| | | | |  | | By Ryan Heath with Suzanne Lynch | | | GOOD MORNING from the Magic Mountain, where POLITICO's transatlantic team is gearing up for a busy week in Davos. We'll bring you news, gossip and razor-sharp analysis throughout the week from the World Economic Forum with our morning newsletter, running Monday through Friday (and a daily podcast to boot — download Davos Confidential each morning here, and check out today's edition here).
| | | | A message from Hedera: Hedera is the sustainable blockchain for the Web3 economy. Whether you're a startup or enterprise, a creator or consumer, Hedera goes beyond blockchain, so developers can create the next era of fast, fair, and secure distributed applications that bring trust back to the world. Learn more. | | | | | | FIRST THINGS FIRST — THE WEATHER: Delegates have been trickling into the Alpine resort ahead of the opening event this evening. But while theWEF may have thought the "summer Davos" it hosted in 2022 was a one-off experiment, the advance teams arriving on Saturday could be forgiven for thinking otherwise: They were greeted by unfrozen lakes and grass rather than snow up and down the mountains, as temperatures hovered above freezing. Snow did fall Sunday. It's not the Davos snowmaggedon of 2018 — but it might be enough to allow sled runs down from the Schatzalp. Temperatures are dropping, so here's hoping things will be back in full swing by the end of the week. MORAL LESSON 1: It doesn't matter how rich you are, you can't control snowfall. MORAL LESSON 2: When it comes to climate change, the WEF has made net zero progress. Those endless debates about climate change that have been a feature of the program for years were prescient — take a look around, climate change is literally happening before your eyes. WHO'S IN: U.N. Secretary-General António Guterres, German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, China's Vice Premier Liu He, Donald Trump's son-in-law Jared Kushner, Dell Technologies founder Michael Dell, Goldman Sachs chief David Solomon, former U.S. Vice President Al Gore, former U.K. PM Tony Blair, European Central Bank chief Christine Lagarde, IMF chief Kristalina Georgieva, South African President Cyril Ramaphosa,European Parliament President Roberta Metsola, Polish President Andrzej Duda, Spanish Prime Minister Pedro Sánchez, Irish Taoiseach Leo Varadkar, FBI Director Christopher Wray, U.S. Labor Secretary Marty Walsh, U.S. Trade Representative Katherine Tai. WHO'S OUT: George Soros, the 92-year-old philanthropist, will miss this year's event for the first time in years. Soros cited a scheduling clash, and said he would be back next year. Six of the G7 leaders (only Germany's Scholz is attending). Japan — most of thedelegation pulled out at the last minute. Russia, obviously.U.S. Treasury Secretary Janet Yellen —despite being in Switzerland this week, she's not making the trip to Davos. Peter Mandelson, the U.K. New Labour architect and Davos regular. WHO'S INDIFFERENT: Nobel Peace Prize-winner Beatrice Fihn, who campaigns to eliminate nuclear weapons, told us she "genuinely had forgotten that Davos is still happening." Scott Colvin, a Davos veteran who is now public affairs director at Aviva, called the format "dated," adding: "The events around COP," the United Nations Climate Change conference, "now feel a bigger deal, given their focus on a specific global policy objective." BY THE NUMBERS: A total of 600 CEOs, 56 finance ministers, 19 central bank governors, 30 trade ministers and 35 foreign ministers are attending Davos this year. But while the WEF's operating model requires it to provide a place for the world's most influential people to talk (119 billionaires joined in 2020), all that power is a stark reminder that billionaires and CEOs don't look like the rest of us. The WEF speaker roster is now 42 percent female, while overall female participation is (only) 27 percent — both figures are new highs for WEF. Where they're flying in from: Europe still supplies the biggest chunk of political leaders in Davos, while the U.S. has by far the biggest chunk of corporate customers — nearly 20 times the size of the Chinese delegation. Covid test: The pandemic that derailed WEF three times may be a distant memory for many of those attending, but participants are still required to do a test on arrival. That said, no one monitored your authors spitting and swirling behind a privacy curtain — meaning anyone could dupe the system in multiple ways.
| | | Consumer sentiment improved in 31 out of 43 countries surveyed by Morning Consult in December. But President of Morning Consult Kyle Dropp shared new Index of Consumer Sentiment data with us, which shows that roughly two-in-three of the world's largest economies still have negative views toward the state of the economy and their personal finances. European countries are at the bottom of the list.
