As the global political economy faces a critical test, world leaders must urgently prioritise strengthening democratic governance and embedding social safeguards in trade systems rather than undermining them.
This was the resounding call at the 2025 World Economic Forum Annual Meeting, held in Davos, where discussions on inequality, technological disruption, and the future of globalisation took centre stage.
Secretary-General of the International Trade Union Confederation, Luc Triangle, led the charge in highlighting the failures of the current economic model, warning that without immediate reforms, the world risks exacerbating inequality and social unrest.
A statement by ITUC noted that Triangle’s message comes at a time when public trust in governments is at an all-time low, with many workers feeling abandoned by policies that fail to ensure fair wealth distribution.
According to Oxfam’s latest report, it underscored the staggering growth of inequality, revealing that billionaire wealth rose three times faster in 2024 than the year before. Despite decades of globalisation, the absence of adequate social safeguards in trade and investment systems has widened the gap between the rich and the poor.
It noted that major issues included the lack of enforcement in human and labour rights due diligence across global supply chains, declining labour income shares, and the persistent failure to guarantee workers a living wage.
“Precarious jobs are on the rise, forcing many to juggle multiple roles just to survive. At the same time, an ineffective global tax system allows wealth to accumulate unchecked while debt burdens cripple developing economies,” it stated.
Meanwhile, the rapid development of artificial intelligence dominated discussions in Davos.
While financiers and investors touted its efficiency gains, concerns were raised about its potential to exacerbate job displacement and deepen inequalities.
“Without robust governance, AI risks becoming another tool that amplifies the flaws of an already broken economic model,” the statement read.
Triangle warned that the unchecked pursuit of profit by the one per cent gathered at Davos is fuelling a ticking time bomb of inequality and environmental degradation.
He stressed that democratic governments must act now to hold these influential players accountable for their social responsibilities.
“The tools, opportunities, and resources to fix the system exist. What we lack is the political will to implement them,” Triangle added.
Triangle called for the upcoming World Summit for Social Development in Qatar to deliver concrete reforms that include ensuring decent work through a Just Transition, mandatory human rights due diligence, a fair global tax standard, and comprehensive debt restructuring and cancellation.
These measures, he argued, were essential for rebuilding trust in governance and creating a sustainable global economy that benefits all.
He explained that “With global leaders continuing business as usual despite clear signs of impending crises, the WEF’s discussions underscored the urgent need for a New Social Contract.”
“Only by embedding democratic governance and social safeguards into global trade can the world navigate rapid change and build a fairer future for all,” Triangle added.
