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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Davos day 2: Germany’s Scholz not drawn on Ukraine tank decision; Zelenskiy urges faster action – as it happened

Full story: Zelenskiy uses Davos speech to intensify call for more tanks from allies

And finally, here’s our latest news story from Davos:

Volodymyr Zelenskiy has stepped up calls for Ukraine’s army to be supplied with heavy tanks and urged “resolve and speed” of decision-making from western allies in the face of resistance from the German chancellor, Olaf Scholz.

Addressing a packed gathering at the World Economic Forum in Davos via video link on Wednesday, Ukraine’s president warned that “tyranny is outpacing democracy” as Germany hesitates over whether to supply the country with Leopard 2 tanks.

Scholz dashed hopes that he would announce a decision to supply Ukraine with heavy tanks in his keynote speech in Davos earlier in the day, making no new weapon commitments and warning the world needed to avoid escalating the conflict into a war between Russia and Nato.

More here:

We’ll be back in the morning from Davos, when Labour leader Keir Starmer and shadow chancellor Rachel Reeves are here, as is business secretary Grant Shapps and trade secretary Kemi Badenoch…. GW

As flagged earlier….

Shapps: We care about UK steelmaking.

Grant Shapps is also asked whether he is prepared to bail out British Steel.

The business secretary replies that “We do care about our ability to make steel in the UK”.

The reason energy prices are so high, and steel is so expensive, is directly down to Putin, he says.

There is a cost for freedom, and one of those costs is very high energy prices, Shapps concludes.

And on this summer’s Ukraine recovery conference, Shapps insists that it will galvanise the whole world to pledge funds for the reconstruction – even if the war isn’t over by the middle of June.

That’s the end of the press conference.

Shapps: Those responsible for Ukraine's damage should pay reconstruction cost

Q: US and Canadian governments have brought forward legislation to use frozen Russian assets to fund the Ukraine reconstruction – will the UK do the same?

Business secretary Grant Shapps says this is being kept under very close review. The UK moved quickly when the war began, he replies, including preventing Russian private jets from leaving.

We’ll carry on working internationally to ensure we take a relatively common approach, Shapps says. The UK has been at the leading edge of the Ukraine issue, but must work within the law.

Those who have cause this enormous cost, which is the Russian president and those connected to him, should lead in the recovery, Shapps declares.

Switzerland’s foreign minister, Ignazio Cassis, agrees that those responsible for the damage caused in Ukraine should pay the bill.

But, we have to act within the rules of law, Cassis insists, reiterating Shapps’ point.

Updated

Ukraine’s Prime Minister Denys Shmyhal explains that Russia must be held accountable for its actions. The aggressor must compensate Ukraine for the damage cause in the war, Shmyhal explains.

He says the funds could come from several sources, including confiscated Russian funds around the world, funds from the state budget of Ukraine, from donors and from the private sector.

The private sector should play a leading role in Ukraine’s recovery, Shmhal says.

Q: How much could the reconstruction cost?

Schmal says in June 2022, the World Bank estimated it could cost $350bn,

Now, estimates are that the Russian aggression could cost between $600bn and $700bn. We will work closely with the World Bank, he says.

Ukraine’s electricity system has been targeted by Russia, he adds, meaning a lot of reconstruction is need.

Grant Shapps begins by telling the press conference that the thoughts of the United Kingdom are with Ukraine, and with those lost on this difficult day following the horrendous helicoptor crash in a Kyiv suberb.

The British people are up for the task of hosting the 2023 Ukraine Recovery conference, Shapps explains.

He cites UK support for Ukraine, including training for the Ukrainian army before the war started, and the pledge of Challenger tanks this week.

We will do our best to pick up the mantle from Switzerland’s outstanding work leading the recovery conference, Shapps continues, telling Ignazio Cassis he is giving the UK some very big Swiss shoes to fill.

Switzerland's Cassis: right time to discuss Ukraine recovery

Swiss Federal Councillor Ignazio Cassis says Switzerland is not disengaging from its support for Ukraine’s reconstruction, athough it handing the UK the co-hosting of the 2023 Ukraine Recovery Conference.

