No one has perfected the veiled threat as well as Larry Summers, President Obama’s chief economic adviser. It was on fine display at the World Economic Forum on Saturday.
He was speaking on the main economy panel with Zhu Min, deputy governor of the People’s Bank of China, so it was a great cast list. Mr Zhu’s contribution was to say how he recognised China couldn’t rely on the US consumer for growth in the future, understood there was excess capacity in certain Chinese heavy industries and vowed policy was to make structural changes so that demand would re-balance away from exports and towards consumption.
That is all very well and such cooperative noised certainly please the Davos crowd, but four years ago, his boss made almost the identical contribution to the same panel debate, pledging to slow China’s reserve accumulation and shift demand towards domestic consumption. When asked why anyone should trust Mr Zhu’s words today when there is no evidence of a serious shift from four years ago, he made a half-promise: “It’s a long process … you will see progress day-by-day, year-by-year”. My bet is that the first half of his sentence turns out to be true. Read more
Davos women are gathered to listen to the likes of Arianna Huffington and the impressive Indonesian trade minister, Mari Pangestu, and to network amongst other women. Seemingly stuck at just 15 per cent of participants, the ‘tribe’ (as its referred to by Harvard prof Rosabeth Kanter)looks quite different all gathered together vs as a light sprinkling. As I’m sitting down and slightly wondering what I need to be doing here for children, most of the women at the table tell me they happen to be Save the Children supporters – it’s great to be able to say thank you.
The Google party is even cooler this year with wetsuit, snorkel-clad waiters serving sushi, and coloured pure oxygen tanks for those in need of a blast. Media moguls, politicos, all the young global leaders and even some royalty hit the dance floor. Read more
The BBC’s Politics Show presenter Jon Sopel is moderating a discussion on cross-sector partnerships. I’m on the panel with Accenture and IKEA. Amazingly it’s a decent turnout at 7am (after a late night for most compounded with jet lag for many). Are NGOs and businesses converging? What will partnerships look like in another decade? Classic Davos fringe meeting. Encouraging levels of enthusiasm and a few new partnership ideas emerge.
I’m catching quick meetings with CEOs I’d struggle to get time with normally. So I miss what I hear was a great session on global talent mobility – a big issue for Save the Children. Read more
Here are further glimpses of the Davos kaleidoscope.
First, my friend Moises Naim, editor of Foreign Policy, gave me a new acronym on the global recovery. It is LUV. The L is for the L-shaped recovery of the European economies. The U is for the U-shaped recovery of the US economy. The V is for the shape of the recovery of big emerging economies. Read more
Although the conference dribbles on until Sunday morning, by Friday evening the tone has been set. So what is the verdict?
The mood is certainly better than last year, when the world was ending, but it is worse than at the beginning of last week. Alessandro Profumo of Unicredit acutely observed that Davos is likely to accentuate whatever mood you arrived in, rather as alcohol does, I guess. So those who arrived nervous about the economic prospects are leaving even more jittery. If you arrived feeling pessimistic, you will leave somewhere between suicidal and homicidal.
The market background has not helped. Anxiety about Greece has grown over the past three days. In the circumstances, it was strange to see both the Greek prime minister and his finance minister here. Maybe the subtext was to show that there can be no crisis if they are munching muesli in the mountains, but though some may have been reassured, more people asked who was at home minding the taverna. Read more
On Friday I talked at the World Economic Forum about how I see the next 10 years as the Decade of Vaccines – a time when we will make more progress than ever on immunisations that save lives in the developing world.
The Decade of Vaccines will build on the phenomenal progress of the past 10 years. Since its creation in 2000, the GAVI Alliance has helped immunise more than 250m children in poor countries, averting 5m deaths and preventing a great deal of sickness and suffering. (You can read more about GAVI’s work in my 2010 Annual Letter, which was released this week.) Read more
By Chris Giles, the FT’s economics editor
I had an ulterior motive last night when I went to a dinner on Shakespeare and the crisis. I thought the session, led by Carol and Ken Adelman, founders of Movers and Shakespeares, would be ripe for ridicule and typical of some of the enjoyable nonsense of Davos. Their website, after all, does talk guff about teaching ”critical business skills through Shakespeare’s greatest works”. Read more
By Chris Giles, the FT’s economics editor
In a recent speech, Mervyn King, governor of the Bank of England railed against the inconsistencies of national recovery strategies, saying that, “a present there is no political mechanism for achieving that consistency”. Read more
Will India meet global expectations? This is what was debated in a large televised room packed with serious corporate players yesterday (so this is where they are). Lots of talk about India’s role as regional power and growth rates, but then finally a brave panellist suggests that the number one priority has to be for India to develop its people. The moderator completely ignored this and went back to growth rates.
Frustrating given India really could stop its children going hungry and dying from preventable causes – with enough determination. Bangladesh, a poorer country, has made faster progress on cutting child mortality rates. Read more
Another weird day has passed. But all days at Davos are weird. One never knows what is going on, except for the fact that, wherever one is, one would be far better off somewhere else.
