DAVOS, SWITZERLAND – A hedge fund investor told me she attends the World Economic Forum each year “so that I’ll know what to short.” In a world awash with geopolitical and economic pessimism, the dominant mood at this year’s Davos, her argument is that it might be time to go “long” on optimism.
One can quibble with her premise that Davos is a place more for conventional wisdom than investable solutions. As the world’s leading convener of global and business elites for most of the past half-century, the WEF often has been ahead in identifying trends, including the Fourth Industrial Revolution, and in generating positive change, such as CEOs’ increased focus on social responsibility.
That said, there’s no doubt this year’s prevailing theme was a collective gloom without ready solutions. One of Europe’s most murderous conflicts since World War II grinds on without resolution; the global economy grinds toward recession with slowing growth and growing inflation; and COVID with all its variants persists into its third year, with a particular pounding of China and related supply chains.
Yet there was another narrative on display in Davos as well.
Russian President Vladimir Putin has jolted the collective West from its slumber. Europe has responded with more collective purpose, and its taxpayers are funding weapons for a Ukraine fighting for shared freedoms. Even Davos’ newest elites, the cryptocurrency crowd, are exploring ways to deploy aid more effectively and swiftly to Ukraine even as they lick their wounds from billions in losses from the Terra crypto scandal.
That Davos for the first time took Russians off its invite list underscored that there are some crimes the global community must oppose.
“In Davos, our solidarity is foremost with the people suffering from the atrocities of this war,” said Klaus Schwab, the Forum’s founder and executive chairman. The WEF called for a “Marshall Plan” for the reconstruction of Ukraine, and Ukraine’s President Volodymyr Zelenskyy told the Davos crowd via video that it should use seized Russian assets to help accomplish that task.
Not present was China’s President Xi Jinping, who has used the Davos stage to preen as a champion for a better world, most recently on Jan. 17 when he spoke to a virtual WEF session.
“We need to discard Cold War mentality and seek peaceful coexistence and win-win outcomes,” he said, just a matter of days before he signed a joint statement with Putin agreeing to a relationship “without limits.” That, in turn, was a little more than a month before Putin launched his war.
One wonders whether Xi ever tried to convince Putin of what he told his January Davos audience: “History has proved time and again that confrontation does not solve problems, it only invites catastrophic consequences.”
The week’s most repeated story was that of how Ukrainian business leader and philanthropist Victor Pinchuk transformed the perennial “Russia House” into “Russian War Crimes House.”
Prominently located on the ski resort’s main drag, Russian business and government leaders took meetings and downed vodka shots there in previous years. This year its walls wore photographs and a big screen showing Putin’s atrocities.
“Russia for years came here to Davos to present itself in the way it believed it should show itself to the world,” exhibition curator Bjorn Geldhof, told CNBC’s Silvia Amaro. “We are representing war crimes that Russia is committing in Ukraine, but war crimes that were also committed in Chechnya, that were committed in Syria — so what we are showing is the reality from Russia that most people don’t speak about.”
For all these reasons and more, I am going “short” on pessimism and long on “optimism” as I return to Washington, D.C., this weekend. I’m acting less due to any conviction about a positive outcome than I am because of the costs to us all if we don’t leverage this moment for a common cause.
I’m wagering that the hope and heroism Ukrainians have demonstrated will overwhelm the complacency that has weakened global democracies for much of the past three decades. I’m betting that the resolve to help the Ukrainians win will expand and outlast signs of fatigue as Russia makes gains in eastern Ukraine.
As Delaware Senator Christopher Coons told the Washington Post’s Ishaan Tharoor in Davos: “I think it’s fairly obvious that the Russian plan is to grind it out … and to count on the West to come apart in some way and frankly to lose interest and be distracted by high energy costs and our own elections.”
I’m also wishing, against previous experience, that following this week’s school shooting in Uvalde, Texas, resulting in 21 deaths, the United States can address its domestic ills even as it rallies the world to help Ukraine defeat Putin. One draws hope from the new $40 billion aid package for Ukraine that Washington’s toxic partisanship isn’t irreparable.
One can only see hope in Sweden and Finland’s applications to join NATO, ending a 200-year history of Swedish neutrality, not to threaten Putin but rather to better unify the transatlantic community against a generational threat. I’m betting that NATO can overcome Turkish President Recep Tayyip Erdogan’s objections.
President Joe Biden’s trip this week to Asia was also encouraging, in that it introduced a new economic plan to advance relations with his partners and abandoned the outdated concept of “strategic ambiguity” toward Taiwan, not to make war but to prevent it.
It was Secretary of State Antony Blinken’s speech at George Washington University on Thursday that captured the link between Putin’s war and China’s challenge.
“Beijing’s defense of President Putin’s war to erase Ukraine’s sovereignty and secure its sphere of influence in Europe should raise alarm bells for all of us who call the Indo-Pacific region home,” he said, later adding, “We cannot rely on Beijing to change its trajectory. So we will shape the strategic environment around Beijing to advance our vision for an open, inclusive international system.”
That’s an outcome worth investing in.
— Frederick Kempe is the President and Chief Executive Officer of the Atlantic Council.