Cassis says people were shocked when the first Recovery Conference was held last year, when the conflict was raging.

But by focusing on Ukraine’s recovery, it gave Ukraine hope for the future, Cassis says.

Also, holding discussions about the reconstruction of Ukraine helps get the right medium and long-term perspective on the process.

“A year later we take stock – it was the right thing to do”, Cassis says.

He says there are several reasons why reconstruction is an issue for now, not for waiting until there is a peace agreement.

For example:

  • It keeps the economy alive. People are living and working in Ukraine, and hoping.

  • It is essential to generate revenues for the people, and tax revenues for the governments

  • Reconstruction boosts reforms, including in the judicial system.

  • The aim is to build back better, with clean tech.

Grant Shapps MP, the UK business secretary, is holding a press conference now in Davos with Swiss Federal Councillor Ignazio Cassis, and Ukraine’s prime minister Denys Shmyhal (joining live by video connection).

It’s at the Eisstadion, Davos’s ice-hockey arena, where Ukraine, Switzerland and the UK are meeting to formalise the handover from Lugano to London as co-host of the 2023 Ukraine Recovery Conference.

This year’s conference is meant to help Ukraine recover from the damage caused by Russia’s invasion. It will, we’re told, focus on “the mobilisation of international and private sector support for the economic and social stabilisation of Ukraine”.

Shapps has tweeted that he’s in Davos to ‘bang the drum’ for British business.

Poland’s president is backing Ukraine’s call for more support.

Speaking on a panel after Volodymyr Zelenskiy’s special address, Andrzej Duda says he fears Russia was preparing a new offensive in Ukraine within months.

It is crucial to provide additional support to Kyiv with modern tanks and missiles, Duda adds.

He tells Davos delegates:

“They [ie Russia] are still very strong and we are afraid they are preparing for a new offensive on a few months so it’s crucial to send additional support to Ukraine, specifically modern tanks and modern missiles.”

Q: Yesterday, Henry Kissinger told Davos that he now backed Nato membership for Ukraine, and that Russia may reevaluate its historic position. How do you see Russia’s position?

Zelenskiy replies that Russia has earned a place among terrorists, a situation that does not depend on its current leaders.

He says Russia must open its eyes, if it is to see the future of the Russian Federation.

He is pleased that Kissinger has changed his mind, as Nato membership is Ukraine’s best guarantee of safety.

Q: Do you worry about your security following the helicoptor accident?

Zelenskiy says firmly that he does not.

He says the helicoptor crash was not simply an accident, as it was due to the war, just as civilians are being killed in Russian shelling.

Here’s a clip of Zelenskiy warning that the free world must not hesitate in taking action against Russia (surely a nod to Germany’s reluctance to allow Leopard tanks to be supplied to Ukraine?)

Q: From here, the war looks like a stalemate – how does war look from your office, Mr Zelenskiy?

The war does not look good, ever, Zelenskiy replies. It has slowed over the winter, though.

Ukraine is standing strongly, resolutely. It is important to know that Ukraine is strong and united, Zelenskiy continues.

It is not us who started the war, but it is us who will have to end it, Zelenskiy declares, by removing Russian forces from Ukrainian land.

Ukraine needs the whole world united behind our joint values, he continues, and it also needs supplies to take on the enemy on the battlefield, and financial support.

He thanks the European Union for its support on Ukraine’s budget deficit.

Zelenskiy: World must not hesitate in its response to Russia

Zelenskiy says his speech will be short, as time is short in the war.

He says the world is now facing a time crisis, on top of existing crises such as food security and the energy crisis.

He warns that the reaction of the civilised world needs to be faster

Russia needed less than one second to start the war, the world needed days to respond, he points out.

Ukraine and its allies have been resisting for almost a year, Zelenskiy continues. Prompt actions have brought results, such as the grain deal and energy unity. This has saved millions of lives, not just in Ukraine.

The world was hesistant when Russia invaded Crimea in 2014, Zelenskiy says sternly. The world must not hesitate today, or ever.

