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By SUZANNE LYNCH and RYAN HEATH
with Sarah Wheaton, Cristina Gonzalez, and Jamil Anderlini
WHICH DAY IS IT ANYWAY? Welcome to Wednesday’s Davos Playbook, on the penultimate day of the World Economic Forum. But is it Day Three or Day Four? We’re all out of sync this year with the curtailed timetable.
Weather report: Heavy rain throughout the night has led to a soggy start to the morning in Davos, but things should brighten up by about lunchtime. It may be safe to leave your WEF umbrella at home, but might be best to bring your wellies.
Speaking of which: The open-sided golf-style buggies ferrying journalists to the media center from the Congress Center did not hold up well under the deluge.
Another downside of Summer Davos: Where are the windows? One Davos newbie commented on the lack of daylight (and air) in the main Congress Center. The cozy cocoon vibe works well when it’s minus 10 outside. Not so much in late May.
Party update: Playbook can confirm Gwen Stefani will no longer perform at the Cloudflare event at the Piano Bar tonight. Could it be the pop diva reconsidered given the company has been named and shamed by the Ukrainian government for continuing to operate in Russia?
**A message from SQM: SQM has already begun exploring its options for making its logistics routes low carbon, by introducing Chile’s first high-tonnage electric truck to be used in large-scale mining. Switching SQM’s fleet from 320 diesel trucks to electrical trucks would eliminate approximately 3.840 tons of CO2 per year. Read here.**
WHAT WE’RE WATCHING TODAY
BIG NAMES: Some of those taking to the stage today include: Israel’s President Isaac Herzog (3 p.m.) … European Parliament President Roberta Metsola … ECB chief Christine Lagarde and a host of EU leaders (10 a.m.) … Bridgewater’s Ray Dalio, IMF chief Kristalina Georgieva, European Commissioner Valdis Dombrovskis and Prime Minister of Croatia Andrej Plenković (5.30 p.m.) … WTO chief Ngozi Okonjo-Iweala (4.15 p.m.) … Prime Minister of Georgia Irakli Garibashvili and Moldovan leader Natalia Gavrilița (9.15 a.m.).
Not coming: Austrian Chancellor Karl Nehammer was due to speak at 11.45 a.m., but canceled his trip to Davos at the last minute. Broadcaster ORF reports he’s staying home to “take care of urgent domestic political obligations.” 👀
WORKERS OF THE WORLD UNITE: We all know Davos is packed with figures from the top echelons of the business world, but what about workers? The so-called Great Resignation has been one of the hottest trends of the post-pandemic world as millions of workers have quit their jobs and others have demanded wage rises, providing a new headache for the corporate world.
Playbook spoke to Sharan Burrow of the International Trade Union Confederation ahead of this afternoon’s panel “Responding to the Great Resignation.”
Labor fights back: Has the balance shifted toward the worker? Not quite, Burrow says. “This notion of the Great Resignation is largely a myth. If you actually look at the U.S. Bureau of Labor Statistics and the census it shows a nearly one-to-one correlation between the rate of quitting and the rate of swapping jobs.”
Choosy: Workers are getting a “little more discerning” and people are feeling a little less loyal to employers, but Burrow urges caution on the figures. In leisure and hospitality, for example, the quitting rate rose to nearly 6 percent from 4 percent before the pandemic. “Changing jobs is not the same as quitting jobs.” Tune into the session at 2.30 p.m.
CRYPTO IN FOCUS
CRYPTO KINGS: Crypto, the new wild child of finance, is making quite a splash this year. “GOODBYE GOLDMAN” screams one sign for crypto company LCX along the Promenade. At least 10 other shop-fronts have been taken over by blockchain, crypto and in one case a “Securrency” enterprise. One central meeting point — Hub Culture Pavilion — is crypto-anchored, and a church has been turned into the Filecoin Foundation-sponsored CNBC venue.
There are 2 camps here: Frank McCourt, the billionaire former owner of the Los Angeles Dodgers and now promoter of a new core internet protocol, the Decentralized Social Networking Protocol (DSMB), makes a distinction between what he calls the underlying tech — like DSMB, or the cross-blockchain transfers enabled by companies like Polkadot (which he is partnering with) — and wild-child use cases of this new tech (all the Coin companies). The latter, he reckons, will amount to little more than the pets.com of 2022: dead or bankrupt in a year.
Francis Suarez, the crypto-loving mayor of Miami and president of the U.S. Conference of Mayors, is in town to tout his city as a tech hub (the new Silicon Valley). Suarez sees “more democratizing prosperity” in the blockchain future. “We want to be at the forefront of this disruptive world,” he says, because it “will shift the global balance of power.”
Not good timing: The Davos crypto onslaught comes at a difficult time. A whopping $500 billion has been wiped off the crypto market in the last month. While some financial whizzes have been playing it down, noting the percentage of wealth crypto represents, on Tuesday, the ECB warned that crypto assets will pose a risk to financial stability if they continue to grow in popularity and complexity.
