Global elites descending on Davos for the World Economic Forum faced urgent warnings from Oxfam and the IMF on Monday (21) that the international economy is at risk, as swelling inequality stokes public anger.
Even before the official kick-off of the annual week of networking and socialising by the world’s rich and influential, it was clear that this year’s event would be shadowed by increasing instability and an upsurge in populism.
Leaders from the United States, France, Britain and Zimbabwe have stayed away from the Swiss ski resort in order to put out political fires back home, largely stoked by popular anger against the elite.
The International Monetary Fund warned in an update to its global economic forecasts that US-China trade confrontations, Brexit and other sources of uncertainty were threatening to drag down global growth even further than its already pessimistic outlook published three months ago.
The IMF cut the global GDP forecast for this year to 3.5 per cent from the 3.7 per cent projected in October. For 2020, the estimate was trimmed to 3.6 per cent.
“The bottom line is that after two years of solid expansion, the world economy is growing more slowly than expected, and risks are rising,” IMF chief Christine Lagarde told reporters in Davos.
she also added that the risk of a sharper decline in global growth has certainly increased.
– Brexit worries –
IMF chief economist Gita Gopinath pointed to the uncertainty surrounding Britain’s divorce from the European Union, with no deal in sight just weeks before Brexit is meant to take effect on March 29.
“It is imperative for leaders to resolve this uncertainty immediately,” Gopinath said.
And while growth is slowing, Oxfam warned in a report timed for the start of the Davos forum that inequality is not.
The UK charity found that the world’s 26 richest people – three of them set to come to Davos this week – now own the same wealth as the poorest half of humanity.
“Extreme inequality is out of control,” Oxfam executive director Winnie Byanyima told AFP in an interview.
Oxfam warned that the growing gap between rich and poor was undermining the fight against poverty, damaging economies and fuelling public anger.
It also urged countries to slap more taxes on the wealthy.