Experts have called it the most important economic meeting in 50 years.
Faced with events like severe climate change and the COVID pandemic, the World Economic Forum’s (WEF) first meetup in two years, at the Swiss mountain resort of Davos, was unlike any other.
For the first time in its history, no Russian delegation was present, with the country’s base at the resort being renamed the ‘Russian War Crimes House’.
The event was also notable for a strong showing from India, considered by many to be an emerging economic powerhouse. With robust growth prospects, the subcontinent claimed to be the quickest-growing large economy this year and promised to play a vital role in global economics over the coming years.
Why Davos is important
Founded back in 1971 by German economist Klaus Schwab, the World Economic Forum (WEF) aims to ‘improve the state of the world’ through business, political and academic means.
Davos is the setting for the WEF’s annual meeting, which brings together 3,000 prominent politicians, business leaders, economists, and journalists to discuss the pressing issues of that time.
The stunning alpine setting is one benefit of Davos holding the event, but the reasons for it being there run deeper than that. Schwab was based at the nearby University of Geneva, and Switzerland’s status as a neutral country in the heart of Europe removed any contentious issues about hosting between rival countries.
The 2022 event was important for several reasons, but two stand out. First of all, it was the first gathering in two years following the pandemic, causing a build-up of issues that needed to be addressed.
Secondly, momentous events across the world, such as the Russian invasion of Ukraine and the climate emergency, made an economic action plan even more important than usual.
Many political and business leaders shared their ideas via keynote speeches, and one country that stood out for their ideas was India.
What India is bringing to the table
In a world beset by economic uncertainty, India’s consistent rapid growth has led to experts analyzing what they’re doing right. At Davos 2022, leader Narendra Modi outlined the reasons for the country’s fiscal success in a live video link interview with Klaus Schwab.
Here are the key features of his speech.
One of the reasons that India can claim to be one of the fastest growing economies in the world is because of how bad its economic situation has been in recent years.
In a country where salaries have always been a fraction of those in Europe and the United States, workers have often emigrated to western countries for a better standard of living. Even today, the minimum wage of 178 INR (2.29 USD) is barely enough to buy you a lottery ticket in the United States.
However, starting from such a low base has given the country a lot of room for improvement. A projected growth rate of 8.5% for 2022 puts the country well above the average of around 7% that even the best performing countries are achieving at the moment.
Reasons for the quick growth according to Modi are a fleet of structural reforms, including privatisation of parts of the economy, a goods and services tax, and the easing of restrictions on foreign investment.
For Modi, it’s proof that he’s living up to a pledge he made at Davos 2018, where he promised to double the size of the country’s economy to an incredible $5 trillion by 2025.
Investment in technology
2021 was a bumper year for tech investments in India, with venture capitalist (VC) funding jumping up to the third highest in the world.
Investments tripled from $15 billion in 2020 to $45 billion the following year, and the city of Bengaluru ranked fifth in the world’s top cities for VC investment.
The nation saw the creation of 44 new Unicorn companies during the year, which demonstrates how innovation is thriving across the region. It also promises to attract new talent from all over the globe as entrepreneurs start to view India as a promising place to invest.
As the country celebrates its 75th anniversary of independence, it hopes to build on technological progress to become one of the global frontrunners for innovation.
A contrast to the chaos in Europe
The Russian invasion of Ukraine triggered a series of panic signals across the European continent, which sent local markets tumbling in value.
India, in contrast, has appeared as a steady alternative for investors, who are encouraged by their consistently positive returns.
While India has moved to bolster ties with the EU in recent weeks, it’s easy to see why it might be enjoying its newfound attraction as an investment hub.
The key challenge for Modi and his government will be to stay on good terms with key allies across the world while maintaining the economic growth that is turning the nation into a major player.
Strong public performances at international forums like Davos will surely be at the heart of their strategy.