Instead, there must be resolve and speed.

Russia is exporting terror around the world, he warns, while Ukraine is offering a 10-step plan to end the war.

The world’s reaction must outpace Russia’s next military move, Zelenskiy continues, and the supply of Western tanks must outpace the next deployment of Russia’s tanks.

Supplies of air defence systems to Ukraine must outpace Russian attacks, he says.

Updated

Zelenskiy addresses Davos, asks for minute's silence

Volodymyr Zelenskiy begins, by telling delegates that the helicopter crash in Kiev today claimed the life of Ukraine’s interior minister, his colleagues, and the helicoptor crew.

Many Ukrainian families lost loved ones today, and many more are losing them each day because of the war, Zelenskiy says.

He asks Davos delegates to honour the memory of everyone lost in the conflict, with a minutes’s silence.

Next at Davos…. Volodymyr Zelenskiy, President of Ukraine, will give a special address to the assembled business chiefs, politicians, economists and other participants here at WEF.

Zelenskiy is calling into the Annual Meeting from Kiev, by video link.

Scholz ducks question on Leopard 2 Tanks, says must avoid Russia-Nato war

There had been hopes that Olaf Scholz might announce a decision on allowing Leopard 2 Tanks to be sent to Ukraine during his speech at Davos, but he has not.

Instead, the German chancellor tells delegates in Davos that we must avoid the conflict escalating into a war between Russia and Nato.

He’s asked by one delegate…

Q: Why are you hesitating on the decision on allowing Leopard 2 tanks to be sent to Ukraine?

Germany has been among the biggest supporters of Ukraine, Scholz insists, as he embarks on a lengthy defence of Berlin’s approach.

He points out that the US has sent more military support, but it does have a much larger defence budget.

We decided very early in the war to change our political strategies, Scholz says, not simply supporting Ukraine with humanitarian aid but with a lot of weapons.

We will continue to provide support, for as long as needed, he insists.

Scholz says that the artillery coming from Germany to Ukraine, and its multirocket launcher, are very effective to Ukraine defending its sovereinty.

Ukraine can rely on our support, but we must avoid this becoming a war between Russia and Nato, Scholz explains.

And his “willingness” and the willingness of Germany, is that Ukraine becomes an independent, free, democratic nation that can join the European Union.

Reminder: Germany is under heavy pressure to allow the re-export of German-manufactured Leopard 2 tanks, which are used by 13 Nato countries, or to give some of its own to help Ukraine.

A group of about 50 defence ministers are due to meet in Ramstein, Germany, later this week to discuss future weapons shipments to Ukraine.

Updated

Onto questions…

Q: Iranian women are being killed in the street, by the Revolutionary Guards. Why will Germany not designate the Revolutionary Guards as a terrorist group, as other countries have done?

Scholz says we must understand that the Iranian government are shooting their own people.

He says sanctions have been imposed in response, and Germany is taking decisions with others in Europe.

We will continue to look at the situation and take the decisions necessary, he pledges.

Updated

The last year challenged us as never before, Scholz says.

And he predicts that in 2045, his successor will address the World Economic Forum, and they will present Germany as one of the first climate-neutral nations.

We will be moving emissions free on roads and railroads, and our buildings will be operating in a climate-neutral way,

So if you are looking for where you can invest in a sustainable way – look at us, come to Europe and to Germany, he concludes.

On immigration, Olaf Scholz says that Germany is keen to welcome workers.

Those who want to roll up their sleeves are welcome in Germany, that is our message, he says.

And on the US Inflation Reduction Act, Scholz says Europe is speaking to their United States friends about concerns that European firms could be disadvantaged.

We are also seeing what can do to improve investment in Europe, he adds.

Increased buying of LNG (liquified natural gas) on world markets should not mean shortages elsewhere, German president Olaf Scholz says.

There need to be replacements for the Russian gas which is no longer flowing to Europe. That means more renewables, but also more gas, Scholz says.

Otherwise, emerging marketrs might switch back to coal, which would be even more harmful for the environment, he warns [reminder, Germany is planning to destroy a village to expand a coal mine).

