India's Global Economic Impact at 54th Davos Summit

India's Global Economic Impact at 54th Davos Summit

GS-2: Important International Organizations

(UPSC/State PSC)

Important for Prelims:

WEF, Some of the key reports published by World Economic Forum, India's performance at Davos summit 2024, International Monetary Fund (IMF), AI issues..

Important for Mains:

Discussed Topics at Davos Summit 2024, Significance of Davos Summit for India, India's prospects, Conclusion.

Feb. 01, 2024

Why in news:

The 54th annual meeting of the World Economic Forum was recently concluded in Davos, Switzerland.

  • The objective of this meeting was to deal with complex issues like copyrighting of AI-generated content and the difference between human and machine creation.
  • Every year, leaders from various fields such as business, politics, economics etc. gather in the Switzerland city to discuss the challenges facing the world and explore the way forward.

Davos summit, 2024

key points:

  • The theme of India's dialogue in this conference, organized from January 15 to January 19, 2024, was based on 'Building Trust'.
  • This five-day session was held in offline mode for the first time in three years.
  • The World Economic Forum's selected action plans align with India's vision of growth, carbon neutrality, sustainability, strong economy and the concept of 'Vasudhaiva Kutumbakam: The World is One Family'.
  • India's presence at Davos reinforces its position as a global economy that adapts to all circumstances and as a preferred investment destination.
  • In this annual meeting, the delegation of the Government of India was led by the Minister of Women and Child Development, Smt. Smriti Irani.
  • Along with him, Shri Hardeep Singh Puri, Minister of Petroleum and Natural Gas, Housing and Urban Affairs, Shri Ashwini Vaishnav, Minister of Railways, Communications, Electronics and IT and Shri RK Singh, Secretary, DPIIT, Ministry of Commerce and Industry were also present.
  • At various sessions of the World Economic Forum, the Indian delegation presented its views on the topics of Education, Biofuels, Gender gap, Renewables, Semiconductors and manufacturing in the presence of other global political and business leaders.

DiscussedTopics at Davos conference 2024:

  • The issue of AI remained at the center of this year's WEF meeting. The many transformative potentials of AI for human well-being were discussed, as well as the need for regulation, the fear of job loss, the risks of impersonation and misinformation, and potentially worsening inequalities.

Special focus on AI-era job market:

  • The International Monetary Fund (IMF)'s "Gen-AI: Artificial Intelligence and the Future of Work" report unveiled in Davos paints a clear picture: up to 60% of jobs in advanced economies are at risk due to AI.
  • The report emphasizes the importance of equipping people with the necessary skills to harness AI's benefits while managing its risks.
  • The report emphasized the integration of AI education to prepare citizens, especially the youth, for a world augmented by AI.
  • The summit emphasized the need for job creation, especially in green sectors, and adaptation of education systems to meet the demands of an AI-driven labor market.
  • The leaders at the meeting advocated collaborative efforts to establish interoperability standards and best practices, reflecting the global trend toward more integrated AI systems.
  • The WEF Summit expressed optimism about AI value alignment, noting significant progress from GPT-3 to GPT-4.

Call for ethical and responsible use of AI:

  • It raised deep ethical questions about AI, highlighting its impact on human authenticity and the blurred lines between virtual and real human connections.
  • The need for responsible AI governance was echoed throughout Davos, calling for a balanced approach that promotes innovation while minimizing risks.
  • China's Prime Minister stressed the importance of global AI governance mechanisms.
  • Microsoft discussed convergence in AI rules, highlighting common understanding of fundamental issues and strategies to address them.

War and uncertainty:

  • Business leaders talked about the risks posed by delicate geopolitical situations in different parts of the world – wars in the Middle East and Europe, threats to global supply chains and uncertainty around food security.
  • The conference did not present any plan or roadmap for peace regarding the Israel-Gaza violence.

