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Editor’s blog – The impossible challenge for the World Economic Forum in Davos

By Dean Carroll

So with Greece taking on the rotating six-month European Union presidency despite its economy and politics languishing in a state of malaise, it seems timely that the World Economic Forum in Davos kicks off next week.

German Chancellor Angela Merkel and leaders from China and India will no doubt be the star turns during the conference, as they have been in recent years. On the agenda at the business jamboree in Switzerland will be a range of pertinent issues including the central narrative of the event The reshaping of the world: consequences for society, politics and business. This translates into the yawning social equality gap between the rich and the poor with a warning flag as to the consequences for politicians and the wider economy.

In fact, the cleavage between the haves and the have nots could pose the single biggest risk to the world in 2014 – according to the WEF’s annual assessment of global dangers. Income disparity and social unrest might well blight the global economy for next decade, warn the pointy-heads at Davos. But, of course, you do not need a Ph.D. to work this out – just take a look at the scenes played out on broadcast news every night where poverty and oligarchism lives side by side but at the same time worlds apart.

Indeed, the forum warns that there is a “lost” generation of young people who lack career prospects and the skills to take up the scarce jobs on offer – leading to pent-up frustration that could well boil over into widespread civil disobedience, as we are currently witnessing in Thailand. “Disgruntlement can lead to the dissolution of the fabric of society, especially if young people feel they don’t have a future,” says WEF chief economist Jennifer Blanke. “This is something that affects everybody.”

David Cole, group chief risk officer at the reinsurer firm Swiss Re, adds: “Many young people today face an uphill battle. As a result of the financial crisis and globalisation, the younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population. While in the emerging markets there are more jobs to be had, the workforce does not yet possess the broad based skill-sets necessary to satisfy demand. It’s vital we sit down with young people now and begin planning solutions aimed at creating fit-for-purpose educational systems, functional job-markets, efficient skills exchanges and the sustainable future we all depend on.”

In the West, the WEF outlined the dysfunctional landscape whereby graduates from “expensive and outmoded” education institutions build up huge debts on courses that are giving them the wrong skills. So while economists seem to think that the moment of catastrophic global economic downturn has passed – somewhat complacently in my view – the elite are coming to terms with the social void created by uber-capitalism. Expect this dismal topic to dominate the headlines in 2014.

However, there will also be more optimistic sounding debates in Davos such as Is Europe back? and Are markets safer? and surprisingly a session on mass state surveillance entitled The Big Brother problem. Still, worries about the eurozone persist among the more sceptical quarters as does concern about China’s troubled property market damaging the wider economy and the escalation of tensions in the Middle East – potentially, leading to unsustainably high oil prices. It is fair to say that 2014 presents one of the most serious set of geopolitical problems the annual meeting has ever had to grapple with, since its inception in the 1970s.

Whether the 2,500 politicians, business leaders, academics and journalists can actually produce any tangible solutions, while ensconced in the luxury mountain resort, seems doubtful. So, enjoy the fondue in Davos ladies and gentleman and avoid the ‘let them eat cheese’ elitist sentiment at all costs. In fact, the local food might well be the only bright moment of the four-day trip. Good luck, you will need it.

Dean Carroll is editor of Policy Review. Follow him on Twitter @poljourno and follow Policy Review @Policyrev

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