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What Davos Agenda had to say about the global economy


Two clear trends shaping the future of the global economy have surfaced this week at The Davos Agenda.
Top of mind for many speakers was the economic recovery from COVID-19 and making sure it's inclusive and works for everyone.
And, linked, but distinct, are the forces shaping the way we do business - most notably sustainability.
The economic recovery from COVID-19
The economic damage caused by the COVID-19 pandemic has been significant. The pandemic has reversed gains in poverty reduction, hit incomes and seen global GDP slump - as this chart from the OECD shows.
And as Xi Jinping, President of the People's Republic of China, said on Monday, it's disrupted progress on human development.
The recovery has been stronger than we expected, said Christine Lagarde, the President of the ECB, but warned about divergence.
It was a sentiment echoed by Janet Yellen, Secretary of the Treasury of the United States of America.
So, what are the next steps in the global economic recovery from the pandemic?
Macro policy coordination is key to turning the world economy from crisis to recovery, President Xi said. "Major economies should see the world as one community," he said.
Indonesia will use its presidency of the G20 as a catalyst for the global economic recovery, President Joko Widodo said.
And the global community needs to work together to ensure the recovery is fast and equitable, Australian Prime Minister Scott Morrison said.
It's vital to get the recovery right, agreed Nadia Calviño Santamaría, the Deputy Prime Minister and Minister for Economy and Digitalization of Spain.
And to do this, reform of the global financial system is needed, said UN Secretary-General António Guterres on Monday. "We're setting in stone a lopsided recovery," he warned.
Japanese Prime Minister Kishida Fumio also called for change - a 'new form of capitalism' to revive the country's economy.
But, the economic recovery is dependent on containing the pandemic - in particular the vaccine rollout - explained Yemi Osinbajo, the Vice-President of Nigeria.
And the recovery is losing momentum, Kristalina Georgieva, the Managing Director of the IMF warned on Friday.
Better business
Tied to the economic recovery is the role of business - as President Joko Widodo made clear.
And for business leaders, the role of business in the economic recovery and, in particular, tackling climate change was clear.
There is a tendency to underestimate the risk of not changing when the world around you is changing, Anna Borg, President and Chief Executive Officer of Vattenfall, told the Accelerating and Scaling Up Climate Innovation session on Wednesday.
Indeed, as Julie Sweet, Chair and CEO of Accenture, made clear it's about competitiveness.
"Those companies who have embraced sustainability are more profitable," she told the ESG Metrics for a Sustainable Future session.
Ultimately, there needs to be a cost to not being sustainable, Frans van Houten, Chief Executive Officer of Royal Philips, told the same session.
And Alain Beijani, Chief Executive Officer of Majid Al Futtaim Holding, struck an optimistic note. "It is possible," he explained.
Weforum
Jan 23, 2022 13:38
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