Jan 20, 2020

Axios World

By Dave Lawler
Dave Lawler

Greetings from Davos, Switzerland. I'll be here all week bringing you interviews and insights from the Alps. Today's Smart Brevity™ count: 1,376 words, or about a 5 minute read.

  • Please tell your friends and colleagues to sign up, and pass along your tips on news, fondue and everything in between: lawler@axios.com

Situational awareness: "French President Emmanuel Macron and Donald Trump of the U.S. agreed to a truce in their dispute over digital taxes that will mean neither side imposes punitive tariffs this year, a French diplomat said" (Bloomberg).

1 big thing: What's worrying the Davos set

A parade of billionaires, CEOs, world leaders and hangers-on has now arrived in Davos, Switzerland, bearing skis, packed schedules and deep concerns about the global economy.

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Reproduced from PwC’s Annual Global CEO Survey; Chart: Axios Visuals
  • PwC's annual Global CEO survey — 1,581 CEOs across 83 territories — was conducted in the fall and released tonight as the World Economic Forum opened. It makes for some pretty alarming reading.

The big picture: 53% of CEOs expect global economic growth to decline in 2020, up from 29% in 2019 and just 5% in 2018. Their views of their own companies’ prospects were the bleakest since 2009.

  • That sentiment was spread across all regions, though CEOs in the Asia-Pacific are most optimistic and North American CEOs least so.

What they’re worried about:

  • CEOs in the Asia-Pacific view trade conflicts as the top threat to their organizations’ bottom lines, while geopolitical uncertainty is the top concern in the Middle East, populism ranks first in Latin America, policy uncertainty in Africa and cyber threats in North America.
  • Over-regulation is the biggest concern among CEOs in Europe, and also finishes top in the global average.

What they’re doing about it:

  • Trade conflicts didn’t even register as a top 10 concern until last year, but are now top-of-mind, particularly in China.
  • Chinese CEOs who are “extremely concerned” about trade conflicts are far more likely to say they’re shifting production to alternative territories than a year ago (44% then, 63% now).
  • Among "extremely concerned" U.S. CEOs, 50% are adjusting supply chains but just 23% are moving production, while 34% aren't making any changes at all (compared to 5% in China).
  • Worth noting: Chinese CEOs now list Australia, not the U.S., as the most important country for their growth prospects.

What they foresee:

  • CEOs around the world expect massive changes for big tech. By 2022, most anticipate more regulations (71%), including on social media, the break-up of dominant firms (63%), and compensation of individual users for their data (51%).
  • While companies are eager to stress their climate consciousness while in Davos, just 24% of CEOs are “extremely concerned” about climate change.
  • In China, though, the percentage of CEOs who see new opportunities for their companies through climate change initiatives has jumped from 2% in 2010 to 47% now — far higher than in Germany (20%) or the U.S. (15%).

Who to expect: 15,000 total attendees (3,000 of them with official invitations) including 100 billionaires and 53 heads of state or government, per Politico.

  • Climate will dominate the official agenda. I eavesdropped on a few attendees tonight discussing whom they most wanted to see, and Greta Thunberg was the consensus pick.
  • Soon after, placard-waving climate protesters chanted their way past the restaurant where I was eating.
  • Several panels will also be dedicated to inequality and human rights.

Between the lines: The irony of the uber-rich and super-powerful arriving by private jet to discuss these topics in a proudly exclusive setting (there are at least 10 tiers of access badge) is lost on no one.

  • But the sheer concentration of power and wealth in one Alpine town makes Davos, now in its 50th year, a hard-to-match destination for deal-making and consensus-building.
2. Donald heads to Davos

Trump at Davos in 2018. Photo: Fabrice Coffrini/AFP via Getty Images

Davos opened this evening on the third anniversary of President Trump's inauguration, and on the eve of impeachment proceedings that will likely be watched more closely than his speech on Tuesday morning.

The big picture: Trump’s America First populism and climate skepticism are anathema to the Davos set, but his tax cuts and economic record are not.

  • Two candidates who scare many CEOs more than Trump — Bernie Sanders and Elizabeth Warren — are among the top contenders in the Iowa caucuses, which begin two weeks from today.
  • Kellyanne Conway told reporters ahead of Trump’s trip that he planned to “take on the perils of socialism right there in Davos,” while heralding his NAFTA replacement deal and partial trade agreement with China.

Trump's Davos dance card:

  • European Commission President Ursula von der Leyen
  • Pakistani Prime Minister Imran Khan
  • Iraqi President Barham Salih
  • Kurdistan Regional Government President Nechirvan Barzani
  • Swiss President Simonetta Sommaruga
  • World Economic Forum Founder Klaus Schwab

Also heading to Davos: Venezuelan opposition leader Juan Guaidó, who is defying a travel ban and may struggle to re-enter Venezuela.