On energy, Scholz says Germany believes hydrogen can play a decisive role, the steel industry for example.

He cites projects using offshore wind in the North Sea to power plants creating green hydrogen.

For as long as quantities are small, and prices high, the state will bring prices down for the industry, says Scholz, saying Germany’s goal is an electrolysis boom.

One thing is certain, energy must remain affordable, in Germany, in Europe and worldwide, Scholz adds.

Scholz says Germany’s energy supply this winter is secure, having swiftly weaned itself off Russian gas.

Updated

Scholz: for war to end, Russia's aggression must fail

Olaf Scholz, Federal Chancellor of Germany, has arrived on stage to give his special address to the World Economic Forum – the only G7 leader expected this year.

Scholz begins by telling delegates that a lot has changed in the last year.

At the start of 2022, many people were expecting a boom, before the Ukraine war began in February.

He reminds the audience of the fatal helicoptor crash, in which at least 15 people including Ukraine’s interior minister was killed.

We are with their families, Scholz says.

There is also a “sword of Damacles” hanging over the world, Scholz says, the danger of deglobalisation and decoupling within the global economy.

Russia has already failed completely in achieving its imperialist goals, he continues.

Ukraine is defending itself with impressive courage, with support from interntaional allies.

We will continue to support Ukraine for as long as necessary, Scholz insists.

In order for the war to end, Russia’s aggression must fail, he insists.

Updated

Gore backs Greta Thunberg over coal mine protest

Al Gore, former US vice president of the United States, has told Davos that he supports Greta Thunberg’s protest against a coal mine expansion in Germany.

He also called for international institions to be reformed to better address the climate emergency.

Gore told a panel here in Davos that the climate crisis was getting worse faster than world is tackling it, warning:

“We are not winning. The crisis is still getting worse faster than we are deploying these solutions.

Gore added that he agreed with efforts by Thunberg to prevent the expansion of a coal mine in Germany.

He reminded the audience that Thunberg had been detained, yesterday, during a protest against the demolition of a German village to make way for a coalmine.

Gore said he agreed with her about trying to stop the coal mine project, which Thunberg has called a “betrayal of present and future generations.”

Gore also said that young activists look at the World Bank, and say it’s being run by a climate denier, adding:

Everyone knows the World Bank is failing badly.

Last September, World Bank chief Davis Malpass was widely criticised for not saying whether he agreed that humans burning fossil fuels were “rapidly and dangerously warming the planet.”

Gore says the COP climate change conference should be reformed, so that decisions could be taken on a super-majority rather than needing unanimity.

That would stop oil and gas companies and petrostates undermining the process, he explained.

Political will is a renewable resource, Gore pointed out, to applause.

Asked to sum up his message in one word, Gore replies:

Early to bed, early to rise. Work like hell and organise.

Updated

Mutiny erupts among WEF staff over role of ‘Mr Davos’

The future of Klaus Schwab – Mr Davos for more than half a century – has become a talking point at this year’s meeting after World Economic Forum employees voiced strong criticism of their chair and the lack of a succession strategy.

A group of current and former WEF staff members who contacted the Guardian said the 82-year-old Schwab was a law unto himself and had surrounded himself with “nobodies” who were incapable of running the organisation he founded in the early 1970s.

“Klaus has been at the helm of the WEF for 52 years. When he was born [in 1938] 122 of the 195 states in the world right now did not even exist. He is completely unaccountable to anyone inside and outside the organisation,” the group said.

“We are a group of current and former employees of the WEF. We want to play our role in fostering debate about the role this organisation plays in the world.”

The group said it wanted to remain anonymous.

“We are hesitant to come forward as Klaus is very well connected and can make life very difficult for us even after we leave the WEF.”

Speculation about Schwab’s future has intensified this week after a piece on the online publication Politico said the WEF’s strategic partners – the firms that bankroll the $390m (£315m) a year business – were unhappy about the lack of a succession strategy.