McCourt agrees, seeing many crypto offerings as cleverly hyped disruption that won’t solve the big problems of today’s internet, which he considers a poorly governed surveillance economy that leaves users without real choices. The “internet and Big Tech’s use of it, as currently architected, is fundamentally flawed,” he says.
VDL SPEAKS: European Commission President Ursula von der Leyen made news in an interview with Playbook’s own Suzanne Lynch on Tuesday, playing down expectations that the EU’s sixth sanctions package against Russia would be agreed at next week’s EU summit. “I do not expect it, I do not want to raise false expectations,” the German politician said in her characteristic no-nonsense style, as Hungary continues to block the package.
Weaponizing food: In her earlier address to the WEF, von der Leyen also waded into the big topic du jour — food security — accusing Russia of “blackmail” and of using “hunger and grain to wield power.” Spanish Prime Minister Pedro Sánchez sees political danger ahead, telling the WEF Congress Hall that food insecurity is “a catalyst for social instability and often armed conflicts.”
WEF’s missed food security opportunity: Russia’s invasion of Ukraine is exacerbating a major global food crisis. According to the U.N., 1.7 billion people are at risk of poverty and hunger; the Eurasia Group puts the figure at 1.9 billion. But according to a cross-sector group of experts Playbook’s Ryan Heath lunched with at Goals House on Tuesday, the number is probably even higher.
So where is the WEF-convened action plan? Sure, the three U.N. food agencies could have developed a plan. But in their absence, WEF is well-positioned to step in, according to Ryan’s food systems lunch-mates. After all, it was here in Davos that GAVI, the Vaccine Alliance, was born 20 years ago. So where is the GAVI of food security?
The key: The group, which included a Colombian Cabinet minister, senior Indian official, Bayer executives, leaders from the biotech industry, Stanford and the World Resources Institute, said inclusion and collaboration are the most critical factors to both stopping the looming famine, and developing more resilient food systems for a world that will soon include 10 billion people.
Aside from innovations — ranging from microbes that will eventually replace fertilizers, to drought-resistant crops, and carbon-sequestering soil management techniques — the group pinpointed reducing food waste as the low-tech, quick option for averting disaster this year.
Playbook checked in with Lisa Moon, president and CEO of the Global Food Banking Network, and she agreed: less than 1 percent of food waste today is recovered and repurposed by organizations like her members. Lifting that rate is what she came to Davos to do. Who’s going to help her?
THE POLITICS OF WEF: As we’ve highlighted throughout the week, the absence of Russians is one of the standout trends of this year’s World Economic Forum. But with so many openly siding with Ukraine, some delegates are quietly wondering if WEF has opened a can of worms.
WHERE DO AUTOCRAT LINES GET DRAWN? If Russia is verboten, what gets others booted too? Is it starting a war? Invading a neighbor? Murdering journalists?
One reason for the Russian ban is strategic. As POLITICO reported back in March, WEF is forced to comply with U.S., EU and Swiss sanctions against Russia. Nonetheless, there’s a healthy smattering of autocratic leaders in Davos this week.
NOT CANCELED: Cambodia’s Prime Minister Hun Sen, one of the world’s longest-ruling autocrats who has been in charge since 1985, was on a panel Tuesday. If you want to know why there’s no effective pressure in Myanmar’s military junta, you can start by examining his role. The former Khmer Rouge militant is now a client of Beijing. He was spotted in close proximity to Zimbabwe’s President Emmerson Mnangagwa — aka The Crocodile. The political heir of Robert Mugabe, he was on stage for a panel discussion on new investment.
NUMBERS DOWN: Let’s face it, this is definitely a quieter Davos. But one seasoned Davos-attendee from the business world points out that CEOs are here, even if the big political figures have stayed away. As he put it: “My dance card is pretty full. It’s still the place to get face time with some of the top decision-makers in business.”
NOW HEAR THIS — LOOMING RECESSION? In the latest episode of our Davos Confidential Podcast, Carlyle Group Co-Founder and Co-Chairman David Rubenstein and Karen Karniol-Tambour, co-chief investment officer for sustainability at Bridgewater Associates, shared their thoughts on the latest trends in the financial world. Listen here.
Also in this episode, European Commission President Ursula von der Leyen on Russian sanctions, former Finnish Prime Minister Alexander Stubb talks Russia and Bill Browder on his new book, “Freezing Order: A True Story of Money Laundering, Murder, and Surviving Vladimir Putin’s Wrath.”
TALK OF THE TOWN
SOROS NAMES AND BLAMES MERKEL: “Europe’s dependence on Russian fossil fuels remains excessive, due largely to the mercantilist policies pursued by former Chancellor Angela Merkel,” said philanthropist George Soros at his annual dinner, impugning the “special deals with Russia” for gas.