3. Data du jour: Parental leave paradox
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Reproduced from World Policy Center; Map: Axios Visuals

Parental leave is steadily becoming ubiquitous around the world, but workplace cultures in many countries continue to prevent employees — especially fathers — from taking time off, Axios' Erica Pandey reports.

  • Shinjiro Koizumi, a popular Japanese politician, made a splash last week when he decided to take paternity leave. New fathers get up to a year off in Japan, but only about 6% of eligible men working at private firms took it in 2018, per the New York Times.

Go deeper

4. Middle East: Should we stay or should we go?

A U.S. military convoy near the Syria-Turkey border. Photo: Delil Souleiman/AFP via Getty Images

Martin Indyk, a former diplomat with decades of experience in the Middle East, set off a debate among foreign policy analysts over the weekend with a piece in the WSJ headlined, "The Middle East Isn’t Worth It Anymore."

His main point: "Few vital interests of the U.S. continue to be at stake in the Middle East. The challenge now, both politically and diplomatically, is to draw the necessary conclusions from that stark fact."

  • Indyk argues that the U.S. no longer needs Middle Eastern oil, Israel is now secure, Arab-Israeli peace "is now clearly hopeless" and ISIS can be contained with a minimal troop presence.
  • That means the only urgent U.S. interest is ensuring Iran does not obtain a nuclear weapon, he argues.

His bottom line: "It is time to eschew never-ending wars and grandiose objectives — like pushing Iran out of Syria, overthrowing Iran’s ayatollahs or resolving the Israeli-Palestinian conflict — in favor of more limited goals that can be achieved with more modest means."

Go deeper: Trump to decide soon on peace plan release date.

5. What are they saying?

Gen. Bipin Rawat. Photo: Pankaj Nangia/India Today Group/Getty

“The Brazilian art of the next decade will be heroic and will be national... as it will be deeply committed to the urgent aspirations of our people, or it will be nothing.”
— Brazilian Culture Minister Roberto Alvim in remarks that echoed Nazi propagandist Joseph Goebbels. He was fired.
“Zelensky has a very primitive understanding of the economy."
— Ukrainian Prime Minister Oleksiy Honcharuk, in leaked audio. He offered his resignation but President Volodymyr Zelensky didn't accept it.
"Girls and boys as young as 10 and 12 are now being radicalized. These people can still be isolated from radicalization in a gradual way, but there are people who have completely been radicalized. These people need to be taken out separately, possibly taken into some de-radicalization camps. We’ve got de-radicalization camps going on in our country.”
— India's top military commander, Gen. Bipin Rawat, on Kashmiris. His remarks were vague, but called to mind China's mass detentions in Xinjiang.
6. Africa: A long way to go for a beer

Beer makes it through a flood in Ngungu, Congo. Photo: Uriel Sinai/Getty Images

Congo is one of the hardest countries on earth in which to travel, but big beer brands manage to get their brews to far-flung villages. The Economist boarded a river barge to find out how:

  • "China has three metres of road per citizen; Congo has three centimetres. Only four out of 26 provincial capitals have roads that reach Kinshasa. Some villages are so isolated that they still use a currency that was abolished in 1997."
  • "It is no surprise that, in the east, the government has little control and the people in power are those with guns. Millions have fled the violence there over the past 20 years."
  • "For most people the only way to travel long distances is to go on boats that ply the Congo river and its tributaries. All the beers that reach the country’s dense, forested interior will have been shipped up the river."
  • "Soon after the boat starts off, the smell of marijuana wafts down from the upper deck, nicknamed 'The United States,' because 'it’s as high as you can go in life,' a passenger explains."
  • "... It is less than 350km — about as far as New York is from Washington. ... Each round trip takes Christine just over a week. She dreads it, but knows that her bar will not survive without beer."

Climb aboard.

7. Stories we're watching

Protesters walk through clouds of tear gas in Beirut, Lebanon. Photo: Sam Tarling/Getty Images

  1. China's confirmed coronavirus cases triple to 218
  2. Peace Corps to withdraw volunteers from China
  3. Malaysia sends rich countries back 150 containers of waste
  4. China and Japan build high-tech test cities
  5. Houthi attack on Yemeni camp kills 79
  6. In photos: Australia endures insane weather
  7. Tokyo 2020 Olympics tickets are selling like crazy

Quoted:

"I do think that it’s important to do right for your country.”
— Isabel Dos Santos last week claiming to have "sacrificed" for Angola and insisting her wealth had nothing to do with her father's 38 years as president
"Leaked documents reveal how Africa's richest woman made her fortune through exploiting her own country, and corruption."
— The BBC on a new ICIJ investigation of Dos Santos
Dave Lawler