The glittering peaks of Davos once again played host to the global elite last week, as titans of industry rubbed shoulders with world leaders at the World Economic Forum. But amid the cocktail parties and panel discussions, there was an unmistakable chill in the Swiss mountain air.
The summit was dominated by one seismic event – the second coming of Donald Trump. With his return to the White House, the fragile threads of international cooperation that bind our world together are starting to fray. As EU Commission President Ursula von der Leyen put it, “we have entered a new era of harsh geogeopolitical competition”.
A Zero-Sum World
In this Trumpian reality, global leaders are rapidly adapting to a transactional, zero-sum worldview – one where the relentless march of globalisation has stuttered to a halt. Russia, once welcomed into the G8 fold, is now a pariah state waging war in Europe. The US and China are locked in an escalating battle for geopolitical dominance.
Amid this great power competition, the champions of multilateralism – development banks, aid agencies, international financial institutions – are starting to look like relics from a bygone age. At Davos, they toiled to grab a moment with passing dignitaries, but their voices struggled to be heard above the clamour.
Collaboration in Crisis
Yet as OECD chief Mathias Cormann warned, global cooperation has never been more necessary. From the climate emergency to widening inequalities, the challenges we face demand a coordinated international response. But with Trump back in the Oval Office, progress on these critical fronts is under threat.
Trump’s protectionist trade policies risk driving up US inflation and interest rates, with devastating knock-on effects for developing nations. Many are already buckling under the weight of unsustainable dollar-denominated debt – 58 countries now spend more on loan repayments than healthcare or education.
We estimate about 58 countries are still in a situation where the levels of debt and the level of debt servicing are so significant that they are taking resources away from some of the fundamental sectors, such as education and health. For some countries it is becoming an existential problem.
– Achim Steiner, UN Development Programme
UK’s Crucial Role
With Trump turning inwards, it falls to other nations to lead the charge on debt relief. The UK has a critical role to play – 90% of developing country loans are governed by British law. But despite pleas from charities, the new Labour government has so far failed to step up to the plate.
Labour strategists argue overseas aid is a hard sell with voters laser-focused on challenges at home. But as technological change accelerates, countries trapped in debt are at risk of falling ever further behind. Assembling a global coalition to tackle this issue will be an uphill battle – but it is one we cannot afford to shy away from.
The Road Ahead
As the Davos elite packed up their skis and headed for home, the path forward looked more uncertain than ever. Trump’s “America First” agenda threatens to unravel decades of hard-won progress, setting back efforts to tackle poverty, inequality and climate change.
But while international collaboration may be deeply unfashionable, it remains as vital as ever. In our interconnected world, no country is an island – not even Trump’s America. Rising to the challenges ahead will require bold global leadership and a renewed commitment to the ideals of multilateralism. The alternative is a fragmented future none of us can afford.
