Emphasis on ‘transition period’ instead of recession from World Economic Forum

Mirek Dusek, Director General of the World Economic Forum (WEF), stated that the world is facing many crises at the same time, saying: “I think the right word to use (for these problems) is transition. “The actions of central banks, the flexibility of labor markets and the reshaping of supply chains will be among the factors that will decide what kind of economic order this transition will result in.”

Dusek answered questions about developments in the global economy and the summit’s agenda ahead of the WEF’s annual meeting in Davos from January 16-20.

Stating that the summit will be held this year under the theme “Cooperation in a Fragmented World” during a difficult economic landscape, Dusek said that the world is currently facing many crises due to interrelated reasons.

‘RESESSION DISCUSSIONS CONTINUE’

Expressing that these crises, ranging from food to energy to climate, affect millions of people around the world, especially those living in the most fragile regions, Dusek said: “The causes of these crises are interconnected and their solutions are also interconnected. “We must be united to identify and act on measures that allow us not only to reduce the future risk of such crises, but also to implement a new growth, jobs and security agenda for the future.”

Noting that methods like accelerating energy transformation, spreading breakthrough technological innovations, and introducing effective diplomatic mechanisms for a more competitive world are among the actions that can help us emerge more resilient from this period of uncertainty, Dusek continued:

“Debates about whether to call the current economic problems a recession have been going on for the past few months, but there is a discrepancy between some developments and the definition of the term. I think the right word to use (for these problems) is transition.”

‘GOVERNMENT POLICIES WILL PLAY A KEY ROLE’

Mirek Dusek drew attention to the importance of government policies in this transition period.
Emphasizing that government policies will play a key role in addressing multiple global crises, Dusek said: “Governments; “We should see adverse conditions as an opportunity to carry out much-needed policy reform, rather than an excuse to stop enacting important policies.”

Dusek noted that government policies should “support the transition to more sustainable sources to decouple economic growth from energy consumption and reduce carbon emissions to counter climate change.”

Dusek affirmed that the recent economic and geopolitical shocks have caused shocks in the security of energy supply, saying: “The deep concern for the security of energy supply should provide impetus to accelerate the movement towards a more sustainable energy model.”

‘CRISES ARE NOT COUNTRY OR REGION SPECIFIC’

Dusek affirmed that the current crises are not specific to a particular country or region and that their effects have affected the world in an unprecedented way, noting that government policies must also be created on a global scale and based on cooperation.

Stating that central banks around the world are working together to combat inflation, Dusek said: “Broader government policies and opportunities for coordinated action to address global systemic problems should be maximized.” (AA)