International Monetary Fund chief Christine Lagarde opened the last panel discussion at this year’s Davos by talking about climate change.
The final panel of the conference typically features central bankers and other economic heavyweights, and the discussion tends to focus on the economic outlook for the coming year.
But Lagarde made it clear that climate change is now at the heart of the debate.
Her panelists agreed.
“If temperatures go up two and half degrees, we’ll lose 15% of the world GDP. Three degrees, we will lose 25%,” said Kristalina Georgieva, the CEO of the World Bank.
The first thing she thinks needs to be done? Eliminate fossil fuels subsidies.
“We have done some, we have shrunk [subsidies] by half, but we still have $300 billion to go … it has to happen faster,” said Georgieva.
While some delegates at the World Economic Forum arrived in private jets, 16-year-old Swedish climate activist Greta Thunberg took a 32-hour train.
She’s been camping out in Davos, giving up the option to stay at a hotel to sleep in a tent in 0 degrees Fahrenheit weather.
In the process, she’s been giving Davos a run for its money.
On Thursday, Thunberg gave an impromptu speech at a lunch with a star-studded guest list that included Salesforce CEO Marc Benioff, former Goldman Sachs president and Trump administration official Gary Cohn, musicians Bono and Will.i.am, and an array of bankers and investors.
“I told them that they belong to that group of people who are most responsible and that the future of humankind rests in their hands, and they didn’t know how to react,” Thunberg told CNN.
“It was pretty fun.”
I’ll be blunt: This year’s Davos was better because US President Donald Trump (and others) stayed away.
2018 was a historic low for Davos. Trump was here, and some participants treated him the same way teenagers would a pop star. The president was the undisputed center of attention, and his presence caused the conference to grind to a halt. As one minister told me, the oxygen can be “sucked out” of Davos when the event is overshadowed by a prominent leader.
The news that Trump would not be coming this year was greeted with regret by the World Economic Forum (their star guest would not be here), and relief by those hoping to actually get something done. When British Prime Minister Theresa May, French President Emmanuel Macron and other leaders canceled their visits, many commentators couldn’t help but proclaim the conference irrelevant.
Now I’ll let you in on a secret: Davos has been much better because they stayed away (IMHO). Top leaders still made important speeches (China’s vice president, Wang Qishan, reassured the world about the Chinese economy and bashed the United States in the process). The panel discussions were interesting and lively.
Throughout the Congress Center I saw people engaged in discussions on the top challenges we face, including climate change. Attendees also grappled with the fourth industrial revolution, which will see the world reshaped by artificial intelligence, robotics and other technological breakthroughs.
For the past five years, Davos has pushed the fourth industrial revolution theme down our throats, to little gain. Now, the revolution is well underway and the effects are being felt in developed and emerging markets. Government ministers, finance bosses, NGOs, media – no one can ignore the change now underway, and here at Davos there was real engagement.
As I head down the mountain, I will reflect – Yes, it is good to see political leaders giving speeches and performing on panels. But it’s even better to see decision makers and power brokers actually getting to grips with issues of vital importance.
Next year will be the 50th anniversary of the World Economic Forum and there’s little doubt that founder Klaus Schwab will pull every string possible to get the biggest names here. I hope that in quiet reflection, organizers realize that this year was so good precisely because the circus stayed at home.
Last year was a wild one for oil prices. Fatih Birol, executive director of the International Energy Agency, thinks 2019 could be even worse.
“Last Davos, we sat here and [said] the name of the game is volatility,” he said during a World Economic Forum panel moderated by CNN Business’ John Defterios. “The volatility [in] the year in front of us may very [well] be much stronger than last year.”
Birol cited a laundry list of potential factors: the slowing global economy, the efficacy of an agreement between OPEC and Russia to reduce oil output and the growing flexibility of US shale production.
Then there’s Venezuela. Read how its political crisis could hit oil prices here.
It’s the final day of Davos 2019.
Panel highlights include “Global Economy in Transition: Shaping a New Architecture,” which features IMF chief Christine Lagarde and Bank of Japan Governor Haruhiko Kuroda.
Our very own John Defterios will be joined by International Energy Agency boss Fatih Birol at a panel titled “The Great Energy Race.”
Official events end in the early afternoon. The work of turning Davos back into a sleepy mountain town will commence soon after.
George Soros has labeled China’s President Xi Jinping the “most dangerous enemy” of open societies and recommended a crackdown on Chinese tech companies.
The billionaire said Thursday in Davos that artificial intelligence and machine learning pose a grave threat when they are controlled by authoritarian states. He singled out the use of such technologies by the Chinese government as a “mortal danger.”
In a provocative speech delivered to journalists and executives attending the World Economic Forum, Soros warned that the Chinese government was developing a “social credit” system that would monitor people living there.
Soros urged the United States to aggressively counter the threat.
