Carney’s Davos Address Warns of Fragmented Global Order, Urges Middle Powers to Adapt

DAVOS, January 20, 2026 – In a major address to the World Economic Forum, Prime Minister Mark Carney warned that the rules-based international order is fracturing, ushering in a new era of economic coercion and great power rivalry. He argued that middle powers like Canada must band together to protect their interests and cannot afford to be passive.
Key Themes of the Speech
Prime Minister Carney, speaking at his first Davos summit as Canada’s leader, outlined a sobering vision of a world where trade, money, and supply chains are increasingly used as tools of leverage. His speech, titled “A Spirit of Dialogue,” was a stark departure from the optimistic globalization narratives of past forums.
Core Arguments: The “Carney Doctrine”
Carney’s core message, dubbed the “Carney Doctrine” by some analysts, rests on three pillars:
Key Facts & Figures
| Theme | Prime Minister Carney’s Assessment |
|---|---|
| Global Economy | Resilient U.S. economy contrasts with stagnant Europe; Germany undergoing historic industrial restructuring. Bearish outlook for China, with real estate adjustment outweighing EV/clean energy competitiveness. |
| Monetary Policy | Interest rates have peaked, but pace of reductions may be slower than markets expect. Carney predicts the U.S. Federal Reserve will wait until June to begin cutting, followed by 1-2 more cuts in 2026. |
| Geopolitical Crises | Middle East conflict widening alarmingly; no practical advances on Palestinian state or ceasefire at Davos. Red Sea attacks linked to Gaza war; Saudi Aramco warns of potential oil tanker shortage. |
| Artificial Intelligence | AI will begin major impacts on productivity and growth by the end of the decade. Requires comprehensive business-government-academia response to ensure workers share in the benefits. |
| Climate Change & Energy Transition | Transition remains core to business models; $1.8 trillion invested in 2025, nearly double oil & gas investment. Needs to double to ~$4 trillion by 2030. AI and clean energy transitions work in tandem. |
| Argentina’s Javier Milei | Speech described as “entertainingly provocative” and “good theatre.” Carney noted Milei’s vehemence is influenced by part by Argentina’s history of high state intervention and indebtedness. |
Domestic Implications: A “Precarity Reality”
Carney acknowledged that his Davos message, while a serious international argument, must resonate domestically. He noted that the global instability he described mirrors the feelings of “precarity” many Canadians now experience in their own lives—a sense that the ground is shifting, institutions are less reliable, and shocks are arriving more frequently.
Frequently Asked Questions
What is the “Carney Doctrine”?
The “Carney Doctrine” refers to the Prime Minister’s argument that cross-border friction with the United States is “an inherent feature of economic integration rather than a sign of diplomatic failure.” It suggests Canada must build resilience and diversify its trade relationships to navigate an era where great powers pursue their own interests above all else.
How does this relate to Canada’s current economic situation?
Carney’s speech comes as Statistics Canada reports a 2.4% year-over-year increase in the Consumer Price Index (CPI) for December 2025, slightly above market expectations. Concurrently, the Bank of Canada’s quarterly surveys reveal subdued business outlooks and anxious consumer sentiment, with respondents perceiving a higher likelihood of missing debt payments and a slightly greater chance of job loss.
What were the main criticisms of Davos mentioned?
Carney cited several critiques of the World Economic Forum’s annual meeting, including Lord Mark Malloch Brown’s comment that “Davos is a good place to recognise problems but not such a good place to solve them,” and New York Times reporting that the “Davos Consensus” has become a counter-indicator of likely events. He also quoted Alex Soros, son of George Soros and chair of the Open Society Foundation, who stated: “Trump is already the president at Davos—which is a good thing because the Davos consensus is usually wrong.”