Climate:

  • Emphasized the need for businesses to adapt to climate change and the need for countries to come together to take action against it despite differences.
  • The World Bank President highlighted the ultimate benefits to businesses from adopting sustainable practices and the need to properly allocate resources in the fight against climate change.
  • It emphasized that developed countries must help finance climate action in developing countries, otherwise inequality will only increase.

China's economy:

  • Facing a slowing economy, China has tried to attract more investment from the West, which has seen some moderation.
  • At 5.2%, China's GDP growth in 2023 is still below pre-pandemic levels, and it is struggling with US efforts to isolate it, as evidenced in the semiconductor trade standoff.
  • In this meeting, concern was expressed over China facing significant structural economic challenges.

India's performance at Davos Summit 2024:

Geopolitical impact on India:

  • Being part of an integrated global economy, India acknowledges the impact of geopolitical events and strives to secure trust commercially and geopolitically, emphasizing its role as a reliable partner.

Government Reforms and Technology:

  • India demonstrated its effective use of technology in governance through steady and proactive reform announcements.
  • The discussion at Davos focused on AI, focusing on maximizing benefits while minimizing AI-related risks, where India is making deep inroads.

Socio-economic participation of women:

  • India gained prominence in the discussion on global issues, especially women's socio-economic participation. Notably, Indian women entrepreneurs in self-help groups manage businesses worth $37 billion annually, making a case for increased investment in women-owned businesses.

Energy Transition Challenges:

  • India stressed three energy transition challenges – availability, affordability and sustainability – while exploring solutions such as green hydrogen.

Significance of Davos Conference for India:

  • India's participation in Davos strengthens its position as a trusted global partner and resilient economy. The country's commitment to collaborative global advancement reflects its role in shaping a bright, sustainable future for the world.
  • India's growth rate in 2024 is projected to be one of the fastest in the world. Equitable development is evident across the country through infrastructure development, gender inclusivity in employment and entrepreneurship, and social protection measures for the deprived sections.
  • India, once marginalised, now attracts global attention for its economic, social and political stability. A population of over 1.4 billion, a dynamic workforce and supportive government policies contribute to India's consistent GDP growth.

World Economic Forum About the World Economic Forum (WEF):

  • Founded in 1971 by German economist Klaus Schwab, the World Economic Forum (WEF) is a non-profit international organization. It is headquartered in Geneva, Switzerland.
  • The Davos annual summit aims to address economic, social and environmental issues by providing a platform to global leaders from various sectors.
  • Some of the major reports published by WEF are:
    • Energy Transition Index,
    • Global Competitiveness Report,
    • Global IT Report,(Report published by WEF in collaboration with INSEAD and Cornell University)
    • Global Gender Gap Report,
    • Global Risk Report,
    • Global Travel and Tourism Report.

India's prospects:

  • The Davos meeting highlights that India is rapidly transforming into one of the fastest growing large economies in the world. Apart from its economic potential, India made its presence felt in other ways as well.
  • When it comes to technology, talent, health care and other sectors, the future worth focusing on is 2024 and beyond.

Investing in women's health:

  • One of the ideas discussed at WEF this year was how investing in women's health could boost the global economy by US$1 trillion annually by 2040.

Global Good Alliance for Gender Equality and Equity:

  • One of the highlights of the Forum meeting was the announcement of the launch of a Global Good Alliance for Gender Equality and Equity with the support and endorsement of WEF and the Government of India.
  • The idea of this alliance emerged from the G20 Leaders' Declaration and India's enduring commitment towards women-led development.
  • It aims to bring together global best practices, knowledge sharing and investment in identified areas of women's health, education and entrepreneurship.

Conclusion:

The Davos Summit annually highlights the development path by addressing global social, economic, political, environmental challenges. India has established itself as a digital leader through the year 2024 Davos Summit. Known for its economic, social and political stability, India is emerging as a center of resilience in the global economy. In the future, India must continue to be a top leader in the global economy with a commitment to cooperation and inclusivity.

Source: Indian Express

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Mains Question:

Discuss the significance and key outcomes of India's role in the World Economic Forum Davos Summit 2024.