Davos day 2: Zelenskiy, Scholz, Stoltenberg and Guterres to address WEF – business live

Larry Elliott

Joe Biden’s Inflation Reduction Act – which provides subsidies for companies investing in green technologies – is not to everybody’s taste but Lord Nicholas Stern is big fan.

The economist who wrote the ground-breaking Stern report on the economics of climate change for Tony Blair’s government in 2006, said the US president had come up with a “remarkable” piece of legislation.

“It comes from somebody who was a master of domestic politics and has a very clear idea of what can happen to the climate”, Stern said, here at Davos.

The president of the European Commission, Ursula von der Leyen, has expressed concern about the subsidies being provided by the US government to persuade firms to base production in the US, and said Europe was working on an industrial strategy of its own.

Stern said this was a good thing because it would create more global competition in the green technology sector, which in turn would help in the fight to achieve carbon net zero.

Stern says:

“The EU is really worried the centre of gravity moves to the US.”

While accepting that the IRA amounted to state aid and protectionism, Stern said it also marked a shift to a different form of globalisation, adding:

“It’s not autarky but it’s not free trade either.”

Martin J. Walsh, the US Secretary of Labor, is telling Davos that America needs immigration reform.

Speaking on a panel on the future of jobs, Walsh says that the US doesn’t have a good immigration policy right now. He cites the issue of students who come to the US from around the world for a university education – if they’re not lucky enough to get a visa they get sent home.

Walsh says that when he meets businesses, they raise immigration as an issue – he hopes they will use their voices to raise awareness of the problem.

The threat to the US economy in the long term isn’t inflation, it’s immigration, Walsh tells delegates at Davos.

He adds that reskilling workers is another priority.

In the UK, inflation has dipped to a three-month low of 10.5% last month,

But in a blow to households, food and drink prices continued to accelerate, rising at the fastest pace since 1977.

My colleague Phillip Inman reports:

The modest drop in December’s CPI was driven mainly by a significant fall in petrol and diesel prices and a decline in clothing prices growth compared with the same month in 2021.

The ONS chief economist, Grant Fitzner, said petrol fell 8p a litre and diesel prices slumped 16p over the course of December.

Here’s the story:

Ultra-rich call on governments to introduce wealth taxes

Rupert Neate

More than 200 members of the super-rich elite are calling on governments around the world to “tax us, the ultra rich, now” in order to help billions of people struggling with cost of living crisis.

The group of 205 millionaires and billionaires, including the Disney heiress Abigail Disney and The Hulk actor Mark Ruffalo, on Wednesday called on world leaders and business executives meeting in Davos for the World Economic Forum (WEF) to urgently introduce wealth taxes to help tackle “extreme inequality”.

In an open letter published on Wednesday, they say:

“The current lack of action is gravely concerning. A meeting of the ‘global elite’ in Davos to discuss ‘cooperation in a fragmented world’ is pointless if you aren’t challenging the root cause of division.

Defending democracy and building cooperation requires action to build fairer economies right now – it is not a problem that can be left for our children to fix.

Zambia debt talks ‘moving more slowly than hoped – finance minister

Larry Elliott

Zambia’s finance minister Situmbeko Muskotwane has admitted his country’s protracted debt negotiations are taking longer than hoped and that the delay is preventing the mineral-rich African country from taking advantage of the transition to net-zero.

Negotiations have been under way since Zambia’s $18b default in 2021 and have been seen as a test case of whether a G20 initiative to ease debt burdens on poor countries can work.

The International Monetary Fund has provided an assessment of how much debt Zambia could service but there has been resistance from China and private bondholders to the level of debt reduction they are expected to accept.

“Negotiations are still going on”, Muskotwane said during an interview in Davos.

Muskotwane tells us:

“They are moving more slowly than I hoped for. But they are still going on and I hope that by the end of the first quarter there could be some positive news.”

The IMF is worried about the debt problems facing a number of countries, and thinks China and the private sector bondholders are blaming each other for the lack of progress. An IMF-convened debt round table will take place on the fringes of the meeting of G20 finance and central bank governors in India next month.

Muskotwane said the IMF had been clear about the level of debt Zambia could sustain, and that once a deal had been done his government would stick to it.

“We want to be a country that when it borrows pays back.”

He said the world would need Zambia’s resource wealth if it was to make good on commitments to net zero targets, noting that his country was rich in copper, nickel, manganese and cobalt.

“People are looking for green energy and the resources needed are all in Zambia. The challenge is to get investors to help us exploit those resources and get the economy to be stronger.”

Good morning from Davos, where the second day of the World Economic Forum is getting underway.

Ukraine’s president Volodymyr Zelenskiy will address today’s Annual Meeting this afternoon, by video call, and he’s expected to call for more heavy weaponry to help push Russian forces back.

This could pile even more pressure on Germany to allow the re-export of its Leopard 2 tanks, with Andrzej Duda, the Polish president, telling Davos yesterday that a positive decision from Berlin was “very, very, very, very needed”.

German chancellor Olaf Scholz will speak before Zelenskiy, the only G7 leader expected to take the stage at this year’s WEF.

Yesterday, Scholz declared he was “absolutely convinced” that Germany will avoid a recession this year, despite Russia’s energy squeeze.

Zelenskiy will be followed on stage by Jens Stoltenberg, secretary-general of NATO.

As we blogged last night, former US Secretary of State Henry Kissinger said Ukraine joining NATO could be an “appropriate outcome” of Russia’s invasion, as he reiterated his call for a negotiated solution to the conflict.

“The idea of a neutral Ukraine under these conditions is no longer meaningful,” Kissinger, 99, told WEF delegates by video link.

Ukraine’s First Lady Olena Zelenska made a surprise appearance here yesterday, urging political leaders and chief executives to use their influence to help her country.

Zelenska brought a letter from her husband for China’s Xi Jinping (to be taken back from Davos by Chinese vice-premier Liu He), plus letters for European Commission President Ursula von der Leyen and Swiss president Alain Berset.

Zelenska warned delegates that the war “could go further” unless Russia is stopped.

António Guterres, Secretary General of the United Nations, also addresses the annual meeting today. He may focus on the climate crisis. Last weekend Guterres called for a renewable energy ‘revolution’, saying this was the only credible path to avoid climate catastrophe.

The agenda

• 10.00am Davos / 9am GMT: Global Cybersecurity Outlook 2023, with Interpol secretary-general Jürgen Stock, Accenture’s CEO Julie Sweet, and Nikesh Arora, CEO and chairman of Palo Alto Networks

• 11:15am Davos / 10.15am GMT: Special Address by António Guterres, Secretary General of the United Nations

• 3:45pm Davos / 2.45pm GMT: Special Address by Olaf Scholz, Chancellor of Germany

• 5pm Davos / 4pm GMT: Special Address by Volodymyr Zelenskiy, president of Ukraine

• 5.15pm Davos / 4.15pm GMT: Restoring Security and Peace, with Andrzej Duda, president of Poland; Jens Stoltenberg, Secretary-General NATO

• 6.30pm Davos / 5.30pm GMT: Uk-Ukraine-Swiss press conference on the Ukraine recovery conference, with UK business secretary Grant Shapps