Good morning from cloudy, rainy Davos, where the World Economic Forum is slowly starting to wind down.
The only G-20 leader of the week to appear here will be Germany’s Olaf Scholz, Thursday morning local time.
FLEXING QUAD MUSCLES
In the past, the simple fact of meeting as the Quad (U.S., India, Japan and Australia) counted as progress in standing up to China — and was enough to annoy Beijing. This week’s meeting in Tokyo, which featured Australia’s Anthony Albanese in his global debut, produced sharper language than usual: “No unilateral change of the status quo by force is tolerated in any region, especially in the Indo-Pacific region,” the leaders said. But the group didn’t agree to do anything to prevent a China-Solomon Islands-style security pact being developed elsewhere in the region.
The Quad will next meet in Australia in 2023.
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Trending — athleisure on the Promenade: Top execs in skimpy lycra is a new Davos look, with the C-suite running class skipping their usual 6:30 a.m. breakfast meetings and jogging all over town in bright green, pink and blue outfits.
Could we get both a winter and summer Davos next year? WEF insiders say that’s unlikely: They’re getting feedback that it’s a roughly 50/50 split among their strategic partners about which is better. It’s more like 80/20 in favor of summer Davos among Global Insider’s network. Given that holding two major events in Davos would be a money-spinner for WEF, the idea should get consideration.
Summer Davos downsides:
— The lack of windows in the main Congress Center. What works as a cozy cocoon in zero-degree weather feels like a prison in late May.
— The golf carts ferrying delegates from the Congress Center to the media village made quite a splash in Tuesday’s storm. Unless you’re wearing waterproof clothes, skip them during rain!
Gwen Stefani will no longer perform at the Cloudflare Piano Bar party tonight. The company attributed the move to a “personal emergency.” So perhaps it was just coincidence that Ukraine’s Digital Transformation Minister Mykhailo Fedorov called out Cloudflare for continuing to operate in Russia in a POLITICO interview from Davos. Stefani has been known to enjoy oligarch hospitality.
While the Congress Center Central Lounge is as busy as ever, the Belvedere Hotel is a shadow of its former self. Gone are the security lines and sardine tin-like bar spaces — the temporary lobby installed for WEF week has been so deserted that visitors could have installed a bowling alley in the empty space.
UKRAINE DOES DAVOS
European Commission President Ursula Von der Leyenmade news in an interview with POLITICO’s Suzanne Lynch, telling the world not to expect more Russia sanctions at next week’s EU summit. “I do not expect it, I do not want to raise false expectations,” she said. Hungary continues to block the package.
Reminder: The other 26 EU countries don’t need Hungary, they could just impose the sanctions bilaterally if they want. They simply want to avoid looking split. Which is, er, exactly what they look like now.
CRYPTO PROVOKES EXTREME REACTIONS
Crypto is making quite a splash this year in Davos, earning a reputation as the World Economic Forum’s wild child. “GOODBYE GOLDMAN” screams a sign from LCX along the Promenade. At least 10 other shop-fronts have been taken over by blockchain and crypto businesses, and in one case a “securrency” enterprise, whatever that means. One central meeting point — Hub Culture Pavilion — is crypto-anchored, and a local church has been turned into the Filecoin Foundation-sponsored CNBC venue. The hard partying crypto crowd confuses some Davos-goers and annoys others: “cryptidiots” is how one delegate dismissed them.
There are two camps here:Frank McCourt, the billionaire former owner of the Los Angeles Dodgers and now promoter of a new core internet protocol, the Decentralized Social Networking Protocol, makes a distinction between what he calls the underlying tech — like DSMB or the cross-blockchain transfers enabled by companies like Polkadot (which he is partnering with) and the Coin companies, which he thinks will amount to little more than being the pets.com of 2022: dead or bankrupt in a year.
