Selling DaStory in Davos

While South Africans boil in the January heat, the global business elite is wrapped up in their warmest winter woollies to attend the 54th annual gathering of the World Economic Forum in Davos, Switzerland.

“Davos” has become shorthand not only for this event, but also for a specific kind of global-first view of economics, business and society. The assembled includes not just CEOs, politicians, heads of multilateral organisations and central bankers, but also academics and other intellectual heavyweights, and occasionally, film- and rockstars.

Globalisation and its discontents
In recent years, however, the very concept of globalisation has come under siege. The pandemic, wars, and domestic political pressures mean countries are moving away from free trade, towards a greater focus on resilience and national security. This doesn’t mean globalisation is dead as some claim, just that it is taking a different direction. The IMF calls it “slowbalisation”. Either way, the mood in Davos these days is seemingly much more focused on the various risks facing the world economy, from conflict to climate change, than on opportunities for growth and expansion. One silver lining on the ski slopes this year: it will be a year of falling, not rising interest rates. We do not know yet how far or how fast they’ll fall – hence the market gyrations over the past two weeks – but lower borrowing costs reduce financial stress pretty much everywhere.

It is into this uncertain environment that a delegation of South African business and political leaders, including Finance Minister Enoch Godongwana, has tried to sell the country at Davos as an investment destination. It has been tough going in recent years, as low growth and massive infrastructure challenges mean foreign businesses have not exactly been falling over their feet to invest here.

Losing competitiveness
The WEF is not just an event, it is also a think-tank that publishes reports on key issues affecting the global economy. For several years, it published a flagship Global Competitiveness Report that assessed and ranked countries across 12 key pillars, including institutions, infrastructure, education, efficient labour markets, financial sophistication, market size and innovation.

South Africa ranks highly for market size, business sophistication and financial market development, poorly for education and labour market efficiency, and in the middle of the pack for the rest.

It was ranked 60th overall out of 141 countries in 2019, the last year the report was published. It squeezed in between Greece and Turkey, ahead of the likes of Brazil, India and Argentina, but behind China, Indonesia and Mexico. At the top of the list, as one might expect, is Singapore, the US, Hong Kong, the Netherlands and Switzerland, while the bottom five were Mozambique, Haiti, Yemen, the DRC and Chad.

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