2012 in Tokyo: at the annual meeting of the World Bank and the International Monetary Fund, the European debt crisis (and risk) was the focus. ECB members sat on the podium. They defended the eurozone and spoke of the rescue of Greece with a correspondingly rigid austerity programme. And especially: keeping the state and the banks separate from each other.
Klaus Schwab remained a lone voice in the wilderness of the World Economic Forum 2012: as before, he warned that the financial crisis could change into a social crisis that would result in a political crisis: populism and radicalism.
2016, four years later at the World Bank and IMF meeting, this time in Washington DC. On this occasion most of the panel discussions took place in the newly designed IMF lobby. It is impressive, sterile and tidy all at the same time. The topic this time round was the social crisis and the imbalance between rich and poor.
Digitization: Economic growth and jobs
Nobody spoke of austerity any more. Even Wolfgang Schäuble, one of the toughest negotiators in Greece’s debt crisis, no longer demanded the reduction of Greek debt, but rather talked about rebuilding Greek competitiveness (in fact, the same demand, differently formulated).
“Growth“, “Structural reforms“, “Jobs” buzzed as keywords around the area. “Yes, we are in a phase of light economic growth,” said IMF CEO Christine Lagarde. “Only this is not yet reflected in the workplace”.
The confidence people have in the economy and in politics must be restored was a message that rang out from the various panels. The magic word is digitization and social entrepreneurship. Currently, the African continent is particularly benefiting from this, which unites countries such as Tanzania and Kenya in an exemplary fashion (also for Europe). India and China are already overtaking Europe in the area of innovation.
New discussion partners
New at this year’s meeting was the realization that the cooperation partners for sustainable global economic growth and peace are no longer just the heads of state and representatives of international institutions. Alibaba, ALFA, Facebook and Apple etc are now regarded as partners on the same level so that it is possible to reach the above-mentioned goals. This applies to topics such as the Unconditional Basic Income. The general tenor of this was why should Facebook & Co not partially share their profits with society in the form of this public welfare idea, also with regard to political responsibility. Keywords: Shitstorm, hatred on the net.
Political Risk: Radicalization
In the past four years – as Klaus Schwab predicted – the political situation has become highly popularized and radicalized. In Europe, strong anti-system thinking dominates large sections of the population. And that both left and right (Syriza, Front National, AfD, FPÖ– to name a few). At the same time, however, the national, protectionist idea is again becoming more and more popular, and also lived by the European governments.
In the US, the current presidential election campaign is characterized by anti-system focus and above all a deep mistrust in the “elite”.
The political risk causes the leaders of the globalized world the biggest headache. It is no longer the emerging countries that have been stabilized by the export of political thought from established “Western” democracies that bring political instability. The countries of origin of this high value export product are threatening to lose their quality seal. In this manner they are a threat to the global achievements made despite repeated setbacks since 1945 – namely peace, prosperity, growth and progress. We Europeans should contribute to the future. We should not accept combining political risk with European countries.
I will close with the words of Jean Jacques Rousseau:
The moral condition of a people derives less from the absolute condition of its members than from their relations among themselves.