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The Paradoxes at Davos 2022

By Gautam Adani, Chairman, Adani Group

It has been interesting being in Davos this year. And, yes, it did feel different after a two-year pandemic-induced hibernation. Attendance understandably was down; but thankfully the temperature, it being May and not January, was up!! The World Economic Forum’s annual meeting returned with an appropriately weighty theme — ‘History at a Turning Point: Government Policies and Business Strategies’.

History indeed is at a turning point. Climate change, followed by the Covid pandemic, followed by global supply chain disruptions, then the ongoing war in Ukraine, followed by levels of inflation that the world has not seen for decades, has meant considerable panic and uncertainty. No one is even pretending any longer to know the answers. In this context, it was good to hear so many varied views at the WEF. However, it would have been even better to hear from those who were missing. Attendance from China, Japan and Korea was sparse this year and of course we heard nothing from Russia or much from Ukraine attendees. In fact, it was a rather one-sided WEF gathering.

Onesided-ness

And, frankly, this one-sidedness is a cause for concern. It reflects, perhaps, a growing close-mindedness that became a characteristic of the global response to the pandemic, as countries withdrew behind their borders. The response to the pandemic, around the world, has been a strange mix of ingenuity and global cooperation on the one hand and blatant selfishness on the other. Take, for instance, the speed with which vaccines were developed by scientists collaborating across borders (including in India) and contrast it with the deep mistrust, suspicion, prejudice, and greed inherent in the vaccine rollout, their availability and their pricing, leading to several layers of fracturing within nations and across nations.

The same pattern of response is evident in the turmoil over energy. Developed nations that were setting targets and giving stern lectures about climate change to the rest of the world now appear to be less censorious as their own energy security is threatened and prices spiral. Very few are willing to admit that there had been an overswing on the side of green solutions and technologies that were still in their nascent stage and that this fragility has been totally exposed by the crisis in Ukraine. Perhaps better sense will now prevail about what pragmatic energy transitions might look like as opposed to green transitions based on little more than magical thinking. It would have been worthwhile to have had more of this debate at the WEF, to have heard more about how we might realistically come together to enable a global green transition based on collaboration and mutual understanding rather than finger-wagging and scolding.

Defence

More than climate change, though, the topic several of the delegates I met at Davos ended up discussing was defence. Clearly, the world has been shaken by the war in Ukraine, as well as the pulling out of troops from Central Asia and the Middle East. When you overlay these concerns with resentment over the uneven distribution of Covid vaccines and the uncertainty around energy supply, it is understandable that nations (even those that are in NATO) are beginning to see sense in augmenting their border security. Almost every leader I spoke to acknowledged, and some even explicitly stated, that a new and more sophisticated arms race may now be coming on. Alliances will form and re-form around defence agreements and many countries may prioritize defence manufacture and procurement as a non-negotiable aspect of self-reliance.

Global cooperation under threat

This state of global affairs has forced us to confront the resulting realpolitik directly rather than hide behind a façade of global cooperation. On one side we are too connected now, bound together by trade and the brute logic of the supply chain. But on the other, a combination of the pandemic, followed by the war in Ukraine and the effort to limit climate change, has exposed the limits of global cooperation.

International alliances and pacts are mutable, built on slippery foundations of self-interest. Indeed, many of the most economically developed nations on the planet are scrambling to find alternatives to a world they have largely brought about, recognizing belatedly that in the quest for hyper efficiencies they have become too reliant on some nations to meet manufacturing needs and too reliant on others to meet energy needs. A flat world, we now know, was largely a fantasy. We must learn to navigate the bumps and the curves rather than assume a flattening of our world is possible or perhaps even desirable.

Sustainability

I went to Davos to learn how the world’s leaders saw this present time, and how they might define a ‘global’ agenda. For instance, if ‘sustainability’ is the agenda and the pressing concern of the hour, then the world’s convictions should not be swayed by either war or pandemic. We must accept that there is a price to pay to make the changes we say we must make.  For me, sustainability is as much about the health of society as it is about the health of the environment. We must see that equality and dignity are crucial aspects of any effort to combat climate change. The time has come for global collaboration rather than cooperation. “You must cooperate with me” cannot imply coercion. Cooperation cannot only mean cooperate with the existing world order.

Therefore, as a response to global conditions, I am convinced that our Prime Minister’s Atmanirbhar Bharat scheme is precisely the catalyst India needs to step up and strengthen self-reliance across all sectors – be it vaccinations, defence or semiconductors. It is clear, in this uncertain time, that there is little alternative to effective, confident self-reliance and that we are now onto this era of self-reliance.

As we go through this process there will be pushbacks – and we will run into controversies in other parts of the world. So be it. Many will try to stop us building semiconductor plants. Many will dissuade us from investing a larger portion of our GDP in defence. Our principles will come under criticism. What we must keep in mind is that many of those who set targets for emissions reductions for India are also those that shy away from acknowledging the disproportionate responsibility borne by a small number of developed countries for the climate crisis. In other words, it is far easier to talk than to walk the talk.

Reassuring sights

I must admit that the very large presence of India at the WEF, even in these times, was reassuring. It showed that India is no longer shy about asserting itself in the global arena. It was a sign of our growing confidence. It was a sign of our belief in the India story, and I am glad I was in Davos to experience this for myself!

India is right to focus on self-reliance, while also seeking to provide an alternative to a world in need of alternatives. If there is a rejigging of the world order, it needs to be one that is based on respectful multipolarity. The world need not be flat. Not when flatness really just means that the world has been forcefully flattened. Instead, let’s seek a more stable world order built around countries that are self-confident, self-reliant and willing to speak to each other in terms of mutual respect rather than coercion and condescension. This is the paradox we must solve!

The good news is that the World Economic Forum

annual meeting in Davos is back. The not so good news is that the world has multipolarized and changed dramatically since the last WEF in 2020 and in no time in recent history have we seen so much simultaneous turmoil. The best news is that India is becoming more assertive, more conscious of the leadership role it can play.