“Instead of waging a trade war with practically the whole world, the United States should focus on China,” said the former hedge fund manager.
Soros also said the United States should apply more pressure to Chinese tech companies Huawei and ZTE, which have been labeled national security threats by some US officials.
Huawei and ZTE make telecommunications equipment and smartphones, and both have been caught up in the trade war between China and the United States. The companies have denied that their products pose a security threat.
Hua Chunying, a spokeswoman for China’s Foreign Ministry, shot back at Soros on Friday, accusing him of twisting the facts.
Soros warned last year in Davos about the danger posed by major tech companies including Google and Facebook, arguing they were monopolies intent on growing ever-more powerful.
It’s the 34th day of the US government shutdown. Business leaders and economists at Davos are warning that Democrats and Republicans better work it out soon.
David Rubenstein, the billionaire co-founder of The Carlyle Group, said on a panel Thursday that he thinks a deal will happen soon because “both sides know they have to get it done.”
But there will be consequences if they don’t.
He added: “I don’t know of any other country in the world that operates this way.”
Our Ivana Kottasová attended a panel discussing disability inclusion, but it appears that many Davos attendees had other plans.
Here’s the bleak turnout:
And it appeared to end on an even sadder note:
Salesforce (CRM) founder Marc Benioff has taken a swipe at social media platforms, saying they’ve lost trust and need major reform.
“I think that these companies have been too slow to change. The CEOs need to change, the leaders, the management teams the board of directors need to change,” Benioff said during a panel Thursday at the World Economic Forum.
WEF chairman Klaus Schwab, who led the discussion with Benioff, polled the audience and noted the “significant” number of attendees who said they no longer use Facebook (FB). He repeated the exercise for Twitter (TWTR).
“Look at how their brands have been impacted,” said Benioff. “If we were here at the World Economic Forum three or four years ago we would be talking about those companies as if they had just walked off Mount Sinai. The reality is now we’re talking about ‘gee, where did they actually come from’ and maybe it wasn’t a high place.”
Benioff is a harsh critic of his own industry, which he says is to blame for high rates of inequality in society. He previously described Facebook as “the new cigarettes.”
Want a look inside Davos’ Congress Center? Watch as a CNN camera takes you on a whirlwind tour of the WEF conference venue, where delegates attend panels, chat and devour canapés.
Should the United Kingdom hold a second referendum on whether to exit the European Union? The Davos crowd certainly wants another vote.
After Prime Minister Theresa May’s Brexit plan suffered a record defeat in the UK parliament, some lawmakers are pushing for a second public vote to break the deadlock. But the risk of a damaging ‘no-deal’ exit is also rising as the clocks ticks down to Brexit day on March 29.
Bank of England Governor Mark Carney said during the panel discussion that the central bank isn’t predicting a disorderly Brexit, but it is preparing for one. He said it’s difficult for companies to be fully prepared, however.
“There are a series of logistical issues that need to be solved, and it’s quite transparent that in many cases they’re not,” Carney warned.
Airbus warned today that its UK factories may not survive a chaotic Brexit.
UK Treasury chief Philip Hammond was billed to appear on a panel discussion with EU leaders at the World Economic Forum on Thursday but he didn’t show up.
Hammond had been expected to participate in a discussion on “The New Impetus for Europe.” The other panelists included Irish Prime Minister Leo Varadkar, Danish Prime Minister Mark Rutte, Polish Prime Minister Mateusz Morawiecki and EU Trade Commissioner Cecilia Malmstrom.
But when the session got underway, Hammond was not on stage. The moderator, World Economic Forum Chairman Klaus Schwab, did not acknowledge his absence.
The UK Treasury said in a statement that Hammond has a packed schedule.
WEF did not immediately respond to a request for comment.
Hammond is scheduled to deliver remarks at a lunch hosted by the Confederation of British Industry in Davos on Thursday.
The trade war between the United States and China is hurting businesses across sectors, according to Christian Sewing, the chief executive of Deutsche Bank.
“It’s impacting business significantly … we notice it,” Sewing said at a panel discussion on Thursday.
“Eighty percent of the revenues of the Dax 30 companies is generated outside Germany, they depend on global trade,” he explained.
Sewing said that the bank has seen “certain declines” in the performance of German companies in the second half of 2018.
“A lot of business leaders are now re-evaluating their investments going forward … they delay investments, they stop investments,” he said.
A top Microsoft executive in Davos says the company is aware that its search engine has been blocked in China.
“We’re not yet certain whether it’s confined to Bing or if it’s something that is broader,” Microsoft (MSFT) president Brad Smith said in Davos.
Bing is the last major foreign search engine operating in China after Google (GOOGL) pulled out in 2010.
“It’s not the first time that we’ve encountered issues like this for Bing in China, these do arise periodically,” Smith said in response to a question from CNN Business.