The highlight of yesterday evening was the opening address of President Nicolas Sarkozy of France. The speech is so classically French as to be a caricature of itself: bombastic, high-flown and verbose, it addresses a vast range of contemporary challenges, around the grand theme of moralising and containing capitalism. Yet, I have to admit, there is much in it with which I find myself in agreement. Read more
I never thought I’d read myself saying this, but there are times when a man can tire of debates about macro-prudential flexing of Basel 2 capital requirements. It’s hard to believe, I know – maybe it’s the thin mountain air that does it.
Fortunately, there are other subjects of debate this year. Bill Clinton came to talk about Haiti, and many others have reflected on the difficulty of organising effective responses to a disaster, in a state which was fragile beforehand, and where much of the usual government infrastructure does not function. The normal difficulties of co-ordinating the efforts of different countries and agencies are compounded, leading Clinton to advocate a small group imposed from outside to force a common approach. Read more
First session of the day is on ‘Rethinking humanitarian response’ and was again dominated by Haiti. Is it really all as chaotic as the media depicts? If the response was slow, slow compared to what exactly? What are the respective roles of the UN, government, NGOS, business and military?
I think we have the answers to these questions but there is not enough time and ongoing interest to build a shared understanding across the different sectors. Still, the room is not hostile and the concluding straw poll shows more people are optimistic than pessimistic about the scale-up in Haiti. Read more
I’m in Davos this week to talk about an issue that I’m especially passionate about: helping mothers and children in the developing world.
Research shows that helping women stay healthy and achieve financial security has an amazing ripple effect. A healthy woman is more likely to give birth to a healthy child. She can earn money to feed her family, send her kids to school and buy medicine when they’re sick. When women thrive, their families thrive and their entire community prospers.
Earlier this week, I visited Benin and Malawi to see some of the great progress the two countries are making. In Benin I had the honour of travelling with Carla Bruni-Sarkozy, the first lady of France and an amazing advocate for women and children. We went to the village of Dangbo, where we visited a hospital that provides a full range of free health services for pregnant women. They have a fantastic program that integrates these services with HIV testing, counselling and treatment. We talked to several women there who had come in for prenatal care and then decided to get tested for HIV. If they test positive, they can immediately get drugs that will help keep them from passing the virus on to their babies. Read more
It is snowing in Davos. I don’t know why that should surprise me. It is a ski resort, after all. The locals – who apparently do not simply disappear when the World Economic Forum leaves town – are pleased, since it means there will be plenty of snow on the slopes for the school half-term. But for some delegates, the snow seems to be a bit of a downer – adding to the discomfort of Davos. I saw one South African delegate struggling into his heavy coat and gloves and moaning, “this is torture.” The Chinese, however, are pleased. A senior Chinese official claims that there is an old Chinese saying that – “Heavy snow means there will be a good harvest.” This was slightly more interesting than his claim that the nations of the world “have common but differentiated responsibilities” over climate change.
I have spent much of the day in meetings of the Davos “International Media Council” which brings together a group of journalists from all over the world for off-the-record briefings with important people. This is all very flattering – but also slightly frustrating, since I am not allowed to report what they say. Read more
The hotel vestibules were buzzing as I arrived – seems President Sarkozy pulled no punches in his address yesterday and people are up for ‘rethinking and redesigning’. But, I asked my dinner companions, to what extent? If you were going to redesign a global economic system right now, would you tolerate design flaws that leave 70m kids out of school?
But what grabs people’s attention is the Tiger Woods back-story and how well his erstwhile corporate sponsors handled the PR crisis – must say I never expected that as a Davos theme. Read more
By Chris Giles, the FT’s economics editor
I am at a so-so lunch discussing the prospects for long-term economic growth and have just heard the best comment on global imbalances and the worst suggestion for international organisations. Both came from Angel Gurria, secretary general of the OECD. Read more
One of the big topics of conversation here in Davos is the economy. In panel discussions and hallway conversations, people are talking about the long-term effects of the recession of 2009. While it’s true that we will see lingering unemployment and huge government deficits for quite some time, I think the big story is actually much more positive. I believe we can make amazing progress in the years ahead to improve people’s lives around the world. The key is to keep investing in innovation. It is what makes the difference between a bleak future and a bright one.
During the past two centuries, a huge number of innovations have fundamentally changed the human condition-more than doubling our life span and giving us cheap energy and more food. If we project what the world will be like ten years from now without continuing innovation in health, energy, or food, the picture is quite dark. Health costs for the rich will keep escalating, forcing tough trade-offs, and the poor will be stuck in the bad situation they are in today. We will have to increase the price of energy to reduce consumption, and the poor will suffer from both this higher cost and the effects of climate change. We will have big food shortages because we won’t have enough land to feed the world’s growing population. Read more
Most editors of news organisations spend a lot of time worrying about their business models these days, so it is unusual to talk to one who has no concerns about his.
On June 14th, Matthew Winkler, editor-in-chief of Bloomberg News, will celebrate the 20th anniversary of the first story going out over its terminals. The story was about corporate bonds and was written by a journalist who is still employed at Bloomberg. Read more
My Thursday column in the FT is about Paul Volcker’s plan.
When a French president praises capitalism an Englishman is conditioned to smell un rat, indeed a whole nest of them. And Sarkozy did not disappoint, in his grand opening address at Davos.
He offered three interpretations of the causes of the crisis: global imbalances, short-termism, and bankers being tempted into speculation and away from real banking. Arguably they point to quite different solutions, but they were all grist to his moulin. Read more