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Davos 2016: Here are key themes that will dominate WEF discussions

The theme for this year’s meeting is ‘Mastering fourth Industrial revolution’

business Updated: Jan 20, 2016 12:47 IST
Gaurav Choudhury
The theme for this year’s meeting is ‘Mastering fourth Industrial revolution’
The theme for this year’s meeting is ‘Mastering fourth Industrial revolution’(Reuters)

Global leaders will converge at Davos, the popular Swiss ski resort, to discuss geo-politics, economics and development at the World Economic Forum’s (WEF) flagship annual event that gets underway on Wednesday.

The theme for this year’s meeting is ‘Mastering fourth Industrial revolution’

HT gives a heads up on 5 key issues that would dominate the discussions at WEF this year:

China

· The world’s second-largest economy grew at 6.9%, its slowest pace in a quarter of a century, amid mounting concern for global investors. It is the slowest since 3.8% in 1990.

· The Chinese economy is slowing, according to multiple projections, and its financial market has been on a roller-coaster ride, roiling world markets as it tries to find balance.

· Struggling to claw out of its worst slowdown in more than a decade hit by shrinking exports—the edifice of its growth story—China’s central bank have devalued the yuan to a its lowest value in five years.

· The devaluation is primarily aimed at making its manufactured products cheaper and help exports race ahead of competitors.

· World leaders are expected to expend a significant time in Davos discussing the state of the Chinese economy.

Climate Change

· Never before in recent history has climate change assumed such an importance in geo-political discussions as now.

· After four years of talks , representatives from 195 countries created history in Paris in December 2015 by agreeing to a comprehensive climate change deal that will commit nearly every country to lowering planet-warming greenhouse gas emissions besides giving a boost to clean energy business.

· The COP21 agreement will have a lot in store for economies in transition like India with over a trillion dollars in green investment set to be handed out in the next decade or so, enabling the adoption of greener technologies — an endgame that the agreement sets out to achieve.

· The long-term goal is to limit global warming to “well below” 2 degrees celsius over pre-Industrial Revolution levels, and to try for 1.5 degree if possible.

· Climate change and COP 21 are expected to be key discussion points in Davos as well

Jobs

· The official theme of the 2016 meeting is “mastering the fourth industrial revolution”, which implies “fusion of technologies that is blurring the lines between the physical, digital and biological spheres”.

· According to the WEF report disruptive changes to business models will have a profound impact on the employment landscape over the coming years.

· Many of the major drivers of transformation currently affecting global industries are expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps.

· According to the WEF report in many industries and countries, the most in-demand occupations or specialties did not exist 10 or even five years ago, and the pace of change is set to accelerate.

· By one popular estimate, 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist. The report says that in such a rapidly evolving employment landscape, the ability to anticipate and prepare for future skills requirements, job content and the aggregate effect on employment is increasingly critical for businesses, governments and individuals in order to fully seize the opportunities presented by these trends—and to mitigate undesirable outcomes.

India

· Amid sputtering global conditions, India is set to become the world’s fastest growing major economy by 2016 ahead of populous neighbour China that is battling an industrial deceleration.

· According to latest government estimates, India will likely grow at 7-7.5% in 2015-16, marginally faster than the previous year’s 7.3% growth.

· A new World Bank report has said emerging market economies that led the global recovery from the 2007-8 financial crisis are slowly down, with one exception, India.

· It called India-led South Asia a “bright spot” in an otherwise gloomy outlook for emerging markets, using a phrase that has come to be used regularly in recent months for India.

· According to the World Bank, India is projected to grow at 7.8% in 2016.

· The International Monetary Fund has projected “robust” growth for India in 2016 and 2017 and a “more gradual” pickup in global economy than it had said before.

· India would grow by 7.5% in both 2016 and 2017, the Fund’s update to the World Economic Outlook said on Tuesday.

· Finance minister Arun Jaitley would be accompanied by RBI Governor Raghuram Rajan and other senior government officials at the summit. Jaitley’s two sessions ‘India and the World’ and ‘Asia’s Era of Infrastructure’ would be keenly followed for cues on India’s future reforms roadmap, essential to cement its place as the world’s growth engine

Developed Economies

· For better part of the last decade, India, along with China, had been the toast of discussions in Davos

· This year, however, the phraseology at Davos, could undergo a subtle metamorphosis.

· Amid budding signs of recovery in the US, macroeconomic strategists in the developed world are now focussing on ways to “Re-shoring” of jobs to their countries, as opposed to “Off-shoring.”

· This could mark a fundamental shift in mainstream economic thinking following the world economy’s Great Crash of 2008.

· Last year, British Prime Minister David Cameron had summed it up rather appropriately at Davos when he cautioned that the West cannot afford to be “starry eyed” about globalisation and that it was about time to bring home the benefits by seizing the re-shoring opportunities– where some jobs that were once offshored are coming back, from East to West.

· All eyes will on reading the fine-print of the new phraseology at WEF this year

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