Implications of Davos 2020 for Global Economic Growth (Part ii)

The current publication assesses the impact of the melting Arctic ice, the fourth industrial revolution, leadership and geopolitics on human and national economic activities in the 21st century in various parts of the world. This feature is a continuation of an earlier publication which ended on climate change and its relative effect on economies across the globe. Here is the second part of the implications of Davos 2020 for global economic growth.

Melting Arctic Ice’s Implications for the World

Scientists at the World Economic Forum (WEF) held the belief that the loss of Arctic ice imperils many species, including Homo sapiens. It may hence influence global economic growth.

Available statistics indicate the world has lost about 75% of the volume of Arctic summer sea ice since the 1970s till date.

The Arctic affects the jet stream, causing extreme weather conditions around the world. More worrying is the fact that the Arctic Ocean, which used to be white in colour has changed to blue, and absorbing more heat in a feedback loop.

Melting of the Arctic does not only pose a threat to the species, but also humans. Global warming is melting the ice caps; melting of the Arctic ice has an Albedo effect.

These include hurricanes, severe weather, fires in many parts of the world; and turning of the Arctic ice colour from white to blue. Such perils are all detrimental to global economic growth

Prof. Gail Whiteman of Lancaster University revealed the Amazon is the lung of the world; the Arctic could be likened to the human circulative system, and feeds on climate change everywhere.

Prime Minister Marin perceived the phenomenon as one requiring immediate or short-term considerations; and the long-term socio-economic benefits to be derived would exceed the immediate costs.

It is worth emphasising global temperature is heading for 3 Celsius instead of the 1.5 Celsius targeted.

President Trump has announced the United States preparedness to withdraw from the Paris Agreement on climate change.

The withdrawal is expected to come into effect a day after the presidential elections in November 2020, if he wins.                  

The Fourth Industrial Revolution & Global Economic Growth

Society has evolved in its quest for effective and efficient production in commercial quantities to meet the growing needs and demands of inhabitants.

This development is commonly known as the Industrial Revolution. Experts believe the world has evolved to the fourth industrial revolution.

The first revolution involved use of water and steam power to produce goods in large quantities to meet growing demands.

The second involved use of electric power for mass production; and the third focused on use of electronics and information technology to automate small- and largescale production in various parts of the world.

The fourth is described as the digital revolution. It involves blending of technologies that is, blurring the lines among biological, physical, and digital spheres to meet growing socio-economic needs across the globe.

Global leaders are encouraged to embrace the digital revolution due to its enormous propensity to turn the economic fortunes of nations around, positively.

Leadership and Geopolitics & Global Economic Growth

As noted in the preceding section, leadership is at the heart of the World Economic Forum’s scheme of activities.

As a result, the forum emphasised on stakeholder capitalism, a relatively new paradigm in leadership that blends profit maximisation with creativity, innovation, and ingenuity in addressing socio-economic issues.

Three significant pillars for the development of responsible leadership in this decade were identified: leaders are responding to stakeholders’ demand for responsible corporate action; the new generation of leaders focus more on purpose than profit; and efforts to implement the foregoing could help identify unexpected spheres of action.

Leaders’ inability to act decisively and beyond their personal interests was a subject for discussion at the forum: many individuals and communities feel distrustful and abandoned by their leaders in recent years.

Research conducted by the Forum of Young Global Leaders, the Global Shapers Community, and Accenture found a pressing disconnect between public expectations and traditional models of leadership.

For instance, under the traditional models, business leaders lay strong emphasis on remaining at the forefront of innovation and technology.

However, their organisations’ stakeholders such as employees, customers, and representatives of the community, among others, value long-term vision, strong ethics, and inspiring authenticity.

The current decade brings in its wake, a fresh start; it presents leaders with an opportunity to be brave, take a stand; and to make decisions they know would inure to the common good of all stakeholders, but are hard to initiate. Indeed, the globe is saddled with myriad of significant challenges; and leaders have the opportunity to adapt different approaches to mitigate them.

Finally, world leaders could demonstrate responsible leadership by examining their responsibilities, running their ideas by a different generation; and truly engaging their stakeholders, among other significant considerations.

Ghana’s current President, Nana Addo Dankwa Akufo-Addo, did not mince words when he affirmed the country’s commitment to the realisation of the United Nation’s Sustainable Development Goals (SDGs).

Ghana remains one of the few African countries with very strong commitment to the implementation and realisation of the SDGs.                 

Geopolitics was discussed with special reference to the political instability in some parts of the world, including Venezuela, Syria, Lebanon, and Iran, among others.

Head of the United Nations (UN) Assistance Mission for Iraq, Madam Jeanine Plasschaert, averred Iraq is still a very vulnerable place to be, in spite of the country being out-of-war.

In the case of Venezuela, Mr. Juan Guaidó asserted more people have fled the country than have fled Syria, although the former is not up-in-arms in terms of civil war.

Mr. Juan Guaidó is recognised by more than fifty (50) countries as the interim leader of Venezuela.

However, President Nicolás Maduro perceives Mr. Juan Guaidó as a usurper.

Political unrests in most parts of the world tend to have adverse effects on the smooth implementation of business strategies to assure rapid development and growth at the global level, although some economies and businesses tend to benefit significantly from those unrests.

Conclusion

The recent World Economic Forum was intended to build strong and unifying consensus between business leaders and governments on how to effectively address pressing global issues; and advance global economic growth.

However, it ended with rows over the climate crisis and some threats of trade war.

The foregoing notwithstanding, resolutions at the forum are expected to stem the tide and shape the global economy positively.

Various statements delivered by most participants called on global leaders to prioritise environmental cleanliness and safety through a relentless fight against climate change.

Through this, the much needed economic development and growth would be achieved.

Author: Ebenezer M. Ashley (PhD)

Fellow Chartered Economist & CEO of EBEN Consultancy

Email: ebenezer.ashley@gmail.com 

Website: ebenezerashley.org 

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