More here:

Catastrophic cyberattack likely in the next two years, business chiefs fear

Most business leaders fear that global geopolitical instability means a catastrophic cyberattack will occur by 2025.

A survey by the World Economic Forum released this morning found that 93% of cybersecurity experts and 86% of business leaders believe global geopolitical instability is likely to lead to a catastrophic cyberattack in the next two years.

The poll shows that a lack of skilled cyber experts is threatening the security of business and societies.

Jürgen Stock, secretary-general of Interpol, told a press conference in Davos that the level of concern exceeds anything seen before.

Increased digitisation is leading to increased connectivity, Stock explained, and making it harder to find security experts. Firms should consider reskilling staff to fill this gap, he said.

Speaking to the Guardian, Stock insisted law enforcement was making progress and “doing a lot” in the fight against cybercriminals, which due to “ongoing investigations we can’t make public”.

Stock said:

We have a number of success stories in global law enforcement, and Interpol is connecting member countries across geopolitical divides.

But we need to be much much better, at the end of the day.

We are, by far, not yet where we want to be in really getting the criminals behind bars.

Stock explains that law enforcement are good at taking server infrastructure used by cybercriminals down.

But as the criminals who are using the darkweb, selling cybercrime as a services, use encryption, anonymisation and nicknames, it isn’t like breaking a mafia gang, Stock explained, adding:

It’s a completely different concept than the mafia concept, where they are operating based on the same family, in the same region.

The international nature of cybercrime is an added challenge for law enforcement, Stock explains.

“Honestly, there is a lot to do”, in term of cooperation with the private sector, providing resources, training and skills, he adds.

Interpol, which is 100 this year, facilitates worldwide police cooperation and crime control between countries “despite all the geopolitical difficulties”, Stock says. That includes Russia, who are a member of Interpol.

Cooperation “depends on the two countries concerned” Stock adds.

Last October, Interpol coordinated a joint law enforcement effort involving 14 countries across four continents against Black Axe, a cyber fraud group, and related West-African organized crime groups. There were 75 arrests, and €1.2m was recovered.

Julie Sweet, chair and chief executive officer of Accenture, said companies must ‘secure the core’ of their business to avoid cyber disruption

Edi Rama, prime minister of Albania, told reporters that if cybercrime was a state, it would be third largest economy after US and China. He said Albania has been under cyberattack from Iran since last summer.

He compares the threat of hacking to a ticking bomb, warning that sometimes you don’t know that hackers are there, and that you are sleeping on a bomb.

Updated

Greta Thunberg is set to meet International Energy Agency (IEA) executive director Fatih Birol in Davos on Thursday, the organiser of a planned round-table event has told Reuters.

Here’s the story:

Thunberg, who was released by police on Tuesday after being detained alongside other climate activists during protests in Germany, is due to meet Birol along with fellow campaigners Helena Gualinga, Vanessa Nakate and Luisa Neubauer, the organisers said in a statement.

The IEA, which makes policy recommendations on global energy, was not immediately available for comment.

Thunberg attended the World Economic Forum’s (WEF) annual meeting in Davos in January 2020, when she challenged world leaders, including former U.S. President Donald Trump, to act on climate change, saying that “our house is still on fire”.

The UN chief has tweeted his warning that the world faces the “gravest levels of geopolitical division and mistrust in generations”.

Updated

Full story: UN head accuses fossil fuel firms of business models ‘inconsistent with human survival’

The head of the United Nations has accused the world’s biggest fossil fuel companies of refusing to abandon a business model at odds with human survival despite knowingly putting the world on course for a climate meltdown decades ago.

Speaking at the Davos summit of business and political leaders, the UN secretary general, António Guterres, launched a strong attack on the world’s leading oil companies, many of which are represented at the World Economic Forum’s annual meeting at the Swiss resort.

Guterres said recent revelations that ExxonMobil knew back in the 1970s that its core product was “baking our planet”, made “big oil” similar to the tobacco companies that knew smoking led to cancer.

“Just like the tobacco industry, they rode roughshod over their own science. Big Oil peddled the big lie … And like the tobacco industry, those responsible must be held to account,” he said.