… But he ❤️s Draghi: Soros repeatedly praised Italian Prime Minister Mario Draghi for backing tougher measures against Moscow.
Addiction prescription: Soros also mentioned a letter to Draghi — later shared with reporters — outlining a plan to wield Putin’s dwindling oil storage capacity to outsmart him.
DINNER DOWNER: An angry European Commission Vice President Frans Timmermans sounded off at a private gathering of European leaders for complacency in tackling big challenges and failing to understand the suffering of ordinary people.
— Former U.S. House Speaker Paul Ryan lining up with the plebs to get into Barry’s Piano Bar. “We’re not line skippers,” he proclaimed. He was joined by Petra De Sutter, Belgium’s deputy prime minister, the most senior trans politician globally. (Upon departing, Ryan insisted on staying under the house umbrella until his car door was open.)
— Bill Browder also waited his turn patiently with attendees at the Skybridge party.
— “Davos is a verb” — the worst banner hanging across the Promenade this year.
— China Daily available as the go-to free paper at Ameron Hotel.
— U.S. Climate Envoy John Kerry mobbed by journalists as he talked with China’s Xie Zhenhua in the Congress Center.
— ECB chief Christine Lagarde making a beeline for Irish Tánaiste Leo Varadkar and later deep in conversation with Arancha González, the former Spanish minister of foreign affairs and dean of the School of Politics and International Studies at Sciences Po.
— Mooching around at the Hilton Garden Inn: If Anthony Scaramucci was this lethargic ahead of his famous Skybridge wine tasting, which is heavy on heavy red wine, we can only imagine how he’s feeling this morning …
— We couldn’t help but notice one delegation deliberating avoiding joining the standing ovation for Ukrainian President Volodymyr Zelenskyy.
Photo: Ryan Heath
OVERHEARD AT DAVOS
— “We only put people on stage who are great” — Belgian Prime Minister Alexander De Croo speaking from the stage at his own “Chips for Health” event. (Belgium is home to the world’s leading semiconductor research center.)
— “It’s only a little bit of rain!” Hans Vestberg, the Swedish CEO of telecoms giant Verizon, as he ran smiling up the path out of Congress Center, without an umbrella, in the pouring rain around 5 p.m. Tuesday.
— “Have big ears and thick skin,” Citibank boss Jane Fraser shares the best bit of advice she got when she became CEO, at McKinsey’s breakfast session on resilience.
— “I really liked her — she was so un-French” — a guest at Bank of America’s drinks reception.
— Person 1: “I have to go meet someone at Palantir now” … Person 2: “Well, remember to turn off your phone.”
— European Unity in a Disordered World, Congress Hall, 10 a.m. ECB chief Christine Lagarde, European Parliament President Roberta Metsola, Slovak Prime Minister Eduard Heger, Irish Taoiseach Micheál Martin, Dutch Prime Minister Mark Rutte.
— Prime Minister of Greece Kyriakos Mitsotakis in conversation, Aspen 11.30 a.m.
— Special address by Israeli President Isaac Herzog, Congress Hall, 3 p.m.
— Reimagining Humanitarian Assistance, Congress Center, 3.30 p.m.
— Trade: Now What?, featuring WTO chief Ngozi Okonjo-Iweala and European Commissioner Valdis Dombrovskis, Congress Center, 4.15 p.m.
— An Economic Iron Curtain: Scenarios and Their Implications, featuring Bridgewater’s Ray Dalio, IMF chief Kristalina Georgieva, European Commissioner Valdis Dombrovskis and Prime Minister of Croatia Andrej Plenković. Congress Hall, 5.30 p.m.
— Rethinking the EU’s Partnership with its Neighbourhood, featuring Prime Minister of Georgia Irakli Garibashvili, Moldovan leader Natalia Gavrilița, Estonia’s President Alar Karis and Austrian Minister of Foreign Affairs Alexander Schallenberg (9.15 a.m.)
THANKS TO: Our editor Zoya Sheftalovich and producer Grace Stranger.
**A message from SQM: SQM (one of the world’s largest lithium producers) is supporting the UNFCCC’s ‘Race to Zero’ campaign by developing green lithium to fuel the electric vehicles needed for the transition to Net Zero. As part of Race to Zero, SQM is committing to the goal of reducing emissions across all its activities in line with the Paris Agreement, with transparent action plans and robust short- and long-term targets, which they will report on annually. The company has already begun exploring its options for making its logistics routes low carbon, by introducing Chile’s first high-tonnage electric truck to be used in large-scale mining, which could eliminate approximately 3.840 tons of CO2 per year. SQM is also committed to high social and environmental performance and is the second lithium mining globally company that started an independent third-party audit against the Initiative for Responsible Mining Assurance (IRMA) Standard. Read more here.**
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