Frances Suarez, the crypto-loving mayor of Miami and president of the U.S. Conference of Mayors, is in town to tout his city as a tech hub (the new, new Silicon Valley). Suarez sees “more democratizing prosperity” in the blockchain future. “We want to be at the forefront of this disruptive world,” he said, because it “will shift the global balance of power.”
Not good timing: A whopping $500 billion has been wiped off the crypto market in the last month. CasperLabs COO Cliff Sarkin told CNBC: “We committed to coming here [Davos] a long time ago” and insisted “we are going to withstand the bear market and there will be a bull run again.” On Tuesday, the European Central Bank warned that crypto assets are starting to pose risks to financial stability.
BELGIUM’S TECH PITCH
It’s not often that a small country manages to capture the town’s attention. Belgium did it Tuesday by gathering computer chip royalty at the Grischa – DAS Hotel, and plying them with great beer and chocolate. Pat Gelsinger, CEO of Intel, told the room: “We need geographically balanced and resilient supply chains.” He went on to praise the EU for moving quickly on legislation to deliver better chips supply to Europe. “The EU CHIPs Act started a year behind the U.S. effort and has progressed further,” he said. Belgian Prime Minister Alexander De Croo jokingly offered to lobby the U.S. Congress to correct the imbalance.
WHY IS WEF MISSING FROM THE FOOD SECURITY CRISIS?
The Russian invasion of Ukraine is exacerbating a global food crisis. According to the U.N., 1.7 billion people are at risk of poverty and hunger; the Eurasia Group puts the figure at 1.9 billion. But according to a cross-sector group of experts your host lunched with at Goals House on Tuesday, the number is probably even higher.
The EU’s von der Leyen accused Russia of “blackmail” and of using “hunger and grain to wield power, while Spanish Prime Minister Pedro Sánchez warned of political danger ahead, telling the WEF Congress Hall that food insecurity is “a catalyst for social instability and often armed conflicts.”
So where is the WEF-convened action plan? Sure, the three U.N. food agencies could have developed a plan but in their absence, WEF is well-positioned to step in. After all, it was here in Davos that GAVI, The Vaccine Alliance was born 20 years ago. So where is the GAVI of food security?
The group, which included a Colombian Cabinet minister, senior Indian official, Bayer executives, leaders from the biotech industry, Stanford academics and the World Resources Institute, said that inclusion and collaboration are the most critical factors to both stopping the looming famine and developing more resilient food systems for a world that will soon total 10 billion people.
Aside from innovations, which range from microbes that will eventually replace fertilizers, to drought-resistant crops, and carbon-sequestering soil management techniques — the group pinpointed reducing food waste as the low-tech, quick option for averting disaster this year.
Global Insider checked in with Lisa Moon, president and CEO of the Global FoodBanking Network, and she agreed: Less than 1 percent of food waste is currently recovered and repurposed by organizations like her members. She came to Davos to lift that rate. Who wants to help her?
Sometimes it’s the simple things: Global Insider spoke to James Rogers, CEO of Apeel, a California-based company that extends the life of fruits and vegetables, usually the most wasted foods. “We create a plant-based coating applied to the surface of fruits and vegetables that allows the fruit to last two or three times longer before it’s thrown away,” he said. Rogers’s big problem this week: even though the EU has banned single-use plastic (and there’s nothing more wasteful than a plastic-wrapped individual piece of fruit) it hasn’t explicitly authorized innovations like his fruit coating, scaring off European supermarkets from using his product.
Calling the EU’s green supremo! An angry European Commission Vice President Frans Timmermans, who leads the bloc’s green efforts, sounded off on a private gathering of European leaders for complacency in tackling big challenges and failing to understand the suffering of ordinary people. He could perhaps consider applying some of that energy to fixing food supply issues like those posed by Apeel.
THE POLITICS OF WEF: The absence of Russia is one of the stand-out trends of this year’s World Economic Forum — Russians have been banned as a political stance, and also because WEF was afraid of being hauled before courts for breaking U.S., EU and Swiss sanctions.