“Today, fossil fuel producers and their enablers are still racing to expand production, knowing full well that their business model is inconsistent with human survival. This insanity belongs in science fiction, yet we know the ecosystem meltdown is cold, hard scientific fact.”

The need to step up progress in the global battle to prevent a rise in temperature of more than 1.5C has been one of the themes of the Davos meeting but the head of the UN said many of the pledges made by companies to achieve net zero carbon amounted to greenwashing.

More here:

And finally, António Guterres says he does not see the end of the Russia-Ukraine war in the immediate future, unfortunately.

He doesn’t see an opportunity yet for a serious peace negotation between the two sides.

How bad is the situation we face today?

I really think we are in the worst situation of my lifetime, António Guterres replies, pointing out that he didn’t live through world war 2.

The first problem is the climate emergency, and the “lack of a sense of urgency in relation to climate.”

The climate emergency is an existential threat, and very close to a tipping point that makes catastrope irreversible, Guterres explains.

Secondly, the UN chief explains that the geopolitical divide is different than in Cold War.

The Cold War was easier, Guterres explains, as there were two blocs with clear rules of engagement.

Although they caused trouble for each other, they had mechanisms to stop that trouble if it was becoming a threat.

Conflicts today are more dangerous as there are fewer mechanisms to stop them getting out of control, Guterres points out.

Social media platforms should be held legally accountable if their software deliberately amplifies false information, António Guterres tells Davos.

He explains that algorithms have been build to amplify messages, and there should be accountability, when the spread of misinformation benefits from the way the algorithm amplifies them.

That, in my opinion, creates a responsibility on the platform, Guterres says.

Guterres says all corporate leaders should put forward credible and transparent transition plans on how to achieve net zero – and submit those plans by the end of this year.

He explains to delegates that politicians and business leaders should resist short-term thinking, saying:

Don’t look at what’s going to happen to you tomorrow, look at what’s going to happen to all of us in the future. And to be honest, it’s happening now.

Guterres warns of 'great fracture' between US and China

Antonio Guterres also warns Davos that the world risks a ‘great fracture’, the possible decoupling of the two largest economies, the US and China.

Such a rift could create two different set of trade rules, two dominant currencies, two internets and two conflicting artificial intelligence strategies, the UN secretary general fears, and hit global growth.

UN's Guterres: Big oil peddled big lie on climate change

United Nation’s secretary-general António Guterres is addressing Davos now, and heavily criticising fossil fuel producers.

Guterres says the world is “flirting with climate disasters”, with every week bringing a new horror story.

The commitment to limit global heating to 1.5 degrees is “nearly going up in smoke”, Guterres says, in a keynote speech to the WEF Congress hall.

Without further action, we will hit 2.8 degrees of heating. “For many, that will be a death sentence.”

But this is not a surprise, Guterres says, citing last week’s news that Exxon had privately predicted global warming, but then spent decades publicly rubbishing such science in order to protect its core business.

We learned last week that certain fossil fuel producers were fully aware in the 70s that their core product was baking our planet, Guterres says.

Just like the tobacco industry, they rode rough-shod over their own science, Guterres says sternly.

Some in big oil peddled the Big Lie, Guterres adds.

And like the tobacco industry, those responsibly should be held to account, he insists.

Updated

Citi chief Fraser sees 'rolling country recessions'

A series of “rolling country recessions” is likely, the boss of the Wall St banking giant Citigroup has warned.

Jane Fraser told a panel at the World Economic Forum that with “different counties are in very different positions” and central banks interest rate increases likely it is a “choppy time in the world”.

She said:

“We are expecting to see a rolling series of country recessions around the world.

However Fraser said the bank sees the overall economic picture improving with “tail risks coming in a little bit more”.

“It’s been a warmer winter in Europe. We’ve obviously seen some very good news from economic opening - a slightly more bent to market friendly measures in China as they open up ,albeit with a short term cost on the human health component.

“In the States [there is] a very strong labour market and what is likely to be a recession there, but something that is pretty manageable.”