Chinese users first noticed problems late Wednesday, when the phrase “Can’t access Bing” started popping up on social media.
It wasn’t immediately clear why Bing was blocked. China’s internet regulator didn’t respond to a request for comment.
The Cyberspace Administration of China announced Wednesday that it had closed 733 websites and shut down 9,382 apps in a crackdown on “harmful” information.
“We’re not aware of any ongoing negotiation or disagreement so we’re working to understand it better,” said Smith.
Davos is entering the final stretch.
The World Economic Forum has another action-packed day today, and the stage is set for a takeover by central bankers.
Bank of England boss Mark Carney is scheduled to appear on two panels. He’ll be joined in a discussion on “Resetting Financial Governance” by Bank of Japan Governor Haruhiko Kuroda.
Top corporate leaders scheduled to appear on panels include Microsoft (MSFT) CEO Satya Nadella, Deutsche Bank (DB) chief Christian Sewing and Alibaba (BABA) CEO Daniel Zhang.
CNNi has booked Bank of America (BAC) CEO Brian Moynihan, Dutch Prime Minister Mark Rutte and IMF Managing Director Christine Lagarde.
What economic slowdown? Chinese VP Wang Qishan said earlier at Davos there’s no reason for concern about his country’s economic expansion, despite China recently reporting its slowest growth in almost three decades.
“There will be a lot of uncertainties in 2019, but something that is certain is that China’s growth will continue and will be sustainable,” he said Wednesday.
Earlier this week, China said its economy grew 6.6% in 2018.
“I think [6.6%] is a pretty significant number,” he said. “Not low. At all.”
Wang said that the Communist Party is “trying to remind people that speed does matter, but what really matters for the time-being is the quality and efficiency” of development.
China’s government has been working to rein in high levels of debt and put the vast economy on more stable footing. But those moves have led to a slowdown. Momentum has also been blunted by the trade war with the United States, which has led to tariffs on hundreds of billions of dollars in Chinese exports.
Davos hates plastic this year.
“Plastic has become the nuclear waste of our generation,” said Marc Benioff, the Salesforce CEO and environmental activist.
Climate and the environment are big topics at the conference. Experts have pointed to how much damage plastics can cause, including the concern that there will be more plastic than fish in the oceans by 2050 if nothing is done. They’ve also observed that every single piece of plastic ever produced still exists, unless it has been burned.
But there is still hope.
The European Union plans to ban 10 single-use plastic products starting 2021, and force its member states to recycle 90% of plastic bottles by 2025.
Major cities and countries around the world, including Taiwan, Seattle, and Vancouver, have banned plastic straws. India is cracking down on single-use plastic. And the United Kingdom proposed a ban on plastic straws, drink stirrers and cotton swabs.
“I don’t think I have seen a single issue like plastics, where companies, business leaders, governments are coming together to really try to solve it,” said Nina Jensen, marine biologist and the CEO of REV, the the Research Expedition Vessel project.
A tax on the rich proposed by newly elected US Congresswoman Alexandria Ocasio-Cortez is being viewed with caution by many at the World Economic Forum.
Ocasio-Cortez, a New York Democrat, suggested earlier this month that a 70% tax on income over $10 million could fund a climate change plan she’s pushing called the “Green New Deal.”
But in the Swiss ski resort of Davos, where thousands of the world’s top business, political and academic leaders meet each year, there was skepticism.
During a panel, Michael Dell, the billionaire founder of Dell computers, was asked whether he supports Ocasio-Cortez’s plan. Before he could respond, many in the room burst out laughing, seemingly at the fact that Dell had to answer the question.
Dell said he trusts his private foundation more than the US government to spend money wisely.
“So no, I’m not supportive of [Ocasio-Cortez’s plan]. And I do not think it will help the growth of the US economy,” Dell said.
But Erik Brynjolfsson, director of the Massachusetts Institute of Technology initiative on digital economy, didn’t immediately discount the idea.
“I don’t have a strong opinion on that proposal, the devil is in the details,” he said. “There’s actually a lot of economics that it’s not necessarily going to hurt growth and I think we have to examine it more closely.”
Much of the discussion about the slowdown in China’s economy has focused on the growing trade dispute between China and the United States. But not enough attention has been paid to deliberate decision by the Chinese government to cut back on its debt, according to Jin Keyu, an economics professor at the London School of Economics.
Speaking at a panel entitled The Debt Time Bomb, Jin said that the Chinese government has been taking deliberate steps to reign in debt for the last two years.
“Only two years ago financial markets were saying that China is the next ticking financial bomb. Financial fragility was the issue in China because of debt,” she said. “We are seeing the consequences of a deleveraging cycle to make China safer, although slower.”
China announced this week that its economy grew only 6.6% in 2018, its slowest annual pace of growth since 1990.
