There’s a new global divide in the world, says the president and CEO of RBC.
“After a half-century of globalization, of rules and ambitions that carried the world through the end of the Cold War, the rise of the Internet and the explosion of mobile computing, the world is facing new challenges, and new questions,” says Dave McKay on his return from the 50th World Economic Forum (WEF) in Davos, Switzerland earlier in January. “And once again, a new generation is demanding action. Can capitalism again rise to the challenge?”
Countries vie for economic transformation
While this was his fifth trip to the WEF, McKay says it was the first time that he began to see the emergence of geopolitical systems and their economies as platforms competing for the transformation that lies ahead – and the deep implications that this holds.
The 2020s may see a reordering of economies and industries, as societies respond to the threats of climate change and sectors tap the potential of smart technologies, writes McKay. “But who defines that change remains to be seen. More than ever, business will have to step up.”
EC ready to impose trade measures
The WEF saw governments asserting themselves, says McKay, especially European leaders who have been hit by negative interest rates and face the departure of Britain from the European Union. Ursula von der Leyen, the German president of the European Commission, said Europe will not compromise on regulations to compete with Britain and is ready to impose trade measures against any country that doesn’t meet environmental, social and labour standards.
There has been some thought that these rising global differences could see a return to socialism in Europe. That may still happen. But, says McKay, pragmatists like Germany’s Angela Merkel laid out an economic model rooted in sustainability during the WEF, bringing with it a balanced approach to markets. However, he notes that global trade tensions may worsen as Britain tries to cut deals with the U.S. and China in a race to bridge the two platforms.
