WEF announces first special meeting in Riyadh with global cooperation agenda

Jeddah - Yasmine El Tohamy - DAVOS: Trade tensions are looming large over the global economic landscape, with experts at the World Economic Forum expressing concerns about the growth trajectory. 

Over the past three decades, trade and investment have played pivotal roles in fostering international prosperity. However, recent developments and geopolitical events have raised alarm among key figures at the forum, sparking discussions on the challenges and opportunities ahead.

Ngozi Okonjo-Iweala, the director-general of the World Trade Organization, shed light on the global challenges faced in the previous year.

She said: “Last year, we saw weak growth in trade, which we projected at 0.8 percent. We experienced a slight rebound in the last quarter.”

Entering 2024, Okonjo-Iweala expressed cautious optimism but cited concerns about disruptions in the Red Sea, Suez Canal, and other regions. 

Addressing the need for strategic focus, the WTO official emphasized the importance of areas such as services, digital trade, and green trade. 

Discussing the investment side, she mentioned ongoing negotiations for an Investment Facilitation Agreement at the WTO involving 110 countries, aiming to eliminate barriers and stimulate growth. 

She added: “So what should we do on the investment side? We’re negotiating an Investment Facilitation Agreement at the WTO with 110 countries. The idea is to help developing countries as much as possible sweep away those barriers so the investment can come in and revitalize growth and trade.”

She further noted: “We’re also looking at rules to underpin digital trade, and we hope that ministerial discussions will be able to advance on these fronts.” 

Khaldoon Khalifa Al-Mubarak, CEO and managing director of Mubadala Investment Co., provided insights into the significant shifts in global trade dynamics, attributing changes to factors including the COVID-19 pandemic and geopolitical events such as the Russia-Ukraine conflict. 

Al-Mubarak highlighted the UAE’s proactive stance in fostering business agreements with major economies and maintaining globalization as a trade hub. 

He stated: “On trade, I think the UAE did more trade agreements in that period than any other country in the world. From trade agreements with big economies like India, Turkiye, Indonesia, to massive bilateral trade deals, which again, I think helped position the UAE very, very well.”

Shifting the focus to technology, Al-Mubarak said: “The theme of WEF this year is AI, but I want to tackle it from a different angle,” emphasizing the crucial role of infrastructure, energy transition, and data centers in the journey toward generative AI.

He emphasized that AI extends beyond technology, explaining that it encompasses the infrastructure, the energy transition, and data centers that enable it. 

Chrystia Freeland, deputy prime minister and minister of finance of Canada, stressed the transformative nature of the current economic moment, comparing it to the industrial revolution. 

Freeland outlined Canada’s commitment to environmentally conscious energy, citing an 85 percent clean grid and a $15 billion government fund, in collaboration with private capital, to promote decarbonization and economic growth. 

She said: “Canada is absolutely determined that decarbonization for us will mean more jobs, more growth, more manufacturing, and we recognize government needs to play a role to make that happen.”

Valdis Dombrovskis, European Commission executive vice president, highlighted the changing geopolitical context and the risk of economic fragmentation. 

Dombrovskis stressed the importance of resilience, diversification, and cooperation in the face of challenges posed by the green and digital economy. 

He added: “Now when we are moving to the green and digital economy, it requires other inputs, other raw materials, critical minerals. It’s very important that we are not developing strategic dependencies from certain suppliers but ensuring resilience through diversification.”

The EU official emphasized the significance of a multilateral trading framework, stating: “Multilateral trading framework matters a great deal economically.”

Brian Moynihan, chair and CEO of Bank of America, provided insights into the economic well-being of consumers. 

Moynihan stated: “The good news is that consumers in the US are in pretty good shape, and consumers in the EU are in pretty good shape. You put those two economies together, and you’ve got 45 percent of the world’s GDP.”

Moynihan emphasized the importance of technology in the modern economy, stating: “Computers, phones, chips, they are the wheat and protein of the economy now. So you have to get those distributed in the world.”

Moynihan called for a rethinking of globalization to ensure broader benefits for all, especially those who did not profit in the past.

In contemplating generative AI, Okonjo-Iweala underscored its potential to reduce trade costs and enhance supply chain efficiency. She said: “The generative AI, is a very important tool that can reduce the costs of trade, make supply chains more efficient, and increase productivity.”

She also highlighted the need for robust rules governing the use of data, a crucial element for developing powerful AI models, adding: “What we need are good rules because there’s one thing you need for AI, and that is data, large amounts of data to train large language models. So who controls the data is going to have the power to build the sharpest AI models.”

The global community is grappling with the imperative to navigate trade challenges, embrace technological advancements, and foster inclusive economic growth. 

The convergence of insights from world leaders highlights the complexity of the current economic landscape and the need for collaborative efforts to shape a resilient and sustainable future.