As usual, the yearly meeting of the world's richest countries, the richest business leaders, economists and civil society leaders hosted by the World Economic Forum (WEF) has kicked off today at Davos, the ski resort in Zurich, Switzerland. Given that the economic uncertainties caused by post-pandemic volatilities in the commodities market, fuel oil and natural gas prices in the international market are still unstable and global inflation is still untamed, the stakes of this year's Davos meet are obviously very high. The issues that will figure most prominently are if recession in Europe is inevitable. Will the European Union (EU) leaders be able to convince their US counterparts of the negative impact that US President Biden's Inflation Reduction Act of 22 would have on their business interests in America?
In fact, the EU's, for that matter the world's, economy is now going through an unprecedented crisis. The economies were already reeling from the impact of historic high inflation and the US dollar getting stronger by the day. The Ukraine war that started on February 24 last year only made matters worse as the pipeline for Russian gas that kept Europe running suddenly went dry. However, it is not Russia who stopped supplying the gas, but it was the other way around. In fact, it was the fallout from the retributive sanctions that Europe and the USA together imposed on Russia for its invasion of Ukraine. As a result, the global energy market which was already volatile became further unstable. With the supply of Russian gas and oil coming down to a trickle, they started to look for other sources of gas and oil including the Middle East and the USA. But those are pricier. What options are now open before them? Should they stick to their ideological stance of supporting Ukraine and punish Russia and through sanctions make it for Russia to continue with its, what the latter says, 'special operation' costly? But though about a year (11 months to be exact) has already passed since the war began, there is still no sign of Russia's giving in to the orchestrated campaign against it launched by the West on the Ukrainian front. Meanwhile, Europe has been paying the highest price. It has to give shelter to and feed millions of Ukrainian refugees and provide financial and military support to Kyiv so that it can continue to wage its resistance war against Russia. Though the USA is bearing the lion's share of cost of Ukraine war from the other side of the Atlantic, Europe is feeling the heat of the war directly. So, it would be natural for its leaders, businesses and the common people to ask why should the Ukraine war continue indefinitely at their expense? Especially, the energy crisis has left a crippling effect on their industry and the economy, in general, not to speak of the hardships they have been compelled to put up with. In this connection, let us hear what Qatar's state minister for energy and head of Qatar Energy, Saad Sherida al-Kaabi told the Atlantic Council Global Energy Summit last Saturday (January 14). He said that a mild winter in Europe has seen prices of gas coming down, but that volatility (in the energy market) would remain 'for some time to come' and that there was not much gas coming into the market until 2025. That he believed Russian gas would eventually return to Europe. Consider that this is coming from someone who knows about natural gas. Of course, European leaders and experts on the issue to join the WEF's Davos meet also know that.
EU leaders already irked by US's Inflation Reduction Act might be thinking of taking a more pragmatic approach towards the Ukraine war. So, one cannot rule out the possibility of EU considering real politik as a way out of the morass of the war in Ukraine and return to the Russian gas as a pragmatic course of action. Though, due to high inflation, the EU bloc's economic growth has taken a hit, it has somehow escaped recession thus far. Even so, the threat remains.
No less concerning than a possible recession is the danger of a nuclear war. Earlier, in 2018, many including one of the world's most successful financier, George Soros, said that the USA, who then refused to accept the fact that Kim Jong-un had any nuke, was on course towards a nuclear with North Korea. Now the focus has turned to Putin's Russia. Remember that Russia is not North Korea and the whole world knows that. It is hoped, the world leaders, especially those of EU at Davos would take this existential issue seriously.
But has a developing country like Bangladesh any stake in what is going to be discussed at Davos club of the global rich? Since the Davos participants dictate the world economy and politics, what they talk and decide matter for the rest of the world including Bangladesh. If their talks lead to a cessation of the Ukraine war or arresting uncontrolled inflation, a stable US dollar and increasing financial assistance for climate-vulnerable countries including Bangladesh, that would definitely be of help for us.
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