In the heady mountain air of Davos last week, away from the parties and the back-slapping tech bros, another, more beleaguered crew touted their wares: the multilateralists.
On the sidelines of the World Economic Forum, representatives of aid agencies, development banks and multilateral lenders grabbed a moment with the many world leaders present, vying for attention among the glitz.
But at a summit dominated by the second coming of Donald Trump, and where the overwhelming concentration of power in the hands of a few giant corporations was blatant, theirs seemed like voices from another age.
Trump’s arrival in the White House cements a shift that began even before his first term: away from the relentless march of globalisation, towards a more fragmented world.
Russia, once welcomed into what became the G8, is promulgating a war in Europe, its economy now walled up behind sanctions; China and the US are vying for geopolitical dominance.
As the EU Commission chair, Ursula von der Leyen, put it, “we have entered a new era of harsh geostrategic competition”.
Adapting themselves to Trump’s transactional, zero-sum worldview, global leaders ditched any appeal to high-flown ideas, and rattled out negotiating points.
Von der Leyen highlighted the 3.5 million Americans employed by European-owned firms in the US. The UK trade secretary, Jonathan Reynolds, pointed out that we lack the large surplus in goods that might put us in Trump’s line of fire.
Nationalism is in. Grand global ideals, not so much. Yet as Mathias Cormann, the determinedly optimistic secretary general of the Organisation of Economic Cooperation and Development (OECD) said when we met in Davos, the world still urgently needs countries to collaborate.
“Multilateralism is never easy,” he said. “It’s always difficult, but that doesn’t make it any less necessary. There are a whole range of issues that can only be effectively tackled through global cooperation.”
He pointed to tax reform, where the OECD is the convener of the years-long project to tackle avoidance by multilaterals, and to the climate crisis.
Both of these issues are urgent, and climate in particular is likely to take a back seat under Trump – his video-link speech on Thursday included a lengthy digression on the merits of coal.
But at least on climate there is a global agreement – the Paris treaty – and its other signatories should continue to implement their part of the bargain. Von der Leyen said the EU would “stay the course”.
There is another urgent issue which Trump’s policies risk exacerbating, and for which there currently appears little chance of progress: debt relief for the world’s poorest countries.
Many economists fear Trump’s tariff plans will drive up US inflation, risking higher interest rates and a stronger dollar. For countries with hefty dollar-denominated loans, that would mean a jump in the cost of servicing their debts.
Already, debt repayments for lower-income countries as a share of government revenues are at the highest level in 30 years, according to World Bank data. There are 32 African countries that spend more on debt servicing than on health.
There is a G20 process for helping countries whose repayments become unmanageable, administered by the IMF: the Common Framework. But charities complain it is a sticking plaster that leaves countries saddled with unsustainable debt.
Achim Steiner, head of the UN Development Programme, said: “We estimate about 58 countries are still in a situation where the levels of debt and the level of debt servicing are so significant that they are taking resources away from some of the fundamental sectors, such as education and health. For some countries it is becoming an existential problem”.
He suggested the G20 finance ministers’ meeting in South Africa next month was the right forum for tackling the issue – but doubted member countries would show the leadership required.
Readers with long memories may recall a time when it was the UK, under a Labour government, that provided the leadership to tackle unsustainable debt, as Gordon Brown cajoled and entreated global leaders to deliver a jubilee.
According to Steiner: “We need to learn from the last time, when we had essentially a moment where we said: ‘Look, there’s no point in holding on to this debt, because it, first of all, will never be repaid. Second, it’s causing more problems than it’s actually solving.’”
A quarter of a century on, many senior figures in the UK’s aid sector are deeply depressed at the new Labour government’s failure to make development a priority.
On Monday, a coalition of charities, including Save the Children, Debt Justice, Cafod and Oxfam, will rally outside the Treasury to mark the start of a campaign calling on the government to lead the way on debt relief.
They have a tough fight on their hands. Labour strategists believe the politics of overseas aid are all wrong: they fear their “hero voters” want to see domestic problems tackled before we extend the hand of kindness overseas.
Yet the UK has a special responsibility, given that the biggest group of creditors are private lenders, and 90% of their contracts are governed by UK law. These investors need to be involved in write-offs, alongside official lenders. China, which has stepped up lending in recent years, would also have to participate.
Delegates to Davos last week were left in no doubt that global collaboration is deeply unfashionable. In this chilly climate, assembling a coalition to tackle unsustainable debt is a tough ask.
Yet some things are worth fighting for, and the accelerating pace of technological change means countries trapped in debt are sentenced to fall ever further behind. The UK’s charities are right to urge Labour to step up.
