India's Global Economic Impact at Davos Summit 2024

At the 2024 Davos Summit, India’s presence reverberates across the global economic landscape, casting a spotlight on its profound impact and burgeoning influence. With a dynamic economy fueled by innovation, entrepreneurship, and a burgeoning digital revolution, India stands as a beacon of opportunity and growth in an ever-evolving world. As delegates convene in the Swiss Alps, India emerges as a pivotal player, shaping discussions on sustainable development, technological advancement, and inclusive growth. From its robust startup ecosystem to its strategic investments in key industries, India’s trajectory underscores its status as a transformative force on the global stage, poised to redefine the contours of the international economic order.

Tags: GS – 3, Important International Institutions– Growth & Development– Artificial Intelligence

For Prelims: World Economic Forum (WEF), CII India Business Hub, Artificial Intelligence (AI), Non-Performing Assets (NPAs), Moody’s Investors Service, Gross Domestic Product (GDP), UNCTAD World Investment Report.

For Mains: Significance of Davos Summit 2024 for Indian Economy.

Table of Contents

Context:

India’s flourishing economy goes beyond national development; it serves as a guiding light for collective global progress, underscoring our dedication to forging a bright and sustainable future for the world.
Global leaders, tech innovators, and thought leaders convened at Davos in January 2024 to address pressing economic, political, and social challenges, with AI at the forefront.
At Davos 2024, amidst global challenges like geopolitical crises and climate change, India showcased its impressive growth trajectory, highlighting successes amid adversity.

What is the World Economic Forum (WEF)?

About:

The WEF is a Swiss nonprofit foundation established in 1971, based in Geneva, Switzerland.
Recognized by the Swiss authorities as the international institution for public-private cooperation.

Mission:

Committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.
Founder and Executive Chairman: Klaus Schwab.
Some Major Reports Published by WEF are:
Energy Transition Index.
Global Competitiveness Report.
Global IT Report
WEF along with INSEAD, and Cornell University publish this report.
Global Gender Gap Report.
Global Risk Report.
Global Travel and Tourism Report.

The Key Takeaways of Davos Meeting, 2024:

Artificial Intelligence (AI):
- At this year’s WEF meeting, AI was a focal point, with discussions highlighting its transformative potential for human welfare.
- Concerns regarding regulation, job displacement, risks of impersonation and misinformation, and exacerbating inequalities were also addressed.
War and Uncertainty:
- Business leaders voiced concerns about the risks posed by fragile geopolitical situations worldwide, including conflicts in the Middle East and Europe, threats to global supply chains, and uncertainties surrounding food security.
Climate:
- The imperative for businesses to adapt to climate change and for countries to collaborate despite differences in addressing it was a prominent topic.
- The World Bank President emphasised the business advantages of adopting sustainable practices and the necessity of proper resource allocation for climate action.
- It was underscored that developed nations must support climate action financing in developing countries to prevent exacerbating inequality.
China’s Economy:
- Facing economic slowdown, China aimed to attract more Western investment, albeit with some cooling observed. Despite a 5.2% GDP growth in 2023, still below pre-pandemic levels, China grapples with efforts by the US to isolate it, as seen in the semiconductor trade dispute.
- Structural economic challenges were acknowledged, with Western companies investing less. Nonetheless, even 3%-4% growth in China remains significant for many companies attending the WEF summit.
India’s Prospects:
- Davos highlighted India’s rapid transformation as one of the world’s fastest-growing large economies.
- India’s presence extended beyond economic potential, with attention drawn to its advancements in technology, talent, healthcare, and other areas, signalling promising prospects for 2024 and beyond.
Investment in Women’s Health:
- Discussions at WEF included the potential for investment in women’s health to boost the global economy by USD 1 trillion annually by 2040.
Global Good Alliance for Gender Equity and Equality:
- A key outcome of the Forum meeting was the launch announcement of a Global Good Alliance for Gender Equity and Equality, endorsed by WEF and the Government of India.
- Stemming from the G20 Leaders’ Declaration, the alliance aims to pool global best practices, foster knowledge sharing, and drive investments in women’s health, education, and enterprise.

The Special Focus on AI at Davos Meeting 2024:

Focusing on AI-Era Job Market:

At Davos, the International Monetary Fund’s (IMF) “Gen-AI: Artificial Intelligence and the Future of Work” report revealed a concerning statistic: up to 60% of jobs in advanced economies face AI-related risks.
This revelation spurred intense discussions on the future of work, stressing the urgency of skills training and adaptation. The report underscored the necessity of equipping individuals with the skills to leverage AI’s benefits while managing associated risks.
A crucial shift highlighted by the IMF’s report was not job displacement by machines, but by people proficient in AI. It advocated for integrating AI education to prepare citizens, especially youth, for an AI-augmented world.
The summit emphasised job creation, particularly in green sectors, and adapting education systems to meet the demands of an AI-driven labour market. Complex issues such as copyrighting AI-generated content and distinguishing humans from machine creations were tackled.
A shift towards more idea-centric roles was projected, facilitated by AI’s ability to elevate job functions to higher levels of abstraction. The summit expressed optimism about AI value alignment, noting significant advancements from GPT-3 to GPT-4.

