INTERVIEW: World Economic Forum brings a touch of Davos to Saudi Arabia

(Illustration by Luis Grañena)
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Updated 17 February 2020

INTERVIEW: World Economic Forum brings a touch of Davos to Saudi Arabia

  • Based on the 2030 strategy in Saudi Arabia, there are a lot of trailblazers in innovation and technology

Børge Brende, president of the World Economic Forum (WEF), brought a little flavor of Davos to Saudi Arabia last week. And it was not just that the overnight temperature in the Saudi capital fell to a low of 2 degrees Celsius — only marginally warmer than the Swiss town that hosted the annual gathering of the global elite last month.

It was also the buzz in the lobby of the Four Seasons hotel in Kingdom Tower in Riyadh, which will be the venue for the first-ever regional meeting of WEF to be held in Saudi Arabia. All that was missing was the clatter of snow spikes and the tinkle of Alpine cow bells.

“I’ve brought Davos weather with me,” said the 54-year-old Norwegian, who has been WEF president since 2017, after a ministerial-level career in his country’s government, including a stint as foreign minister. Brende was leading the WEF advance party tasked with agreeing the final details of the meeting, scheduled to be held in early April with around 600 official delegates and speakers as well as a substantial entourage of aides, observers and media.

It will be a big event in what promises to be a busy year for the Kingdom, which will culminate in the G20 Summit of global leaders in November. Preparations for that event — the first time a G20 Summit has been held in the Middle East — are well underway, and the WEF meeting could be seen as an essential trial run for the G20 extravaganza.

The decision to stage the event in Saudi Arabia was announced at a plenary session that Brende moderated with some of the leading policymakers from the Kingdom at Davos in January. Why was Riyadh chosen this time for an event that the WEF has previously staged in Jordan, Egypt and the UAE?

“Saudi Arabia is the first country in the Arab world to hold the G20 presidency, so that merits a lot of focus this year,” Brende said. “We also know that Saudi Arabia is the largest economy in the region, and among our members and partners there’s a lot of interest now to see how the G20 agenda can also reflect the industrial changes we’re faced with through the Fourth Industrial Revolution.”

That concept — abbreviated to 4IR — has been pioneered by WEF founder Klaus Schwab to describe the huge technology-driven changes underway in the global economy and society as information technology and digital communications come together to affect the lives of everyone on the planet.

Technological innovation has been eagerly embraced by the Kingdom’s policymakers as part of the Vision 2030 strategy to diversify its economy away from oil dependency and boost the job-creating potential of the private sector.

Brende suggests there is a challenge of perceptions with regard to rapid economic change in the region. “In the Middle East, you’re faced with two kinds of realities at the same time. It’s one of the youngest populations in the world, and there’s a lot of innovation underway — entrepreneurship and startups. But at the same time there are a lot of conflicts and proxy wars going on in the region,” he said.

“So there are two realities, but we’ll focus mainly on the opportunities. For example, we’ll have 50 startups from the Middle East attending the Riyadh meeting. We want to showcase the silver linings that are there and all the dynamic startups in the region,” he added.

“One of the challenges is that a lot of the media focus on the region is on polarization and proxy conflicts, but we’d also like to underline that based on the 2030 strategy in Saudi Arabia, there are a lot of interesting trailblazers in innovation and technology.”


BIO

BORN: Norway, 1965

EDUCATION: Norwegian University of Science and Technology

CAREER

  • Member of Norwegian Parliament
  • Environment minister
  • Trade and industry minister
  • Foreign minister
  • Secretary-general, Norwegian Red Cross
  • President, World Economic Forum

WEF is not primarily a peace-making or conflict-resolution forum, but its mission statement — “committed to improving the state of the world” — implies an interest in bringing opponents together in some kind of reconciliation. Does Brende see any possibility of resolution to some of the region’s apparently intractable antagonisms from the April meeting?

“I hope that there will be enhanced dialogue in the region, and also with all the young people coming — global shapers and leaders, the startups — there will be inspiration to other countries that will be participating. There are so many opportunities in the region that aren’t sufficiently capitalized on,” he said.

However, Brende does not believe that Iran will be present at the event. “There’s no plan currently to have Iran in Saudi Arabia,” he said. Israel is also unlikely to attend. Brende does not anticipate any problem with Qatari involvement in the meeting, despite the continuing standoff with the Kingdom. “I’ve seen that there are initiatives to improve the relationship with Qatar, and will be discussing that while I’m here,” he said.

Big delegations are expected from all G20 members, with strong participation from European, North American and Asian countries. They will gather at a crucial time for the global economy. “We’re facing a situation of slowing growth, so there has to be a real strategy on how to avoid recession. We think that technology investment is a good way to increase future competitiveness,” Brende said.

But he expressed about the economic implications of the coronavirus outbreak in China, which is certain to impact growth and — significantly for the Kingdom — will reduce demand for oil. “China, the second-largest economy in the world, is growing at the lowest rate of growth for 30 years, and is also struggling with the coronavirus. We at WEF are vigilant and following the situation,” Brende added. 

The meeting will focus on six main “platforms,” each of which has big implications for Saudi Arabia, the Middle East and North Africa (MENA): Employment, training and skills; financial inclusion; energy transformation; urbanization and smart cities; environmental issues; and the growth-enhancing potential of the 4IR.

