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The Davos Forum

Davos

The rich and powerful of this world are currently attending their annual meeting at the Davos Economic Forum, which had not been held for two years due to the pandemic. This time the meeting takes place in May, far from the snow that usually accompanies it, and Russia is not taking part, as it has not been invited as a sign of the ostracism to which it has been subjected after the invasion of Ukraine. But just because it is not physically present does not mean that it is not present, for an exhibition of photographs illustrating the horrors of the war imposed on Ukraine and the crimes committed there by the invading troops has now been installed in a building usually occupied by Russia. Ursula von der Leyen, President of the European Commission, has also spoken harshly against the Kremlin for using hunger as a tool to serve its military aims by preventing Ukrainian grain exports, blocking ports, destroying silos, stealing wheat and even bombing crops.

Today, the leaders meeting in Davos have to reflect on how to deal with the consequences of five simultaneous crises that feed on each other as they attack us from all sides.

The first is the COVID pandemic that is still with us no matter how much we want to look the other way. There are still many deaths, mutations are still appearing that may be more contagious but are fortunately no more lethal, and in some places they are still clearly affecting our daily lives. In Pennsylvania, masks are again required in schools, and Shanghai (5% of China's GDP) remains draconianly isolated at a very high cost to the quality of life of its inhabitants and to the country's economy, whose slowdown is reverberating around the world. It is not known how many deaths this pandemic has already caused, as the official figures of 6 million victims probably fall far short, and to these should be added the unexplained increase in deaths of 15% over the usual figures that the world has experienced over the last two years, and which in the USA has reached 17%, although in Spain it has remained at 12%. The impression is that this virus, symmetrical in its origin and asymmetrical in its effects, is here to stay and we will be lucky if it does not evolve into more lethal or vaccine-resistant forms. The recent appearance of monkeypox, endemic in countries such as Nigeria or Congo and potentially less serious, but which has spread rapidly to several European countries, makes us wonder whether overpopulation and hyperglobalisation might not be leading to such problems becoming more and more frequent. I am afraid the answer is yes.

The second crisis is the Climate Crisis, potentially the most serious of all as it affects the very ecosystem that keeps us alive. Next to it COVID is a scratch. The war in Ukraine has a very negative impact on the climate because the gas and oil supply crisis that it has brought with it is driving up prices and causing some countries to temporarily return to coal, which is much more polluting. In the face of emergencies our political systems give preference to what is urgent over what is important and politicians who have to be re-elected cannot be blamed for this. It is to be hoped that the increase in fossil fuel prices will in the medium term make investment in renewable energies more profitable, as they are currently insufficient to meet existing demand and are even more expensive.

The third crisis is the crisis of war itself, a war of territorial conquest in the heart of Europe more typical of the 19th century, but fought with the devastating weapons of the 21st century. Six million refugees have fled from Ukraine to other European countries, which have received them with more enthusiasm than administrative facilities, and the number of internally displaced persons is higher. The outcome of the invasion is still an unknown as Putin has been changing his objectives as he realised that he could not achieve his initial goal of occupying Kiev and installing a puppet government along the lines of the one he has in Belarus. He is now concentrating his attacks on the separatist regions of Lugansk and Donetsk and on Ukraine's Black Sea coast. In any case, the end of this war does not seem near because Washington has decided to use it to weaken Russia and this means that the impact of the sanctions on the Russian economy will be prolonged (it is estimated that it will shrink by 10%) and also on our economies (the 19 euro countries have only grown by 0.2% in the first quarter of this year), with a negative impact on the price of fossil fuels, on the overall growth of the economy and on inflation. Prolongation also increases the risk of conflict spillover or the use of nuclear weapons. It seems impossible, but it should be remembered that the invasion of Ukraine seemed impossible only a few months ago.

The fourth crisis is the food crisis, since Ukraine is the source of 20% of the wheat, 15% of the maize and 76% of the sunflower oil consumed in the world. Ukraine is also a major producer of fertilisers and the war prevents it from exporting these products, with the triple consequence of increasing prices, impoverishing harvests in other latitudes (for lack of fertilisers), and provoking or aggravating the consequences of famines that hang like the sword of Damocles over very weak economies in Yemen, Afghanistan or the Horn of Africa (Somalia, Eritrea, Sudan). The humanitarian disaster looming over the most disadvantaged - as is always the case - could be terrible and will be aggravated by the droughts brought on by global warming.

The fifth crisis is that of globalisation: in a world that is becoming not only more interconnected but also more interdependent, we have seen how COVID has affected global growth and global supply chains, causing a lack of parts that has crippled industries and led to shortages and unemployment. And because we don't want that to happen again, we are taking steps to seek closer and more reliable suppliers, at the price of sacrificing profit for greater security. Profit-seeking capitalism has thus received a hard and well-deserved blow. The monopoly on the production of vaccines or microchips cannot be left in the hands of third parties. "Decoupling" aims to make us less dependent and more self-sufficient, less fragile in the face of future crises, and China is seeking the same with its circular economy concept, with which it aims to achieve greater technological autonomy and become less dependent on exports by strengthening domestic consumption. The risk of all this is to end up with different and mutually incompatible internet systems, or with separate systems of financial transfers, which is not desirable at all.

The problem is that all these crises are global in their effects and cannot be tackled with local recipes, because viruses do not understand borders, nor can Europe, which releases 9% of greenhouse gases into the atmosphere, stop global warming on its own. The state is powerless in the face of problems that can only be tackled effectively through international cooperation, which is not easy to achieve in the current context of generalised confrontation. That is why it is necessary to look for spaces for collaboration beyond the differences that separate us and thus face together these challenges that benefit no one and that we cannot face alone. This is where a contribution from the Davos Forum would be welcome. It is when the storm is raging that lighthouses on the coast are most needed.

Jorge Dezcallar, Ambassador of Spain.