But with so many openly siding with Ukraine, some other delegates are quietly wondering if WEF has opened a can of worms.
WHERE DO AUTOCRAT LINES GET DRAWN? If Russia is verboten, what qualifies others to get the boot. Is it starting a war? Is it specifically invading a neighbor? Is it murdering journalists?
One reason for the Russian ban is strategic. As POLITICO reported back in March, WEF is forced to comply with U.S., EU and Swiss sanctions against Russia.
Nonetheless, there’s a healthy smattering of autocratic leaders in Davos this week.
NOT CANCELED: Cambodia’s Hun Sen, one of the world’s longest-ruling autocrats, was on a panel Tuesday. If you want to know why there’s no effective pressure in Myanmar’s military junta, you can start by examining Hun Sen’s role. The former Khmer Rouge militant is now a client of Beijing.
He was spotted in close proximity to Zimbabwe’s President Emmerson Mnangagwa — aka the Crocodile. The political heir of Robert Mugabe, he was on stage for a panel discussion on new investment.
The Mohammed bin Salman Foundation has a sleek venue on the Promenade — and a handy tactic for luring in visitors: the promise of premium ice cream.
Don’t bite: Cardamom and saffron ice cream may sound enticing, but the details don’t gel. The flavor is made by pumping saffron water onto regular old soft serve. And since murdered journalist Jamal Khashoggi won’t be able to join you for dessert, our verdict is to skip.
TALK OF THE TOWN
SOROS NAMES AND BLAMES MERKEL: “Europe’s dependence on Russian fossil fuels remains excessive, due largely to the mercantilist policies pursued by former Chancellor Angela Merkel,” said philanthropist George Soros at his annual Davos dinner, impugning the “special deals with Russia” for gas. Soros repeatedly praised Italian Prime Minister Mario Draghi for backing tougher measures against Moscow.
Side note: Partygoers at a “Space Exploration Cocktail” bailed up Global Insider to urge your host to take book leave to write a book they tentatively titled “How Angela Merkel screwed the West.”
- Former U.S. House Speaker Paul Ryan lined up with the plebs to get into Barry’s Piano Bar for Anthony Scaramucci’s Skybridge wine tasting party. “We’re not line skippers,” he proclaimed, before telling Global Insider about his disappointment at Australia’s weekend election result. Ryan was joined in line by Petra De Sutter, Belgium’s deputy prime minister, and the most senior trans politician globally. On departure, Ryan did insist on staying under the house umbrella until his car door was opened.
- “Davos is a verb” — the worst banner hanging across the Promenade this year.
OVERHEARD AT DAVOS
- “We only put people on stage who are great.” — Belgian Prime Minister Alexander de Croo speaking from the stage at his own “Chips for health” event (Belgium is home to the world’s leading semiconductor research center).
- “It’s only a little bit of rain!” Hans Vestberg, the Swedish CEO of telecoms giant Verizon, as he ran away from Congress Center, without an umbrella, in the pouring rain around 5 p.m. Tuesday.
- “I really liked her — she was so un-French.” — a guest at Bank of America’s drinks reception.
- Person 1: “I have to go meet someone at Palantir now.” Person 2: “Well, remember to turn off your phone.”
ALL THE LONELY PEOPLE: Nothing says Davos more than exorbitant hotel prices ($1,000 a night for a twin bunk bed, anyone?) and rip-off house rentals ($30,000 for a few days in a three-bed apartment). But in another sign that numbers are down this year, late arrivals can pick up some relative bargains. One delegate nabbed a last-minute room in a central Davos hotel for $480 a night instead of the expected $1,000 … leaving them with about enough extra cash to buy half a bottle of champagne at Hotel Europe.
Thanks to editor John Yearwood, Suzanne Lynch, Cristina Gonzalez, Zoya Sheftalovich and producer Hannah Farrow.
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