WEF boss Schwab warns commodities rout could spur more migration

Founder and president of the World Economic Forum Klaus Schwab speaks to the media in Switzerland, on Jan 13, 2016.
Founder and president of the World Economic Forum Klaus Schwab speaks to the media in Switzerland, on Jan 13, 2016.PHOTO: EPA

DAVOS (BLOOMBERG) - As the crash in commodities prices spreads economic woe across the developing world, Europe could face a wave of migration that will eclipse today's refugee crisis, says Mr Klaus Schwab, executive chairman of the World Economic Forum.

"Look how many countries in Africa, for example, depend on the income from oil exports," Mr Schwab said in an interview ahead of the WEF's 46th annual meeting, in the Swiss resort of Davos, which runs from Jan 20 to 23. "Now imagine one billion inhabitants, imagine they all move north."

Whereas much of the discussion about commodities has focused on the economic and market impact, he said he is concerned that it will also spur "a substantial social breakdown".

That fits into what Mr Schwab, the founder of the WEF, calls the time of "unexpected consequences" we now live in.

In the modern era, it is harder for policymakers to know the impact of their actions, which has led to "erosion of trust in decision-makers". "First, we have to look at the root causes of this," Mr Schwab said. "The normal citizen today is overwhelmed by the complexity and rapidity of what's happening, not only in the political world but also the technological field."

That sense of dislocation has led to the rise of radical political leaders, who tap into a rich vein of anger to promote xenophobic policies. For reason to prevail, Mr Schwab said, "we have to re-establish a sense that we all are in the same boat".