- Cr. Chayanid (Mint) Kovavisarach
Over 5 days in the small ski-town of Davos, global leaders and change-makers assembled for the 50th anniversary of the World Economic Forum (WEF). As Davos’ security checkpoint approaches, against the hillside and in the snow, a key message is written: ‘there is no planet B’. Encapsulating not only the global demand for climate action over the past year, it is also emblematic of the top issue in the Forum’s agenda. As climate action and sustainable development take the forefront of all discussions over the course of the week, ‘Tech for Good’, ‘Better Business’, and the ‘Future of Work’ are closely behind.
As the Fourth Industrial Revolution approaches unequally in both intensity and geographic distribution, corporations and governments prepare for the societal, digital, and organizational transformation that follows. The age of big data opens up huge potential in all sectors and industries: in healthcare, the potential lies in tailored treatments and better detection of diseases. However, like in all sectors, the use of big data raises ethical questions of fair access and use of personal information. However, expanded responsibly, it could transform peoples’ safety, finance, and daily planning. In finance is where we see a key role for ‘Tech for Good’ in Southeast Asia. Research and development on Central Bank Digital Currency (CBDC) has accelerated amid increased interest of the role CBDC could play as a potential solution to challenges such as financial inclusion and payment-system efficiency. The WEF has thus provided a CBDC Policy-Maker Toolkit to provide a concise summary of key issues and guidance for policymakers considering general purpose of wholesale CBDC and which has seen adoption by Southeast Asian central banks. Cambodia’s central bank has piloted a quasi-form of CBDC for its national payments system. According to Dr Veerathai Santiprabhob, Governor of the Bank of Thailand, Thailand has made good progress on a wholesale CBDC project and have employed the Toolkit’s framework to tackle obstacles they have faced, such as handling associated risks.
Against the backdrop of a rapidly advancing digital economy, the global job market is in transformation. The WEF’s Future of Jobs Report 2018 suggests that, by 2022, the world would see a loss of 75 million jobs as a result of digital disruption, but a gain of 133 million new roles. The challenge presented is particularly steep in developing countries, where governments must simultaneously overcome poverty, lack of infrastructure, as well as catch up with the digital world. By 2030, China, India, and Southeast Asia are expected to contribute roughly 60% of global growth; yet, 62% of ASEAN youths believe their current skills are outdated and require retraining, according to a World Economic Forum survey in 2019 and it is believed that 53 million workers will have to be reskilled in ASEAN alone. The WEF has launched ‘Reskilling Revolution’, a project partnered by UNICEF and Generation Unlimited, amongst other international and civil society organisations, to provide one billion people with better education, skills, and jobs by 2030. Within Southeast Asia, governments will need to innovate and reform education to ensure that there is not only a competitive and appropriately skilled workforce but that a culture of learning as a lifelong endeavour.
The other side of the coin is the role corporations play in the transformation. ‘Better Business’ is another one of the major themes at the WEF, where companies can no longer serve only their shareholders but must consider all stakeholders. This involves addressing both environmental and sustainable issues alongside societal issues, such as people’s well-being. The latter is through which companies play a key role in providing both constant retraining and reskilling of their employees amid this disruptive technological and job market transformation. In this ‘year in the evolution of corporate governance’, Bank of America CEO Brian Moynihan claims that ‘a clear priority is defining a way to measure companies’ performance in meeting social and environmental goals, in a similar way to which their financial performance is measured now’. The Forum’s International Business Council has discussed a proposal, Toward Common Metrics and Consistent Reporting of Sustainable Value Creation, prepared in collaboration with the Big Four accounting firms in line with SDGs and ESGs to include: principles of governance, the company’s commitment to ethics; planet; people, the role that human and social capital play in business; and prosperity.
The last, and the most important, takeaway from the WEF is undoubtedly climate action and sustainability. On one hand, it is undeniable that the global economy is at a ‘tipping point’, with economists, financial institutions, and corporations extremely pessimistic with the global outlook. The Forum’s Global Risks Report 2020 writes that the global economy is weighed down by ‘trade tensions, inequality, and geopolitical uncertainty’. On the other, the world faces a climate emergency. Air pollution is considered a health crisis that kills over 4 million people a year. In January 2020 alone, natural disasters have wreaked havoc across all corners of the Earth: a volcano eruption in the Philippines, an avalanche in Kashmir, an earthquake in Turkey, floods in Brazil and Indonesia, and fires across Australia. Yet, in spite all this, there is an increasing demand for energy from fast-growing regions in the developing world. A transition to greener and more equitable economy is thus imperative for productivity and sustainable growth. Governor of the Bank of England, Mark Carney, warns that an impending financial collapse is dependent on the climate emergency. Speaking at the Bloomberg Climate Forum at the WEF, he believes that climate action bolsters economic growth, rather than damaging the global economy: ‘there is a need for a big increase in investment globally to accelerate the pace of global growth to get us out of this low-growth, low-interest-rate trap’. As such, such capital can be mobilized in towards energy efficiency, alteration in consumption, and carbon capture. Working towards ‘Better Business’, Carney firmly believes, like many others at the WEF, that ‘companies that don’t adapt will go bankrupt without question’.
