In a fractured world

The Bosphorus Bridge in Istanbul has the unique status on allowing people to drive from one continent to the other. The Bosphorus strait is a narrow stretch of water that connects the Black Sea to the Sea of Marmara. The bridge across the strait connects Asia with Europe. The symbolism of Bosphorus takes even more significance in times of rising divides across the world.

On way to the World Economic Forum’s annual summit Davos, I spent a couple of days in Istanbul to get to know a country that is an exciting mix of Asian and European cultures. This culture that has integrated the best of the continents has always fascinated visitors to Istanbul. The Roman Empire controlled the region of modern-day Turkey, while the Ottoman empire later went on to control large parts of Europe, Asia and North Africa in 16 and 17th centuries. Istanbul is called the city of two continents as it straddles the Bosphorus. It has been at the intersection of two important continents deeply connected but severely divided too.

Today, divisions being created across the world have less to do with history and more to do with modernity. While regions of violent conflict remain, they are fewer than earlier. However, various new divisions have emerged and are troubling.

Economic disparity has been rising to create a severe backlash against the concepts of capitalism. After emerging as the most powerful economic idea in last 70 years, its faults are driving some people to question its basis. 
Globalisation is on the decline as its past champions in the US and Europe argue for protectionism. The top 1 per cent control half the wealth of the world, says Credit Suisse’s global wealth report. The number of billionaires is growing faster in developing countries in Asia. Income inequality is rising between and within economies. Climate change has divided countries as the rich want the aspiring billions to stop following their path of wasteful consumption to reduce the impact on environment. Many still don’t believe in climate change. Ethnic and regional identities are placing strains on countries with demands for independence rising within Europe and Asia.

Two recent reports by the WEF offer sombre predictions and red flags for global leaders who are gathering in Davos. The theme for the meeting is “creating shared future in a fractured world,” indicating the need for urgent action.

WEF’s The Global Risks report highlights potential breakdown of democracies, cyber wars and food crisis among other issues. “A widening economic recovery presents us with an opportunity that we cannot afford to squander, to tackle the fractures that we have allowed to weaken the world’s institutions, societies and environment. We must take seriously the risk of a global systems breakdown. Together we have the resources and the new scientific and technological knowledge to prevent this. Above all, the challenge is to find the will and momentum to work together for a shared future,” says Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum.

A survey of 1000 experts on the outlook for 2018 showed up high levels of pessimism. About 93 per cent respondents said that they expect political and economic confrontations between major powers to worsen in 2018.

Then there are the fourth industrial revolution technologies. These technologies including scientific breakthroughs like 3D printing as well as new platforms like Internet of Things, blockchain driven by the power of artificial intelligence and data science.

The Readiness of Future of Production report by WEF also highlights the challenges of rapid change. Only 25 countries in the world are in a position to make the most of the new technologies. While at a level the fourth industrial revolution is allowing everyone access to new technologies, their abilities to benefit on it is poor. India at ranked 35th on the global manufacturing index since it has not been able to invest in new production methods. 
Japan is leading globally in the current baseline of production; United States is best positioned to capitalize on the Fourth Industrial Revolution to transform production system, says the report.

Countries have been placed in four categories by the report, “Leading (strong current base, high level of readiness for the future); High Potential (limited current base, high potential for the future); Legacy (strong current base, at risk for the future); or Nascent (limited current base, low level of readiness for the future).” Most countries are in the final three categories.

Prime Minister Narendra Modi is working to improve economic inclusion in India while Donald Trump is struggling to create economic opportunities in the US. When they and 70 other heads of state meet global leaders from other fields, these worrying divides will dominate conversations. Hopefully, they will collaborate to build new bridges that connect people and continents.

The writer is an economic analyst and author of Kranti Nation: India and The Fourth Industrial Revolution