By Richard Quest
In a more innocent age, Davos was a high-minded gathering for intellectuals trying to solve the world’s problems. But the World Economic Forum has gradually become overwhelmed by a circus of rock stars, Hollywood A-listers, big-ticket world leaders and their entourages. The issues may still be debated, but they can feel secondary to the spectacle. It’s easy to forget about the state of the world when you’ve just spotted Charlize Theron.
Last year’s big-ticket rock star was of course Donald Trump. The US president certainly knows how to make an entrance. His arrival at Davos in 2018 – amid gasps, gawps and selfies from its elite delegates – was among the most memorable of his political career.
However, he also knows how to make an exit, sometimes before he has even arrived. Unlike his ‘will he, won’t he?’ routine before the Singapore Summit with Kim Jong Un, he not only stuck with his decision to pull out of Davos, but doubled down on it, withdrawing his entire delegation. Theresa May joined him this week, after a harrowing week in Parliament. Poor old WEF founder Klaus Schwab may be the only person having a worse week than the UK Prime Minster. Suddenly, the rock stars are no longer on his bill.
Last year’s Davos was an event crying out for attention, after a 2017 Forum that was poorly attended and short on headlines. Trump delivered that in spades, making the WEF feel fresh and relevant.
The shoe may not quite be on the other foot this year, but the WEF could have been the place to reinvigorate Trump’s presidency. Throughout his administration, Trump has been able to point to a US economy that remains a matchless global powerhouse. From a surging stock market to robust job growth, he has claimed credit, sometimes justifiably, for delivering the economic success he promised voters.
Right now though, that powerhouse looks like it might actually be on fire. With a deficit on track to pass $1 trillion, alongside a stock market that has approached record-breaking levels of volatility in recent weeks, the last thing the United States needed was a record-breaking government shutdown. But that is what they have, delivering more uncertainty and deepening an already cavernous political rift between the branches of government.
With Democrats controlling Congress, Trump is far weaker at home than he was this time last year. After Fisk recently warned of a downgrade to the United States’ AAA status, and amid sustained sell-offs of U.S. debt from its chief buyer, China, the outlook is rather cloudy, even if the fundamentals of the U.S. economy remain strong.
In 2018 Davos-watchers wondered if Trump would walk into the Forum and lob a metaphorical hand grenade into proceedings. But rather than rub the globalists’ noses into his America First agenda, his appearance felt more like a charm offensive, short on substance perhaps, but at least mildly reassuring. Now things have changed. With diminished domestic leverage, a wobbling stock market and unrest among sections of his blue-collar base, not to mention startling fresh revelations from Michael Cohen, there may be a need to refocus on old alliances and safe havens.
Davos, with its unique combination of heavyweight political, business and intellectual clout, might have been the perfect place for Trump to regain the initiative lost in his administration’s parochial focus. As the WEF gets under way on Tuesday, he may wish he was here. Frankly, Theresa May will probably wish she was anywhere rather than Westminster.
There is a positive to all of this though. The names may not be as big, but there are still plenty of heavyweights attending this year’s Forum. These are serious people, keen to get down to the nitty gritty of debate and solutions, and less concerned with the political photo opportunity or the landmark speech. So rest easy, Klaus; perhaps Davos will benefit from the absence of the circus.