“As one of the youngest regions in the world, millions of new jobs have to be created every year, and that’s a question of addressing the huge skill gap which exists. We’re trying to do this via the skills ‘accelerator’ that the forum has launched,” Brende said.

“We’re looking at a billion new and reskilled jobs by 2030 in cooperation with the private sector, and we’re also setting up a center for the 4IR in Riyadh. The new technologies give the opportunity for many countries that were maybe not the winners of previous industrial revolutions to leapfrog in development.” G20 education ministers will be form a large contingent at the MENA meeting to address these issues, Brende said.

Energy will be a major item on the April agenda. It will discuss what policies are needed to ensure that the transition from fossil fuels does not impact the macroeconomic environment of countries, such as Saudi Arabia and others in the Arabian Gulf, that still depend on hydrocarbons. 

It will also examine the sensitive issue of government subsidies. Along with other regional economies with a big public sector, Saudi Arabia has sought to pare back subsidies in energy, water and food. The WEF meeting in Riyadh will debate what safety nets need to be in place to ensure that vulnerable segments of populations remain protected.

Brende welcomes the relaxation of travel restrictions in the Kingdom, such as the introduction of electronic visas, and hopes to see a big female involvement in the April meeting.

The Davos annual meeting has been criticized in the past for the comparatively low level of women attending as delegates, with some 24 percent at last January’s event. “That’s about the same level as in government and private business, but we’d like to have gender parity. If we can get better than that in Riyadh, it would be great,” he said.

Senior policymakers in the Kingdom have given the event their “full endorsement,” he added, and while in Saudi Arabia he met with Crown Prince Mohammed bin Salman. “We want to underline that the 4IR is a huge opportunity, not a threat, for the Middle East. The region has shown it can deal with conflict and still achieve economic growth. It’s resilient. We hope the meeting will underline how the visions of growth and inclusion win out over conflict and polarization,” Brende said.


G20 ministers agree to keep markets open, tackle pandemic supply disruptions

Updated 31 March 2020

G20 ministers agree to keep markets open, tackle pandemic supply disruptions

  • G20 leaders pledged last week to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus outbreak
  • The coronavirus has infected nearly 738,500 people worldwide and killed some 35,000

RIYADH/WASHINGTON: Trade ministers from the Group of 20 major economies agreed on Monday to keep their markets open and ensure the continued flow of vital medical supplies, equipment and other essential goods as the world battles the deadly coronavirus pandemic.
G20 leaders pledged last week to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus outbreak, while working to ease supply disruptions caused by border closures by national governments anxious to limit transmission of the virus.
In a joint statement issued after a videoconference, the trade ministers pledged to take “immediate necessary measures” to facilitate trade, incentivize additional production of equipment and drugs, and minimize supply chain disruptions.
They agreed that all emergency measures should be “targeted, proportionate, transparent, and temporary,” while sticking to World Trade Organization (WTO) rules and not creating “unnecessary barriers” to trade.
They also vowed to work to prevent profiteering and unjustified price increases, and keep supplies flowing on an affordable and equitable basis.
“As we fight the pandemic both individually and collectively and seek to mitigate its impacts on international trade and investment, we will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” the ministers said.
They agreed to notify the WTO about any trade-related measures taken to keep global supply chains running and said they would convene again as necessary.
The ministers, however, stopped short of explicitly calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies. A key adviser to US President Donald Trump is working on new rules to expand “Buy America” mandates to the medical equipment and pharmaceutical sectors, something that dozens of business groups said could worsen shortages.
The joint statement included the phrase “consistent with national requirements” already used by G20 leaders, which experts say could provide a loophole for protectionist barriers.
Lack of protective medical gear is putting doctors and nurses at risk. Many countries rely on China, the source of the outbreak, for drug ingredients and are struggling to avoid shortages after lockdown measures prompted by the epidemic held up supplies and delayed shipments.
Supply chains are backing up as air freight capacity plunges and companies struggle to find truck drivers and shipping crews. Europe and the United States are short of tens of thousands of freight containers. Shippers struggle with crew shortages and quarantines at ports. Agriculture is also being disrupted.
The ministerial video conference was attended by representatives from the WTO, World Health Organization and Organization for Economic Cooperation and Development.
A senior World Bank official urged G20 members to agree to refrain from imposing new export restrictions on critical medical supplies, food or other key products, and to eliminate or reduce tariffs on imports of key products.
US Trade Representative Robert Lighthizer told the ministers during the meeting that the pandemic had revealed vulnerabilities in the US economy caused by over-dependence on cheap medical supplies from other countries. He did not reference the “Buy America” rule specifically, but said Washington was encouraging diversification and wanted to promote more domestic manufacturing to produce more suppliers for the United States and others.
G20 finance ministers and central bankers will also meet virtually, on Tuesday, for the second time in just over a week to continue coordinating their response, the Saudi G20 secretariat said, as worries grow about the debt crisis looming over poorer countries.
Japanese Trade Minister Hiroshi Kajiyama told counterparts that both the public and private sectors should try to avoid shutting supply networks to enable an early resumption of economic activities.
The coronavirus has infected nearly 738,500 people worldwide and killed some 35,000, and has plunged the world into a global recession, according to International Monetary Fund chief Kristalina Georgieva.