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By Michele Wucker
This year’s Annual Meeting of the World Economic Forum in Davos differed from many recent years in that it was not overshadowed by the economic crisis. During a week of ideas, spectacle, and conversations high in the Swiss Alps, world leaders discussed many of the major global challenges that do not get as much attention or action as they deserve: climate change, the gender gap, inequality and the youth jobs gap, and select geopolitical issues –particularly in Iran, Syria, Japan, and China.
The attention shifted from imminent economic disaster to other highly obvious, but under-addressed challenges in world policy - the Gray Rhinos. These issues are huge, staring us down, and threatening to charge. And yet, they’re not getting the attention or action required to solve them.
The issues at hand at Davos provided an interesting taxonomy of the species – from recognized challenges whose solutions are clear but acted on only half-heartedly, to challenges whose existence obscures other issues, to recognized issues on which the solutions are unclear, to threats for which all of the answers seem bad, to those for which the previously unimaginable begins to be imagined.
Climate change is a threat we recognize. We know what we have to do to head it off - reduce greenhouse emissions. The few people who still deny this are caught in the throes of a natural human defense mechanism that keeps us going through major shocks. Eventually, this shock needs to subside if we are to survive.
This year at Davos, there were no fewer than 23 climate change related sessions, including one with some of the world’s biggest leaders: Al Gore, Paul Polman, Bill Gates, Ban Ki-Moon, Ngozi Okonjo-Iweala, Jim Yong Kim, Mishal Husain, and Erna Solberg. These sessions are part of an ‘unprecedented effort’ by the United Nations to get a new agreement on climate change. Some action has been taken, but it’s still not nearly enough.
The gender gap in the global economy is a challenge that has been widely recognized as a drag on the world’s economic potential – and an untapped opportunity to boost growth. It’s also a meta threat, the lack of diversity on corporate boards and in key decision making bodies makes it less likely that other leaders will see past Groupthink and recognize threats - or opportunities.
Through the World Economic Forum I’ve met a number of remarkable business leaders, men and women alike, who are deeply committed to closing the gender gap. They see the business case for more diverse leadership. They understand it as a basic social issue, many of them speaking of their daughters. The Global Gender Parity Group has compiled a database of best practices, and has set a goal to reduce the gender gap in Mexico, Japan, and Turkey by 10% by next year.
Nevertheless, resistance remains strong in too many places. Check out the question at 42:44 in this panel on gender-driven growth, for example. This man’s comments were not consistent with my experiences at Davos, but they are a reminder that progress is painfully slow on too many measures, at Davos and elsewhere. The World Economic Forum itself has tried offering an extra attendance badge to companies bringing four delegates in an effort to get the number of women up to 20%. Despite these efforts, and despite some of the best-attended sessions in 2013 to address the need to close the gender gap, the percentage of women delegates fell from 17% last year to 15% this year (16% by some accounts). The number of women on panels remains woefully inadequate, though I’m told the percentage actually went up this year.
Though Davos takes heat every year for the underrepresentation of women, it’s far from alone. In the United States, for example, Catalyst reported the eighth year in a row of negligible growth in the percentage of women on corporate boards.
Even among those who agree there is a problem, there’s not always agreement on what to do. I was struck, however, by the number of leaders at Davos who said their gut reaction was to oppose quotas. When they looked at what worked and what didn’t, however, they soon changed their minds.
And then there’s inequality. How appropriate that one of the most talked-about celebrity appearances this year was Korean pop star Psy, whose hit Gangnam Style parodied the wealthy residents of that neighborhood of Seoul.
A striking statistic came from an Oxfam report released as delegates were arriving in Davos: the 85 richest people in the world own $1.7 trillion in assets –the same amount as the 3.5 billion poorest. You don’t have to be a rocket scientist to see that this is not sustainable.
To be sure, it’s hard to escape the irony of discussing inequality in an environment in which attendees downed reportedly roughly 1,600 bottles of bubbly and 3,000 bottles of red and white wine, at the Belvedere Hotel alone.
Not surprisingly, Bono faced a maelstrom on Twitter of people pointing out that it was hard to take seriously his talk about inequality considering U2’s behavior. The band moved its music publishing business to the Netherlands to avoid paying Irish taxes after Ireland capped tax-free income in 2006.
People who have gotten the short end of the stick know that inequality is a problem citizens and smart leaders ( across all sectors) know we have to tackle. Even leaving issues of justice aside, inequality makes it harder for businesses to find qualified employees and customers to buy their products. Inequality creates social tension that leads to protests and upheaval.
The question of what to do and who must do it is a Gordian knot. There’s no silver bullet answer. In the United States, the discussion has focused on minimum wage. So many other issues feed into inequality: education, tax structures, health, legal barriers, migration, diversity, access to jobs and opportunity. Turning recognition of a problem into concrete goals and steps to get there is challenging. This is no excuse not to address the problem, but there needs to be specific strategies to change it.
No Good Answer
Even worse than a problem with complicated and overlapping answers is one in which the answers range from bad to worse. The geopolitical issues provided the thorniest problem: situations for which even the best available options are problematic at best. Addressing the situations in Iran and Syria are two such examples.
Then there are the threats that have been smoldering, and all of a sudden flare up into focus. One theme that surprised many observers was the rising temperature of the dispute between Japan and China over a certain set of islands whose name is a shibboleth (call them by the wrong name and risk the wrath of one country or the other). A leading Chinese analyst called Japanese Prime Minister Shinzo Abe a “troublemaker” at a session on global security risks in which World Policy Institute Senior Fellow Ian Bremmer, founder of Eurasia Group, participated. The language from Wu Xinbo, Executive Dean of the Institute of International Studies at Fudan University, was startling. Wu later agreed, however, that war was unlikely. And when Nouriel Roubini compared the conflict to 1914, echoing comments by Abe himself, it put Black Swan stalkers on alert.
Getting Out of the Way
These different types of threats all require distinct responses, but they all share what’s common to a Gray Rhino threat: they are huge and hard to ignore. The troubling thing is, we’re not making the progress we could be in responding to them. With all due respect to a certain bird, there are Black Rhinos and White Rhinos –but no matter what you call them, they’re all gray. You can’t say they don’t exist because you think they’re the wrong color. You just need to recognize that they are there and do something to get out of the way.
Michele Wucker is President of the World Policy Institute. Her new book, The Gray Rhino: Why We Keep Missing the Most Obvious Threats –and How We Can Get Out of the Way, will be published by St Martin’s Press in 2015.
[Photo courtesy of World Economic Forum]