The founder of the World Economic Forum, which will hold its annual meeting this weekend in Davos, Switzerland, is predicting that falling oil prices could worsen the migrant crisis and bring chaos to Europe.
“Look how many countries in Africa depend for their income from oil exports,” Klaus Schwab told Bloomberg News. “Now just imagine 1 billion inhabitants. Imagine they all move north.
“So it could be that the present refugee problem we have in Europe is just the precursor of what could come if you add in addition a possible water crisis,” he continued. “So I’m very concerned that the lowering of commodity prices leads to substantial social breakdown in a number of countries.”
Schwab also said the Federal Reserve and other elite decision makers are moving in “uncharted territory.”
The theme of this year’s conference, set for Jan. 20-23 in Davos, is “The Fourth Industrial Revolution” as the world prepares to deal with mass replacement of human labor with robots and other technology.
Schwab said leaders should not underestimate the impact of lower commodity prices or the vulnerability of some countries to foreign-exchange exposure.
“I’m positive for the developed world but I would foresee the potential for quite substantial shocks,” he said.
“You’re seeing uncharted territory. We don’t know. We make a decision, but we don’t know actually what the consequences are. I would say we are living in times of unexpected consequences. Whatever your decision, you don’t know exactly what will happen. So we are not completely in control of what is happening, and this leads also to the erosion of trust toward decision makers.”
‘Very concerned about final impact’
The refugee crisis, if not dealt with wisely, has the potential to bring chaos and unimaginable change to Europe, Schwab said.
“I think we probably have to redefine the word ‘refugee’ to make sure those who are really in need find the necessary protection, but certainly we have to look what to do with those who are more economic refugees. I do not have a recipe,” he said. “But I know we have to protect those … it’s one of our European values. This is having a heart for other people. I am torn myself. Because I would like to help those people as much as possible. On the other hand, I am very concerned what the final impact on populations will be.”
German Chancellor Angela Merkel said over the weekend she feared the refugee crisis will “tear the European Union apart,” according to the Huffington Post, and she blamed nationalist attitudes for the fissures in German society. The crisis is jeopardizing “the very core of the European Union,” added the EU’s migration commissioner.
Merkel’s government has already welcomed 1.1 million migrants from the Middle East and Africa.
Her popularity has plummeted as a result, as Germany has been hit by a historic crime wave. Muslim refugees perpetrated hundreds of sexual assaults on German women at New Year’s Eve parties in Cologne.
Merkel, facing a backlash not just from “far right” opponents but from her supporters as well, called Europe “vulnerable” and the fate of the euro “directly linked” to resolving the migrant crisis – “highlighting the risk of at the very least serious economic turbulence if not a formal dismantling of E.U. institutions,” according to Huffington Post.
Germans are also getting little help from E.U. co-founder France, whose leaders fear a rising anti-immigrant National Front, or from Britain, which is embroiled in its own debate on whether to quit the E.U. altogether.
Efforts to engage Turkey’s help have proved unfruitful as Istanbul has shown little interest in preventing migrants from reaching Europe. German and E.U. officials are warning that without a sharp drop in migrant arrivals or a big increase in help from other E.U. nation-states, Germany could shut its borders.
With Merkel’s conservative allies in Bavaria demanding she halt the mainly Muslim refugees ahead of regional elections in March, her finance minister delivered a veiled threat to E.U. counterparts of what that could mean for them.
“Many think this is a German problem,” Wolfgang Schaeuble said in meetings with fellow E.U. finance ministers in Brussels. “But if Germany does what everyone expects, then we’ll see that it’s not a German problem – but a European one.”