The World Economic Forum has ended with business and political leaders worrying whether the economic boom in Asia, Brazil, the US and Germany can last. Lacking a big theme, this year’s meeting of the rich and powerful focused on global threats, from political turmoil to scarce resources. European leaders used the stage in Davos to drive home their message that they will do anything to save the euro. And the UK and Gates Foundation joined forces in a push to eradicate polio. Prime Minister David Cameron said the UK government would double its funding for the fight against the debilitating disease to $60m (£38m) despite the “tough economic times”. The Bill and Melinda Gates Foundation, meanwhile, will add $100m in funding. “There is an incredible opportunity to wipe out the last 1% of polio, saving lives now and preventing the threat of outbreaks in the future.”
In 2009 and 2010, the annual meetings of more than 2,000 of the world’s most powerful business leaders and politicians had been gloomy affairs, as the credit crunch was followed by a global economic crisis. This year, company bosses showed plenty of optimism, but always tempered by warnings that the good times might not last. Chanda Kochhar, chief executive of Indian bank ICICI, said that while it was important to look for optimism and opportunities, this had to be grounded in reality. “We are optimistic, but we are afraid to be optimistic,” said Paul Bulcke, boss of food giant Nestle.
Ellen Kullman, chief executive of DuPont, agreed, but acknowledged that 2010 had been “a fantastic year for growth, and 2011 will still be good.” Whoever one spoke to, whether it was Michael Dell, founder of the computer giant carrying his name, Kris Gopalakrishnan of IT services firm Infosys or Wei Jiafu of China Ocean Shipping Group: everybody reported really strong growth and predicted investments and expansion. One banker, at a private meeting, spoke of “boom times”. A survey of bosses from around the world, compiled by accounting firm Pricewaterhouse Coopers and published at the eve of the Forum, suggested that confidence levels were back to pre-crisis levels. Despite this, many of the discussions and sessions held during the five days of the forum focused on what could go wrong. Government debt, especially in Europe, soaring inflation, especially for food, and scarce resources from food to energy, and cyber threats were all on the long list of worries that dominated the Davos agenda.
Davos was set for a vigorous debate about the health of the eurozone, or rather the lack thereof. However, this was somewhat squashed when French President Nicolas Sarkozy and German Chancellor Angela Merkel launched a clearly co-ordinated pincer attack on speculators, bankers and investors to tell them in no uncertain terms that they would do anything that was necessary to defend the euro and prop up weaker members of the currency union. With the back-up of the region’s central bankers, who made forceful statements in private sessions for leaders of the banking industry, they appeared to calm the nerves of most. Greek Prime Minister George Papandreou, meanwhile, also sat through a succession of meetings to make the case that the eurozone crisis had been contained and that Greece was on the way to recovery. “The Sarkozy and Merkel statements put the markets at ease, put me at ease,” said Jacob Wallenberg, chairman of Investor AB, the giant Swedish holding company. Still, there was some scepticism. “The eurozone is still a high risk area in 2011… another sovereign debt crisis is possible, and [government] deficit reduction will have a negative impact on economic growth,” warned Wei Jiafu.
As so often during the annual meetings in Davos, an outside crisis forced its way on to the agenda, the turmoil spreading through North Africa, from Tunisia to Egypt. A hastily organised session featured two of the technocrats now in ministerial positions in Tunisia’s interim government, and throughout the hallways participants swapped the latest news from the unrest in Cairo’s streets. However, with few Arab leaders in attendance this year, the discussions lacked the heft that the Davos event used to provide during previous crisis.
If this year’s Davos served one purpose, then it was confirmation of the fact that India and China are now fully grown players on the world stage, both politically and economically. Discussions at Davos at times appeared to measure the health of the global economy by the strength of growth in both countries. Both countries had sent strong delegations to the forum, with neither politicians nor business leaders reluctant to assert their strength and authority. – BBC
