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Globalization hasn't fixed the gap between rich and poor, top CEOs say

A significant number of global business leaders have questioned whether globalization has done anything to tackle inequality or mitigate the issue of climate change, according to a new survey by the audit firm PwC.

For the past 20 years, CEOs have been largely positive about the contribution of globalization to the free movement of capital, goods, and people. However, this year's survey respondents are skeptical," the survey, released on Monday evening at the World Economic Forum in Davos, said.

The survey by PwC was carried out between September and December 2016 with 1,379 CEOs responding from 79 countries with a range of online, postal, face-to-face and phone interviews. Forty-four percent of respondents said that globalization had "not at all" closed the gap between the rich and poor. Just 13 percent agreed that it had helped this inequality "to a large extent". The rest implied that it had had some effect.

PwC contrasts the latest results with its survey from 1998 when CEOs were positive about the drivers of globalization. It also highlighted in the 2017 survey that only 60 percent of CEOs believed that globalization has had a largely positive impact on improving the movement of capital, people, goods and information.


Consumer rights activists take part in a march to protest against the Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) in Berlin, Germany, September 17, 2016.
Fabrizio Bensch | Reuters
Consumer rights activists take part in a march to protest against the Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) in Berlin, Germany, September 17, 2016.

The 2017 results also showed that 35 percent of CEOs believed that globalization had not helped with the fairness and integrity of global tax systems and 28 percent didn't believe it had averted climate change or resource scarcity.

The results come after a tumultuous 12 months for politics with the election win for Donald Trump and the Brexit vote in the U.K. Leading analysts to believe that voters are beginning to question globalization and current socio-economic models.

Citing PwC's recent consumer survey, the audit firm also said that only 38 percent of the public believed globalization has had a largely positive impact on improving the movement of capital, people, goods and information.

"Public discontent has the potential to erode trust which is needed for long term sustainable performance. The real challenge here though, isn't just one of how CEOs navigate, it's about the need for CEOs to have a deeper, two-way relationship with stakeholders, customers, employees, and the public," Bob Moritz, the global chairman at the company, said in the accompanying press release on Monday.

"Understanding the root cause of the potential discontent or perception is a critical first step towards communicating the benefits of business for society. There's a lot at stake if we do not achieve inclusive global growth."

Speaking on the incoming Donald Trump presidency, Moritz told CNBC at Davos that there was a confidence level with CEOs that they'll get more certainty around taxation and regulation.

"The question's going to be will it actually create the job growth? Because even if you actually go and monopolize the trade policies and maybe take care of the globalism versus the nationalism, the digitization and the automation has actually taken away a lot of those jobs in the Midwest," he said.

"So will the country actually invest in education. Will the country actually invest in the new job and be that center for the world?"

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