DAVOS, Switzerland- For one week every January, the Promenade in Davos offers a makeshift barometer on how power is shifting in the global economy. As the World Economic Forum descends on the alpine resort, countries and corporations temporarily convert the boutiques and restaurants that line its main street into conference venues and meeting spaces. This year, representatives from the Middle East and India made a splash, reflecting their respective wealth and investment appeal. Like a funhouse mirror, however, the Swiss conflab tends to exaggerate and distort.
Indian delegations were out in force in Davos. No fewer than five states including “Magnetic” Maharashtra and Tamil Nadu were present, taking over spaces on the Promenade, alongside big companies such as Infosys and Wipro It was a demonstration of India’s eagerness to lure inward investment from US companies like Apple and Tesla who are seeking to reduce their dependence on China by establishing new manufacturing hubs and other facilities.
Information Technology Minister Ashwini Vaishnaw told Reuters he expects annual foreign direct investment in the country to cross $100 billion “in the next few years”, well ahead of the $71 billion India logged in 2022-23. That will help sustain a growth spurt which S&P Global forecasts will make India the world’s third-largest economy by 2030. Those expectations may take a knock if business-friendly Prime Minister Narendra Modi fails to secure a third consecutive term later this year, however.
Gulf states struck a similarly confident tone, despite the uncertainty in the region triggered by conflict between Israel and Gaza. Saudi Arabia is not only looking to invest its oil wealth overseas, but is also seeking to attract multinational companies, financial institutions, and tourists. In Davos, the ancient Saudi desert oasis of Al Ula and the futuristic new real estate development of Neom both jostled for attention from delegates trudging between meetings along the icy street. On the strip previously occupied by cryptocurrency startups and purveyors of medical psychedelics, the United Arab Emirates now offered passers-by cups of steaming hot chocolate.
By contrast, China made a subdued impression. Premier Li Qiang travelled to Davos to declare that the country was open for business, and an opportunity not a risk. But his message did little to shift the caution with which most large multinational companies and financial institutions are approaching the world’s second-largest economy.
Chinese-founded companies tried to steer around difficult questions regarding the deteriorating Sino-American relationship, preferring to stress their global credentials. With fewer global companies clamoring to engage with the People’s Republic, one financier noted there was more time to ski than in previous years. Days before the start of the conference, US asset management giant BlackRock captured the shift by reorganizing its international operations to make both the Middle East and India separate sub-regions alongside Europe and Asia-Pacific.
The other hard-to-avoid topic was artificial intelligence. The chairs of large global companies gathered behind closed doors to debate the opportunities and risks posed by self-teaching computers, though some participants admitted to emerging more bewildered than enlightened. Several US tech companies, however, pointed to the already tangible benefits of deploying large-language models to help write software code, for example, and handle help desk queries.
OpenAI boss Sam Altman, who arrived in Switzerland fresh from surviving a boardroom coup at the ChatGPT owner, was much in demand. So was Microsoft boss Satya Nadella, whose $3 trillion software group is largely bankrolling the company. The ability of tech giants to spend vast sums training AI models and then roll out services to hundreds of millions of customers means these giants will probably capture a large chunk of any financial benefits from the new technology. “The distribution power of the incumbents is just too great,” said one venture capitalist.