Updated

Gita Gopinath, the International Monetary Fund’s No. 2 official, has said the global economy has shown “signs of resilience” – which may calm some of the worries at Davos over an economic slowdown.

Bloomberg has the details:

The new IMF forecasts for the global economy, due at the end of the month, will be “in the ballpark of what we put out in October,” she said.

“After going through about three rounds of downgrades at least we don’t have a worse outcome we’re looking at this time around.”

Gopinath also believes headline inflation has probably peaked – a timely point, with UK inflation having dropped in December (but still in double-digit levels).

Joe Biden’s Inflation Reduction Act - which provides subsidies for companies investing in green technologies - is not to everybody’s taste but Lord Nicholas Stern is big fan.

The economist who wrote the ground-breaking Stern report on the economics of climate change for Tony Blair’s government in 2006, said the US president had come up with a “remarkable” piece of legislation.

“It comes from somebody who was a master of domestic politics and has a very clear idea of what can happen to the climate”, Stern said, here at Davos.

The president of the European Commission, Ursula von der Leyen, has expressed concern about the subsidies being provided by the US government to persuade firms to base production in the US, and said Europe was working on an industrial strategy of its own.

Stern said this was a good thing because it would create more global competition in the green technology sector, which in turn would help in the fight to achieve carbon net zero.

Stern says:

“The EU is really worried the centre of gravity moves to the US.”

While accepting that the IRA amounted to state aid and protectionism, Stern said it also marked a shift to a different form of globalisation, adding:

“It’s not autarky but it’s not free trade either.”

US labor secretary says immigration reform needed

Martin J. Walsh, the US Secretary of Labor, is telling Davos that America needs immigration reform.

Speaking on a panel on the future of jobs, Walsh says that the US doesn’t have a good immigration policy right now. He cites the issue of students who come to the US from around the world for a university education – if they’re not lucky enough to get a visa they get sent home.

Walsh says that when he meets businesses, they raise immigration as an issue – he hopes they will use their voices to raise awareness of the problem.

The threat to the US economy in the long term isn’t inflation, it’s immigration, Walsh tells delegates at Davos.

He adds that reskilling workers is another priority.

Updated

A general view of the Davos Congress Centre, the venue of the World Economic Forum 2023 (WEF) in the Alpine resort of Davos, January 18, 2023. REUTERS/Arnd Wiegmann
A general view of the Davos Congress Centre. Photograph: Arnd Wiegmann/Reuters

UK inflation dips slightly to 10.5% but people continue to feel pinch

In the UK, inflation has dipped to a three-month low of 10.5% last month,

But in a blow to households, food and drink prices continued to accelerate, rising at the fastest pace since 1977.

My colleague Phillip Inman reports:

The modest drop in December’s CPI was driven mainly by a significant fall in petrol and diesel prices and a decline in clothing prices growth compared with the same month in 2021.

The ONS chief economist, Grant Fitzner, said petrol fell 8p a litre and diesel prices slumped 16p over the course of December.

Here’s the story:

Ultra-rich call on governments to introduce wealth taxes

More than 200 members of the super-rich elite are calling on governments around the world to “tax us, the ultra rich, now” in order to help billions of people struggling with cost of living crisis.

The group of 205 millionaires and billionaires, including the Disney heiress Abigail Disney and The Hulk actor Mark Ruffalo, on Wednesday called on world leaders and business executives meeting in Davos for the World Economic Forum (WEF) to urgently introduce wealth taxes to help tackle “extreme inequality”.

In an open letter published on Wednesday, they say:

“The current lack of action is gravely concerning. A meeting of the ‘global elite’ in Davos to discuss ‘cooperation in a fragmented world’ is pointless if you aren’t challenging the root cause of division.

Defending democracy and building cooperation requires action to build fairer economies right now – it is not a problem that can be left for our children to fix.

Zambia debt talks 'moving more slowly than hoped - finance minister

Zambia’s finance minister Situmbeko Muskotwane has admitted his country’s protracted debt negotiations are taking longer than hoped and that the delay is preventing the mineral-rich African country from taking advantage of the transition to net-zero.

