At Davos, Modi puts free trade first
At Davos, Modi puts free trade first
In the first address at Davos by an Indian leader for two decades, he talked of the need for “creating a shared future in a fractured world” — with a warning that technological changes “can create fault lines that can inflict a very painful wound,” — ticking the box marked “fourth industrial revolution,” the core of the WEF cannon.
But he also sprang to the defense of global free trade and laissez-faire economics with a reference to the “forces of protectionism” in a thinly veiled hit at US President Donald Trump, who is expected to expound his “America First” message on Friday.
“The solution to this worrisome situation against globalization is not isolation. Its solution is in understanding and accepting change,” he said. Modi ranked protectionism among the three biggest challenges to global stability, along with climate change and terrorism.
Indeed, the specter of Trump — due on Friday — loomed everywhere on the first day. Prime Minister Justin Trudeau of Canada — one of the WEF’s favorites for a number of reasons, not least his physical and philosophical contrast to the American — took the opportunity of his special address to announce that Canada and 10 trade partners had signed an agreement to advance the Trans-Pacific Partnership, the trade treaty Trump renounced as one of his first acts in office.
Like Modi, he too linked protectionism with the other challenges the WEF perceives: Technological disruption, gender inequalities and climate change.
Norwegian Prime Minister Erna Solberg struck a note familiar with Saudi Arabian attendees at the WEF, when she called for a new global crackdown on global corruption.
“We need to see who is taking money, who is bribing others, and show that this is unacceptable in all our societies,” she said, proposing a #MeToo campaign against corruption, which she said was fueling terrorism and making it harder for emerging countries to develop their economies.
Middle East issues were on display at the meeting too, with behind-closed-doors sessions on the strategic condition of the region and geopolitics. Executives from Middle East corporations were involved in an apparently endless series of bilateral briefings.
Participants at the 48th annual meeting of the WEF had struggled through huge snow drifts and transport problems to get to the event.
At one stage, even the helicopters could not land — an event unprecedented for most WEF veterans.
But they did not let those wintry problems dim their enthusiasm for the basic message that Davos likes to hear: Liberal globalism in all its forms.
World’s biggest sovereign fund worried about trade wars
- The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter
- Markets are worried about a trade dispute between the United States and China
OSLO: The managers of Norway’s sovereign wealth fund, the world’s biggest, expressed concern Tuesday about global trade tensions, which could heavily impact its value.
The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter, helping erase a loss of 171 billion kroner in January-March that was attributed to a volatile stock market.
The Government Pension Fund Global, which saw its total value swell to 8.33 trillion kroner by the end of June, manages the country’s oil revenues in order to finance Norway’s generous welfare state when its oil and gas wells run dry.
But Norway’s central bank, which runs the fund, said geopolitical and trade tensions presented a risk.
“It’s fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long-term global investor,” Trond Grande, the deputy chief of Norges Bank Investment Management, told reporters.
Markets are worried about a trade dispute between the United States and China. Accusing Beijing of unfair competition, the US administration is considering slapping a new round of levies worth $200 billion on Chinese goods.
Talks between the two slated for Wednesday and Thursday aimed at resolving the dispute have however eased concerns somewhat.
Following US-Turkey tensions that sent the Turkish lira and the Istanbul stock market tumbling, the Norwegian fund said its assets there were worth less than the 23 billion kroner they were at the beginning of the year.
“We’ve seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot,” Grande concluded.
The fund’s strong second quarter was attributed primarily to its share portfolio, which accounts for 66.8 percent of its investments and which rose by 2.7 percent.
Real estate holdings, which account for 2.6 percent of its holdings, rose by 1.9 percent, while bond investments, which represent 30.6 percent, remained flat.
Faced with falling oil revenues in recent years, the Norwegian government has been tapping the fund to finance public spending since 2015. But with oil prices recovering, the fund registered its first inflow in three years in June.