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Key highlights from the World Economic Forum in Davos

Abu Mubarik

The year began with a period of turmoil in China’s market. And the concern now is that the nation is heading for a hard landing, involving dramatic falls in the value of its currency and stock market.

 
 

GDP isn’t enough

The International Monetary Fund (IMF) boss, Christine Lagarde, has called for a second look at how GDP is measured.

Speaking at the just ended World Economic Forum, Ms Lagarde said: “We have to go back to GDP, the calculation of productivity, the value of things – in order to assess, and probably change, the way we look at the economy.”

What is next for China’s economy?

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There have been various triggers: the raising of interest rates in December 2015, ongoing tensions in the Middle East, and the collapse of oil prices. A reduction in the price oil could have been a positive thing, but instead it seems to be rattling the financial markets.

And weak growth hasn’t been restricted to China. Emerging markets have also felt the pinch. In Europe, concerns about migration, Brexit, Grexit and Eurozone bailouts have led to a stressed credit market. In the US, after years in which revenues have been growing, there is now less confidence.

“It’s a perfect storm,” says American economist Nouriel Roubini, sitting on the panel. “Markets tend to be manic depressive – they go from excessive pessimism to excessive optimism.”

It looks like China’s “new normal” is here to stay. So, what can be done? China could go about shutting down its factories, for a start. It would result in a rise in unemployment, but if there's any storm China can weather with ease, it's this one: with its young population shrinking and its ageing population growing, soon there might be more jobs than job applicants. “Even with a growth rate of only 5%, China can maintain social stability,” says Roubini.

Brexit

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British Chancellor of the Exchequer George Osborne was hopeful that the United Kingdom could remain in the European Union – albeit a reformed one. “We need a better relationship, proper protections and lasting arrangements so that a large, non-EU member can co-exist with the EU, "he says. "These changes will resolve the uncomfortable relationship."

His approach would be “mature and measured”, he added. Britain wants to be part of a "more competitive" Europe, which is a source of innovation, business and growth. As such, the region shouldn’t be “priced out of the global economy”.

Paris Climate Accord

The disruption of the earth’s climate system was evident in the El-Nino weather pattern last year, which was associated with a sustained period of warming in the central and eastern tropical pacific and the ability to spark deadly and costly climate extremes.

Speaking at the World Economic Forum, United Nations General Secretary, Mr. Ban Ki-moon, warned that economic development around the world would be undermined if the agreed targets to limit climate change are not met. “Climate change undermines development gains. If we do not properly police this Paris agreement, then the remaining 16 sustainable development goals would be undermined,” he said.

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Gender equality would be the 'single biggest stimulus to the economy'

We will never achieve gender equality unless everyone – girls, boys, women, men – are involved. That, in a nutshell, was Emma Watson’s message in Davos, where she came to launch UN Women’s new HeforShe website.

The UN Women Goodwill Ambassador was interviewing 10 male CEOs who have committed to advancing gender parity. The companies also released data on their gender diversity figures – something Watson described as a "big deal".

Speaking to McKinsey CEO Dominic Barton about his company's latest findings on gender parity, she noted that full female participation in the workforce could boost GDP by $28 trillion within a decade, the "single biggest stimulus to the economy".

Source: World Economic Forum

Abu Mubarik Abu Mubarik Abu Mubarik is a writer at Pulse Ghana with special interests in Ghana politics, international relations and geopolitics.

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