Davos 2026: a fragmented world put to the test of dialogue
30 JAN, 2026
By Moneyfarm
By Richard Flax, Chief Investment Officer at Moneyfarm
The “spirit of dialogue,” the guiding theme of the 2026 World Economic Forum, was tested by an international landscape marked by rising geopolitical tensions and growing confrontation between competing blocs. Davos’ traditional optimism gave way to a more realistic reading of a multipolar world, in which global cooperation appears weakened, though not entirely obsolete.
Geopolitics dominated the debate, with the WEF’s Global Risks Report documenting the shift toward an era of heightened competition in global affairs, characterized by the erosion of multilateralism. In this context, the growing role of middle powers has emerged, tasked with compensating for the crisis of a system once underpinned by major powers through new forms of flexible cooperation. From India and Brazil to Canada, momentum is building around regional forums and issue-based alliances focused on trade, energy security, and value chains—aimed at filling the vacuum left by paralyzed global institutions and reaffirming that no single superpower should be able to set the global agenda alone.
On the economic front, the outlook appears more resilient than expected. According to the International Monetary Fund, global growth in 2025 stood at around 3.3%, while recession fears have eased. Geoeconomic fragmentation, however, remains the main short-term risk, underscoring the need for global leaders to build buffers, diversify value chains, and strengthen financial safety margins.
The specter of a major decoupling—the progressive separation of interdependent economies into rival trade blocs, along with technological and financial disengagement—has not yet materialized. Global trade has avoided an outright economic war, instead reorganizing along new axes, with Southeast Asia and India emerging as new engines of growth. Nevertheless, concerns persist over high debt levels and the lagged effects of restrictive monetary policies.
Significant attention was also devoted to the advancement of Artificial Intelligence, approached with a more pragmatic mindset than in the past. Enthusiasm has given way to the realization that the real challenge lies in scaling AI in the real economy—across infrastructure, energy, and human capital. According to Forum surveys, AI could boost global growth by nearly 0.8%, yet its risks—from labor market disruption to security threats—have now firmly entered the list of major long-term global risks.
On climate change, Davos painted a contradictory picture. Failure to act on climate remains the leading systemic risk for the planet, while politics continues to oscillate between green pledges and returns to fossil fuels, with the cost of inaction rising year after year. The energy transition is advancing primarily through market forces: in 2025, 93% of newly installed global electricity capacity came from renewable sources. The real battleground, however, lies in the geopolitics of energy, as the war in Ukraine and the ensuing gas crisis have prompted many governments to reassess energy priorities, often at the expense of climate objectives.
Finally, one of the most cross-cutting themes at Davos was the crisis of trust in institutions and democracy. Traditionally the conclave of the global establishment, the 2026 edition portrayed a system under strain—less from external challenges than from growing public distrust of institutions themselves. The Edelman Trust Barometer 2026 reveals deep polarization, showing that nearly 70% of citizens in major economies are reluctant to trust those with different values or opinions. As trust erodes, so too does the collective capacity to address key challenges, from economic inequality and conflict to the climate crisis. Without a renewed trust pact between citizens, institutions, and businesses, it became clear that even the most sophisticated economic, technological, and climate strategies risk remaining ineffective.
