WEF Sets Roadmap for 2012

The World Economic Forum’s (“WEF”) releases, each year, an outlook for the upcoming year. Currently, WEF’s “Outlook on the Global Agenda 2012” is evoking condition from policymakers. This outlook is a important set of analyses and policy recommendations meant for those who accept the necessity for change. WEF presented its findings at its Annual Summit held in the United Arab Emirates (“UAE”) in October 2011. The agenda will be discussed at the annual meeting in Davos, Switzerland, in January 2012.

The World Economic Forum is a stand-alone global entity, which seeks to improve conditions by taking all stakeholders in both local and global matters. It believes that a global agenda is needed, for 2012, to take on problems on multiple areas such as regimen changes in the Middle East or the economic crisis in Europe. Moreover fresh models are needed to determine the well-being of a growing population inhabiting the planet.

The schedule largely revolves around issues such as, the political paralysis in Europe and the U.S., the problems in the Euro zone, global power shifts, challenges arising from demographics, scarcity of resources and environment. WEF expects instability, in 2012, on account of factors such as lack of trust in existing institutions and the absence of a solid global financial regulatory system.

Firstly, WEF duly noted that as the current economic crisis plays out in Europe, there is considerable risk of the problems spiraling out of control on account of the global linkages among economies. Unless macro economic problems are quickly sorted out, the global economy can easily slip into a double dip recession.

The WEF makes several suggestions for tackling the crisis, including dealing with the Euro zone problem by addressing the solvency issue of Italy, Greece and others; as well as offering a long-term game plan for institutional reform. The effort to stabilize EU nations needs recapitalization of banks exposed to sovereign debt and ensuring liquidity.

Further, unpredictable flows of hot money flowing from one region to another expose nations to systemic risk. The Chiang Mai Initiative, the Latin American reserve and the European Financial Stability Facility (“EFSF”) are steps taken to determine regional economic stability.

The WEF believes that we are witness to a shift of influence from West to East and North to South. It also asks a transfer of power from super powers to a coalition of nations, based on geography, shared concerns and economics.

The U.S. and Europe will have to battle to get out of their economic morass. However, despite their current economic plight, they will maintain leadership in technology development and the financial services.

Furthermore, the influence of an emerging social media will continue to dominate headlines. Examples include WikiLeaks and the Occupy Wall Street movements, who would wield influence on government attitudes towards big business and institutional hegemony.

In conclusion, WEF expects the chase for natural resources will lead to a shift in power from more powerful to weaker nations, who may be blessed with oil, copper and other resources. Companies domiciled in the BRIC nations and South Africa will increasingly jostle for control of resources. The WEF suggests the establishment of a multi-polar monetary system consisting of traditional global financial institutions, such as the IMF, working in tandem with regional partners to help tackle crises, such as in Europe.

Thirdly, there is an urgent requirement for fresh growth models, which will provide for inclusive growth. Welfare economics, as espoused by Dr. Amartya Sen of Harvard University, seeks to measure economic policies in terms of their impact on the entire community. The European social model describes a commonly held vision for a society that combines economic growth with full employment and social inclusion.

Despite massive unemployment in countries, as varied as Pakistan and Ireland, employers are often unable to fill vacancies due to a skills deficit. Among other suggestions, WEF encourages life-long learning, courses in energetic development and public-private partnerships to generate employment.

Fourthly, while commenting on the environment, the WEF believes that forward-looking institutions must manage sustainable economic growth in light of a shortage of natural resources, particularly water, as well as climate change. It believes that total resource management is imperative, which will take into account factors such as, energy, water, food, demographics and economic growth.

More information about Dow can be found at WEF Sets Roadmap for 2012.