Calls for Ethical and Responsible Use of AI:

Profound ethical questions about AI’s impact on human authenticity and the blurring lines between virtual and real human connections were raised.
These discussions urged deeper reflection on our relationship with technology.
The need for responsible AI governance resonated throughout Davos, with calls for a balanced approach fostering innovation while mitigating risks.
China’s Premier emphasised the importance of global AI governance mechanisms.
Microsoft discussed the convergence in AI regulations, highlighting a common understanding of fundamental issues and strategies to address them

How did India Fare at the WEF Summit 2024 in Davos?

CII India Business Hub Highlights: At Davos, the CII India Business Hub saw significant activity, providing a platform for India to showcase its successes and upcoming opportunities.
Geopolitical Impact on India: India, as part of the integrated global economy, recognizes the impact of geopolitical incidents and aims to secure trust commercially and geopolitically, highlighting its reliability as a partner.
Government Reforms and Technology: India highlighted its effective use of technology in governance through proactive reform announcements. Discussions centred around AI, emphasising India’s progress in maximising benefits while mitigating risks.
Women’s Socio-Economic Participation: India took a leading role in global discussions on women’s socio-economic participation, showcasing the significant contribution of women entrepreneurs managing businesses worth $37 billion annually.
Energy Transition Challenges: Energy discussions at Davos focused on climate change, with India highlighting challenges in availability, affordability, and sustainability while exploring solutions like green hydrogen.
India’s Equitable Growth: India’s projected growth in 2024 ranks among the world’s fastest, with a focus on infrastructure development, gender inclusivity, and social security measures for disadvantaged sections.
India as a Pocket of Resilience: Moody’s Investors Service views India as a “pocket of resilience” amid global economic challenges, citing economic, social, and political stability as key factors, making it an attractive investment destination.
Global Recognition and Economic Prowess: India, once on the sidelines, now receives global attention for its stability and consistent GDP growth, driven by its dynamic workforce and supportive government policies.
India as a Trusted Global Partner: India’s participation at Davos underscores its role as a trusted global partner and resilient economy, reflecting its commitment to collaborative global advancement and a sustainable future.

Conclusion:

Thus, Davos 2024 underscored India’s adept embrace of technology, especially in AI, alongside proactive governance reforms, positioned it as a frontrunner in the digital sphere. India’s stability across economic, social, and political realms stood out, marking it as a resilient force amid global challenges. With a focus on collaboration and inclusivity, India’s flourishing economy serves as a guiding light for global advancement and sets a precedent for fostering a sustainable future.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Q1. Which of the following gives ‘Global Gender Gap Index’ ranking to the countries of the world? (2017)

(a) World Economic Forum
(b) UN Human Rights Council
(c) UN Women
(d) World Health Organization

Ans: (a)

Q2. Who among the following is the founder of the World Economic Forum? (2009)

(a) Klaus Schwab
(b) John Kenneth Galbraith
(c) Hobert Zoellick
(d) Paul Krugman

Ans: (a)

Q3. The Global Competitiveness Report is published by the (2019)

(a) International Monetary Fund
(b) United Nations Conference on Trade and Development
(c) World Economic Forum
(d) World Bank

Ans: (c)

Source: (IE)

FAQs

Q: What is India’s current stance on global economic policies?

A: India remains committed to advocating for inclusive and sustainable economic policies that foster growth, innovation, and development worldwide.

Q: How does India contribute to the global economy’s growth?

A: India’s robust economic growth, burgeoning tech sector, and demographic dividend contribute significantly to global economic expansion, offering vast opportunities for investment and trade.

Q: What initiatives is India undertaking to enhance its economic presence globally?

A: India is actively pursuing economic reforms, infrastructural development, and fostering innovation ecosystems to bolster its competitiveness on the global stage and attract foreign investment.

Q: How does India address challenges like income inequality and poverty in its economic agenda?

A: India recognizes the importance of addressing income inequality and poverty through targeted social welfare programs, skill development initiatives, and inclusive economic policies to ensure equitable growth and prosperity for all its citizens.

Q: What role does India envision for itself in shaping the future of global trade and commerce?

A: India aspires to play a pivotal role in shaping the future of global trade and commerce by advocating for fair trade practices, fostering regional economic integration, and leveraging its demographic dividend to drive innovation and entrepreneurship on a global scale.

In case you still have your doubts, contact us on 9811333901.

For UPSC Prelims Resources, Click here

For Daily Updates and Study Material:

Join our Telegram Channel – Edukemy for IAS

1. Learn through Videos – here
2. Be Exam Ready by Practicing Daily MCQs – here
3. Daily Newsletter – Get all your Current Affairs Covered – here
4. Mains Answer Writing Practice – here

India’s Global Economic Impact at Davos Summit 2024 – UPSC