Political, diplomatic divisions dominate Davos

Davos in Switzerland has been a meeting point for political leaders and business tycoons, economy and market experts. Nothing significant happened there though it attracted huge media attention. The statements made by each of them at Davos gave sense of what the mood was like in the world.

For many years, the mood at Davos was optimistic though there were notes of caution about the future, especially with regard to the emergence of AI as a dominant factor of the global economy. This year’s Davos jamboree very clearly reflected the many dividing lines crisscrossing the continents, and it was much more so in the Europe-United States divide over US President Donald Trump’s uncompromising stance over the American intent to take over Greenland apparently for security reasons.

Trump as usual made his point in the most undiplomatic manner, saying that it was America which had defended Europe against Germany. He clearly implied that it was America alone that can check the intrusion of Russia and China in the Arctic.

It is indeed the case that Americans can run their military bases in Greenland without much hindrance. Trump wants to turn what is de facto into what is de jure. In wanting to do so, he is willing to do away with all international protocols of sovereignty and territorial integrity.

European leaders and Canadian Prime Minister Mark Carney had hit back at the US and Trump n the most dignified and clear language. Carney and EU Commission President Ursula von der Leyen and EU foreign minister Kaja Kallas were polite and firm in their refusal to give in to Trump’s extra-diplomatic demands.

The focus this year then shifted from economics to politics. It would appear that it suits Trump very much that there was not much focus on economics. It was the political issue of sovereignty that was the centre of focus, especially with regard to Greenland. Trump was pushed back to an extent when it was agreed to open negotiations over the Greenland question between the United States, Greenland and Denmark along with members of the NATO. Trump for the moment has deferred the forceful occupation of Greenland which he was threatening to do.

Ukraine was not on the agenda but there was much activity around talks between the US, Ukraine and Russia delegations. There was no talk of the implications of the American capture of Venezuelan President Nicolas Maduro, and the system of controls over Venezuelan oil production was underway.

There were warning shots from the economic experts’ corner. Former IMF chief economist Geeta Gopinath had warned that India would pay a heavy price in terms of economic productions and the lives of people if there is no action on controlling air pollution. Gopinath’s warning has a strange ring to it because Trump has been pulling the US out of all climate-related initiatives and organisations associated dealing with them.

India and China are quite committed to take the necessary action in response to the climate change crisis. The two Asian giants can be criticised for not doing enough, but certainly not for denying climate change or for not taking any action to reduce greenhouse gas emissions.

The other voice of dissent against Trump’s climate policy is the lament of electric vehicle (EV) manufacturer Tesla. He bemoaned the fact that Trump had withdrawn support for the alternative sources of energy. He noted that the US has the potential to meet its energy demands through solar power by using part of the US territory as the base. Most American industrialists are with Trump on the climate issue.

Davos 2026 cannot be called a disaster. But it has certainly reflected the uneasiness – political and diplomatic – that was hanging in the air.