Negotiations have been under way since Zambia’s $18b default in 2021 and have been seen as a test case of whether a G20 initiative to ease debt burdens on poor countries can work.

The International Monetary Fund has provided an assessment of how much debt Zambia could service but there has been resistance from China and private bondholders to the level of debt reduction they are expected to accept.

“Negotiations are still going on”, Muskotwane said during an interview in Davos.

Muskotwane tells us:

“They are moving more slowly than I hoped for. But they are still going on and I hope that by the end of the first quarter there could be some positive news.”

The IMF is worried about the debt problems facing a number of countries, and thinks China and the private sector bondholders are blaming each other for the lack of progress. An IMF-convened debt round table will take place on the fringes of the meeting of G20 finance and central bank governors in India next month.

Muskotwane said the IMF had been clear about the level of debt Zambia could sustain, and that once a deal had been done his government would stick to it.

“We want to be a country that when it borrows pays back.”

He said the world would need Zambia’s resource wealth if it was to make good on commitments to net zero targets, noting that his country was rich in copper, nickel, manganese and cobalt.

“People are looking for green energy and the resources needed are all in Zambia. The challenge is to get investors to help us exploit those resources and get the economy to be stronger.”

Introduction: Zelenskiy, Scholz, Stoltenberg and Guterres on agenda

Good morning from Davos, where the second day of the World Economic Forum is getting underway.

Ukraine’s president Volodymyr Zelenskiy will address today’s Annual Meeting this afternoon, by video call, and he’s expected to call for more heavy weaponry to help push Russian forces back.

This could pile even more pressure on Germany to allow the re-export of its Leopard 2 tanks, with Andrzej Duda, the Polish president, telling Davos yesterday that a positive decision from Berlin was “very, very, very, very needed”.

German chancellor Olaf Scholz will speak before Zelenskiy, the only G7 leader expected to take the stage at this year’s WEF.

Yesterday, Scholz declared he was “absolutely convinced” that Germany will avoid a recession this year, despite Russia’s energy squeeze.

Zelenskiy will be followed on stage by Jens Stoltenberg, secretary-general of NATO.

As we blogged last night, former US Secretary of State Henry Kissinger said Ukraine joining NATO could be an “appropriate outcome” of Russia’s invasion, as he reiterated his call for a negotiated solution to the conflict.

“The idea of a neutral Ukraine under these conditions is no longer meaningful,” Kissinger, 99, told WEF delegates by video link.

Ukraine’s First Lady Olena Zelenska made a surprise appearance here yesterday, urging political leaders and chief executives to use their influence to help her country.

Zelenska brought a letter from her husband for China’s Xi Jinping (to be taken back from Davos by Chinese vice-premier Liu He), plus letters for European Commission President Ursula von der Leyen and Swiss president Alain Berset.

Zelenska warned delegates that the war “could go further” unless Russia is stopped.

António Guterres, Secretary General of the United Nations, also addresses the annual meeting today. He may focus on the climate crisis. Last weekend Guterres called for a renewable energy ‘revolution’, saying this was the only credible path to avoid climate catastrophe.

The agenda

  • 10.00am Davos / 9am GMT: Global Cybersecurity Outlook 2023, with Interpol secretary-general Jürgen Stock, Accenture’s CEO Julie Sweet, and Nikesh Arora, CEO and chairman of Palo Alto Networks

  • 11:15am Davos / 10.15am GMT: Special Address by António Guterres, Secretary General of the United Nations

  • 3:45pm Davos / 2.45pm GMT: Special Address by Olaf Scholz, Chancellor of Germany

  • 5pm Davos / 4pm GMT: Special Address by Volodymyr Zelenskiy, president of Ukraine

  • 5.15pm Davos / 4.15pm GMT: Restoring Security and Peace, with Andrzej Duda, president of Poland; Jens Stoltenberg, Secretary-General NATO

  • 6.30pm Davos / 5.30pm GMT: Uk-Ukraine-Swiss press conference on the Ukraine recovery conference, with UK business secretary Grant Shapps

Updated

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