World Economic Forum DAVOS 2012

Davos-Klosters, Switzerland 25-29 January
The Great Transformation: Shaping New Models

There is widespread agreement that the international community needs to undertake a complementary set of adjustments in national policies supported by improvements in international cooperation to rebalance the world economy and make it more inclusive and sustainable. There are numerous key points to bear in mind.

Viewed over a half-century, the global economy is in better shape than the crisis might indicate. Mankind is better off than it has ever been and technology promises to make things even better. Whatever choices are made to improve global governance, care must be taken not to disrupt the processes that have allowed society to achieve such remarkable progress. A host of urgent problems must still be faced, foremost among them the deteriorating environment, ageing populations, jobless youth and global economic imbalances.

There are four key priorities for achieving sustainable economic growth: education, social stability, incentives for taking risks and global economic integration. As efforts are undertaken to improve or revamp the IMF and other financial sentinels, they must be given the authority and tools to influence harmful economic policies, even in the most powerful nations.

Looking for new opportunities

With the worst financial crisis in generations still fresh in people's minds, it is easy to think we should be pessimistic about the economic and societal outlook.

Yet, a glance over the shoulder shows how far the world has come. In just sixty years, since the end of the Second World War, Europe and much of Asia has recovered from impoverishment. China has emerged as a global superpower and Africa too offers the prospect of growth.

Improvements in health, education, the emancipation of women and the ditching of old societal norms means that huge strides have been made. That's not to say that problems and difficulties don't remain - concerns about environmental damage, population growth and global imbalances in trade and finance mean that there are still major challenges ahead.

There are four key factors that will help drive growth and development forward: good and widely available education, social stability, economic stability and a culture that encourages entrepreneurship and risk-taking.

Issues that need challenging are the continued depletion of natural resources, limits on the amount of financial speculation in the economy and more balance to iron out swings in demand versus supply.