| | | PROTECTIONISM IS BACK: WEF economic orthodoxy is out, and governments plowing money into their domestic industries is in, as they try to reduce dependencies on other countries in strategic industries. The Biden administration's $369 billion in clean energy incentives in the Inflation Reduction Act has infuriated allies from Europe to Asia. The EU too is planning to pause its own subsidy limits (Ursula von der Leyen will have more to say on this Tuesday). We are intrigued to see how Davos — the pinnacle of globalization — copes with the new vogue for subsidies, export controls and economic self-sufficiency. IT'S STILL CRYPTO WINTER: Oh, how times can change. In May, delegates could not walk down the Promenade without being bombarded with store-fronts and pop-ups dedicated to crypto. Eight months on, the industry is on the edge. The collapse of FTX, led by Sam Bankman-Fried, is keeping the whole sector nervous. Crypto.com cut 20 percent of its workforce Friday. But Davos veteran Anthony Scaramucci has announced he's investing in a company set up by Brett Harrison, the former head of FTX. TECH: WHAT LAYOFFS? Tech is also having a moment — and not in a good way. The tumultuous Elon Musk takeover of Twitter and ensuing rapid job cuts reflect a broader retrenchment in the tech sector. The lavish parties thrown by big names like Salesforce and Facebook were the thing of Davos lore. Let's see if they live up to their previous form this year. One thing is clear: Despite the layoffs, tech companies like Qualcomm, Meta, HCL and Salesforce still have a healthy presence on the Promenade. COST OF LIVING: The WEF's Global Risks Report identified the cost-of-living crisis as the biggest short-term risk to the economy. UKRAINE WISH LIST: Russia's invasion of Ukraine will be the top geopolitical story of this World Economic Forum. Expect Kyiv to up demands to the West for tanks — particularly German-made Leopard 2s — as it seeks to repel Russia. German Chancellor Olaf Scholz is due to give his keynote address on Wednesday.
| | | HAVE WE JUST LANDED IN TIMES SQUARE? The stately Promenade that runs the length and breadth of Davos is alive with billboards, pop-up fronts and corporate branding — the Davos man's playground. Spotted: Some new additions this year. The United Arab Emirates are running a new line in hot chocolate at what looks like the most expensive pavilion on the Promenade; India has a sustainability lounge; and yes, the Saudi government is back in the form of a gaudy MBS-branded lounge. Most Davos-esque slogans: "Impossible is Possible" (Emirates) … "From Isolated to Integrated" (Deloitte) … "Supercharging Progress" (HCLTech). WHERE ARE ALL THE TORIES? In a flashback to the early noughties, the U.K.'s New Labour crew is out in force. Former U.K. Prime Minister Tony Blair, former Foreign Secretary David Miliband and the current Labour leader Keir Starmer are Davos-bound — perhaps a sign the latter is embracing the "third way" mantra of some of his predecessors? Interestingly, the current British PM and multimillionaire Rishi Sunak — in many ways the consummate Davos man — is skipping the event, perhaps in a sign of how politically toxic Davos can be for politicians trying to appear down with the people. SURVIVAL OF THE RICHEST: Oxfam has put out its annual inequality report this morning, and it raises some uncomfortable truths for the Davos set. The richest 1 percent grabbed nearly two-thirds of all new wealth created since 2020 — a colossal $42 trillion. The group is calling for a tax of up to 5 percent on the world's multi-millionaires and billionaires, which it says could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty. What's the prospect of the Davos set endorsing this? A snowball's chance in hell, we reckon.
| | | | A message from Hedera:   | | | | | | BUSINESS OPENS A MASSIVE TRUST LEAD OVER GOVERNMENT: Ryan sat down with Richard Edelman, CEO of the eponymous communications firm, to unpick the top findings of the Edelman Trust Barometer — a regular feature of the World Economic Forum each year. You can hear more on our EU Confidential Podcast, which is running throughout the week in Davos. Top findings: Business has a staggering 54-point lead over government in how the public rates competence. "Trust has become local," Edelman says. "So there's a big expectation on 'my CEO' and the most credible source of information is 'my company's newsletter.'" Poorest choose between heating their homes and eating: "The lowest 25 percent don't have trust in institutions. There's a real crisis of confidence about the future," Edelman says. "'Heat or eat' is a phrase I've heard. … That's just not OK." Why do people trust business? "Business conducted itself really well during the pandemic, came up with vaccines, kept people working in a safe condition, went on to manage through the George Floyd murder, and over 1,000 companies got out of Russia: That's four times more than got out of South Africa over 20 years during Apartheid," Edelman argues. Why did businesses do it? "Two-thirds of employees say 'I'm only going to work for a company whose values are equivalent to mine.' Similarly, 60-plus percent of consumers are belief-driven buyers and 85 percent say they want CEOs to stand up. So the smart company decides to stand up in areas of competitive advantage and knowledge and ability, like Pfizer on global health or Citi about green financing."
| | | HOUSE OF HEALTH: The Psychedelics House of Davos is all grown up this year — as Energia Foundation's House of Health — at Mühlestrasse 8. Event program. HOUSE OF BALANCE: It's promoting itself as "a refuge and quiet space" with "an array of tailored experiences … focused on helping people reconnect with themselves, their community and the planet." Events are spread across several locations, but most are also at Mühlestrasse 8.
| | | Here's the rundown of the 400 or so official sessions (so you don't accidentally end up at yet another panel on innovation). — 7.15 p.m. local time: Official welcome session with Klaus and Hilde Schwab at the congress center.
| | | | A message from Hedera: Hedera is the sustainable blockchain for the Web3 economy.
Whether you're a startup or enterprise, a creator or consumer, Hedera goes beyond blockchain, so developers can create the next era of fast, fair, and secure distributed applications that bring trust back to the world.
The Hedera leaderless proof-of-stake public network is powered by hashgraph consensus, achieving the highest grade of security possible, with blazing-fast transaction speeds and incredibly low bandwidth consumption. It's ten times faster than other blockchain alternatives, with always predictable gas fees, and proud to be carbon negative.
Governed by the world's leading organizations including Google, IBM, DLA Piper, and ServiceNow, Hedera is smart contracts, done smarter.
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