What position does this put Southeast Asia in? Against the backdrop of being some of the biggest contributors to marine plastic waste, the region is expected to increase its overall energy demand by 60. The key challenge for the region is thus to leapfrog technologies as each country transitions to higher economic growth paths and the world transitions towards cleaner and greener energy. With respect to mobility, while the region does not yet have robust policy frameworks for EVs, several countries have set targets and incentives to replace traditional individual vehicles. Furthermore, it is imperative, as Thailand improves the connectivity of its public transport sector, that public transport utilizes renewable technologies and provides a more attractive alternative to individual transport to reduce carbon emissions and hazardous air pollution.
Furthermore, only 15% of households in Southeast Asia have air conditions, through the distribution of households is more concentrated in some cities and countries than others, relative to 80% of households in wealthier countries with less challenging climates. The global pledge to energy efficiency and the region’s challenge to leapfrog existing technologies can thus be employed in ensuring both energy efficient and sustainable cooling facilities for consumers through government policies such as implementing or increasing minimum energy performance standards.
The 50th Anniversary of the World Economic Forum in January has not only set the tone for the year but for the decade. With many goals set, meeting the 2030 SDGs, averting the climate crisis, advancing and adjusting to the technological revolution, amongst many others, the Forum represents the challenging decade ahead. Nevertheless, at the crossroads of numerous ‘tipping points’, many opportunities present themselves for a developing region like Southeast Asia: leapfrogging development, retraining skills, and utilizing innovative technologies for an economic growth that is compatible with environmental sustainability.
Following the last year’s Forum themed ‘Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution’, the Chairman of the Forum, Klaus Schwab applauded Gen Prayuth Chan-o-cha as the Prime Minister under the junta rule for his 4.0 development policies to modernise and digitise operation and management in various industries. As if he could foresee the victory of the military-dominated party, Phalang Pracharat, Schwab also reiterated the importance of decentralisation of power and supported public-private integration so Thailand could keep up with the world of rapid changes. What the junta has achieved during its time was perhaps commendable in maintaining relative peace and order relative to the previous administrations.
‘Stakeholders for a cohesive and sustainable world’ being the focus for this year with Trump versus Greta Thunberg taking the centre stage, sustainable development dominated the discussions. Attending the WEF 2020 from Thailand, Governor of the Bank of Thailand Dr Veerathai commented that the Thai financial institutes and financial management need to be resilient amidst the uncertainty of global economic dynamics and technological disruptions. Dr Suwit Maesincee, another delegate from the Thai government leading the brand-new Ministry of Higher Education, Science, Research and Innovation, said that he would focus in empowering human capital to enhance competitiveness for Thai industries and businesses at the global stage.
Looking back at home, a couple of weeks after the Forum, the Thai government has been struggling to address the people’s cry of disapproval for the government’s crisis management. Thailand has been hit by ‘storm after storm’, as Deputy Prime Minister of Economics Dr Somkid Jatusripitak put it. The government approached the economic slowdown through an extended period of ‘Chim Shop Chai’ (Eat, Shop, Spend) stimulus package to encourage domestic spending. In recent Cabinet meetings, Thailand sees its government mostly occupied with responses to immediate challenges.
Thailand has yet to keep up with the development that provides sustainable solutions to the apparent socio-economic issues. While the administration is busy trying to restore confidence from the people and acceptance from the international governments, the business sector has already responded badly to the government’s 6-month review, with the financial sector projected at least a 0.2% shrink in the economy.
Despite the negative outlook, Minister of Finance Dr Uttama Savanaya said more measures to improve the economy this year will follow. This opens a window for opportunities for companies and organisations to express their interests in helping the government for its recovery. In relations to the resolutions from the World Economic Forum, the Thai government relies on the public sector to share expertise and experiences needed to catch up with the global developments. Most government agencies welcome collaboration with businesses which may take forms of Memorandum of Understanding (MOU), or simple public consultation. These allow companies to raise their concerns and make recommendations which will be of mutual benefits.