DESPITE the blue skies and sunshine in Davos this week, a darkening of the mood is palpable among participants at this year's World Economic Forum (WEF).

Gone are the sunny declarations of last year, when political and business leaders declared the world had at last shrugged off the gloom of the 2009 financial crisis.

This year, uncertainty and anxiety about the multiple challenges the world faces are back with a vengeance at this annual gathering of the world's leading advocates, and beneficiaries, of economic globalisation.

German Chancellor Angela Merkel voiced these concerns during her keynote address on Thursday, describing events of the past year as a "wake up call to the world".

These had made plain that countries are going to have to stand up for the freedoms and principles they hold dear, she said, pointing to Russia's aggression over Ukraine and the recent Islamist attacks on free speech in France.

Just moments later, the attention of participants shifted to the breaking news of the massive bond- buying plan of the European Central Bank (ECB) to boost Europe's stalling economy. Earlier this week, Chinese Premier Li Keqiang also said that slower growth was the "new normal", making economic reforms all the more critical.

As always, such economic and political issues feature prominently on the WEF agenda, amid a dizzying array of discussions - from the urgent need to tackle climate change and global pandemics, to social and security challenges posed by new digital technologies, and even sessions on mindfulness to help leaders stay on top of their game.

Yet, going by the formal discussions and chatter in the corridors, minds are clearly focused on the global "to do now" list.

At the top of this list is rising income inequality. Noting this in the WEF's Outlook on the Global Agenda 2015, an assessment of the key risks facing the world, former United States vice-president Al Gore said: "As the world's rich continue to accumulate wealth at record rates, the middle class is struggling... Over the last 25 years, the average income of the top 0.1 per cent has grown 20 times compared with that of the average citizen...

"Our economies may be growing, but the number of available jobs is largely failing to keep pace. For many, the situation is urgent."

Taking up this theme, Harvard Professor David Gergen noted that 86 per cent of those the WEF polled said the world faces a "leadership crisis", coupled with a "weakening of representative democracy". Over half (55 per cent) felt they could not trust their governments to be open, transparent and accountable.

Declining trust - between political leaders and voters, as well as among communities and countries - has been a recurring theme in many discussions here.

WEF founder and executive chairman Klaus Schwab, who has watched these global mood swings for decades, summed up this sentiment when he declared: "We have to restore trust in the world. Right now, trust is a precious commodity."

As one Davos delegate put it, economic stagnation has led to a growing disillusionment, especially among the young. The Davos mantra on globalisation - that open markets for trade, investments, people and skills, would lead inexorably to rising incomes and better lives for all - is increasingly being questioned.

For all their benefits, global integration and interdependence have also given rise to greater insecurities. Many workers feel more uncertain about their jobs and economic futures, leading to mounting resistance to immigration and economic liberalisation, noted Swiss President Simonetta Sommaruga in her opening address.

Fostering greater trust, however, is a two-way street, argued Prof Gergen. While voters are hungry for action from their leaders, politicians everywhere take their cue from electorates.

"We the people bear responsibility. In one country after the other, political polarisation has come in part because the middle has fallen away and engagement has been dominated by extremists. Globally, we the people have been hesitant to speak up when it matters most, when we are facing the toughest crises - from climate change to poverty to fiscal stability."

Dr Merkel drove this point home in her usual no- nonsense manner.

Pressed to comment on the ECB's plans, she side-stepped the question, but made plain that any stimulus package must not distract people from the need for deep, perhaps painful, structural reforms.

Such clear-headedness and plain speaking will be critical in restoring trust, and faith in the globalisation that this Davos forum has long championed.