What is The Great Reset, and why is it controversial?

The Great Reset is an initiative by the World Economic Forum. It has been conceptualised by the founder and executive chairman of the WEF, Klaus Schwab, and has evolved over the last few years. It is based on the assessment that the world economy is in deep trouble. Schwab has argued that the situation has been made a lot worse by many factors, including the pandemic’s devastating effects on global society, the un- folding technological revolution, and the consequences of climate change.

The Covid-19 crisis, and the political, economic and social disruptions it has caused, is fundamentally changing the traditional context for decision-making. The inconsistencies, inadequacies and contradictions of multiple systems –from health and financial to energy and education – are more exposed than ever amidst a global context of concern for lives, livelihoods and the planet. Leaders find themselves at a historic crossroads, managing short-term pressures against medium- and long-term uncertainties.

Schwab demands that “the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a ‘Great Reset’ of capitalism.

The agenda of The Great Reset touches on many key issues facing the world, first is the question of reforming capitalism. Davos has been at the forefront of calling for “stakeholder capitalism” that looks beyond the traditional corporate focus on maximising profit for shareholders.

Second, Davos is certainly right to focus on the deepening climate crisis. Climate sceptics have been ousted from Washington and President Biden has rejoined the 2015 Paris accord on mitigating climate change.

Third is the growing difficulty of global cooperation that Davos wants to promote. The era of great power harmony that accompanied the liberalisation of the global economy at the turn of the 1990s has yielded place to intense contestation. The contestation is not just political but increasingly economic and technological.

THE OPPORTUNITY

As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons. Drawing from the vision and vast expertise of the leaders engaged across the Forum’s communities, the Great Reset initiative has a set of dimensions to build a new social contract that honours the dignity of every human being.