the situation can be handled:

  • Develop apprenticeship programmes for young people. Education should not mean merely knowledge transfer (in a classical school environment) but skills development and preparation for the world of labour.
  • Provide lifelong training: flexible training programmes are required to keep pace with continually changing economic needs. Governments need to cooperate more closely with business.
  • Give rights to workers in the platform economy: with the growth of self-employment (such as Uber) there is a greater need for establishing the legal framework to protect these workers.[30]

[1] Davos 2017: Prime Minister’s speech to the World Economic Forum. Speech, 19 January 2017 (2017.01.23)

[2] ELLIOTT, Larry: Philip Hammond blames Tony Blair for Brexit vote. The Guardian, 20 January 2017 (2017.01.23)

[3] WEARDEN, Graeme: Davos 2017: Soros says UK in denial over Brexit, and May won’t last – Day Three as it happened. The Guardian, 19 January, 2017 (2017.01.23)

[4] BAIRD, Roger: Davos 2017: German finance minister Schäuble warns UK against becoming a low tax haven. International Business Times, January 19, 2017 (2017.01.23)

[5] GUTTERIDGE, Nick: NO MORE SUPERSTATE’ Dutch PM says ever-closer union ‘dead’ and urges free movement reform. Express, January 19, 2017 (2017.01.23)

[6] PARKER, Ceri: This double game is destroying us’ – EU strikes back at its critics in Davos. World Economic Forum, 19 January 2017 (2017.01.23)

[7] President Xi’s speech to Davos in full, World Economic Forum, 17 January 2017.

[8] Parker, Ceri: ’Defend the International Liberal Order’ – top quotes from Joe Biden’s Davos swansong. In: World Economic Forum. 2017. január 18.

[9] Obstfeld, Maurice: The global economy is picking up. Now we must focus on making it inclusive, says IMF. In: World Economic Forum. 2017. január 16.

[10] Kennedy, Simon: Anthony Scaramucci Is This Year’s Surprise Davos Star. In: Bloomberg. 2017. január 17.

[11] Wearden, Graeme: Davos 2017: Hammond fires Brexit warning; Kissinger says Trump must help rebuild world order – as it happened. In: Guardian. 2017. január 20.

[12] Parker, Ceri: Donald Trump’s Inauguration: what they had to say at Davos. In: World Economic Forum. 2017. január 20.

[13] Politics of Fear or Rebellion of the Forgotten? In: World Economic Forum.

[14] Davos 2017 – A Conversation with Henry Kissinger on the World in 2017.

[15] The Global Security Outlook. In: World Economic Forum.

[16] RAZUMOVSZKIJ, Filipp:Давос: что говорили о России. In: 2017.01.20.

[17] SZTANOVAJA, Tatjana: „Давос как предчувствие. Как Россия вписалась в атмосферу «ужаса глобальной катастрофы»?” In: Republik. 2017.01.20.

[18]SZTANOVAJA, Tatjana: „Давос как предчувствие. Как Россия вписалась в атмосферу «ужаса глобальной катастрофы»?” In: Republik. 2017.01.20.

[19] RAZUMOVSZKIJ, Filipp:Давос: что говорили о России. In: 2017.01.20.

[20]RAZUMOVSZKIJ, Filipp:Давос: что говорили о России. In: 2017.01.20.

[21]RAZUMOVSZKIJ, Filipp:Давос: что говорили о России. In: 2017.01.20.

[22] GANDEL, Stephen: Henry Kissinger Says Donald Trump Is Right about Russia. In: Fortune, USA. 2017.01.20.

[23] KUPCOVA, Alina:Как Китай поможет Украине в войне с Россией. In: Obozrevatel, Ukrajna. 2017.01.19.

[24]KUPCOVA, Alina:Как Китай поможет Украине в войне с Россией. In: Obozrevatel, Ukrajna. 2017.01.19.

[25] Davos 2017: Top 5 stories from the first day of Davos, 17 January 2017

[26] Davos 2017: Top 5 stories from the first day of Davos, 17 January 2017

[27] CHAINLEY, Ross: These 3 trends will define your future, says Jack Ma. World Economic Forum, 19 January 2017

[28] CHAINLEY, Ross, Google co-founder Sergey Brin: I didn’t see AI coming. World Economic Forum, 19 January 2017

[29] World Economic Forum: Digital Transformation Initiative. Executive Summary. January 2017

[30] HORCH, Dan: Promise or Peril: Decoding the Future of Work. World Economic Forum, 19 January 2017

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